The last auction was a fail. Undervalued the top bid by quite a bit with my maths.
Whatever it was, that the other parties took into account, I did not see it in such bullish light.
Approx 350k above the top bid I had in mind... That's quite a miss.
But maybe it's all for the best... Because there is another auction on Monday and there is quite a beauty awaiting!
Will this be the one? Will I be enough for her to let me wisk her away?
How much will the planners let you get away in the large yard? What will the building costs be? And what realistic resale values can be expected after turnaround? What are the VAT and tax implications for the company if we decide to rent units rather then sell (in case the resale market is weak)?
Too many questions for me to sleep properly.
Below what my dreams are made of ( I know not everyone's cup of tea - warning derelict content!)
Friday, 22 September 2017
The last auction was a fail. Undervalued the top bid by quite a bit with my maths.
Saturday, 2 September 2017
Despite not much sucess at sourcing the next project since the sale of the warehouse (now few months already), the scouting is on.
The subdued market post brexit means the buy needs to be particularly good value to ensure that little bit of extra margin buffer.
The last one we looked at (old printing works in north east london did not meet the reserve price and the planning risk felt a little too much for our apettite anyway...
But a new round of auctions is now few weeks away and one in particular has caught my eye.
So crunching numbers again and checking planning history (the basics)....
This one may be a mix of rental potential as well as planning upside and flip.
Sunday, 21 May 2017
We just had to have a warehouse party!
- approx100 guests
- 4am end
- 1 entire iberico ham leg
- 8kg Comte cheese
- 2 DJ's
- 1 security guard (being Brixton, Had to keep gate crashers out)
- can't remember specs of soundsystem, (but loud enough to trouble the neighbours across the road!)
- no's of cocktails served... Sorry did not count!
I think it was wise not do this earlier, could easily become addictive... But now keys need to be handed over in couple of weeks for completion.
And the hunt for new properties is gaining traction again.
More on that soon.
Tuesday, 2 May 2017
After a long long year... (During which I hardly blogged - apologies)
I can confirm that our latest project has sold/exchanged today!
- 13 months turnaround.
- 20% return
- pre brexit purchase and post brexit exit.
- site untouched (apart from squatters episode)
- added value purely generated through an improved pre planning application.
- sold forward to another developer to execute.
- offer too good to refuse an easy exit at this stage.
- further 20% profit expected on buyers side (on purchase price) once completed (in addition to his transaction costs -stamp duty etc)
Stay tuned. Next post is about a warehouse party!
Wednesday, 17 August 2016
Another very very long silence! And another apology for that!
Not even know where to start really....
Brexit and it's effects on the property market!? That could deserve an entire post in itself!
Lambeth council? I would not say it "deserves" and entire blog post, but I could surely do a ranting post about them too!
Or maybe the squatters that have just sent me pictures of their table football and "installations" as proof that they are looking after the property!
That's right.... Squatters. Let's zoom in on that current pain point and try to factually report on the squatter situation in bullet points (don't want to bore anybody)
- now in the property since over a month
- approx 20 people and 4 dogs (according to neighbours)
- police barely attended site
- court proceedings have cost approx 5k
- estimated security cost to remove them once legally allowed to another approx 2k
- we would be violating their "rights" if we were to enter in our own property (while they just came in at night and changed the locks!)
- have been kind enough to send us pictures of inside and saying they will "look after the property"!
Just going to keep it at that and show you the proud banner currently being displayed at the front of the property.
Wednesday, 15 June 2016
Please accept my apologies for my long silence!
A lot has happened since the last post but I thought that if not everything, I should at least post about the photoshoot that we did.
Very spontaneous, and as we did in the last development, very "raw".
Keeping the space and fashion in contrast.
With these things, pictures tell more then a 1000 words.....
Pls note this is before any Photoshop treatment/clean up - with pure natural light.
Tuesday, 23 February 2016
Ok. So as posted last week, we have purchased a new property at auction and I said I would elaborate properly once the adrenalin rush would subside....
And the mountain to climb comes back into focus!
Not sure where to start, but I think basically to reuse an analogy; My co-investor and myself have taken all the chips that had been invested in the last project (as well as the gains) and have put the whole lot back onto black.
Last week, the roulette has started to spin again.
Of course the analogy is not correct. Roulette is purely related to luck - whereby this will be challenging on many levels: budgeting, timeline, builders, planning, negotiations, architecture... Etc.
So not sure if reassuring or scary.. But at least a good amount of things are in my hands... Others less so: market forces, economy, etc.
Anyway, the project remains a bet and can be broken down into 3 separate bets: (Your investment may go up as well as down and past performance is no indication of future returns) :
1)Maximise area (obvious I guess)
We have now a warehouse of approx 5000 sq ft ( say about 460sq meters) which is 2mn walk from the zone 2 Brixton station. (Info for non Londoners: Brixton has been gentrifying for years and although it has not yet reached the heights of Shoreditch... It's not too far behind.)
We do not have planning permission to convert the commercial space into residential, but the sellers had got a mostly positive answer from the Council/local authorities to turn it into 7 flats as well as retention of a shop on the ground floor.
Now, literally taken at the price we purchased, this would be approx a zero sum game after the estimated cost of the building work.
The plan is to therefore add an entire storey by raising the roof by 0.5m-1m and lower the 1st floor level. Ideally adding mansards, and possibly even add more sq ft on ground floor flats by digging down by 1m in some areas and therefore allowing to have some mezzanine levels within the high ceilings.
(Realising this is going to be a long post! )
So the hope is that we increase the proposed sq ft area by about 20- 25% and only then will we make a decent profit.
2) Commercial vs residential valuation
The other challenge is going to be to convince the council to keep only a small shop on the ground floor.
The Councils wants to retain employment areas and want to keep the town centres with different size shops... And we are looking at reducing the existing shop space by 75%... Which is something they pointed out as a problem in the pre planning discussions of the previous owner.... So we hope that a good town planning consultant will help us put a convincing argument forward.
That is a key bet because the sq ft area value drops by more then 50% for commercial space! (250 GBP sq ft instead of expected residential 800 GBP sq ft)
3) Design bet:
Currently the plans put forward by the previous owner are ok and workable, but not inspirational.
The bet is that by increasing the "sex appeal" of the spaces will increase desiribility and resale prices.
Basically creating well planned spaces with a wow factor and character. (Would like to think of a boutique development.)
The maximisation of natural light comes first, through the use of double height spaces, glass floors, roof lights and light wells piercing through to ground floor level. (Starting to get my head around that)
Then the retention of the character of the spaces... The beautifull old metal trusses, the warehouse floorboards, original brick walls etc.
And finally, simply the unusual, unexpected, curious... Same bet as Lavender grove... That there are people out there that will be ready to pay over the odds for exceptional spaces!
Will see in about a year and a half if the bet was right!
But of course will keep you updated!