Project Overview
Mixed-Use Investment Acquired via Lease Option
This project involved the acquisition of a mixed-use property in Folkestone, comprising two residential flats and one commercial unit. The vendors were in the process of winding down a business partnership and required a clean exit at the full asking price.
Jaox structured the transaction as a lease option, allowing control of the asset with a minimal upfront deposit, while providing the vendors with certainty and flexibility during the separation process.
The property is located in Folkestone, a growing coastal town that has experienced sustained property price growth and has been identified as an area of continued regeneration and investment.
The Structured Solution
Key elements of the solution included:
1. Lease option structure secured with a minimal initial deposit
2. Permission to refurbish and bring the property up to modern standards prior to purchase
3. Fire safety and compliance works completed across the residential units
4. Tenanting of the property prior to purchase, stabilising income
5. Bank valuation obtained on end value, not purchase price
6. Traditional lending secured post-refurbishment, enabling retention as a long-term investment
This approach allowed value to be created and risks addressed before ownership transferred.
Key Numbers
Returns Achieved Through Structure and Leverage
- Deposit Paid: 10%
- Refurbishment Spend: £ 25,000
- Loan-to-Value: 90% of purchase price
- Return on Equity: 28%
- Strategy: Lease option followed by refinance and hold
By structuring the acquisition correctly and securing lending based on end value rather than purchase price, Jaox was able to offer the vendor their asking price, retain the property as an investment, and achieve strong returns with limited upfront capital.
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