A few weeks back I had a call to come and view a freehold block of 14 properties, in a prime road in Ealing called Castlebar. The deal was through an agent but was off market. We met the owner who was an old Irish gentleman who had clearly made some money in his time.
The property was built well and it wasn’t heaped out on, meaning he didn’t try and reduce the square footage to the bare minimum to try and squeeze more units in. The properties were large, light and airy, many came with balconies.
The seller was old school and we were eager to do the deal there and then, one of the reasons for this is we had been offered this property by another agent for £6m. This agent hadn’t even seen the property and was coming to see the property after us so they could agree the deal for a lot less and then flip it back on to us. Hence we were keen to close the deal there and then before they came. However being an old boy he refused to shake hands, and commit there and then knowing there was a viewing later on.
As it transpired the vendor took an instant dislike to the other party who came across very egotistical and inquisitive; he simply didn’t want to deal with them. We were consequently able to secure the contract on this and then had it pulled. However whilst we agreed the deal someone known to us contacted us and we got talking; apparently they wanted to purchase the property and had the offer agreed for the same price we had but never received the contract. They were not prepared to let the deal go.
Two things can happen, one is we compete and the highest bidder wins, or more sensibly we agree to work together and purchase the property at the agreed price. We went with the sensible option and agreed the latter, so we purchased the block through the fund we have launched and are currently selling the units off individually with a discount of 15% off a conservative market price.
The area of Ealing is going up heavily, there is major regeneration going on in this location, and it is rare to find properties which have been so well made and designed with a discount of this level. Properties are selling fast at current market values and therefore there exists no reason to give any discounts.
However we are not looking for the First Time buyer or the novice investor, we want someone who can execute the deal quickly and will not ask silly questions along the way. We will keep the conditions of sale strict, a deposit will be taken when the price has been agreed, exchange will happen within 7 days and completion within 28 days. There is no reason why all sales cannot be done in this way, this ensures there is some level of seriousness and security for both sides. Auctions operate in this manner and also new build properties as well. However what happens often is files are kept on a lawyer’s desk and they do not move in a hurry.
We are also looking to close a small auction deal today at the Eddisions Property auction, the property is in Plaistow and is not an area we focus on. What got my attention was this was primarily a commercial auction and this lot being a residential seemed ill placed.
When this happens you can sometimes grab a deal. The property is a double fronted house, Which is at the end of a residential road. The garden has a peculiar triangle shape but this is of little concern to us, it would be of concern to an end user. Our aim is to pick this little lot up at a maximum price of £275k and get planning permission to convert it into four flats. The end value would be expected at around £400k, another angle would be to get planning and simply resell.
The property has been guided at £150k to £160k, but this has little to do with the reserve price. Often this serves as a carrot to bring many people in so the price can be hiked up way above. It is not uncommon for prices to go double of the guide prices and even higher.
The deal was done almost accidentally, we had someone enquiring what they could do with£60-70k, we said not very much on your own, but you can join a syndicate. However this deal popped up and last minute our client decided to go for it.
The property is tenanted until November therefore it must be purchased as a BTL investment. However there are only a few lenders who will lend on this to a First time buyer, which is the status of this client. There is always bridging to fall back on. We will know in a few hours what the result is. The fact it is tenanted is a good thing because it keeps most investors away, viewings become difficult if not impossible and many are not happy to take the risk of purchasing the property blind, which we are.
We have also had our architect give us his opinion on the possibility of conversion, he has confirmed there are no issues. So it could be a very lucrative deal for this first time buyer.
You can never get too comfortable regarding raising finances for an auction property. From the drop of the hammer the clock starts ticking and you have 28 days to come up with the rest of the money. If you fail to do so you will have a further two weeks and then you forfeit the deposit. In this scenario we have three ways of getting funds, one is the conventional route of a mortgage, the second is through bridging – fast but expensive, and the third is through another investor. For this reason we are confident of executing this through to completion; come rain or shine.
If you’re interested in purchasing BTL investments in Ealing with a minimum 15% discount get in touch with our office now.
5 Bedroom Semi Detached House
Streatfield Road, Harrow, HA3 9BL
- Within catchment area of many desirable schools
- Rarely available property on the road
- Chain Free
- Vacant possession
- Spacious Garage
- Extended Property
Call us now to reserve!
Sow & Reap
A Property Investment Company
!Tips of the week.
To generate good profits by flipping properties you need to be able to pick the right property, in the right location, at the right price. And all this requires the right LOCAL knowledge.
Always remember to see an investment from the markets’ viewpoint and not your own, don’t let your emotions carry you away!