The Brothers' Journey: From Uncertainty to Property Success
- Martin Foster
- Aug 22
- 3 min read
Updated: Oct 1
The Beginning
It all started with a call. Brother-in-laws, Paul and Andrea wanted to step up from their previous investments in property and take on a bigger development opportunity. They liked the idea of care home conversions but just weren't sure how or even where to start.
Having seen some of Nicholas's videos on YouTube and knowing that he was arguably the UK's leading expert of care home conversions, they took the plunge and made the call to discover how Nicholas could help.
The Opportunity
It was actually on their first consultation call while Nicholas was going through some potential opportunities, that this care home site came up as available through his network of agents. Nicholas ran the brothers through the potential of the site, completed the initial deal analysis with them, worked with them on the offer and negotiation, and needless to say they went on to buy the site within a couple of weeks.
As the brothers' primary goal was creating cash flow, through the conversion of the care home into a 53 bed HMO, one of the primary concerns was the availability of potential tenants. What the initial deal analysis highlighted was the location of a large hospital right next door to the site as well as easy access into the city of Worcester. Both of which are good indicators of tenant demand in the area.
The Implementation
Due to the nature of the conversion, and by utilising Nicholas's experience and network of contacts, the brothers were able to complete the initial renovation of the primary building quickly. This meant that a HMO licence for 30 rooms was approved allowing Nicholas to bring in Property Guardians to provide a rental income.
Incredibly the rental income of £13k per month, not only covered the bridging loan cost, but provided £4k per month in positive cash flow. All this while waiting for the planning approval required to convert the remaining 23 rooms.
The Results
18 months in and just having received a valuation of £4.1 million from their lender, the brothers are planning to refinance the site and take out a mortgage of £2.6 million. This will not only cover all their existing development costs on the project, leave them with £1.5 million of equity in the property but will also release all the capital that they initially invested in the deal allowing them to move onto their next deal with Nicholas by their side.
And the cherry on the cake for the brothers? The projected annual rental income of £170k, will not only cover their finance costs, but provide them with £12k per month positive cash flow. More than exceeding their initial requirements.
"This is our first one we have done together; we wanted to de-risk it... wasn't that confident... your experience and guidance has helped... it's been amazing."
— Paul & Andrea, Care Home Developers
Running The Numbers
Purchase Price £1.2 million
Development costs £0.8 million
Final GDV £4.1 million
Profit £2.1 million
Mortgage £2.6 million
Equity £1.5 million
Annual Income £170k
Positive Cash Flow £12k per month
Nicholas's development consultancy is essential for anyone looking to successfully develop, invest in, or manage development projects in the UK. He provides valuable guidance and support throughout the entire process from sourcing to build and exit.
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