FLIP · Property AnalysisThis report provides a comprehensive analysis of the property at St. Georges Road, Hull HU3, focusing on its flip potential. The analysis includes market valuation, refurbishment strategies, risk assessment, and financial projections.
The property is a terraced house currently configured as two separate 1-bedroom flats. The flip strategy involves converting it back into a single 3-bedroom family home and undertaking a pragmatic refurbishment. The purchase price is attractive, but the conversion complexity elevates risk. Projected ROI is 22.8%, based on a defined gross profit. However, net profit is marginal, requiring successful negotiation and cost control.
This property, located in Hull HU3, presents an unusual configuration: two self-contained flats within a single terraced house. The flip strategy focuses on converting this back into a desirable 3-bedroom family home. The proposed refurbishment includes layout reconfiguration, modernising key areas, and cosmetic upgrades.
The property, currently configured as two self-contained flats, presents a unique opportunity for reconfiguration into a single family dwelling. Post-refurbishment, the property is projected to achieve an After Repair Value (ARV) of £155,000. This valuation is based on comparable sales data for 3-bedroom terraced houses in the HU3 area, such as the recent sale on Thoresby Street for £135,000. While this property is slightly smaller in floor area (979 sq ft), the proposed conversion into a functional 3-bedroom, 1-2 bathroom house, coupled with modern cosmetic upgrades, supports an ARV towards the higher end of the comparable range. The refurbishment strategy focuses on maximizing value by transforming the two-flat layout into a cohesive family home. Key value-adding works include the removal of one kitchen and bathroom, blocking off internal access points to create a single dwelling, modern redecoration, new flooring throughout, and a refreshed kitchen and bathroom. These improvements directly address the needs of owner-occupiers looking for more space and modern amenities. The existing UPVC double glazing and relatively modern boiler systems reduce the immediate need for significant capital expenditure on utilities. The goal is to present a desirable, turn-key property that appeals to the family market, thereby commanding a stronger resale price compared to its current configuration or a less renovated state.
Note: ROI calculated as Gross Profit (£35,000) divided by Total Investment Cost (£153,705). Gross Profit is defined as ARV minus Purchase Price.
Hull's property market has seen moderate growth in recent years. For family homes, particularly 3-bedroom terraced properties, demand typically remains steady, supported by affordability compared to other regions. We anticipate a modest appreciation of 2-3% annually in this segment, assuming stable economic conditions. The success of this flip relies more on the value-add through reconfiguration than market appreciation alone.
The listing is presented as an "investment opportunity" with "sitting tenants" and a stated yield. This suggests the seller is likely divesting a Buy-to-Let asset rather than facing distress. There are no overt signs of urgency, such as heavily reduced pricing or explicit 'quick sale' requests. The mention of a "connected person" relationship with the agent may indicate a desire for a smooth, uncomplicated transaction, but not necessarily a distressed sale.
This property carries a high risk profile primarily due to its unusual configuration as two flats. The flip strategy requires significant conversion work, increasing potential for cost overruns and timeline delays. While the ARV is achievable, the net profit margin is tight, leaving little room for error. Market demand for the refurbished property at the target resale price is a key factor.
The property currently comprises two 1-bedroom flats. The goal is to convert it into a single 3-bedroom family home. This is highly feasible by repurposing one of the existing reception rooms.
Recommendation: Yes, converting to a 3-bedroom property is recommended. The cost to create the third bedroom is relatively low compared to the significant increase in market appeal and resale value it offers for a family home.
Damp Assessment: Image 7 (Ground floor kitchen/diner) shows potential discolouration near the boiler installation, warranting inspection for leaks or damp. Image 9 (Ground floor bathroom) shows minor wall discolouration near the ceiling, possibly indicating ventilation issues or minor damp.
The refurbishment will focus on converting the two existing flats into a single, cohesive 3-bedroom family home. This involves structural alterations, modernising the main kitchen and bathroom, general decoration, and new flooring.
Type of Refurbishment: Pragmatic Conversion & Cosmetic Refresh.
Not recommended for a typical flip without significant price negotiation. Conversion to a 3-bed is feasible (ARV £155k), but net profit is marginal (~£4.9k) after £23k refurbishment. Risk level is high (75/100) due to conversion complexity and tight margins. Consider opportunities with lower entry costs or clearer value-add paths.
The property at St. Georges Road, Hull HU3, presents a complex investment opportunity due to its current configuration as two self-contained flats. While the purchase price of £120,000 is attractive, the flip strategy necessitates converting it back into a single 3-bedroom family home, involving significant refurbishment costs (£23,000) and an estimated 8-week project timeline.
We project an After Repair Value (ARV) of £155,000 for a well-refurbished 3-bedroom property. After accounting for all acquisition, refurbishment, selling, and holding costs, the total investment reaches £153,705. The calculated ROI, based on gross profit (ARV minus purchase price), stands at 22.8%. However, the net profit after all expenses is approximately £4,895.
Key risks include the complexity and potential cost overruns of converting the dual-unit property, the dependency on achieving the projected ARV, and the sensitivity of the modest net profit to market fluctuations or unexpected delays. The presence of sitting tenants adds a layer of complexity, though it can sometimes facilitate a smoother handover if kept occupied (which deviates from a pure flip strategy).
Given the high risk assessment (75/100), tight profit margins, and significant reconfiguration required, this investment is not ideal for investors seeking substantial returns with lower risk. We strongly advise attempting to negotiate the purchase price down significantly (targeting below £100,000) to create a more favourable financial buffer. If such negotiation is not possible, exploring alternative investment properties with less complex value-add potential would be prudent. Thorough due diligence, including a detailed structural survey, is essential before proceeding.