Patrick Souiljaert

From: patrick@sussexpatrick.com [mailto:patrick@sussexpatrick.com]
Sent: 03 January 2012 02:59
To: patrick@sussexpatrick.com
Subject: Welcome to My Property Network 7

Hello humans

Happy New Year to you all!

Welcome to the new people I’ve recently added to My Property Network (now in excess of 400 members). If you’re not sure who I am, I am the first and only property investor with Cerebral Palsy (www.sussexpatrick.com).

I’ve had an action-packed few weeks. I’ve secured the purchase of 2 props in 2 weeks and my first prop (which I completed on in May has been flooded! It’s all good fun!

The flood in my first prop was caused by a bust pipe in the flat above. I haven’t done anything about it myself. Howard & Co www.howardestateagency.co.uk (the best letting agency in Worthing) have sorted it all out. My tenant (and her baby) stayed with her mum for 5 days, whilst the flat dried out. The maintenance company are going to do the required redec work. All I need to do is ensure the work is done properly so I can get the flat re-valued and refinanced.

(The best tenants are people who have got no ambition of owning their own home – because they will treat your property as their own home)

My 2^nd and 3^rd props are going through now.

My 2^nd prop is a 1 bed flat with a yield of over 10%, right by Worthing Station. The flat was due to be sold at auction but I bought the prop beforehand – and I should complete on it on 9 Jan. The flat needs a refurb. It has a big bay window (which was going to need a lot of treatment, due to damp). However the maintenance company have applied for planning consent to replace the window with a new UPVC one. They estimate the window will be replaced at the beginning of Feb but I would like to try and get it done sooner. I like a challenge! All I need to is try and get the planning consent rubberstamped ASAP. Paul Howard is a Worthing Councillor and has said he can help! Thank you Paul – it’s great working with you.

What I haven’t mentioned above is all of the dealings with solicitors, EAs, letting agents, builders, maintenance companies etc.. It goes without saying because we all do it. My point is this, if non-investors were to read what I’ve written they would probably say something like “property investment and owning properties is so difficult. All you get are problems with tenants, damaged properties, having to apply for planning permission…”.

I love property investment, all I see it as is people. The hardest thing I find is viewing a load of props. Everything else is simple and easy. I really like liaising with people – and doing the analytical work.

My 3^rd prop is a 2 bed flat in Bognor town centre (near the station). It’s on the market with Whiteheads (www.whiteheadsestateagents.co.uk), one of the biggest EAs in Bognor and I’ve built a good relationship with them. I was the first person to view the prop when it came onto the market for £100K. The EA said the vendor was very motivated, wanted a quick sale and would accept a low offer. After viewing the prop on a Friday, I started at £70K, and then after the weekend, I told the EA my highest offer was £85K.. The EA came back saying the vendor wanted £94K.

I left it for 2 weeks and phoned the EA and offered £85K again. The EA came back with £90K. At 90K the yield is 9.2%, I thought it’s a bit low but had another look at all of the figures and concluded it was worth buying the prop for £90K:

• I compared the maintenance charge and remaining lease with my 1^st prop (10% yield):

Prop 1 maintenance charge & GR £950

Prop 1 remaining lease 68 years

Prop 3 maintenance charge & GR £546

Prop 3 remaining lease 85 years

• I would like to work with Whiteheads and they have offered me a rental management fee of 7%.
• After the refurb the prop would value up to £125K

On 23 Dec I received an email from Whiteheads, saying the vendor now won’t accept anything less than £91K. This prompted me to have another look at the figures, and another search for comps/sold prices. It appears that £125K is a little optimistic and think what I originally thought about the prop only valuing  up to £110K. Hence I phoned the EA last week and explained my concern. They said they’re going to email me sold comp prices of £125K. I would still like to buy the prop if it will value up to £125K.

I’ve decided to call some surveyors and other EAs I know in Bognor and ask their opinion. I’ll then let Whiteheads know if I still want to proceed with this purchase.

I have had another 1 bed flat, 10% yield offer accepted (through another EA) but the vendors aren’t very motivated to sell (if at all). The vendors are a husband and wife, and a business partner in Majorca. It took them over 3 weeks to make a counter-offer of £62K to my offer of £60K. Hence I offered £61K, waited another 10 days or so and then went with £62K. The EA said “The vendors are very happy accepting your offer of £62K but the business partner is now thinking about buying out the husband and wife.” That was over a month ago. What I’ve decided to do here is, phone the EA and say my offer will only last for another 7 days.

I always say to people that I’m looking for a yield of 10%. There are different ways of calculating yield and I would like to clarify how I do it. Some people include the maintenance charge, ground rent, refurb costs etc. I go by the gross yield hence only use the purchase price and the annual rental income – and there’s a good reason why. I know what the rental rates are in my area so when I’m browsing Rightmove, I can quickly ascertain if a prop is a potential deal. When I find a potential prop, I then phone the EA and ask for more info.

This is how I calculate yield:

(the annual rental income / the purchase price) * 100

My motivation to try to secure 2 props in 2 weeks came after Rob Moore emailed to tell me he had entered me into the Progressive VIP competition. This led me to take massive action and I posted a number of updates, throughout the 2 weeks, (and my competition video) directly on my blog. Go to www.sussexpatrick.com and scroll down a bit!

Many congratulations to Iain Wallis for winning the competition – you are a worthy winner. Iain is going to buy a BTL prop and donate the proceeds to Cancer Research (in memory of his sister-in-law). I would also like to thank all of the people who voted for me.

When someone issues me with a challenge and a deadline – I go for it!

My updates always seem to end up longer than I intended! I’m going to write another update to run through the figures on my 3^rd prop and whether I decide to buy it. I’ll also outline my plan for 2012.

Other blog updates in the pipeline:

• Another one on Mindset (I love mindset stuff!)
• A blog inspired by the Wealth & Lifestyle weekend I recently attended.

Thank you for reading!

Best regards

Patrick Souiljaert

I am the first property investor with Cerebral Palsy. Follow my journey – www.sussexpatrick.com

Like me, you can achieve anything you want – just take action and stay focused.