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Semi detached split into 6 ' flats'. Worth buying? Legit?

Started by Neil, March 26, 2015, 04:28:30 AM

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Neil

Hi people, just came across this house a fairly standard looking semi detached property in North London in a fairly pricey area, the house has been split into 2 x 1 bed and 4 x studio flats, well I say flats but really they're just std rooms with a kitchenette and shower toilet built into each room, clearly too small to be legally considered as 'flats in my opinion, as for example the attic room which hardly has space to swing a cat has also been classed as a studio.
My dilemma is , is it worth buying.
It was bought for 1 mil three years ago and the buyer made 6 new leases thereafter, all in his name and a freehold title (which is held within a company)
He is now willing to part with this at 27percent discount on his purchase price, as he just wants to payoff his mortgage amount..

I know I will be limited to a commercial lender, (he is currently with lloyds ) but my question is ,
Is this worth buying ?
And if I do, will I be able to refinance later on?  Am I likely to have issues later on?
There are no planning applications made for this conversion that I can see, but having said that, he has evidence that they've been converted into flats way before he bought the property as he has council tax bills going back ten years, the flats each have independent electricity supplies. Can I somehow legalise these, as I am confused about whether all is is legit or not?
What's the best way forward?, worth getting into this deal or should I run the other way. All six flats are let on ASTs at the moment.
What questions do I need to be asking to secure my position , to the council or to the seller?
Thx to everyone . Your response is highly appreciated.

Hippogriff

I cannot provide much help here as I've never been in the position to consider dropping quarter of a million Pounds into a property... but your sentence here - "He is now willing to part with this at 27percent discount on his purchase price, as he just wants to payoff his mortgage amount." - got my personal radar going haywire.

I might be overly suspicious... but one wonders why.

From 3 years ago to now, property prices have only been going up... recovering from 2008. In areas of London property has risen dramatically - "...the price of a typical home 9.5% higher than in March 2013", said Robert Gardner, Nationwide's chief economist"" so I immediately start to wonder why this property would be different.

Certainly lots of due diligence required methinks.

boboff

You will need to work at this, hard.

You will get allot of aggravation.

If it works money wise, with 75% occupancy, and you spending 8 hours a week chasing rent and tenants, then it would be up to you, if it doesn't walk away.

Also don't be afraid to offer him 50% discount, if you want it that bad.

If you can get it at this sort of money, I would consider it, making it back into a house and selling it on.

Richard goldberg

Today's market is very strong and houses and flats and units are getting eaten up I let property's pretty much within a day of taking them on, I would say that you could HMO the building and offer it to some housing associations they pretty much pay the rent in full even if the property is empty,
also house prices seemed to have levelled out at the moment.