£27k per year 7 bed HMO conversion

Property investor and developer, Mitch Nunn, shares his latest acquisition and plans to increase its value by £300,000.
He purchased the property for £340,000, but the post-works valuation came back at an impressive £650,000, surpassing the average value of houses on the street (£400,000).
Join Mitch as he explores the property, discussing his goal to convert multiple houses and achieve 100 bedrooms locally.
Don't forget to like the video and stick around for a detailed discussion on the numbers.
Mitch shares his challenges with insurance, future investment plans, and his strategy for acquiring properties before auction through his agent relationships.
Find out how he plans to convert the house into a seven-bedroom, seven-bathroom HMO, leading to a commercial valuation based on income rather than traditional methods.
Also connect with Mitch on…
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[@esraec1]

Looking forward to seeing the transformation on this one 👍🏼

[@MitchNunnProperty]

Thank you

[@andrewgushman]

Looking forward to seeing your journey Mitch.

[@MitchNunnProperty]

Thanks Andrew 👌🏻

[@theremotepropertyinvestor1281]

🙌🙌🙌 there we go mate… we’re off and running

[@MitchNunnProperty]

Thanks for your help on this one mate 👌🏻

[@simonineile8085]

just been watching through your journey and what your plans are, its really interesting and inspiring what advice could you give to someone wanting to do something like this rather than the usual single occupancy property . do you have a plan you would follow etc . love the spaces idea too well done on the hard work .
atb si

[@MrQuinnah]

Brilliant insight Mitch. You mention 27k pa profit on this house. I didn’t see tax calculated though, or did I miss that? I’m living in Ireland and the tax rates have made it feasibly impossible to do what you do here. Appreciate any insight. I was looking at US or Dubai for investing and was pleasantly surprised by the UK rental income tax rate. In Ireland it’s 52% on the gross which makes it pretty unviable

[@MitchNunnProperty]

Figures are pre tax. This house is actually making more than 27k PA based on rents achieved. Properties held by a LTD company so paying 19% corporation tax on profits sub £50k and 25% on profits over £50k.

[@MrQuinnah]

Legend Mitch. Thank you. I’ll make reference this when I reach out for advice !

[@sussexcarcentre]

Is it 27k Mitch with bills did you include that on met income

[@Ap-cg7wj]

What is the profit after bills ?

[@alexburrows6942]

Did you need any planning or dev rights certificate to do the work?

[@MitchNunnProperty]

Needed to do a full planning app to take this one from C4 (6bed) to Sui Generis (7bed)

[@andyrooot]

Thanks Mitch for the content, where are you up to with regard to getting to 100 rooms?

[@MitchNunnProperty]

23 complete / 17 in development / 8 in conveyancing / 12 in planning

[@andyrooot]

@@MitchNunnProperty ok thanks

[@KashMartin_RealEstate]

Yes 👏🙌

[@MitchNunnProperty]

Thanks Kash 👌🏻

[@outere2044]

The numbers sound good , what area is it .?
And how much do u achieve per room then pcm

[@MitchNunnProperty]

Thanks. This is Southend in Essex. Achieving room rents of 750-1000! Use £800 per unit as an average

[@davedavids2231]

Do you only get commercial valie for 7 beds then ?

[@MitchNunnProperty]

7 beds plus is full planning Sui Generis which means a commercial valuation. 6 beds is C4 planning status which is permitted development and much more chance of a bricks and mortar valuation. It’s quite a grey area though and sometimes subjective dependent on surveyor 👍🏻

[@dominicgilbert519]

Doesn’t it need to be in an Article 4 area too, to obtain a commercial valuation?

[@cvjss2]

You mention at the start that you got a valuation of £650,000 post renovation works but the average house will sell for about £350,000.
Are you not concerned that if there is a property crash, or demand for HMO's drop, more legislation comes in for HMO's, more costs etc., then you may have to sell the property for example? If you sold the property no one will buy it for £650,000....
Getting high commercial valuations is a very risky strategy where you are effectively in negative equity from day one, therefore you are just making "paper profit". When the market is booming and rents are going through the roof then this strategy is great as you can grow the portfolio rapidly, however this is also how you can go bankrupt when the property market falters.
I enjoy watching the content and as an experienced property investor the tips you give are very informative for me. Many thanks!!