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.
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!
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.
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.
Given the looming contract exchange deadline, the mind (and the boys) should be fully focused on the finishing line (of phase one).
As you can see below things are moving apace.
- all earth now removed from the actual lower ground area
- 80% of steels now in place
- 95% or cast concrete details ing walls in place
- main house structure now rebuilt where required
But!!!
- contractor is squabbling about bits and bobs to extract more money last minute.
- back garden that's supposed to be lowered as well has not yet been touched!
- entire side return and its roof still needs rebuilding in original stock brick!
It's a race against time and at the moment its looking like time is winning!!
On another note here but: there is something magical about the time the steels come in. It's like the bones or the space matrix is set.
All of a sudden, spaces that were until then only imaginary or only on 1:50 scale, take a 1 to 1 dimension. The spaces actually reveal themselves.
Am particularly happy about the view from the lower ground up through the glass floors/ double height and the glass skylight above into the trees.
It was always going to be the more dramatic space of the scheme, and it looks like its going to work as imagined.
Even if the rest of the shaping up process is going to be in someone else's hand; I managed to get the satisfaction that the bare bone has been set reasonably well.
Small joys.
Since I need to keep my mind distracted; let's call it a "rebound" effect after having to let go the pretty girl (as per analogy used in last post).
It's time for hunting again. Quick check of latest auctions, property sites etc... (More covered on hunting process in previous post)
Anyway, so that beauty came to my attention:
http://www.rightmove.co.uk/commercial-property-for-sale/property-36170160.html
And after a quick talk with my friend/co-investor; turns out he likes churches too!
Here a few pics from the viewing last Saturday. What a beauty!
.... But it comes with some issues... As we call it internally: "the beauty has hairy legs"
In fact lots of hair indeed: it has subsidience (the ground is givingway), is far-ish from public transport (17mn walk), has no planning permission to convert to residential yet, and is in a non "up and coming" zone 4 spot... Not the end of the world, but nearly (sorry, sounding a bit like a London snob here!)
But despite all this... Have to admit that even if unshaved... It's a beauty indeed!
I don't want to jinx things, but....
Happy to announce that a very acceptable offer has been received.... Rejected, increased, still rejected... Increased again and finally accepted.
If all goes to plan, within a couple of week a 50% profit on investment will be crystallized. That's over a 18 months timeframe, so pretty decent when keeping in mind the market grew only 5% or so over the period.
Also to mention is the fact that the sale is for a shell and planning permission only. So the entire phase two of the works is still to be carried out by the purchaser.
Question arising: is it the right time to exit and should one not have carried out the complete project to lock in maximum profits?!
Answer is: not sure! I do actually believe that there is still potentially another 150k at least in the project if carried through to completion ....and since there is currently nothing lined up to reinvest it would be tempting.
But somehow as with any gambling, one should know when to exit the casino.
So purely from an investment perspective it's the safe option, and given that all the eggs are in one basket (and there another investor involved): it feels like the right thing to do.
However from an architects perspective it's like giving a newborn baby for adoption!
Now I know many might say that I should just cash in and be happy....
But I can't help being a "senti" (shortcut my wife uses for "sentimental"). I have gone through the spaces so many times in my head, thought about finishes, details, viewpoints, light angles.... And and and...
Creatively speaking one could argue it's the equivalent of seeing a beautifull girl go off with another guy after a flirtatious night out with her! (Could take the analogy further and make it more graphic but...)
Having to learn to let go... And go hunting again I guess.
