OFFERS INVITED AROUND £180,000. The flats themselves are worth £200,000
An interesting one here, and quite a complicated one too. Offered for sale are 2 TENANTED flats, including the freehold. They currently bring in £1050 per month which a 7% return on the asking price. They are in good order too. In theory, these should be worth about £90,000 and £110,000 each, so there's an immediate saving of about £20,000 on the asking price.
So what's the catch? Well there are a couple of things the purchaser needs to be aware of and take on the chin
- if you look at the diagram above there are actually 2 freeholds for sale here - number 4 and number 25. The latter is a ramshackle commercial building (see below) in the garden of the former, let since the dawn of time at a peppercorn rent. Once you own it you could leave it, or evict the tenant and develop it, or turn it into a garage or garden - your choice. But you're buying it as it is.
- the house has a natural spring in the cellar - always has. There's a pump down there that deals with this, but it's a known issue.
- the current owner has had the property for many years and paperwork is pretty scarce. You're buying it a discounted rate accepting this.
It's the type of purchase that will appeal to someone who is happy to take a property on at a genuine discount and accept that there are a few irregularities - the vendor seeks that type of buyer. It really needs to be a cash purchase, as the vendor wants a quick transaction. A solicitor will be required to 'process the transaction' rather than analyse in the n'th detail. It's the type of property that would usually end up in an auction for these reasons, and that's where it will be heading if a sale isn't agreed in the next few weeks.
