Will this "investment" be a PITA

Prothet_of_Doom

http://www.rightmove.co.uk/new-homes-for-sale/property-57941114.html

I wasn't particularly looking for a project, but was looking at houses in the area because my son is about to embark on hunting for his first house.

And this caught my eye.
I may be a bit Aspergers, because in 3 days I've become somewhat obsessed by it.
So far :
I've looked at all the planning applications relating to this and the other 2 house on the plot.
I know that it's not exactly as per planning application (supposed to have bay windows at the front, for example - nothing major)
I have priced up the cost of finishing it (Ranges from £25K to £42K)

I have spoken to 4 lenders/brokers about borrowing some funds to complete this beast, and know that it's going to be painful from a paperwork point of view taking on a project mid build

I have arranged to view it and spoken superficially to the agent about why the builder has decided not to finish it. Cash flow and time apparently.

The options when complete would be to a) sell at a profit b) Rent it out c) sell to son (who might be interested in helping finance it with his deposit - but this adds further complication)

Talk me out of it someone !! Oh and I have yet to mention it to my wife :rotfl: - in my defense I have lots of stupid ideas that I think about alot before eventually bringing her in on my Great plan, and if I discussed every single one with her, she'd be totally stressed by the volume of it, so I just stick to the one's that are winners. :T

eddddy

Prothet_of_Doom wrote: »

I have spoken to 4 lenders/brokers about borrowing some funds to complete this beast, and know that it's going to be painful from a paperwork point of view taking on a project mid build

Presumably any mortgage lenders would want a 10 year new build warranty. What do the warranty companies say about offering you a warranty in these circumstances?

If you plan to own it for 10+ years (maybe renting it out) and you don't need a mortgage, I guess you'll be OK without a warranty.

But if you will need a mortgage, or you want to sell to someone who needs a mortgage - you'll probably need a warranty.

davidmcn

eddddy wrote: »

Presumably antgay morge lenders would want a 10 year new build warranty. What do the warranty companies say about offering you a warranty in these circumstances?

If you plan to own it for 10+ years (maybe renting it out) and you don't need a mortgage, I guess you'll be OK without a warranty.

But if you will need a mortgage, or you want to sell to someone who needs a mortgage - you'll probably need a warranty.

Not necessarily, most lenders will accept an architect's certificate. The question is whether any professional has actually been supervising the build to date?

Cakeguts

It says architectural drawings for a 3 bed but it doesn't say planning permission for a 3 bed. I wonder if it has got planning permission at all?

iantojones40

I'm always very suspicious about any ''development opportunity'' in general... surely if they are such a good deal they wouldn't even get as far as Rightmove and would be snapped up by a builder or property developer with EA connections.

jamei305

Maybe they just realised they got the foundations wrong. You have no idea and no comeback.

DaftyDuck

I wouldn't believe their reasons for offloading it.... Time to finish now would be minimal, and most of the capital spend is done. Why have no other builders involved in the project chosen to take it on. So, aside from the windows, what else is against planning or building control.

Anyway, the finished product won't be that great. Are you sure there's a real profit there, even if all goes well?

Newbuild projects aren't what I do, but this one sets alarm bells off.

marksoton

I wouldn't. Not even with your bargepole.

Ozzuk

I think it's one of those properties that you need to see in person to appreciate as it looks horrible in both style (or lack of), layout and general location (grounds, access, overlooked).

Anything can be a good investment if bought for the right price, that house doesn't scream profit to me (don't forget the new SDLT rules) but I don't know the area, demand and haven't seen it. I'd echo other comments though, if they have got so close then what is stopping them completing and realising the value that you are hoping to? They have quotes and a builder ready so surely they've looked at the maths and it isn't working or they'd just drop the price further.

AdrianC

It's tiny. 990ft2. Roughly 99m2.

It's a long way from finished. It needs windows and doors, it needs first and second fit electrics and plumbing. It needs full internal finishing. That's a fair chunk of money. Basically, you're buying some groundworks, blockwork and a roof. And some paperwork. Which you already know doesn't quite tie up with what's been built so far.

It's not exactly the most prepossessing location in the world. It looks more like it should be a double garage, tbh.

Unless BC have been involved from the start, you'll never get BR sign-off.

And that's just what leaps out from a quick look at the thoroughly mediocre photos.

fishpond

"I have arranged to view it and spoken superficially to the agent about why the builder has decided not to finish it. Cash flow and time apparently."

If the builder will finish it if you pay them, how come the builder hasn't got the time to finish it now.
So, as nearly always it comes down to lack of money.
If they put have put as much thought into planning and building it as they have done with the finances, it should fall down in 6 months.
No.