Development finance to convert care home to 4 flats

The Scenario

Our clients owned and operated a 14-room care home in Bournemouth. The business was well-regarded and they had good occupancy rates, but they were frankly exhausted with the commitment of running a hands-on 24-hour operation for 20 years.

They had offers to sell the business as a going concern, and also an offer from a developer who could see the conversion value of the property. But they were ready to do the conversion work themselves and take the full profit.

The Solution

The land and building were currently worth £600K, with an outstanding mortgage of £147K.

Development costs are generally well-contained for care home conversions. High regulatory standards mean that currently operating properties are well-maintained. Construction is generally with stud walls, and extensive plumbing and electrics throughout.

Our clients’ plan was to spend £180K converting the building to four residential flats with combined GDV of £1M.

We sourced development finance for them at 9% pa and they were able to push on with their planning applications.