321% ROI - Part built Hotel to Finished Project

When a developer brought us a part-finished hotel, the opportunity was clear: buy at £1.3m, spend £1.3m finishing it to a high specification with luxury finishes throughout, and rent it out once complete. A RICS surveyor appraised the completed value at £3.8m.

The challenge was cash. Total project cost was £2.6m, so we structured a first charge facility of £2.3m. That meant the client needed just £300,000 of their own money. The £1.3m development budget was deployed into premium bathrooms, bespoke joinery and boutique-standard rooms—finishes that would attract a strong rental tenant and protect the valuation.

Now for the finance cost. The loan carried interest at 0.85% per month for the duration. On £2.3m, that is £19,550 per month. Assuming a 12-month term, total interest = £234,600.

Income and expenditure:

· Completed value: £3,800,000

· Purchase + development: £2,600,000

· Gross profit before finance: £1,200,000

· Interest cost: £234,600

· Net profit after interest: £965,400

ROI calculation:

£965,400 ÷ £300,000 = 321.8%

That is £3.22 returned for every £1 the client invested—after interest. If the loan runs longer, each additional month adds £19,550, but the structure still leaves a very healthy margin. The client ended with a fully finished, rent-producing hotel and a triple-digit return.

Complex deal, simple outcome—

Always Wright Mortgages, the King of Complex.