Tag Archives: BMV

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!

Advertisements

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!!!!

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!