Welcome to this week’s deal of the week.
Graham Porter has come up with this week’s deal of the week. I have managed to turn what were 2 properties presented on Tuesday’s Webinar in to the possible purchase of a whole street containing 100 properties.
Situation: Investor has brought 2 properties and used a council grant to refurbish both properties. Investor has run out of money and is looking to sell properties on. The street is 95% boarded up and is the worst street in the area. Vendor has turned down offer of 19K for both the properties. Area is a selective licensing area.
Properties: 2 x 2 bed mid terrace houses
Asking Price £13,000
Needs £11,000 refurb
Asking price: £15,000
Needs £14,000 refurb
Each property has a £15,000 interest free loan again them which the council granted them to refurbish.
Resale Values: 25K once refurbished.
We would have to buy each house for 10K, spend 10K on the refurbs and the outstanding 15k loans on the houses mean the costs are 35k. The house would owe you 10K. This mean both houses are not profitable.
Rental Values: LHA rate £368 pcm / 85pw
If we could buy all 100 houses on the whole street with an option and the refurb them all,put gates at the end of each street so it becomes a gated community we could push the property values up to 40-50k thus creating our own street price.
Graham to look into CPO with council and ask council for an increase loan/grant value from 15k to 20K
We could apply for bank funding of £500,000 to complete the project and get the council onside to help with the refurb costs.
Potential Profits: 4 Million
This is just one of the many deals I have presented to me each week.
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