060 - Commercial Multi-Let Deal

<p><span style="font-weight: 400;">‘Know your exit options’</span></p> <p> </p> <p><span style="font-weight: 400;">In this BRAND NEW Podcast Series we will be going Behind the Scenes on some of the UK’s most Creative, Lucrative and Award-Winning Deals 🤩</span></p> <p> </p> <p><span style="font-weight: 400;">Hosted by me, Mark S Barrett from The Property Brokerage, this month it gives me the absolute pleasure to welcome Billy Turriff who will share his insights on Commercial Multi-Let deals.</span></p> <p> </p> <p><span style="font-weight: 400;">In this podcast, Billy and I discuss his take on a commercial multi-let deal that he did which highlights why it is important to have multiple exit options.  </span></p> <p> </p> <p><span style="font-weight: 400;">His initial option was to convert it into self-contained studios and even though he had gained prior approval, the build costs due to Covid were too high so Billy used his experience to let out the spaces to individual businesses wanting a flexible office space.</span></p> <p> </p> <p><span style="font-weight: 400;">The rents were similar to what a HMO would provide without the high refurb costs and as this was a commercial property there was no stamp duty to pay.</span></p> <p> </p> <p><span style="font-weight: 400;">This led to a very high Return on Capital Employed (ROCE), after refinancing, of 50%.</span></p> <p> </p> <p><span style="font-weight: 400;">Purchase price £110,000</span></p> <p><span style="font-weight: 400;">Refurb and costs: £20,000</span></p> <p><span style="font-weight: 400;">New valuation: £150,000</span></p> <p><span style="font-weight: 400;">Exit: retained as an asset for own portfolio</span></p> <p> </p> <p><span style="font-weight: 400;">Cash left in after potential refinance: £18,000</span></p> <p><span style="font-weight: 400;">Equity: £20,000 approx</span></p> <p><span style="font-weight: 400;">Cashflow: £9000 pa +</span></p> <p><span style="font-weight: 400;">ROCE: 50%</span></p> <p> </p> <p><span style="font-weight: 400;">If you want