The Road to residual income

AdrianC

Denzel09uk wrote: »

Have you had a look at the paperwork, or is that standard response to anything which is limited Title Guarantee.

It's what it means. They can only offer a limited guarantee of the title, as opposed to the usual full one.

Denzel09uk

Ok, thanks Adrian. I was under the impression that someone else would own the title too. in the information pack it looks as though you become a single share holder of finedon street management company too, non profit, seems strange.

Denzel09uk

its a shame i cannot add an attachment here.

AdrianC

Denzel09uk wrote: »

in the information pack it looks as though you become a single share holder of finedon street management company too, non profit, seems strange.

No, that's perfectly common - and totally separate. The freehold of the block will be owned by the company, with all the leaseholders owning a share.

Denzel09uk

It's been a while since I have updated this, i have been searching for ages through rightmove, auction house, savilles and Cheffins. I had a legal pack review on a flat I was interested in costing £300, it turned out the flat wasn't remortgageable, I thought to myself how many more of these will I have to get done before I go to an auction let alone win one.
I decided to pursue the open market and try and find something that had been on the market for a while. I found a few in Nottingham. Went to view them and started negotiating with the vendors of the properties that I like. I went in with the mindset that if the offer got rejected then i hadn't lost anything.
Started negotiating with one vendor on a flat in Nottingham, market price on rightmove was £55,000 so I went in with an offer of £40,000. Knowing that the flat would cost around £7000 to refurb.
Shock it got rejected so I went in with £42,000 and said that this was the highest I would go.
Offer has been accepted and I'm waiting for the completion to happen.
Including refurb this will rent out for around £400 a month giving me a yield of 9.8%.
The perfect start on my road to residual income.

ognum

Denzel09uk wrote: »

It's been a while since I have updated this, i have been searching for ages through rightmove, auction house, savilles and Cheffins. I had a legal pack review on a flat I was interested in costing £300, it turned out the flat wasn't remortgageable, I thought to myself how many more of these will I have to get done before I go to an auction let alone win one.
I decided to pursue the open market and try and find something that had been on the market for a while. I found a few in Nottingham. Went to view them and started negotiating with the vendors of the properties that I like. I went in with the mindset that if the offer got rejected then i hadn't lost anything.
Started negotiating with one vendor on a flat in Nottingham, market price on rightmove was £55,000 so I went in with an offer of £40,000. Knowing that the flat would cost around £7000 to refurb.
Shock it got rejected so I went in with £42,000 and said that this was the highest I would go.
Offer has been accepted and I'm waiting for the completion to happen.
Including refurb this will rent out for around £400 a month giving me a yield of 9.8%.
The perfect start on my road to residual income.

Well done on pursuing your dream.

I am interests that you didn't manage to stay in your desired 50 miles from Cambridge but also not surprised.

You will have achieved a good rental return, what does your buisness plan tell you about maintenance, costs and importantly capital growth?

Tassotti

I reckon that £300 was well spent. What made the flat unmortgageable?

Denzel09uk

Tassotti wrote: »

I reckon that £300 was well spent. What made the flat unmortgageable?

There was a restaurant on the ground floor that was freehold and there was no agreement between the leasehold company and the restaurant. This meant that if the restaurant went into disrepair then the building could effectively collapse.


I agree £300 well spent.

Denzel09uk

ognum wrote: »

Well done on pursuing your dream.

I am interests that you didn't manage to stay in your desired 50 miles from Cambridge but also not surprised.

You will have achieved a good rental return, what does your buisness plan tell you about maintenance, costs and importantly capital growth?

Within the 50 miles it was frustratingly the average was 10,000 above what i had to spend (£50k) so decided to expand my thinking.


Im looking at 425 PCM on rent which i feel is achievable around the Nottingham area
After refurbishments of around £8000 the return on investment will be around 10%. I have factored in 15% maintenance costs. Should this be higher?
Including the mortgage/estate agent fees and insurances ill be looking at a profit of around £100 - £120 a month.
When finished ill have the property valued and then look to remortgage 6-12 months later to purchase another. I know you cant remortgage for the first 6 months from purchase. but this is all depending on the valuation.
ill build up my bank account to between £3k and £5k for "Emergency" purposes within that 6-12 months by paying the mortgage out of my own pocket in order to build up the account.
The estate agent told me that Nottingham at present on a 1 bed flat has a ceiling price of around £60k for the property i bought. On an 80% mortgage that will give me a further £50k to purchase another.
This is all hearsay and until its valued i wont know what i can remortgage the flat for,

Denzel09uk

UPDATE 30th MARCH 15
Because i am effectively a cash buyer after releasing equity from our house, I had to organise a survey myself, expecting this to be around £750 i contacted a few in Nottingham to see what the deal was. I ended up paying £297 for a RICS Homebuyers Survey, 3 things came out of this survey. Electrics, Gas & Floors.
Electrics - The flat had an outdated consumer unit - £1500 inc VAT to replace and rewire flat
Gas - Boiler wouldnt switch on so they couldnt tell - Plan to get the boiler serviced £150 or replaced at £1800
Floors - The bathroom & Kitchen have thermoplastic tiles - The surveyor said these MAY contain asbestos.
Everything else is cosmetic
Not too bad i thought.
The searches have also come back clear, all systems go.