Milton Street - Mixed Use Property - Title Spilt


The Deal background

This property was brought to us before being placed on the open market, giving us time to get an early offer to the vendor once we knew their objectives.

The vendor, a limited company, are also property investors and needed to release capital from this property to fund a number of larger development projects that they are currently working on.

We were attracted to this deal due to the property offering an opportunity for a title split from one freehold to a freehold with five leaseholds. The large ground floor commercial space could also be split into two seperate units in order to maximise the overall value. We were also able to negotiate a six month delayed completion with control of the property being handed over on exchange of contracts.

This deal has led to an ongoing relationship with the vendor and we are now working on a further purchase from the vendor.

The Numbers

Purchase Price (Freehold): £300,000

Stamp Duty: £4,500

Conveyancing including the creation of 5 new leasehold titles: £6,500

Purchase funded by 70% LTV Bridging Loan: £216,000 at 1.05% per Month for 12 months with interest payments rolled up

Cash Requirement for Project: £150,000 funded by Private Investor at 9% per annum

Total Cost of Refurbishment Works: £75,000

RICS Valuation on each Leasehold:

Maisonette East: £100,000

Maisonette West: £100,000

Flat: £90,000

Commercial East (Smaller Unit): £110,000

Commercial West (Larger Unit): £130,000

Total Valuation of Leaseholds: £530,000

Annual Ground Rent Charges: £1,290

Value of Freehold based on Ground Rent at 15x Multiple: £19,350

Total Value of the Property as an Asset: £549,350

Re-finance of each Leasehold Unit at combined LTV's: £400,500

Proceeds from the Sale of Freehold: £17,500

Total Funds Released: £417,500

Bridging Loan plus interest to be repaid after 12 months: £236,460

Investor Capital and interest to be repaid after 12 months: £163,500

Loan Capital and Interest to be Repaid: £399,960

Gross Profit from Rental Income Generated over 10 months: £16,875

Own funds remaining in deal: Zero

Monthly Mortgage Payments: £1,505

Monthly Rental Income: £3,550

Annual Gross Profit: £20,250

Annual Return on Cash: Infinite




The ground floor single commercial unit has now been split into two seperate commercial units to create a larger 99m2 unit and a smaller 66m2 unit.

The use has been changed to A1 Retail in order to preserve the value of the residential units above, and with the growing popularity of Saltburn we have now secured two local tenants on 5 year FRI leases.

We expect the demand for commercial premises in this area to remain very strong over the coming years.



The residential units have now been completed to high specification and refinanced onto their own leasehold funding:


INVEST In a project

If you're a private investor looking for a return on your capital, or you're a property investor looking to add properties like this to your own portfolio or even looking for a way to get started, then get in touch with us today and we can help you reach your individual goals.