This is the second property we soured for our investor on Staveley street and Learned a lot in the process. We bought this property through the modern method of auction adding an auction cost of £6,300 including VAT.
What we learned was this property was actually an empty property and had been for a while, in fact, the charge on the property had been increased to over £3,700 owed for Council Tax when we were met with the bill after purchase.
However, we managed to save our client every penny of the council TAX and I will explain how.
With the Doncaster council, the council can charge you an ’empty homes premium’ if your home is empty and unfurnished for 2 years or more – you pay this on top of your council tax. The premium can cost up to 100% of your council tax if your home is empty for over 2 years. 200% of your council tax if your home is empty for over 5 years.
I knew that I had to do something about this so I began discussing with the council and talking to a few of our advisors, we found out that there are ways to not pay any council TAX on property that is uninhabitable and also on properties that are going through a refurbishment process provided you provide sufficient evidence like dated photos, schedule of works and so on. ARM Empire helped save our client over £3,700 on council tax.
We also have a flip profit of over £19,000 profit.
This property was purchased off Auction for £32,000
We paid a £1,600 deposit upon winning the auction
cost of the auction including a legal pack £6,300
£810.00 covering the cost of the seller under auction conditions
our solicitor costs came to a total of £659
There was no SDLT as the property was under £40,000
The total purchase cost until we had the keys in our hands came to £39,769
We don’t usually recommend bidding on auctions especially when you haven’t seen inside the property however we had already sourced a property across the road in Staveley street and the market was hot so we secured the property with it coming to market in only 2 days we knew worst case we had to take it all back to brick and by doing so the refurb cost would be around £20,000
This is how the property looked when we the builders first entered it upon completion.
Removal cost and the garden cost came to an additional £3,000
The refurb cost came to a total of £24,000
We had easy access and lower costs as our build team could go from one property to another and we already had a great idea in terms of what needed to be done for the refurb as it was almost identical to the other
We have buyers lined up for the purchase of this property with multiple offers as the one on the other side which we refurbished and sold that was a semi-detached (this one being a mid-terrace) we sold 84 Staveley street for £85,000 and sale has now completed with profits in account.
Total cash in was £65,269 including pre-negotiated sale costs
conservative profit of over £19,000
Over a 27% ROI
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