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SarahBell

Do The Figures Stack Up?

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From an email:

Potential to add value:
Nightingale Road, Bolton, BL6 5DX

We have secured for a limited time a below market value opportunity.

Market Value at present - £144,950
For comparables, please click here
Comparble sold price - please click here

PURCHASE PRICE - £126,050
SOURCING FEE - £4,000
(Motivated seller - Probate property)
3 Bedroom Mid Terrace House in great condition

The current owner has passed away and was a hoarder. The family have emptied the house and having done so the house is in need of a full refurbishment.

House is not mortgageable therefore would need to be a cash purchase or a bridge. (I can arrange a bridge if required.)

Refurbishment to include :
Re wire, new kitchen/bathroom, new boiler, re-plaster, re-decoration, new carpets/flooring, minor building work to install French doors to the rear, Front and rear garden need attention Works required = £20k to ensure high standard of work.

We have a builder in this location who has quoted this amount to get the works completed!

Value of property after works = £190,000

To view comparables to support this, please click here




For more pictures, please click here

Rental Potential After Works:
Single Let as £600pcm = £7,200 per annum

Options:
1. Purchase, refurb and sell back on open market -
2. Purchase and let immediately. I have an extremely competent agent who can manage this property at 8%

Potential Returns :
1. £40,000 profit after purchase, source fee, legals = 27% Return On Investment (assuming a full cash purchase)
If you utilized a 75% bridge and put in a 25% deposit this would produce a healthy 71% Return on investment (see calculations below)
2. Assuming the property has been purchased with a 75% bridging product, this would caluculate as :

Capital Input :
Deposit of 25% = £31,512
Refurb Cost = £20,000
Legals = £1,000
Sourcers Fee = £4,000
Total Input = £56,512

Return On Investment :
Rental Income = £7,200 per annum
Managment @ 10% of £600pcm = £60.00pcm or £720 per annum
Mortgage Payment @ 4% = circa £310 pcm = £3,720 per annum

I have a agent and builder who can manage the property giving you a FULLY HANDS OFF opportunity.

----------------------------

Sold prices

Date Price Address
20/09/2013 £193,000 24 Nightingale Road, Blackrod, Bolton, BL6 5DX
01/06/2007 £188,000 26 Nightingale Road, Blackrod, Bolton, BL6 5DX
06/07/2001 £70,000 2 Nightingale Road, Blackrod, Bolton, BL6 5DX
26/09/2000 £82,500 10 Nightingale Road, Blackrod, Bolton, BL6 5DX
17/07/1998 £58,500 25 Nightingale Road, Blackrod, Bolton, BL6 5DX
16/12/1996 £53,750 11 Nightingale Road, Blackrod, Bolton, BL6 5DX

LHA by postcode
Shared Accommodation Rate:£48.67 per week

One Bedroom Rate:£84.00 per week

Two Bedrooms Rate:£98.96 per week

Three Bedrooms Rate:£114.84 per week <<<<<<<<<<<

Four Bedrooms Rate:£143.84 per week


So LHA rental is 497.64

If LHA is bottom 30th centile of rents then you might get more. but the house is "worth" 3* what you could get that rent for round here.

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Re wire, new kitchen/bathroom, new boiler, re-plaster, re-decoration, new carpets/flooring, minor building work to install French doors to the rear, Front and rear garden need attention Works required = £20k to ensure high standard of work.

Sounds like HUTH works valuation.. LOL

Whys it not morgagable? No kitchen or bathroom or falling down? :) That could add significant cost if there are building defects.

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This:

3 Bedroom Mid Terrace House in great condition

Does not match this:

House is not mortgageable therefore ...

I dont know Bolton but I do know other Northern towns.

600 is high.

The calculations do not show voids.

Yield is too low.

I would guess this would be social rental, in which the yields is waaaaayyyy too low.

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If it`s sounds too good to be true ........

If it sounds too good to be true........ BUY BUY BUY

I'm now working in a different pub (no longer nightclub) and get to here the dreary property hyperbole from our ancient customers... property is the best investment you'll ever make etcetera etcetera I've given up on the counter arguments.

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No doesnt add up. 3 bed terrace in Bolton "potential" sale price £190k in the one area that has continued to slump whilst everywhere else has seen a rally, not a chance in hell. secondly dont touch an unmortgageable property, ever. Terrace rents circa £450pcm. Renters in the NW will expect 3 bed semis with driveways for £600pcm Edit: Apols, just rightmoved it, and it appears to be a semi....somewhat confused by the terrace description above. Eitherway, still stand by my unmortgageable hurdle. Thats a massive red flag.

Edited by Haventaclue

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The obvious question - why are they telling everyone about this amazing 'opportunity' and not keeping it to themselves and family/close friends?

+1

I assume he will make money from referrals to builders, estate agents and brokers.

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I know that area as used to live in bolton. In A1 condition it should be £125-£140k. Whoever pais £183k was commiting mortgage fraud. In that condition with subsidence risks I would not pay more than £80k. This alone proves the crash is but a hairs breadth away.....

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