Duplex Renovation Questions - Into 2 flats

cottlad

Fire_Fox wrote: »

If the property is not selling at £280K then as you already know it's worth £250K plus f&f due to the stamp duty threshold.

Are you saying it would make more financial sense to sell for £250k and guarantee a £25k+ loss?



You need a project manager otherwise you will find a six month build becomes a twelve month build while all the trades work half days on your job, claiming they are waiting for another trade. If you do not wish to project manage yourself you can pay the architect to do it but that will cost. Seriously you cannot hand this over and expect to get high quality at a knockdown price - you are going to have to invest time sourcing top of the range ex-display/ bankrupt stock fixtures and fittings to make this work financially.

If i get a reputable builder that i feel i can trust and have a quote that includes fixtures and fittings then surely as long as i don't completely sit back thisngs should be ok



A good finish means a £10K kitchen (including appliances) - how on earth are you going to do the rest of the conversion for £10K per flat??

£10k? I can go onto the highstreet and buy a very nice kitchen to fit the space for <£2k which only needs fitting along with some nice tiles and a decent cooker. I wasn't planning on purchasing a diamond encrusted aga



As I have already said you haven't factored in all the legal costs,

If you haven't worked it out already i'm currently trying to establish these costs.

you haven't factored in the extra mortgage repayments whilst you seek planning permission and the conversion goes ahead

I'd be paying these anyway whether we convert or not (unless i walk)

you haven't got any money for a contingency.

How do you know that? As it happens i have access to funds as long as the figures add up

An estimate is not a quote,

You are correct. I'm working on estimates at the moment and only on a final quote will we decide to go ahead (or not.)

you may uncover all sorts of horrors when you strip the flat back. What are you going to do if interest rates rise or the market carries on falling throughout the build?

Worst case scenario would be us spending a load of money converting AND then handing in the keys. Massively unlikely.


Then why are you embarking on a project you are not interested in managing, which is going to cost you and your wife tens of thousands of pounds??

It will cost tens of thousands until the flats sell.... at which point we'll walk away hopefully debt free and possibly with a profit to show. That's if the final sums add up.


You don't understand the market,

Sweeping statement. Maybe you could enlighten me on the market for South side of Harrogate?

you don't appear to have any experience,

Which is why i want to sub this out to a reputable builder/architect team at the right price.

everyone makes costly mistakes on their first development but there is no leeway to absorb the extra costs! Why not get written consent from the freeholder, architects drawings, planning permission and then sell the duplex to a developer?


This is an option but developers generally want more profit margin. I am however speakin to one of the builders and MAY go down this route if it looks more promising and the builder wants it.

I've come here actively looking for helpful advice. I'm FULLY aware that this project MAY not be viable and will incur risks. I'm also more than capable of not plunging headfirst into a massive money pit. I know i may at times come across as ignorant and not very savvy but this isn't entirely true all of the time.

If anyone else has any constructive comments other than 'don't do it' then i'd be really happy to hear them. I will continue to look into the viability of this project until it proves unviable or i go ahead with appointing a builder.

Cheers

cottlad

Fire_Fox wrote: »

So it's a gorgeous building in a great location:


You really need to sack the estate agent IMO - it's listed as a four bedroom house then later a duplex apartment, not at all clear what is being sold. Where is the floor plan? Is the layout good or rubbish, how many square metres am I buying in total? Your photographs are rubbish - buyers not want to see a picture of a desk and chair! Why is there only a photograph of one bedroom?? Is it four bedrooms but you are using one as a dining room and one as an office? In which case an unimaginative buyer will see that as two bedroom. Sorry but the apricot colour scheme is very eighties, I would get rid of that. Like the pale blue in the bedroom, but the bathroom is rather eighties.

hehe
The colour scheme in living room is awful i agree..... the whole flat is in need of an update. It's been left and left as we didn't want to spend a fortune after the estate agents told us there'd be no problem selling as is.

The place has been on the market since before i moved into it. I didn't appoint the estate agents and i totally agree, they aren't the best. As soon as i moved in i told the missus to get rid of them but she didn't want to pay the disbursement account of £700 and start again..... obv i wish we had now but we expected the place to sell before now.
The pics are also terrible yes..... if we weren't thinking of splitting the flat there would be better ones up already..... i discussed this with the agent a few weeks ago, along with how cr$p i thought their service was.

It's hard to make the decision also of spending £5k+ sprucing the place up a bit and then selling for another £20k loss when we have another possible option to look at that MAY make us a little.

marcg

Do it if it makes sense to you, but employ someone like me (but not me - I'm in Bristol) to get building regs and to do a schedule of works first. If you don't, I'm pretty sure your builder will either ask you for lots of extra money to cover "all this stuff the building inspector wants" or, be honorable, and go bust. £40k is about right for one flat, not two. I just priced a two bed flat in Bristol (so maybe more expensive costs) at £38k - full acoustic separation, fire works, new kitchen, bathroom, rewire and basic redecoration and carpets. You'll need that twice since the lower flat will also be over the guy below and the subdivision means the building regs will need to apply there as well.

Good luck.

cottlad

jenner wrote: »

please just drop the flaming price and get rid of it



what were you going to use for the money to pay for the conversion anyway out of interest?

1)That would mean we go into £25k debt that would sink us both. The other option would be to walk away and have her go bankrupt.

2)Family (parents) and relatives but only if the figures added up. They would expect a full, honest business plan. I wouldn't even consider taking their cash unless i thought the sums added up

cottlad

marcg wrote: »

Do it if it makes sense to you, but employ someone like me (but not me - I'm in Bristol) to get building regs and to do a schedule of works first. If you don't, I'm pretty sure your builder will either ask you for lots of extra money to cover "all this stuff the building inspector wants" or, be honorable, and go bust. £40k is about right for one flat, not two. I just priced a two bed flat in Bristol (so maybe more expensive costs) at £38k - full acoustic separation, fire works, new kitchen, bathroom, rewire and basic redecoration and carpets. You'll need that twice since the lower flat will also be over the guy below and the subdivision means the building regs will need to apply there as well.

Good luck.

Thanks Marc,
The current layout means there's not a massive amount of structural work needed. No fire escape needed. Current kitchen suite can supply both new kitchens. All the plumbing will be on top of each other. No carpets needed. It's actually a pretty simple job physically and not that many F&F's needed. Just the building regs/soundproof/firedoors etc that need the work/certification. I know £40k is on the cheap side but even at £60k we'll lose less than if we were to drop the price to £250k.

Thanks again

other2010

On a side note, get the EA to do a floorplan and total internal area. That's the first thing i look at when browsing adverts.

Richard_Webster

So Richard.... you said 'you should ask your lender. In practice.............etc'
Does this mean you think it's not wholly necessary/advisable?

If one flat would have raised enough to pay off the mortgage then you wouldn't need to tell them.

As one flat would raise enough money you will have to seek their agreement in order to sell the first flat. There is absolutely no point in telephoning about this kind of thing except possibly to find out which department to write to - but you will have to write because mortgage lenders simply do not have staff who can take in (understand) this kind of request in over the telephone.

Then telephone them at least once a week to find out what progress is being made on your request. Probably best to get your solicitor to write the initial letter.

When you do it is up to you. If you leave it until you find a buyer for the flat there could be a delay while they take in what is involved. I guess rightly or wrongly you would say you didn't understand that their agreement was needed....

If you contact them too soon they may want to impose all sorts of conditions on the work itself , getting their surveyor involved in checking stuff, etc.

Fire_Fox

cottlad wrote: »

I've come here actively looking for helpful advice. I'm FULLY aware that this project MAY not be viable and will incur risks. I'm also more than capable of not plunging headfirst into a massive money pit. I know i may at times come across as ignorant and not very savvy but this isn't entirely true all of the time.

If anyone else has any constructive comments other than 'don't do it' then i'd be really happy to hear them. I will continue to look into the viability of this project until it proves unviable or i go ahead with appointing a builder.

Cheers

Look at the finish and quality you are up against:
http://www.rightmove.co.uk/property-for-sale/property-13536249.html
http://www.rightmove.co.uk/property-for-sale/property-14201970.html
http://www.rightmove.co.uk/property-for-sale/property-14106825.html
http://www.rightmove.co.uk/property-for-sale/property-25114837.html
http://www.rightmove.co.uk/property-for-sale/property-25114840.html
http://www.rightmove.co.uk/property-for-sale/property-24794896.html

puddy

cottlad wrote: »

1)That would mean we go into £25k debt that would sink us both. The other option would be to walk away and have her go bankrupt.

2)Family (parents) and relatives but only if the figures added up. They would expect a full, honest business plan. I wouldn't even consider taking their cash unless i thought the sums added up

are you able to use equity on the property that you said you own already to pay off a potential debt of 25k?

the reason i ask is that i genuinely think that this will run away with you, the project will be too big, you are viewing it too simplistically and not considering the work needed. any builder i believe, will say what you want to hear, once they get working, thats when its another grand to do this, another 2 grand because they didnt know that was here or whatever

has the freeholder indicated what price he would charge for the leases? are you sure you dont need planning permission? what if he dies during the renovation works and the probate takes ages to sort out or his family dont agree with your plans (i say that as i thought you said he was old- apologies if this is wrong)

puddy

Fire_Fox wrote: »

Look at the finish and quality you are up against:
http://www.rightmove.co.uk/property-for-sale/property-13536249.html
http://www.rightmove.co.uk/property-for-sale/property-14201970.html
http://www.rightmove.co.uk/property-for-sale/property-14106825.html
http://www.rightmove.co.uk/property-for-sale/property-25114837.html
http://www.rightmove.co.uk/property-for-sale/property-25114840.html
http://www.rightmove.co.uk/property-for-sale/property-24794896.html

now thats quite worrying because they seem to be at your bottom end of hoped for sale price, those prices are 'asking prices' AND one of them has had to resort to auction

what is the layout and room sizes of this flat, are you hoping to get 2 beds, one reception and one kitchen for both of them? or would you combine the kitchens into the receptions?