Tag Archives: bargain property

Today I had a lucky escape – read the legals!

30 Jul

Today I was again reminded of the importance  of doing your homework. I have been umming and arrhing about what to buy at auction and having viewed loads of properties in London and checking the values I finally decided I didn’t like the London flats that much and decided on a cheapie flat in Shrewsbury.

It wasn’t really an area I knew much about, but the figures made sense – guide of 33k against an end value of c. 60k and a rent of £300-325pcm meaning double digit yields.  I decided at the last minute to go to auction and buy it – but just before I left I thought I better take a quick look through the legals. All looked in order apart from a paragraph in the lease which I didn’t fully understand…not wanting to take a chance I emailed it to my solicitors to get them to explain it to me.

The auction was about to start so I raced to the train station. 5 mins into my train journey my solicitor called and told me what the paragraph meant “If you buy that flat you have to live in it – you can’t rent it out”. Shit – I was about to buy it for the double digit yield! Not only would it impact me, but it would also have an impact on the resale as I thought it may appeal to another investor when the time came to sell – but this would cut out a huge part of the market.

Bugger I was now on the train but with nothing to buy…and I didn’t trust myself to go to auction and not buy anything! Then I remembered there was a viewing for a property that I liked in an auction next week – so I jumped off the train at the next station, raced home got the car and made it into North London just in time to see a lovely flat – now on my hit list!

Having just checked the results for the flat in Shrewsbury it sold for just £32k…great price as long as the buyer intends to live there!

The Missed Opportunity In East Ham

26 Jul

Today I saw a property in East Ham – it was a ground floor purpose built flat with about 74 years left on the lease and a guide of 100-110k. I thought the end value was about 140-150k so there was something in it.

I went along to view and it the block was well maintained externally and internally:

The inside of the flat was a good size – there was some damp in the bedrooms, but that could be sorted

The kitchen was dated:

The bathroom could be sorted for minimal cost

The lounge was a nice size and just needed cosmetics

I had it down on my list to bid for…

Then I got busy and had another property I was trying to bid for…so I didn’t attend the auction as I decided with it being a big auction house it would go well over guide anyway. So I chose to go for the other project…

How WRONG was I

It sold for 99k! DOH!!!!

My Kettering Quandry!

23 Jul

Today I was driving back from North to South and while on the A14 remembered there was a place going to auction in Kettering. As it was just a quick diversion I thought I would do a drive by. 

The property was a 2 bed terrace which was listed as a sale by mortgagees NOT in possession. That means they have the power of sale (as the person hasn’t paid the mortgage) but they have not actually evicted the owner or changed the locks…which means they don’t know if the property is occupied or not! Importantly, it also means there will be NO internal viewings as they do not have access.

It was a street close to town and looked in good condition.

I decided that I should check out the back. In retrospect, me on my own at 8 o’ clock at night going down a back alley and climbing over the garden wall may not have been the best idea….I managed to get some pics through the window of the kitchen. It looked pretty new…

Then I was looking through the dining room indow and suddenly I saw what appeared to be a sleeping bag S***!  Was the property lived in??!!

I made a sharp exit – bearing in mind I didn’t know if the property was occupied and I was currently in the back yard.

I still needed to know if the property was occupied so I knocked on the neighbours door and got chatting. She was lovely and invited me in to see the layout of her property. She was very helpful and made my mind up that I would bid for the property…

But I got outbid 😦

The Brixton Basement with a “vanishing” second bedroom

20 Jul

When you see a 2 bed in Brixton high street with a guide of £100k you know something’s wrong – or that they really are just keen to get you bidding…but it didn’t sell! With the reserve at £100k my curiosity was piqued and I scheduled in to see it. I knew it was under commercial premises – but it was central and so I figured I could make it work.

When I arrived I was pleased to see the residential access had a separate access from the high street to the flats (there were 3 of them in total above/ below the commercial). Then the fun began – the first room you walked into (on the ground floor) was a thin long narrow bedroom which was on the borderline of “decent” housing standards. There was damp damage but not too hard to treat.

You then walked downstairs to a quite light basement which was a lounge with kitchen and bathroom off.  All in good condition…

But then i was looking for the second bedroom!

The deeds had shown the property had 2 bedrooms but there was only 1 in this property. I went hunting and found it…behind a boarded up wall. I climbed out of the window so that I could look through the outside of the building and see what had happened…the shop had “stolen” the second bedroom and converted their back part into a flat which the bedroom was now a part of!!!!

I have circled the window in question here – i couldn’t get too close as there were people in the “stolen” bedroom!

I spoke to my solicitor to see what we could do – to be honest, I was willing to accept the situation and buy it as a one bedroom as the price was still right for the property…until it turned out – it had no planning, no building regs and no access! Oh and a freeholder who was in breach of contract!

Even if this all still sounds bad – the fact is you price in risk and you offer at a price which covers yourself. I negotiated with my solicitor what we felt the legal issues would cost to resolve – but in the end someone else decided that they would take more risk than me and offered more money!