Friday, 19 September 2014

Olive Lane Darwen, Reduced by 15% Another Investment Opportunity? from Paul Ainsworth Lord, Darwen Property Expert

I'm always on the lookout for potential deals for Landlords that call me asking for my opinion on whether or not they should buy this house or that, which is great.  But the thing is I often get really enthusiastic new landlords or 'wannabe' landlords looking for properties but just not sure what to buy or where, and this is where local knowledge comes in handy.

Local Knowledge is Paramount
Luckily for me, I have lived in Darwen all of my life (except for a 5 yr stint at Uni) so I can happily say I know every street in Darwen - and just as importantly, know the difference between one end and the other - and there can be big differences.

Take Olive Lane in Darwen for example. Talk about a mixed bag! You see, there are some partsof Olive Lane that work for some investors and other parts that don't. For a variety of reasons.

Reduced by almost 15%
Anyway, on the subject of Olive Lane, I noticed that Proctors Estate Agents have this terraced on the market (still), which has been nicely reduced by almost 15% from when it was put up for sale last November! So it gets my attention.

First of all, it should have been snapped up by now IMHO. So let's take a look at it on Rightmove...

Ugly Pictures are Good!
Ok, it's not very pretty (or at least the Darwen Estate Agent's listing isn't). But as a landlord, this can be a good thing, because the chances are joe punter will think so too. In turn there will be less interest in it (hopefully) and this could well be the reason why it still hasn't sold?
But then again, if you check out the house next door you'd be forgiven for thinking this might be a rough area. Afterall, if next door's had the front door kicked in why on earth would you want to buy a house next door to that? And more importantly is it going to rent out if it was done up and made nice and presentable?

Landlord's Investment Deal on Olive Lane in Darwen.

Well, here's my view on this...

The property game should be seen as a long term business
We have to remember the property game, or at least for landlords and wannabe landlords, should be viewed as a long game, and not a business to get into if you want to make short term quick wins (however, such a strategy is fine, but requires a different approach with a different game plan).

So as a medium to long term plan, and with that firmly in mind, this one fits the bill nicely.

Firstly I see an opportunity to add value here, and secondly, I expect to get it for even less than they are trying for. I'd probably chuck in a cheeky offer at 20k with a view to getting an offer accepted at somewhere between 25-30k. But any reduction in price at this sort of level has to be seen as a win.

It's then reasonable to assume, given there is a lack of internal pictures, that it's gong to need a decent spend. Assuming you can do a bit of the work yourself, or have access to some lads that can do a good job at the right money, let's allow say... a 15k refurb budget.

'No Money Left In' Deal
So at worst you pay 30k for it, spend 15k refurbing it, it then stands you at 45k. So long as you followed the refurb advice of an agent that can get you a top rent, I see no reason why you wouldn't be able to add equity and still deliver a double digit yield on this little baby, and pull out all your money again remortgaging it on a sensible BTL mortgage? (and still make a profit on the monthly cashflow).

In summary what we have here is a 'no money left in' deal that will cashflow nicely.

Doubled in price
And not forgetting this is a mid to long term business, if property prices continue to double every 12 years or so, like they have over the last few hundred years, given time you'll double your money too.

Bit of a no brainer really. Perhaps I should buy it myself???

If you see any other like this little baby and want to discuss if it's right for you, why not give me a ring, or better still cal in for a brew? I'd be more than happy to have a chat. My office is right in the town centre, Ainsworth Lord Estates 49 Market St Darwen BB3 1PS Tel 01254 760 660 - ask for Paul.

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