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The story of 10 property investment deals in 10 weeks, when Glenn first got started – Deal 2

Hodge Lea Lane. £30k below market value £1k refurbishment

£200 pm positive cash flow

The first investment property I ever bought to do up and sell was number ** Hodge Lea Lane. The sweet little old lady and gentleman were off to the coast to live in a mobile home and very relieved they seemed to be when they left.  Wow, over the next few weeks we must have had £100,000 worth of bills come through the door.  No wonder they didn’t leave a forwarding address!  During the £9k refurbishment, one of my lads asked me to knock on number ** a similar property opposite.

 “We want to move in around a year and do not want the hassle of estate agents” the gentleman said.  “We think the property is worth around £130k. What would you pay for it?” I offered approx £115,000 and requested 4 weeks notice to completion and the gentleman took my card.  It is important to put a sign up while you are doing refurbishments that says “purchased cash within 3 weeks cash paid for similar properties.

We purchased this property, our first flip deal in October 2004 for £106K.  We spent £9K on a refurb and sold it for £143K.  Total profit after all other costs was £15K.  Not bad for 12 weeks work.

Meanwhile back to the property opposite, 9 months later he called me to ask me for a firm offer as he was ready to go in 4 weeks.  The property was immaculate, Boiler and double glazing were under 2 years old, decoration was not to everyone’s taste (bold stripy wallpaper), but immaculate.  I noticed there were no radiators in the upstairs bedrooms so I offered £114,500.  4 weeks later on ……………..they handed me the keys and we completed.  My mortgage of 85% of £114,500 = £97,325 and I borrowed £20,000 from a friend unsecured at 2% per month to pay the deposit (cheers Steve).  As the couple had been on holiday for 2 weeks they had very generously given me the key so we could paint the property.  Full magnolia job over all wallpaper, some cream tile paint in the kitchen and all woodwork including all doors satin wood.  Some new laminate floor look cushion floor in the kitchen total cost just under £1000.  1 Week later a middle aged lady passed the credit checks with flying colours and she moved in with her brother and his son paying £695 per month.  She had an elderly dog and wanted to check I was happy for her to keep it or she would have to have it put down.  Emotional blackmail was met with the answer as long as you are happy with the current carpets as I had intended to change them. Good job she likes dark blue.

4 weeks later

We remortgaged the property to 85% of £145,000 = £123,250

So the first mortgage and deposit with interest wasrepaid leaving just over £8k total costs were around £4000, so we was left with £20k of equity and £3k cash.  Mortgage was £492 per month and rental income was £695 pm with under 2 weeks void.  The new tenants main concern was that it was a long term let and I assured them as long as payments were always on time their 6 month AST would always be renewed.  They stayed there until 2009.

This was in July 2005 current value is £145k current mortgage payment is £398.00 per month.  Value peaked at £165K in 2007.

Property is currently rented at £795 per month and has only had 5 weeks void in 4 years.

If you would like to learn how to buy investment property below market value and would like to invest in some property training then call Darren on 01908 423700.  We run many property investing courses to suit every level of property investor.

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