The story of 10 deals in 10 weeks, when Glenn first got started - Deal 2

Posted on 01. Dec, 2009 by glenn in Glenn's Blog

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

£200 pm positive cash flow

The first 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 **.

 ”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.

9 months later (no I hadn’t snuck round and seen his wife) 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

I have just had the re-mortgage to value of 85% of £145,000 = £123,250 date…………..

So first mortgage and deposit with interest repaid leaving just over £8k total costs were around £4000, so I am left with £20k of equity and £3k cash.  Mortgage is £492 per month and rental income is £695 pm and 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.

This was in july 05 current value is 145k current mortgage payment is 398.00 per month

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