PROJECT STARTED JUNE 2019
The following case study is one of the most recent property deals that I have completed. I am going to try and break down the deal as much as possible, explain how it came about, what I did and also present the results. I hope you find it interesting!
I was presented with this opportunity from a property sourcer that I know well - Ross Baillie. He had sourced the property from an online property auction and secured the deal before the property had actually gone to auction. The property was in quite a good condition but would require a small amount of refurbishment.
I paid Ross £1,000 for his services in finding and facilitating this deal. I also paid £1,000 to the property auction as that was their fee.
The home report of this property indicated that the value was £59,000 but because it was a repossession, I was able to secure it for £38,000 in June 2018. I did not use finance for this deal, I bought the property outright with cash. My solicitor's fees were £1,000.
Once I had secured the property, I had a damp specialist inspect the property due to signs of damp. He concluded that the damp was only some surface mould and was not a large problem. A deep clean and a re-paint of the whole property was undertaken.
More renovations were required and included partial rewiring, painting the whole property, new doors, fixing some flooring, new carpets and small repairs in the bathroom. The total refurb cost was around £4,000.
I bought this property in a limited company as it is now more beneficial to me to buy through a limited company due to my financial situation and recent tax changes.
I rented the property to my first tenant in October 2018, meaning from purchase until renting was around 5 months. I think that I really could have cut down this time if I had been more on top of the project. I think 2-3 months is realistic and what most investors should aim for.
In April 2019, I had the property revalued and it was now valued at £70,000. I remortgaged the property with a buy to let mortgage. This meant that the lender was willing to lend 75% loan to value (LTV) and I could receive 75% of the new £70,000 valuation. Therefore, I received £52,500 back - this covered all of my initial investment and more.
This really was a great deal and not every deal will work out as well as this one has. However, this is proof that great deals are out there and that investing in property can provide great returns.
Below I have provided all of the figures for the deal. Again, I hope this has been useful to you! Please do not hesitate to contact me should you wish to discuss anything regarding property investing or property finance.