Archive | August, 2010

It was Mot to be in Mottingham

27 Aug

When you see a 3 bed house in London for sale at a guide of £80k you know something’s wrong…but curiosity got the better of me and I had to go and take a look.

Prior research had shown the house had been on sale for £160k a year ago but it had not sold and had been taken off the market and was now going to auction…that is never a good sign.

Anyway, off I trotted and I was pleasantly surprised!

I knew it was an ex council house but the area and the estate looked well cared for and tidy:

The house was never going to win any design awards and the flat roof was not ideal – but it was OK

It came with a garage underneath…bonus!

It had 3 reasonable sized bedrooms. A bright orange lounge with a rather strange built up stage and feature wall (and carpet which looked like grass!!)

And a great sized kitchen/diner – although the wood cladding looked rather suspect and the homemade electrical extension looked dodgy:

But nothing that could not be sorted!

OR SO I THOUGHT!!!

Convinced it was a goer I sent the papers to my solicitor to check.

Well that was the glitch. It was a freehold house with a leasehold interest – but the leaseholder was missing – and you were NOT buying the lease!

In layman’s terms – when you buy a flat you buy the leasehold and then you pay ground rent and service charges to the freeholder. You owning the leasehold means you get to live in the property for the length of the lease. With me so far? Well, here you owned the freehold but somebody else owned the leasehold. That means somebody else should/ could be living in the house. This meant that effectively you were squatting in the house!!! And to cap it off – the garage which the house was built on was also leasehold – and owned by somebody else entirely!

Hmmmmm

My solicitor was rather perturbed by my choice:

“Sam, you have brought me some complicated properties – but this is the worst so far”

Unabated I decided to continue in my line of optimism

“Yes, I understand your concerns, but what can be done about it?” I enquired

“Well” she replied “The best thing would be to get an indemnity policy so that if the missing leaseholder turns up and stakes a claim in the property – you are now effectively squatting – then you would be covered for the market value of the property. After 10 years you could then make a claim for adverse possession”

I liked it – a solicitor who saw the problems, coughed and spluttered, and then came up with a viable solution!

“So that’s us sorted then – that’s what I’ll do!” I replied

“Oh there’s just one more thing Sam” She cautioned

“What’s that?”

“I doubt you’ll get lending on this and it will be difficult to sell – you might want to speak to some banks before you bid…”

“Ah” I replied “That’s a slight fly in the ointment”

I proceeded to call the bank, explain the situation and send them the documents to get their thoughts.  I was very stressed as it was 3.30pm and the auction was 11am the next day!

4.45pm my phone rings. It’s the bank manager

“We’ve had our specialist security sector look at this and they’re happy to lend as long as you take out the indemnity policy for full market value” He explained

“Yippeee!!!!!!!” I was chuffed!!

Off to auction I went…..

So given the guide was 80k, given the legal issues, given you will be squatting in the house, given most banks wouldn’t lend, given it was a nightmare property to try and even sell I figured I would get a bargain! I was planning to rent it for the next 10 years and at a rent of approx £950 pcm I was thinking it would be a good investment….

But so did everyone else….I didn’t even get to put up my hand as it sailed past my £120k limit and sold for £138k…

Ah well obviously I wasn’t cut out to be a squatter!!!!

How to survive basement living in London

23 Aug

Today I had a jam packed schedule as the auction season is starting to get into full swing after the summer lull.

I had spotted a few properties in London which I liked the look of – well – I liked the location, but I was rather disappointed to see they were all “lower ground floor”. I’ve never been a fan of “lower ground floor” or what I call basement living, but as the viewings were that afternoon I thought I may as well trundle along and stop being so closed minded – you never know there may be a diamond waiting to be mined out!

So here was a recently converted basement – the approach to the flat (past another two flats is a bit like a rabbit warren) and I was not sure how you would get furniture into this flat given the angled wall as you walk into the flat:

And the view out of the bedroom windows was uninspiring to say the least….

But failing that you could always look out of the lounge window (well if you had one) so we’ll just have to settle for the view from the kitchen window…Hmmm

So I’ve stuck to my guns – I’ll leave basement living for someone else!

Make sure you see your auction purchase BEFORE you buy!

20 Aug

Today was a reminder lesson as to why you need to see properties before you buy at auction.

So the deal was a 1 bed flat in Soham, Cambridgeshire with a guide of £20k. Research suggested from comparable properties that the flat had a retail of around £60k – plus a healthy rental in the region of £350-400pcm.

The auctioneer could not get me inside before auction and so I decided to do a drive by on the area.  I had looked on google street view before I left and was a bit concerned as it looked like some sort of building work was going on….however the picture in the catalogue looked OK – but it was not very clear:

But when I got there – it all became very clear (well not really) but look at all the windows which are boarded up!! But that was not the actual flat for sale – that was some part of the building that you were above and next to! Lord only knows what was happening behind these huge boards!

And what on earth is the neighbour doing that they don’t want you to see???

And I get the distinct impression that the other neighbours are running the communal garden area as some sort of car cemetary! (maybe I’m being mean – maybe this is a second hard car lot for www.webuyanycar.com)

After this great introduction I was obviously (not!) keen to see the flat! Here it is in all it’s external glory!

Frankly, I don’t give a damn how much “potential” it may have inside – I am not buying it – not even at £20k!

The Boat Park Joint Venture…That Never Set Sail :)

16 Aug

Most people know I will try my hand at most things in property…but buying a boat park was a new one on me!

I saw my friend in London – he was very excited…

“I have just sent you an email just 2 hours ago – it’s about a great business we should do together” His eyes were glistening – he was so excited.

That made me excited.

“Wow sounds great what is it?” I asked

“A boat park in Weymouth!!” He exclaimed

I was momentarily stunned – of all the things I thought he was going to say a boat park in Weymouth was not one of them!

I got home and looked through the details he had emailed. It looked fab – it also came with part of the beach.

But then I started doing the sums…and I realised this was more of a business venture rather than a property deal.

I called him to discuss…

“So this boat park in Weymouth – have you actually been to see it”

“Yes it was lovely….” and he trailed off

“The thing is they are developing a big marina by the port so I don’t think this boat park will work” He sounded disappointed

“Well, look” I said “I don’t really have the time to run a boat park business so shall we just *park* this one for now” (hehehehehe pun intended

Today I have moved to a new "home" www.WhatSamSawToday.com

14 Aug

Today I have moved my blog to www.WhatSamsawToday.com so follow my Confessions of a Property Developer here!

http://www.whatsamsawtoday.com/