Following a Refurb Project from Beginning to End
Par t 1:
The deal
ong-time YPN friend and veteran investor Jesse Fossey Taylor of ForTheLandlords.com is opening up his purchase and refurb process to share a few of his projects as they happen with readers! We’re going to follow these projects from beginning to end. Each one is current and live, so each report will span three months, which means you get the as-it-happens, warts-and-all story of a full refurbishment. Over to Jesse … In this first instalment, I’ll take you through the BEFORE story of a house I bought last December.
The property 189 Canklow This is a three-bed, red brick and tile semidetached house in Rotherham, sourced via an estate agent. It was a corporate sale – a repossession being sold by the mortgagor. When it first came on the market, we (ie my company) were one of the first to view but there was a hot bidding war and the house was snapped up quickly at a much higher price than we offered. However, the sale fell through because the buyer wasn’t proceeding fast enough, and the corporate seller got fed up with waiting. The agent, with whom we have a great relationship, came back to us as he knew we’d be able to get it all done and dusted quickly. I find this happens quite a lot with repossessions – we rarely buy straight away, but often pick them up after a higher bidder fails to go through with the purchase. Purchase price:
£51,000
Offer agreed with previous buyer:
ca £60,000
Date of completion:
19/12/19
I’d describe this house as a standard, utility-style property, probably post-WW2 construction, the type that you see up and down the country. However, the property is in poor condition inside and out, nothing serious but in need of a full renovation. £51,000 is a really good price, as we know people would have been prepared to pay £60,000-£65,000 for it even in this poor condition.
The plan Our plan for the property is to refurbish to add value then rent it out to a working family. I anticipate the rent being in the region of £525-£575 pm. We’ll do what I call a “bog standard strip out and refit”, which means everything except the roof, so new windows, kitchen, bathroom, boiler, flooring, re-wiring and decoration. Anticipated value after works:
£85,000-£95,000
Renovation estimate: £21,639 Work started in January, and I’ll talk through the details and cost of works in the next instalment – and also let you know if we come across anything unexpected. But on that note …
Drama! The Christmas lull meant there was a quiet period before we started work. Then when our builder turned up in January, he found there had been a small fire at the house. No one had told me or anyone else anything about it, so this was a complete surprise. Both police and fire brigade had been called, and it turns out that either the previous owner or tenant had – allegedly – revisited the house and tried to destroy the electricity meter, presumably because of some debt.
They were rather brutal and attacked it with a hammer and goodness knows what, then left it popping and fizzing away with sparks flying out of it, which set the box on the side of the wall ablaze. It was only when the builder called to say, “I’m sure there was an electricity meter there before”, and I checked back on our photos to make sure that there definitely had been, that we found out about it. I called the electricity company to get the supply turned back on and it was them who told me there had been a fire. I can’t believe that no one had bothered to call the owner of the property – ie me! But there we are – in this game you have to accept that unexpected problems will crop up and I learned long ago to accept such things as being all in a day’s work. Tune in again next month for the next instalment of what happens at 189 Canklow! In the meantime, if you’re keen to learn more about these kinds of renovations, you can see an example over at
www.ForTheLandlords.com/YPNhouse
CONTACT JESSE E hello@ForTheLandlords.com W www.ForTheLandlords.com/YPNhouse P 03333 448 148
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