Roma Finance has helped two Midlands-based property entrepreneurs purchase a string of pubs in the Lake District to convert into houses in multiple occupation (HMOs).
• The clients’ team was made up of experienced builders and buy-to-let (BTL) landlords who saw an opportunity for HMO accommodation
• The clients sourced three vacant ex-public houses for change of use
• The plan involved converting the three pubs to provide a total of 54 rooms
• The three properties are in an area where there is a significant shortage of accommodation
• Roma Finance provided £240,000 over 12 months for the purchase and renovation works
The clients saw a gap in the market after learning of plans to increase investment in the area. They were looking to acquire the pubs in order to satisfy the increasing demand for rooms from contract workers.
The clients completed their research and found three former public houses that they planned to convert.
One would be converted into a twenty-six bed HMO and the other two converted into fourteen bed HMOs.
Although the pubs were structurally sound they were not in good condition. Due to the nature of the project, the clients needed a specialist lender that could deliver the finance needed within a short time frame for the refurbishment and change of use building works.
The clients’ introducer put them in touch with Roma Finance who met them to discuss the project and plans for the properties.
The Roma Finance team decided that the plans were well thought out, and agreed to three separate loans - one for each property – totalling £240,000 over twelve months.
“This was an exciting case as it’s always a pleasure to work with clients who not only have vast experience in converting property but also did their sums to make sure the yield calculations were favourable too,” said Scott Marshall, Operations Director at Roma Finance.
“It was also a pleasure to see unused buildings, in this case pubs, being brought back to life with a positive change of use that will help the growing workforce and the local community.”
Roma Finance said the exit will involve a commercial refinancing of each of the properties once they are converted and up and running as HMOs.