Three-bed end-of-terrace,
Somerset
The deal in one paragraph
An extended three-bedroom end-of-terrace minutes from a Somerset town centre and its railway station, listed at £165,000 and restricted to cash buyers — a single certificated-fix defect blocks most mortgage lenders (full detail with the pack). That restriction has already forced one price cut and removes nearly every owner-occupier from the bidding. This is the mispricing we buy: purchase cash, put the defect right for a budgeted £5,000, refinance at 75% once mortgageable — and the money left in works hard.
The angle
Thin buyer pool
The defect removes mortgage buyers entirely. The seller negotiates with cash offers only, and has already reduced once. Every week on the market strengthens the cash buyer's hand.
Cheap, known fix
The remedy is a quotable, certificated job — budgeted at £5,000 including making good. Once done, the property is mortgageable again and the refinance route opens.
Built-in margin
A 3-bed on the same street sold for £215,000 in December 2024 (Land Registry). Buying at £150,000 leaves margin before a single booking is placed.
Underwritten as a plain BTL first
Every deal must stand up as a standard buy-to-let on market rent before any serviced-accommodation income is counted. This one does — at asking, let alone at target.
| At asking £165,000 | At target £150,000 | |
|---|---|---|
| Refinance loan (75%) | £123,750 | £112,500 |
| Interest-only at 5.5% | £567 pcm | £516 pcm |
| Estimated market rent (verify locally) | £950–1,050 pcm | £950–1,050 pcm |
| Rent needed at lender stress (145% @ 5.5%) | £822 pcm | £748 pcm |
| Gross yield at £1,000 pcm | 7.3% | 8.0% |
Income scenarios — good, likely, poor
Nightly-rate model for a 3-bed. Net figures are after utilities (~£2,880/yr), council tax band A (~£1,630/yr) and interest at 5.5% on the 75% refinance loan, shown at the £150,000 target — cleaning, management and insurance sit outside this screening basis. All figures are projections, not guarantees.
| Scenario | Basis | Gross / year | Net / year |
|---|---|---|---|
| Good | £175 night · 90% occupancy | £57,488 | £46,790 |
| Likely | £175 night · 80% occupancy | £51,100 | £40,402 |
| Poor | £125 night · 50% occupancy | £22,813 | £12,115 |
Return on money left in
ROI is net annual income (after utilities, council tax and refinance interest) against cash still in the deal after the 75% refinance. Money left in = 25% retained + stamp duty + legals £1,750 + sourcing fee £3,000 + remediation £5,000.
Projected return on money left in at the £150,000 target — with the poor case still returning 22%. Payback of the cash left in runs at roughly 16 months on the likely case.
Offer strategy & day-one cash
The ladder
Open £145,000 — cash, no chain, completion on the seller's timescale.
Target £150,000–152,500.
Ceiling £165,000 — the deal still clears 66% likely at full asking.
Day one, at target
≈ £167,750 total: price £150,000, stamp duty £8,000, legals £1,750, fee £3,000, remediation £5,000. Refinance releases £112,500 back, leaving £55,250 in the deal. At £160,000 or below, the full day-one requirement stays inside a £180,000 cash budget; at asking it reaches £183,800.
The lever is certainty: a cash buyer who understands the defect and will not renegotiate on survey is worth more to this seller than a higher number that falls over.
What we verify before exchange
- Defect scope. Proper remediation quote against a full survey. A bad survey could move the £5,000 budget.
- Refinance valuation & timing. Underwritten at purchase price after ~6 months; lender appetite post-remediation confirmed with the broker.
- Nightly rates. £175 at 80% is our standard 3-bed screening basis — verified against live local comparables before completion.
- Market rent. £950–1,050 pcm range confirmed with local agents; the stress test passes with headroom at both prices.
- EPC. Not stated in the listing — obtained, with any works factored into the budget.
Fit & exits
Operate
Run as serviced accommodation with placement demand on top — the model this pack projects.
Single let
Stands up as a plain BTL on market rent at both asking and target — the base the whole deal is underwritten on.
Resell mortgageable
Post-remediation, resell to the full market against the £215,000 street comp — the cash-only discount becomes the margin.
As with every deal we sell, aftercare is built in: a company let from the buyer at a guaranteed rent, or ongoing placement of bookings. You're buying the deal with the operating route attached.
Photographs — under wraps
The photograph set — and the address — are held back while the deal is live. They identify the property, and protecting a live deal is part of what you're paying for. Accept the deal and the full set is released the same day.
Released on acceptance
Released on acceptance
Released on acceptance
Proof of funds, our sourcing terms, and the fee agreed â then you get the street, the door, and the full photograph set the same day. Straight talk: if the numbers above don’t work for you, the address won’t change that.
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