Archive | January, 2011

How To Buy A Property For £13,000

28 Jan

Today I was scanning through the auction catalogues and I couldn’t help but notice the price on a property that was going for sale  next week at just £13,000!

So I bet you’re wondering where on earth can you buy a 3 bedroom property for just £13,000?  OK – let me tell you now – it is NOT in Bulgaria – it is in the UK!!

A local estate agent says “situated in a prominent position close to all local amenities including shops, schools and with excellent transport links closeby”

And it wasn’t in Merthyr Tydfil or anywhere remotely near the Welsh Valleys or in some remote part of Scotland.

No it was in Liverpool – our very own Capital of Culture!

Now I know many years ago that you could buy whole streets in Liverpool for just a few pounds, and while house prices may have fallen – they have yet to reach such crashing lows that you buy a house and get change from a tenner.

So what’s the catch with this £13,000 house? OK so it needs major refurbishment – but that has to be expected for an auction property. It seems to rent for a good predicted yield – typical rents in the area are circa £400 per month. Properties seem to resell there as well – a property in that street has just sold for £45,000.

So, I’m OK with all of that – my concern is the neighbour….because sadly the house next door is not up for sale!

The Surrey Property Development – But Does It Have The X Factor?

25 Jan

Today I was travelling in the Surrey area when suddenly a burnt out bungalow caught my eye.  It was a generous sized plot in a good part of town. And…low and behold…it was For Sale!

I could not resist – I pulled over and jumped out of the car ready to explore.  The bungalow had seen better days (many, many years ago) and had been ravaged by fire…

Now the sign may put many people off….


So here is the bungalow from the outside – as you can see it needs some work!

The property had been severely fire damaged:

And as you can see the property had been left for a long time – look at the undergrowth growing through the structure of the building:

The building was also supported by some make shift stilts!

Now at this point you may be wondering what on earth this fire damaged bungalow has got going for it!

So let me show you the view at the bottom of the garden and which the property directly fronts onto:

Yes – what a beautiful plot indeed!

So obviously my mind went into overdrive – I could imagine beautiful glass backed properties overlooking the River Thames, wrap around balconies, direct river moorings…ooh you could have fun.

And then I sat down to do the sums.

Now with such a building project the foundations are going to be very deep indeed – and that comes with a huge cost. I had worked out that we needed to get two detached 4 bed properties on the plot to make it worthwhile.

The plot had an asking price in excess of £500k, not such a bad price…but then I started to add up all the costs…and before you know it I realised I needed to raise a cool £1 million pounds of hard cash. I know – it’s a lot of money – but to be truthful there is still money in this project – perhaps a profit of £200,000 when the project is complete.  That would still give a return of 20% which is pretty respectable in development terms – especially given the project would take less than 1 year.

But, while I liked the plot and I had ideas of what could be done. I just didn’t get “that” feeling. I don’t know how to explain it – it ticks all the boxes – great location, desirable USP, good profit and return…but I still felt a “but”. And all I can tell you was that it wasn’t for me –  this project just didn’t do it for me.

And that’s what property development is all about – it’s not always just about the numbers and the profit – you have to enjoy what you do and you have to have complete belief in it. And this, for me, just isn’t “it”.

Helping The Homeless – How Far Would You Go As A Landlord?

19 Jan

Today I’m going to share a story with you – it’s called David’s Story. David is a real individual.  But I do not believe his case is individual – I believe this sad story happens many times over in our modern society.

This handwritten letter was received by David:

Dear Gorgeous Homes,

Due to the fact that I could not afford the rent shortfall each month and being in and out of the hospital most of the year I had no choice but to become homeless.

I have nowhere to go so could not take my belongings with me. If you can use them for another tenant then please do.  Please keep my rent deposit to pay off some of what I owe.

I am sorry for how things have turned out, I am very ill and my life is a complete mess.

If you need to contact me, you have my number, but you may have to leave a message as I will be in hospital.

Please tell Sam I am thankful for all her help.

With sorrow,


So let’s go back to the start – that is: June 2009 when David walked into the letting agency I own. He is homeless and an alcoholic – but he is trying to get clean.  He has been chucked out of the Salvation Army and he has nowhere to go. He begs me to help him.  He is 32 years old – just a couple of years younger than me – the same age as my younger brother. He is destitute and desperate.

I feel terrible – I actually have a vacant property and I could help him…

I call the council and explain the situation, they talk with David over the telephone and he goes down to see them. An hour later they call me and ask if I would be willing to re-house him as they have assessed his circumstances. He is homeless, they have nowhere to put him and he will have to sleep on the streets unless I take him in. They agree they will pay his rent in full and pay a deposit upfront.  They agree that all future rent payments will be made direct to me as he is vulnerable. They fax confirmation that this will all be paid within a matter of days. I move him in that day.

David assures me he will not let me down. He is grateful for this opportunity to try and rebuild his life and he will make a real go of it.

The first month’s rent and deposit was received from the council via BACS within a matter of days.  But the next month – nothing.  I call the council and ask what’s happening.  But nobody knows anything of what’s been agreed – even when I produce the fax.  I try to get hold of the original member of staff who had agreed everything with me – but to no avail. I am passed from pillar to post.

Some 10 weeks later and I receive a payment into my bank account and a breakdown from the council.  I check the amounts and see that the rent is over £100 short per month. I call the council and query this shortfall.  “That’s all David’s entitled to. He is only entitled to a single room rate”. But, I reply “This is a 2 bedroom house and you agreed that you would pay his rent – how can you go back on this?”.

Weeks go by and I try calling different people in the council, trying to escalate the query – but I get nowhere. They now state that David has to make up the difference.  “But, he can’t afford it!” I tell them “and you told me you would pay the rent in full for him because of his circumstances”. It falls on deaf ears.  The council are no longer interested – David not paying rent is now my problem, not theirs.

6 months in and the council have now reduced the rent even further – so much so that I am now more or less paying for David to live in my property.  I explain to him gently that the council are not paying the rent they said they would and, while I would love to continue to help him, I also have bills and a mortgage to pay.  At this stage David is in such heavy rent arrears I knew there was no way it was going to be paid.  He tells me he will go to the council to try and sort it.

Then I hear nothing. I try to call him but his phone is switched off. I try calling round but he is never in. All letters go unanswered.

I don’t know what to do. The rental arrears are building at an alarming rate and nobody at the council can help – added to that I can’t even get hold of David.

Then out of the blue some weeks later, he calls me:

“Sam” he says “I am so sorry, I had my phone nicked and I’ve been in and out of hospital that’s why you couldn’t get hold of me. I promise you I will sort this. I’ve been to the council; I’m trying to sort it.  I don’t know what to do, they said they would pay the rent and now they’re saying they won’t pay it. I don’t know what’s happened. I really am sorry. I want to stay and I’m trying to get myself together”

He sounds so desperate. And, I too, am desperate. I want to give him a second chance. I don’t blame him. It is the council at fault. He is just trying to get on with his life.

“Right” I say “I have a plan. If you want to give this a proper go – here’s what I’ll do. I will forget all the rent arrears up till now and reduce the rent on the condition that you start a payment plan for the future contributions towards the rent”

The rent arrears at that point totalled several thousand.

“That would be great – yes, I’ll do it – I’ll pay every week” David replies

We agree that I will send him some bank paying in slips and he will start the next week. And so he does. In the meantime I contact DWP for him to see if he can get any assistance for top ups due to his circumstances. I inform David and he tells me will go and see them.

Money goes in every week. For four weeks. Then it stops. I call him. He tells me he has received the water rates bill and it was £235 and he had to pay it otherwise he would have no water. He was scared of getting cut off. I explain to him that he could’ve paid the water rates monthly, not all in one go!

The next few months’ communication is sporadic and payments stop altogether. He is in and out of hospital all the time. He kept apologising for letting me down.

I don’t know what the final tipping point was or why he felt he suddenly had to leave.  But I know I am sad for David.  I am sad the system let him down so badly. I am sad that I could not afford to help him more. He was clearly ill and needed help.   


David’s story in photos:

This used to be a clean and tidy house:

Furniture polish – how ironic!!!

David never had a proper bed – I offered him one, but he said he was happy with his “bed”:

Inside the kitchen, cupboards have no food – just small carriers bags tied neatly with bagged domestic rubbish.

There are many discarded beer cans and cigarette butts…

And so there I am today with my scruffs on and some heavy duty gloves and I am ready to do business. I am going to get this property back in shape!

So I decide that I may as well start clearing all the rubbish (there was a 2 week wait for the council’s bulky rubbish collection and the cleaner had quoted £650!) here is my first trip to the skip – I had another 7 car loads like this:

So there I am clearing up and moving the beer cans into the rubbish. And I’m surprised because some of them feel half full – “Gosh that’s odd” I think to myself, “Given he was an alcoholic, I wouldn’t have thought he would leave any beer in a can”. And so I grab 4 cans and turn them upside down in the kitchen sink to drain – while I went back to the other room to collect more…

I was just turning back with more cans in hand when I got closer to the kitchen sink “What the hell is that smell?”


In that moment I realise that the half full beer cans are actually full with human urine…and the bottles all over the house…they were also full of urine!  They are everywhere…

And then in the bedroom hidden underneath a draped sheet (circled above)- I find this orderly collection: Words Fail Me.

Is Rightmove enough to sell your property – or do Estate Agents have magical powers??

15 Jan

Today I have been trying to work out the pros and cons of selling a property myself vs. using a High Street estate agent. Now estate agents get a lot of slack, but I have to be honest, I have had many good experiences with selling my properties via High Street estate agents.

The reason I am in this quandary is primarily down to cost savings. Last time I sold a flat with a London agent it cost me the best part of £4,000. Now, I don’t mind this as they did sell the flat within 2 weeks, the sale completed with the original buyer and there was only marginal hassle (the buyer’s bank made me own the flat for 6 months before they would release funds – Oh and I ended up with squatters – but that’s a different story). However, in my opinion, I only got the price I wanted because I told the negotiator exactly what to tell the buyer and why the flat was worth 5k more than what his original offer was…on the other hand I can’t help but wonder whether by virtue of being an estate agent you can ask for that bit more? So the question is – are estate agents worth the money you pay them?

I have to clarify at this point when I am talking about selling the flat myself, I am not talking about erecting a home made ‘For Sale’ board and only advertising on free ‘For Sale By Owner’ sites (although I understand Tepilo is making great headway in this sector). No, I am talking about the online estate agencies such as Housenetwork and Hatched which allow you to advertise on Rightmove, Zoopla, Primelocation et al – the key property portals which people use to find properties for sale.

What I found with a lot of these online estate agencies is that you pay part/ all of your fees upfront and that is how most of the cost savings are made. Like a High Street estate agent, these online agencies still send a photographer out to get professional photos, do floor plans, a virtual tour and write the property description. They still manage all the communication with viewers and potential buyers, communicate with you about any offers made and should you accept an offer they organise all the paperwork and liaise with all the parties through to completion. As far as I could see the only real difference was that I would be doing the viewings.  But still the question remained…is it really that simple?!

So let’s focus on the cost savings – for the flat I want to sell, we’re talking about £3,000 clear. Yes, £3,000 real money that I could save by using an online estate agency.  It’s a lot of money. Money that could buy me a pretty nice holiday….

But – my fears….

– Will an online estate agent sell my property as well as a High Street estate agent – especially since they’ve already been paid? Where is the motivation to sell and achieve results once you’ve had your dosh?

– Given I am so busy travelling the country looking at potential opportunities do I have time to re-schedule my diary at a moment’s notice to show people the property?

– I live a 90 mile round trip from the property – what happens when viewers change times, their minds, don’t turn up – how will that impact upon my schedule?

– How many potential leads will I miss from the local knowledge/ presence/ leads that a High Street estate agent has?

– Is it a case of you pay for what you get – i.e. the less you pay, the less you get?

So I scoured the net for reviews of the online estate agents I was thinking of using and then I called the agents myself. Hatched came out on top – they had great reviews, 100% of users would recommend them, I have seen some of their boards around and when I called them they were chatty and personable. They also had good back-end systems in place which made me feel they were organised and my property would not get lost in the system.

I tried to convince myself that I could/ would sell my property better than an estate agent – after all I own the property and know more about it. Plus, I stand to make more than them so surely I am more motivated to make a sale…

But I was torn – my previous experience with the High Street estate agent has been so good…who’s to say that just going on the major property portals such as Rightmove is enough to sell a property? Maybe estate agents have some sort of additional magical way of selling a property??

Using an online estate agent feels a bit risky – but more because of the fear of the unknown and what I may be missing rather than anything I can properly articulate.  I know we’re talking about saving £3,000 – but if an online agent doesn’t sell the property then I have nothing to save as they didn’t sell it in the first place!  That, to me, makes it a false economy.

And so torn between positive previous experiences with High Street estate agents, fear of the unknown of using an online estate agent and concerned by my ever bulging diary getting deluged with viewers I opted for the traditional High Street estate agent.

Why? I hear you cry! Well, for now, I have decided my job is to focus on buying properties and finding opportunities rather than also trying to sell the properties.  Yes, I could make a great cost saving – but at what “actual” cost? If me trying to juggle viewings with potential buyers means that I end up missing a viewing on an auction property I could end up with a missed opportunity that costs me more than the £3,000 I stand to save from selling the property myself.

Time will tell if I have made the right decision…but for now it’s in the High Street estate agents’ hands – and I have to say, for now, I like it that way 🙂


Since this post, I later pitted the wits of an online estate agent Vs. a high street estate agent, you can read about the story here and here and then the crazy story which later happened here and then the ending here.

My East Dulwich Bargain Flat

13 Jan

Today I bought a super little 1 bed flat in East Dulwich. Yes…this time I bought!

It’s an ex-council flat – but it’s from the 1920’s so (in my opinion) it has more kerb appeal than the usual council suspects:

It’s located on a wide tree lined avenue a few minutes from the park, with a bus stop outside which takes just 37 minutes to Oxford Circus. When the East London line goes in next year it will be even quicker to get into town.

The communal hallways are rather utilitarian – but at least they are clean and the service charges are reasonable at £700 per year. The gardens are also well maintained, there is a bbq area and it has a nice feeling about it.

Inside, the flat has a good flow – there is a central hallway with all of the rooms coming off the main corridor.

There is a good sized double bedroom with a built in wardrobe:

There is double glazing throughout the flat which looks to have been installed about 5 years ago:

The lounge is a good size with 2 windows and a fireplace (although the retro look may not be to everyone’s taste! – and the cobwebs and dust everywhere just add to the good feeling 🙂

The bath and toilet are separate rooms and are full of dirt, dust and cobwebs…but I love them just the same!!!

The kitchen is a good size for a 1 bed and can even fit a dining table in…(OK – maybe not this dining table – but you get a sense of room proportions!)

In my first viewing I fell in love! I loved the area and I loved the flat…but then I reckoned so did all the other people who viewed – there was a good number of people and I reckoned I didn’t have a chance of buying it at a good price. But after the most delicious home made pancakes, maple syrup and bacon at the local cafe my mind was made up – I had to bid!

And so because I had fallen for the area so much I decided that I would bid more and would take a lower profit – hell I may even just keep it and rent it.

I was so taken with the flat I made a pre-auction bid- the guide was £125k and so I offered £136,337. (Yes, a rather random number but one which I thought may make it look as though I had done some very clever mathematics!)

And so my offer was refused…I wasn’t surprised but at least I had tried

I was pretty sure I would not get the flat at the price I wanted and so I opted to do a telephone bid…but by this time had now decided I would bid up to £141,500k. Why the increase? I had done more research on the area and decided that it had such a good buzz around it I just had to pay more as I wanted the flat so badly.

The day of the auction arrives…I am SOOOO nervous. The guy who calls me for the telephone bid is the same guy I have dealt with who refused my pre-auction bid.

Bidding starts SO slow. Nobody seems to want to kick it off…at the end of the phone it’s difficult to tell the mood of the room – was it that people were holding back or was it that people were not interested – that they hadn’t come to the auction for this flat!

Eventually bidding starts at £115k and gradually creeps up to 120k where it seems to stick and the auctioneer is prompting me to bid if I want to buy it. Now, I prefer to wait until close to the end to bid, but I am worried I may lose my chance – and at this price is it really possible it is going to sell?!

And so I bid £121k…and then someone else bids and someone else and then it’s back to me and I get a bid in at £125k and then nobody else is bidding against me….and my heart is in my mouth. I am just standing still, desperately trying to listen down the phone as to what is happening in this London auction room….is this really happening? Am I really going to buy this at £125k….

And then the auctioneer says “Going Once” and I just stand there on the end of the phone, my heart thumping wildly desperately hoping that nobody else bids…”Going Twice” And I am going to have kittens…my pulse is racing and I am so close to getting this at the most unbelievably cheap price and this is not possibly going to happen…

“Going Third and Final Time – Sold to the telephone bidder”

And there I stood – the proud new owner of the most remarkable bargain in East Dulwich.  I cannot believe it….I was going to pay £141,500 for this flat I have just bought for £125k!