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Reading conversion from office building to two one-bedroom flats

by | Aug 25, 2021 | Clients

You can watch Karl Griggs from CPC Finance discussing this property project with investors Sanjay Kumar and Malkit Purewal from Savoys Properties in our “Reading Conversion” videos as part of our BRRR property series. You can follow the conversion journey from office space to residential flats.

Savoys Properties purchased a two-storey detached office building in Reading, built between 1930 and 1950, complete with gated parking spaces. The building had previously been completely commercial.  The investors bought the property for £190,000 with a 70% LTV bridging loan (short term loan).

Upon purchase, the investors intended to repurpose the property into two residential flats, a one-bedroom flat on the ground floor and another one-bedroom flat in the upper floor and loft space.

They anticipated the conversion would take 6-8 weeks and had a budget of £70,000. An initial valuation gave the project an estimated GDV of £380,000, which meant that the investors could anticipate recouping all money spent on the project upon refinance. In addition, the anticipated rent per flat was £10,000 per year.

The investors planned to refinance at the end of the project with the same lender who gave them the original bridging loan and to work with the valuer who gave the initial estimated GDV. That way, the lender could be comfortable with the GDV and the investors knew that on that basis they would be able to refinance with a term facility at 75% LTV of the anticipated £380,000 value.

Stay tuned for the end of the project to find out what the final numbers are.