15:23 PM, 20th March 2014, About 10 years ago 4
Every so often a deal comes up that I feel I ought to look at for the purpose of helping someone out, rather than for a big return, though it needs to be a decent investment. I’d be keen to see if any of you have creative win/win solutions for this one.
One of my tenants who has been with me for two years and was my mothers MacMillan nurse before she died has moved her boyfriend in, which is fine by me. He had a leasehold flat to sell and got a purchaser in September.
The flat is in an old Victorian conversion, one of about 10 separate apartment flats, all leasehold. The lease however has only 60 years to go and the buyer agreed to go ahead only if the owner would pay and apply to extend it. He agreed but 6 months later she is still asking questions via her solicitors (I haven’t asked any more about that yet) and no exchange has happened and they are getting very worried and at this moment in time can’t afford the rent to me plus the mortgage on the empty flat.
They came to me to see if I might be interested in buying it.
The flat was purchased in 2004 for £95,000. It was previously sold for £73,000 in 2002. Other flats in the building have sold for between £82,000 and £109,000 up to 2007. He has a mortgage of £800 per month and I suspect had a deposit of say 10% at the time he purchased so owes about £85,000. It went up for sale at £115,000 and they got £110,000. It would rent out at £550
I’m wondering if it is worth me considering a BTL at 85% – ROI would be about 7% after all management fees, ground rent etc and I’m trying to work out if there is a decent offer worth making bearing in mind this is now becoming a distressed sale but with a history that means if I go ahead I want all parties to feel they have been treated fairly
Ideas most welcome