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Flat Purchase/refurbishment Costs?

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I wonder if anyone can estimate the costs of the following.

There may be an opportunity for me to purchase a small block of six 1-bedroom ex-local authority flats in an unsalubrious corner of the North West...

They are boarded-up and may have suffered slight fire or water damage in some parts, but the building and roof seem structurally sound, and imho could be refurbished.

1. Purchase cost/offer. Refurbished and tenanted @£85-90 per week, each flat would fetch at auction around £32.5k, so a block of six might fetch just shy of £200k. What would I offer for the shell as it stands? I'm estimating less than "half-price", but how much less?

2. The flats are very small, around 30 m^2 each. How much for a very basic refurbishment per flat? £5,000?

Any pitfalls to look out for?

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Is petrol that dear at the moment?

Seriously depends what structural state its in if it's had fire.

Pull it down and build some nasty town houses instead.

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I wonder if anyone can estimate the costs of the following.

There may be an opportunity for me to purchase a small block of six 1-bedroom ex-local authority flats in an unsalubrious corner of the North West...

They are boarded-up and may have suffered slight fire or water damage in some parts, but the building and roof seem structurally sound, and imho could be refurbished.

1. Purchase cost/offer. Refurbished and tenanted @£85-90 per week, each flat would fetch at auction around £32.5k, so a block of six might fetch just shy of £200k. What would I offer for the shell as it stands? I'm estimating less than "half-price", but how much less?

2. The flats are very small, around 30 m^2 each. How much for a very basic refurbishment per flat? £5,000?

Any pitfalls to look out for?

£5k each and ex-local authority? Might need to spend £50k on each once you look into it properly.

My bro-in-law is still - 2 years later - working on a block of flats he purchased in a "flash" area in the North West. Fortunately he'd bought the properties years before that, or the whole project would have finished him off. Don't underestimate how long you'll have to spend arguing with the local authorities over health and safety issues, planning, etc.

My current landlord (London) also has a block of flats (left to him when his BTL father died suddenly), and he says they are nothing but a continual pain-in-the-ass, especially once you get them rented out to people who spend all day on the Net checking out their "rights" and getting the council to constantly chase him (think going around at 3:00 a.m. in the morning as some jobless skiver says a light bulb has blown and the darkness might kill her children...)

Also, if you do get bad tennents - and you will - it will take at least 6 months to evict them; and the flat will be destroyed before they go, and there's nothing worthwhile you can do about it (my mate, a landlord in Milton Keynes, had had this happen twice to him in the last 5 years - cost to him of £15k-20k overall.)

Get a proper, detailed survey. Do your research on the area and the true rental potential. Go through all the details with the local council about what you are planning to do before you start.

You might find out that as a business venture these flats may be worth only £50k - for the whole block. In 3-5 years time, you might not even be able to give the damn things away. Who knows? Maybe go and speak to your bank manager about a BTL mortgage - that would certainly bring your feet back to ground with a large dose of reality. It seems to me you are living in a BTL dream at the moment - the reality is usually far from it. :)

Nomadd

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£5k each and ex-local authority? Might need to spend £50k on each once you look into it properly.

My bro-in-law is still - 2 years later - working on a block of flats he purchased in a "flash" area in the North West. Fortunately he'd bought the properties years before that, or the whole project would have finished him off. Don't underestimate how long you'll have to spend arguing with the local authorities over health and safety issues, planning, etc.

My current landlord (London) also has a block of flats (left to him when his BTL father died suddenly), and he says they are nothing but a continual pain-in-the-ass, especially once you get them rented out to people who spend all day on the Net checking out their "rights" and getting the council to constantly chase him (think going around at 3:00 a.m. in the morning as some jobless skiver says a light bulb has blown and the darkness might kill her children...)

Also, if you do get bad tennents - and you will - it will take at least 6 months to evict them; and the flat will be destroyed before they go, and there's nothing worthwhile you can do about it (my mate, a landlord in Milton Keynes, had had this happen twice to him in the last 5 years - cost to him of £15k-20k overall.)

Get a proper, detailed survey. Do your research on the area and the true rental potential. Go through all the details with the local council about what you are planning to do before you start.

You might find out that as a business venture these flats may be worth only £50k - for the whole block. In 3-5 years time, you might not even be able to give the damn things away. Who knows? Maybe go and speak to your bank manager about a BTL mortgage - that would certainly bring your feet back to ground with a large dose of reality. It seems to me you are living in a BTL dream at the moment - the reality is usually far from it. :)

Nomadd

Thanks for the advice... However, the reason I am interested is because I own an identical block not far away, and have had pretty much trouble-free renting for 8 years [97.5% occupancy, only occasional minor damage]. I think they're a good [in fact, a brilliant] investment, and I'd like another! And far from the tenants being bolshie, they have fairly low expectations, which suits me fine. I have had very few problems with DSS tenants. The problems I have encountered are with working tenants, and I am resolved never to take working people again!

One thing you said which intrigued me is about the Council. Why would they be interested? - they sure aren't interested in the one I own, which is another ex-LA block, resurrected from dereliction by its first owner about 13 years ago...

A block of six flats would pull in another £28k a year - not to be sniffed at. If I offered £10k a flat, plus £5k refurb a flat I'd be looking at £105k capital growth on top of the rent. Don't tell me I wouldn't. I could show you identical stuff that achieved that at auction within the past few months. The yields are fantastic. I know this market well...

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Thanks for the advice... However, the reason I am interested is because I own an identical block not far away, and have had pretty much trouble-free renting for 8 years [97.5% occupancy, only occasional minor damage]. I think they're a good [in fact, a brilliant] investment, and I'd like another! And far from the tenants being bolshie, they have fairly low expectations, which suits me fine. I have had very few problems with DSS tenants. The problems I have encountered are with working tenants, and I am resolved never to take working people again!

One thing you said which intrigued me is about the Council. Why would they be interested? - they sure aren't interested in the one I own, which is another ex-LA block, resurrected from dereliction by its first owner about 13 years ago...

A block of six flats would pull in another £28k a year - not to be sniffed at. If I offered £10k a flat, plus £5k refurb a flat I'd be looking at £105k capital growth on top of the rent. Don't tell me I wouldn't. I could show you identical stuff that achieved that at auction within the past few months. The yields are fantastic. I know this market well...

TBH, you just sound like a bored EA who has come here to troll on another quiet day in the office. You ask for advice, but then reply to that advice with your own opinion and "Don't tell me I wouldn't" to anyone who disagrees. If you are so sure about this "brilliant investment" with "fantastic yields" in a "market I know well", then why on earth are you hanging around a site called House Price Crash looking for advice? Strange indeed. The Singing Pig is the site you are looking for.

Anyway, I wish you all the best with your new "investment". :)

Nomadd

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