My first deal from leaflet campaign

Hi Everyone!

Not posted a blog in ages so just updating on what's happened recently. It's a bit long winded so bear with me haha!

I have a recent deal that's set to complete this Friday, if it does it will have taken 29 days from start to finish, with the help of CMS.

I found the deal through my leafletting campaign which went out in November last year. I sent out 10,000 leaflets in LE3 & LE4 and had 7 calls but none amounted to anything.

Then I had a call from a guy in Oadby (LE2) saying his daughter had passed a leaflet on to him as he'd been trying to sell his property for some time. When I first spoke to him I thought it would be a waste of time as it was quite an expensive property and at that price I knew it wouldn't stack. It was a 3 bed detached dorma with garage in good condition and was on marlket for £159 950, it had been on the market for about a year , originally at 199 000.

However after speaking to him and realising he was quite motivated to sell (he moved out of the property some time ago to live with his partner but they needed to sell to downsize and use the proceeds to buy a smaller property) and his daughter was living there currently but was also moving into her own property soon.

I went to view the property which was in a great location and the only thing I could find wrong with it was the flat roof on the kitchen extension needed replacing, it was a really nice property otherwise and after some DD I found it would rent around £640 - £675 mth.

At the time I was sourcing property for an investor friend of mine (who is a cash buyer) and as I didn't have a lot of spare finance I thought I may be able to negotiate a deal for him and I'd get a finders fee.

After speaking further with the vendor he agreed to sell at £120k so I took the investor to see the property and he was impressed and agreed to buy it. (are you still with me? lol!) the investor requested a valuation survey on the prop which I instructed at 140k - with hindsight I now know this was stupid!! I can explain why I did this but don't have time!!! the survey was done by colleys and came back at 140 with no problems but 'the flat roof needs attention' - which I already knew.

Before we started proceedings the investor announced that he'd changed his mind as he'd suddenly had a lot of financial commitments to sort out! Obviously I had to go back and tell the vendor who was devastated! I spoke to him at length about his options: put the property back on the market reducing the price, rent it out to make an income from the cashflow (he owed 50k on the mortgage and was paying £350 mth on it), take a LO on it - which I explained to the best of my ability! Take equity from the house to use as deposit on new property and rent out the old one, Or move back in for a couple of years, re mortgage to release some equity (to pay for the roof repairs) then put it back on the market when (hopefully) the value will have increased again.

The vendor was adamant that he wanted to sell it and didn't want the hassle of remarketing it and asked me what price I'd be willing to pay for it. I'd built up a good raport with him and I was totally honest and said he'd be better off (financially) renting the property out himself but I said I'd do the math and get back to him.

After a lot of deliberation, DD and lots of advice from people on the TMA forum I called and offered him 105k which he seemed shocked at but I explained the reasons why I couldn't offer more than that (Deposit, LTV, rental val etc) I said I was trying to help with a solution but obviously in the end it was his decision.

Two days later he called me and said he'd accept 105!
So the deal is now nearing completion, I have a friend who is a roofer replacing the whole flat roof for £600 and it needs a bit of cosmetic work to the kitchen and downstairs bedroom which I will do myself.

I have spoken frequently to the vendor and kept him up to date with proceedings and everything is going well, he's a really nice guy and said he appreciated how honest I'd been., he's a carpenter and even offered to help me out with any jobs I might need doing!

SO: OMV 140 000, PP 105 000, Equity 35K

Used CMS bridging and put in £4300 cash myself

Mortgage payments (@ 4.35% 1 yr tracker) £390 mth

Rent £650 mth - £7740 yr minus 5% letting agent fees = £227.50 mth cashflow (£7353 yr cashflow)

I'm not sure about the yield as I can never remember how to work it out!!

I will then have 3 BTL's with cashflow of just over £900 a month (after letting agent fees) and hope to get many more. (with the help of TMA of course!)

I really enjoyed the Session in London on Saturday, gave me loads of 'food for thought' re my website, I KNOW what I need to do but as usual I'm so pushed for time with working almost full time AND I'm building a stud wall in my house at the moment which has proved to be very challenging, I looked up how to do it on the internet (after people who were supposed to do it let me down) and I thought "hey thats not so difficult, I can do it myself" - and I have, it's almost finished, just got the plasterer coming today to finish it off (plastering's not that easy!!)

SO, if I ever need a stud wall building in a property I shall do it myself and save money as I love the 'hands on' approach. Even though I have several injuries as a result....a bruised thumb, cuts from the saw, almost got concussion when a piece of 2x3 fell down and smashed me on the head (ouch!) and my room looks like a builders site.

I love a challenge! Here's to the next deal!

Regards,

Sue

Blue Cat Property