Commercial Deal Breakdown – How This Investor Secured a £2,250/Month Passive Income Stream
- Marc Day
- Mar 26
- 2 min read
Updated: May 13
Overview
Here’s a real-world breakdown of a commercial deal that shows exactly the kind of investment opportunities we source for clients. This example highlights the power of long-term leases, off-market pricing, and hands-free cash flow — all aligned with the goals of time-poor investors looking for passive income.
Investor Profile
Type: High-Net-Worth Professional (Medical Consultant)
Objective: Passive income stream with minimal involvement
Investment Budget: £150,000 (cash available)
Timeline: Ready to invest within 60 days
The Property
Type: Mixed-use commercial unit
Location: West Midlands (high street)
Asset Breakdown:
Ground Floor: Leased to a national coffee chain (5-year FRI lease remaining)
Upper Floors: Two self-contained serviced apartments (fully managed by operator)
Deal Details
Metric | Value |
Purchase Price | £375,000 |
Investor Cash Contribution | £150,000 |
Gross Rental Income (annual) | £42,000 |
Net Rental Income (annual) | £27,000 |
Net Yield | 7.2% |
Strategy | Secure commercial tenant. Title split flats above from commercial unit. |
New GDV | £583,333 |
Management | Fully outsourced |
Financing | Commercial mortgage, 60% LTV |
Deal Source | Off-market via agent contact |
Why This Was a Strong Deal
Off-Market Discount – Property was sourced before being listed, saving £25K vs market value
Strong Tenant Covenant – National brand coffee chain on a 5-year FRI lease
Hands-Free Management – Local serviced accommodation operator manages upper floors
Diverse Income Streams – Rental income from both commercial and short-stay lets
Smart Structure – Purchased through Ltd company for tax efficiency
The Outcome
£3,500/month gross rent
~£2,250/month net income after mortgage & management
Zero involvement by investor after purchase
Asset projected to appreciate ~6% annually
Strong tenant and title split significantly improved the valuation of the property (New GDV).
Exit strategy: Refinance to release equity and repeat
Lessons & Insights
Mixed-use = Stability + Flexibility – Commercial on the ground floor, flexible upper floors create reliable and diversified income.
Tenant Strength Matters – Long-term leases with known brands make financing easier and boosts investor confidence.
Off-Market = Better Margins – Avoiding the open market secured the deal below RICS valuation, giving immediate equity.
Management is Key – Outsourcing short-stay lets made this a true passive investment.
How We Help Investors Like You
We specialise in sourcing off-market commercial deals tailored to busy professionals who want hands-off, high-yield investments. From identifying the opportunity to deal analysis, structuring, and introductions to trusted partners — we handle it all so you don’t have to.
Want access to deals like this?
Enquire about joining our Private Investor Network to discuss your investment goals.
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