Bit of "press" cant harm

Glad to see the "pick of the week" in the Evening Standart being one of our flats.
Thinking about the amount of properties available in London, I guess that means we did get something right?

A few pictures of finished product...

Its been absolutely  ages since the last post and I can only apologise profusely!

By now we are nearing resale on the phase 1 of the development in Clapham..... I presume some of you who are attuned to British politics will raise eyebrows due to the rather pathetic timing!

For those of you who are not: current UK affairs are now reaching such a pity state that it would be hard to think of a more atrocious time to market! Well, actually it could be worse, the 29th March 19 could potentially be more auspicious (hardly any sarcasm intended)....

But let's just "keep calm and carry on" as they say on this side of the channel.

Below a few pictures of the 1st flat to be finished....

Feeling a bit rusty.

Have to admit I am feeling a bit rusty.
Just like any other brain activity -or any kind of activity for that matter- unless trained, used and exercised on a regular basis......

Nevermind, it's been a while I had not applied my grey cells to some 3 dimensional puzzle games like how to fit a bathroom into a niche half above the stairs and half into the butterfly roof loft space in order to be able to fit a decent sized second bedroom within the rest of the floorplan.

On top of the spatial constraints, come the financial and regulatory puzzle pieces.... As soon as we open the loft space, new insulation becomes a requirement for building control.... The new support for the load bearing wall, and the extra costs that follow suit.... How much value is added by this second bedroom? Does it cover the necessary additional expenses?

These are the questions on the top floor. But in the lower ground, it seems that the only two options to have two bedrooms to fit is to either knock off the wall that supports the entire staircase across the 4 floors above, or maybe skew the corridor to some "funky angle" in order to knock the wall off but at least keep the pretty much predetermined place for pillars to support it!

I could go on but you get the picture.  It's like playing with a 3 dimensional puzzle.... Maybe 6 dimensional once you take financials, timeframe s and regulations into the equation?

That's just the "straightforward" phase 1 where we are taking the existing 4 flats and just refurbish them for resale later in the spring, but am already looking forward to walking around the finished product!

Plenty of obstacles still to go but it's a labour of love... Can't deny it. Just wish I had more time to exercise that part of the brain a bit more often.

Literally "watch this space"

Pictures say more then a 1000 words

Basically gives a flavour of the state of affairs AFTER the basic clear up of vegetation and rubbish so that one can "walk" or "climb" through the spaces.... (2 days X 2 people) Should be noted that this is all the office and backyard depicted here.
The main house is far from great, but liveable.... Update on that some other time.

Today we are getting the full house measured and surveyed so we get plans and sections in hand. That should help making sense of the nooks and crooks, basements, yards, levels... Etc.

Have to say have never seen something quite as bad....

Voila.... Lets get started.

Keys in hand.... Have to say there is some satisfaction that comes from dealing with "brick and mortar". A satisfaction that is not available when dealing with stocks and shares, options, CDO's etc.

Call me old fashioned maybe, and having said that I will also admit that placing bets on the stock market  avoids the "fun" (inverted commas are for the slight cynical undertone) of the planning stages, the inevitable structural "surprises" and the rest of it.

But in the end I will quote Warren Buffet:
“Never invest in a business you cannot understand.”
So I think I will mostly stick to brick and mortar for the time being...

Sadomasochistic purchase (but at a good price)

Happy to announce that a new project has been on-boarded! (At the border of a pretty good corner of south West London)

2126 sq ft residential and 717 sq ft commercial as well as a large yard with an amazing amount of upside. We believe we can add create up to 3500 sq ft of residential space.

Now I have to explain why the title of this post makes sense.
Well, the project is in Lambeth, which is the same council as the one we dealt with last time, and with all due respect.... It was a real hard battle we had to on our hands to get the plans through pre-planning stage successfully. To have gone in for more feels slightly masochistic frankly.

But on the other hand, based on the numbers we had crunched, it is the first time we bought what we believe to be a real good deal.

Obviously times are different and the climate not as bullish as pre-brexit but as Warren Buffet says "sell when everybody buys and buy when everybody sells" 

20 days to exchange, but for tonight a good celebratory drink should do it.

... A whole new adventure is starting.

Sleepless nights, will she be the one? (Warning derelict content)

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!)

Getting serious again.

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.

More soon. 

Before handing over the keys...

We just had to have a warehouse party!
In numbers:
- 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.

Celebratory diet coke.

After a long long year... (During which I hardly blogged - apologies)
I can confirm that our latest project has sold/exchanged  today!
In brief:
- 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!

Slow progress & squatters.

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.

Warehouse shoot - Fashion statement.

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. 

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)

Finally,

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!

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.

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.