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Refurbishment Case Study

HMO Conversion Refurbishment

How Marcus turned a tired office building into a 6-bed HMO

Bristol
Commercial to HMO Conversion
£340,000
Loan Amount
65%
LTV
0.75%
Monthly Rate
9 mo
Term

The Challenge

Marcus identified a vacant office building in Bristol that could be converted to a 6-bedroom HMO. Traditional lenders wouldn't finance the purchase or works due to the commercial nature and planned change of use.

The Solution

A heavy refurbishment bridging loan covered both the purchase and staged works funding. Funds were released as each stage of the conversion was completed.

Timeline

Day 1
Offer accepted on vacant office at £280,000
Day 14
Bridging approved for purchase + works
Day 28
Purchase completed
Day 56
First tranche of works funding released
Day 120
Second tranche released - conversion 50% complete
Day 180
Third tranche released - final fit-out
Day 240
HMO licence granted, first tenants move in
Day 270
Refinanced to HMO mortgage

Cost Breakdown

Interest (0.75% x 9 months) £22,950
Arrangement Fee (2%) £6,800
Valuation Fee £1,200
Legal Fees £4,500
Total Finance Costs £35,450

The Outcome

The completed HMO was valued at £520,000 and generates £4,200 per month in rental income. Marcus refinanced to a commercial HMO mortgage at 70% LTV.

"The staged drawdown meant I wasn't paying interest on funds I hadn't used yet. The lender understood development projects."
— Marcus, Property Developer
Important: This is an illustrative case study based on typical scenarios. Names, locations and some details have been changed. Actual rates, fees and outcomes depend on individual circumstances and lender criteria. This is not a guarantee of similar results.

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