** Fambourgh Value £115k purchase price £80k rent £600pm £35k BMV
New motto don’t get to friendly with the tenants.
The lady who owned the property was being re-possessed by the Building Society. On top of that, the company that had installed £15k of double glazing was going for a charging order. £15k of double glazing in a £115k property, that must have been Christmas for the double glazing salesman.
As with all my investment properties where the vendor rents the property back I tell them if they pass a credit check I will need only 1 months deposit and 1 months rent on completion but if they fail credit check I will need 6 months deposit and 1 months rent up front.
It works great as £80k purchase price gets a £68k mortgage and requires a £12k deposit now 600pm x 7 = £4200 so deposit required is now only £8k. This was borrowed @ 2% per month unsecured (thanks Steve).
This is the first time I have done any work to a property I have rented back to the vendors but it was required or the re-mortgage valuation may have gone wonky.
I replaced 9 missing tiles from their kitchen floor (I think the job was never completed). Some beading around the Laminate floor in the hall, front and back forest turned back into a garden and repainted the red garage door white, oh and fixed a leaky tap. Re-mortgage is currently going through. Total spend £200.
Mortgage payments for this below market value property investment deal will be £115,000 x 85% = £97,750. This will cost £390pm giving me my plus £200 pm positive cash flow. There will be approx £17k surplus of cash after original mortgage and deposit loan has been repaid.
Reference getting friendly with the tenants every time there is a family bust up (twice weekly) I get a call to say is it ok if the lady becomes the tenant. A day later I get a call to say not to bother. They have also requested I convert the garage into a further bedroom and en suite so they can rent it out for £100pw they even offered me an extra £200 pm rent cost will be around £7k. I said I would sort as long as I got the full £100 pw until my costs are covered.
Property mortgage is currently £252.36 and is currently rented for £795 per month.
If you would like to learn how to buy investment property below market value and would like to invest in some propety training then call Darren on 01908 423700. We run many property investing courses to suit every level of property investor.
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