The Bury Bargains
They say good things come in threes, well these two properties must have a long lost brother somewhere! We purchased 2 x 2 bed terraced houses in Bury back in December 2017. With the owners requiring a quick sale our solicitor worked tirelessly to complete both these purchases right before Christmas. It was touch and go but we got the deal done.
Both properties had been subject to significant neglect. Andrew Street had previously been used for illicit activities and despite have had refurbishment work started this had ground to a halt. East Street didn't fare much better, the downstairs was filled with a half dozen skips worth of rubbish and the upstairs rooms had been fire damage. This property was especially interesting as the insurance had stripped the ceilings in order to put a new roof on to make the property water tight, therefore the potential to add a third bedroom in the loft was obvious.
We unfortunately were not able to carry out the construction work on these project as we required the funds for other projects so both properties were sold on in March and April 2018 netting a profit after all costs of around £10,000. It was disappointing to have to sell these projects but they made great investments for our clients and allowed us to move on to other projects.
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NUMBERS:
Purchase Price £54,000
Deposit £13,500
Legals £1,400
Professional Fees £5,300
Capital Employed £20,200
Development Value £70,500
Profit £9,800
ROCE 48.5%
ANDREW STREET NUMBERS:
Purchase Price £33,000
Legals £1,000
SDLT £0
Refurb £30,000
Total Investment £64,000
Development Value £85,000
Profit £21,000
ROI 32.8%
EAST STREET NUMBERS:
Purchase Price £37,500
Legals £1,000
SDLT £0
Refurb £30,000
Total Investment £68,500
Development Value £85,000
Profit £16,500
ROI 24%
As you can see both properties produced a 20%+ return for our investors, with the numbers for East Street looking even stronger as the investor elected to do the loft conversion works which we estimated would have cost another £10,000 and added another £20,000 to the value taking the profit up to a substantial £26,500 and the return on investment up to 33.75%. We like to think they were a Christmas miracale!
