Market Value:
£150,000.  Unconfirmed by valuation but comparable research suggests it should be worth at least as much as this.

Purchase Price:
£133,000 agreed price. 

Other Financial Details:
None given.

Rental Potential: 
This 2-bed semi is situated in the Birkdale Village area of Southport.  This is a popular middle class area some 45 minutes from Liverpool, famous for its beaches, golf course and being the home of the footballer Steven Gerrard.

According to the vendor it achieves 650 pcm.  The vendor renovated the house upon gaining vacant possession, putting in a new kitchen, bathroom and redecorating throughout, hoping that this would attract greater interest and add value when she went to sell.

Comparables:
Another identical property in the same street sold for £150,000 in April 2007, while 3-bed semis in adjacent streets sold for 151k and 155k in 2007.  Given that the property is at the 'top end' for the area it should achieve the predicted value.

Background:
The owner of this house is also the owner of the L1 apartment in a previous email. The owner needs to sell both to release money to pursue another business opportunity.  She gave the estate agent a short period of time to find a vendor, but now wishes to pursue a cash sale to an investor.  She is prepared to take a price concession in return for a swift, guaranteed completion.

Described by the current estate agent: "surprisingly spacious accommodation, benefiting from a newly fitted kitchen and bathroom along with double glazing and gas central heating. This well maintained property is situated in an established and popular area close to local schools and the amenities of Birkdale Village. This 2 /3 bedroom property is an ideal family or starter home."

The third bedroom is a loft room, which could be used as a playroom, storage or a study, as the vendor did not seek planning permission for it to be used as a bedroom.  It has a fixed stair leading to it. The back garden can be accessed by a side gate and has a sunny and secluded aspect.

Five images available: breakfast bar, external, kitchen, bathroom and lounge - email for copies.

Deal analyser available:   you can request this MS Excel template to analyse diiferent mortgage deals, LTVs, etc

Profit Potential

11% BMV

Market value:                 £ 150,000
Purchase price:             £ 133,000
Mortgage:                       £ 135,000 (plus set-up fees etc added to                                                 loan)

Equity:                             £ 15,000 (minus costs as above note)
Cash Back Potential:     £ 1,500 (minus purchase costs)

Mortgage Payments:    £ 600 pcm on 90% LTV at 5.34% pay rate
Rentals:                            £ 650 pcm (see above)

These are not exact figures above but a good baseline to work with, also note there will be an agreement fee for the mortgage which will be added on to the loan amount and this amount varies in each case.   This increase your loan amount and consequently reduces the equity.

It would be possible to arrange a low fixed rate, which would improve your positive cashflow every month to around £100+ , but consequently cost you higher in set-up fees.

In This example you would have a positive cashflow every month, but you would need to budget for potential void periods, minor maintenance, insurance, British Gas homecare, etc per month. 

Upfront costs:

Valuation:                   
£350 ish - to compensate for the  Mortgage Valuation we have already paid for and received - this is then transferred into your name for mortgage purposes.  There may also be a survey report (which will be mentioned in the Basic Details property description above), if so add another £160.  In this instance a valuation needs to be instructed (see introduction).

Deal Fee:                    
£100 - fee to secure the deal - non-refundable  unless the vendor pulls out, the valuation comes in less than 145k, or the survey highlights a major problem.

1st Part-Payment Finder's Fee: 
Half the finders's fee is payable after the successful valuation, the 'deal fee' is credited to this amount.  If you decide to pull out once solicitors have been instructed, then this is non-refundable.  The other half is due upon completion direct from your solicitor.          

Typical Costs:

Bridge/brokers Fee (0.75%)             £978 for both 

Stamp Duty (1%)                          £1,300

Solicitors Fee x2 + VAT + Disbursements         £1300

Valuation Fee                               £350

Finder's Fee (1% inc. deal fee)        £1330

TOTAL COSTS                                     £5258 ish

CASH BACK  POTENTIAL     - £3,758 (i.e. requires cash down)            

In other words, you could have cash back now which would help reduce your buying costs (as above example) and a 'free' property with inbuilt equity confirmed by valuation, which is cashflow positive monthly.

To Secure the Deal:

Email Your Interest:
Simply reply to the email, with the subject line: "Yes Please" and make sure you attach this email as 'incline text' or alternatively, you include the 'Ref number' of the lead in your subject line.  If you are the fastest to respond, we will inform you that you have the right to purchase the deal.  If you are unsuccesful, we will endeavour to inform you ASAP.

Pay Deal Fee:
By responding like this you commit to paying the Deal Fee within 12 hours of us accepting you as the winning bidder.  The reason for this is to ensure that only serious investors proceed, as if the investor is not serious there may be time to rescue the deal via another investor.

Remember we mainly deal with motivated sellers, often in dire need of help, who need speed and decisiveness in completing the deal as agreed.  This is the reason why you are getting an investment at a discount.  It harms our reputation if we cannot deliver that for them - and we certainly do not want to be responsible for worsening people's circumstances.

Valuation:
You agree to pay for the Mortgage Valuation already carried out within 2 days, and if one has not been carried out and you so desire, you must instruct  a Homebuyer's Report or Building Survey.  Please note that you can only arrange to view the property after or during the valuation visit.  Before contacting the vendor you must allow us to introduce you to the vendor.  You must then pay the 1st Part-Payment Finder's Fee (half the finder's fee quoted, minus the Deal Fee), within a further 5 working days.  Upon paying this you have agreed that you have satisfied yourself regarding facts, figures and research, confirmed that you are able to raise finance on the property, and are fully committed to completing the purchase.  You can pay by PayPal or by direct bank transfer, details of both will be given as requested.

Please ignore above, you may visit property at or after valuation.  The valuation in this instance is instructed by you.

Finder's Fee:
The only accepted reasons for refund of the 1st Part-Payment Finder's Fee is if the vendor tries to pull out of the sale (which needs to be confirmed in writing from the vendor's solicitor), or is uncontactable up to 21 days.  The reason for this is that it is already very late into the process and you will have had enough time and information to proceed to completion.

By replying "yes please" to this email, or emailing back with the deal / lead reference number, you acknowledge and agree to these terms and conditions.