Hotel/Flat Conversion

[good96]

Over the last couple of years (well say 15-20) I’ve gained an interest in property developing.
We currently own two rental properties and have done so for a while. One is now MF and one will be in the coming years.
I’ve recently been looking online and a hotel ( 30 bedrooms) has been listed for sale. I’ve done my research - the area seems swamped by other hotels (it’s not blackpool) and would benefit from more ‘affordable housing’ - I would be interested in buying the hotel and subject to PP / Change of Use look to convert this into flats. I’ve had a look at the floor plans without an architect and I can visualise around 15 flats in the block - this is including the communal areas as well as the kitchen and the private space being converted. Just wanted to know if anyone else has done anything similar and if it really is actually worth it? The asking price is currently £400k which is a steal for the size of the property - the owner needs to sell quickly. I’m prepared to pay the asking price which I will mortgage at first then sell the two rental properties which will inject cash into the project too. My total budget for purchasing and conversion works would be £850k with a view to rent the flats out or sell them individually.
We are both less than 5 years from retirement - (taking early retirement) and although initially planned to sell the two rental homes when we retire, I see this as a better form of income and investment?
Be keen to get ideas from others that have done this..

Sounds exciting but you're going to need every penny of that 400 to achieve this in the current market. Don't over-pay. I'd bid hard, lower. Who else is going to take it on? How're you at budgeting & planning?

I can see a job like that costing 6 -700

There's no way you are going to convert into 15 flats for 450k😢

Have you looked into local planning policy to see what the approach to losing hotel accommodation is? Many areas see such facilities as beneficial to the area - bringing in tourists and their money, local employment etc.
Additionally I assume you refer to the flats as affordable in that they are cheaper than houses, rather than affordable in planning terms (sale price/rent set at a lower rate etc). Only the latter would be seen as a benefit, unless the local policy specifically seeks the provision of flats.
I would advise approaching the local council for some pre-application advice to see what the likely outcome of a planning application would be prior to buying the property.

UPDATE -
After my initial thoughts of considering to convert the building into flats and having viewed the property, that project would not be worthwhile. Extensive building work required (structural issues) so can see why it is so cheap!
That said though. I haven’t lost my appetite or thought process of this type of project and I’ve had an offer accepted on a block of flats (10 in the block) already tenanted for £500k. No work to do the properties straight away (only as and when the tenants vacate) and I’ll be getting a pre tax income of £78k per year for these rentals. Mortgaging the flats for now, but will be selling the 2 rental properties upon completion to pay the mortgage off in its entirety as well as hopefully put some money into savings.

Might just be able to retire even earlier now!

2 rental properties that I’ve owned for a number of years*