Good distressed property story

From: Mike .


Hi,

Last month David asked: Does anyone know how I can find properties from deceased estates and or divorce etc? (Again before they hit the real estate agents)

The link to his post is: http://bne003w.server-web.com/~wb013/read?41887,30

In my reply I suggested advertising which is what Lea did to find this "divorce" property. She posted this on the Singing Pig UK forum. http://groups.msn.com/SingingPig/general.msnw Hope it provides some inspiration.

Just a little story on a deal I am doing, if you're interested in reading!

Found property last week (Edgware) 3 bed med terrace.

Selling for 140k. value as it stands 180k+, value on refurb 225k approx

Hoping to exchange & complete on same day.(Friday 5 July)

Nature of deal, buy fast, do up & sell on (with Joint funding)

Story:

Got a call from guy who had seen my advert, said he wanted a quick sale. I asked nature he said was divorce. When I met him he said he was leaving country in 2 weeks - so tight deadline.

I viewed with original joint venture person, there was a lot of mess and it looked like a bomb had hit the place. Owner said tenant had trashed joint, and he had only just got possession back.

Called up couple of agent's day before to check prices, so had numbers & decided to view one of their comparables. The property I viewed was on same street for 199k and needed just about the same work doing to it as it was very old fashioned (but was liveable for time being) They had already had offers for asking price and chap was bringing wife around later, and they had 4 more viewings that day.

Went home, did a land reg check to get estate plans & boundaries & outstanding charges, and checked with EIG group to see if it had ever been auctioned, or if others in same postcode sold through auction - nothing.

Instructed solicitor, she said she could not start expedited searches without area plan from seller solicitor, so I sent her my copy & the searches were started. In the mean time called commercial acceptances who do financing for 65 -70% LTV. Valuation booked for Monday (same week as exchange)

Joint venture part. Already had a joint venture in place, but fell through, as not fast enough and wanted to put a lot of conditions on sale, so Paul Harten jumped in with some cash to put as deposit. He will put in money and get 100% ROI (return on his investment) not a bad return, however at the same time he will be present to view a full refurb, and be able to chat up my most experienced builders to get all their secrets out of them. Simple contract in place for ROI at 100% of what lender (Paul) puts in.

Deal with builders. Getting good builders is not easy, finding one, try and keep them happy. Will aim to get there Friday (completion day) to price up, I'm sure it will not be more than 10k as there is less work than last refurb I did. I will pay upfront for materials about £2k, then pay balance on sale (aim for 12 weeks max deadline or will revalue & release funds to pay them)

Then as builders fitted me in such short notice, and are very skilled and I like them lots, I will give them a bonus (private but plenty) for being so flexible.

In the mean time the agents I will instruct will be preparing docs, they are already waiting, I have used local agents rather than chain, as I prefer smaller companies, and believe you get a better service.

I will most likely put a commission scale in place. Ie will get a true selling price from them, then decide I can take lower than selling value. But then I will offer them incentive to get more, ie if you say worth 220k, I can really take 210k, but anything above my very reasonable 210k you get 1k per 5k you get extra (something like that)
So that's the story so far.

At end after sold, Paul and I will be quite happy to have had lots of fun and it turns out - if I remember rightly Paul is not a Magnolia fan either.

This story is of course subject to seller not pulling out of sale - which has been known to happen but hey so what, plenty more out there.

Lady Lea
 
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Reply: 1
From: Tibor Bode


What a great story. Congratulation for both being smart and well organised. I know you will make the gain (albeit have no idea about the area) as you've done your homework.
Also thanks for some of the smart point. I might just put them into my knowledge base as well.

Tibor
 
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Reply: 1.1
From: Mark Pardi


What a great story and a "great deal" well done and well negotiated !!

CONGRATULATIONS


Mark Pardi
 
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