DIARY OF A PROPERTY INVESTOR – DAY 8

One of my co- directors is concerned about the mixed-use property (see Day 1) we are in the process of purchasing. The concern is that there may be more problems than we have anticipated and also that the shops will probably be difficult to let (all shops in the North are potentially difficult) and we have not factored that into the price.

We go around to have another look and the concerns begin to multiply. This can happen when you are buying complex properties. My fellow Director thinks we should offer £120,000. I am not sure that the Seller will go for that.  We have already negotiated the price down from £175,000 to £140,000. Will the Seller go for a further reduction? The property has a lot of potential. But we are worried about the condition of the property and how easy the property will be to let especially in regard to the shop.

After a lot of discussion, we come to the conclusion that we are just not happy about this purchase. This is not an easy decision but as the old saying goes ” when in doubt leave it out”

I telephone the Seller. My approach is not to ask for a price reduction as such (which I feel would not be fair to the Seller as we have already negotiated the price down) but to express our concerns and say that we are worried that this may not be the right property for us and to warn him that we may not be able to proceed. He had said another party was interested and if that were the case then it might be better to go with them in view of the fact that we were not sure about our position. He says he understands our position

I also hear that a viewing has been arranged for Sunderland and get some details about the Ownership. It seems the freehold owner is creating a new 125-year lease for the top floor which will be good. There is a fixed ground rent of £1,000 which does not rise during the term of the lease.  I have also been doing more research and am getting increasingly interested in the location which I think has potential. The flats are only a 5-minute walk from the centre, the station and the local shopping centre The Bridges. Interesting.

Leave a Reply

Your e-mail address will not be published. Required fields are marked *