Tuesday, 23 February 2016

New bet - overview.

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!

Thursday, 18 February 2016

Not Victorian, not Hackney -next chapter.

After some fierce bidding ( about an hour ago... Still adrenaline in the bloodstream).
Happy to announce that the next chapter will not not in Hackney nor Victorian!!!

But will be in Brixton and industrial!!
A beautifull warehouse.. Like they don't make them anymore.

More to come.

Monday, 1 February 2016

Sad celebrations.

Right, here we go; after 3 months of legal headache... Completion of the sale has taken place.

And although the deal is good (really can't complain), I still feel like I have abandoned a baby that still needed me.

The best advice I have been given is "The horse should not make friends with the grass", and I cannot agree more .... But.

Had a last walk through day before and while walking through the unfinished spaces, I could just hope that the new owner will respect the original vision and let me walk through it once it's been completed.

View from the garden - basement extension below and soon also the above ground extension on top of the beams.
Same spaces but view from the existing house. 

From the living room with the double height space/ glass floors and skylight  above.
Feeling a bit like that - rusty, useless and in a corner. 
The newly rebuild side return view from the basement -again some glass floors and skylights above 
The supporting pillars that underpin the entire existing house. 
From underneath the existing house.
Where the stairwell used to be

Empty chair.
First floor with mezzanines under the roof (if he wants)

View towards extension from the first floor can imagine the above ground extension being in line with the wood fence. Both in height and depth. 
Raw concrete. Loving it. I would probably leave some of that visible. 
Under the house. It's all supported on some of these pillars. 
From inside ground floor extension. View of new newly rebuild side return. 
The full lenght of the basement from underneath the existing house. 
From first floor view to the garden and extension. 

Should probably stop here. To distract my mind have started going through the auction catalogues again.