Case Studies

Firs Road, Hellesdon, Norwich

3-bed bungalow in Norwich

We bought this property at Firs Road, Norwich, via an Estate Agent. The property had been on the open market, but a sale had fallen through. We were introduced to the agent by a contact of ours who knew we were looking out for interesting property deals. The agent told us that there were potential structural issues due to historical subsidence so we took a builder with us to have a look. He was of the opinion that any issues could be resolved.

The subsidence took place at least 25 years ago and we only knew that there had been a problem because the property had been underpinned at that time. There had been no subsidence since then.

Because of the issues, we were able to purchase the property for £165,000, which was below the market value. We used specialist finance to complete on the purchase.

We stripped back the property, sorted out the issues from the subsidence, and refurbished the whole property. This involved adding a new kitchen and bathroom, flooring, carpets, decoration throughout, filling in a pond and turfing the back garden, plus works to improve the front driveway.

We were aiming at the retired market, people who were downsizing in early retirement, so we had to ensure that it was of a specification to appeal to that market.

The work took 8 weeks and ended up slightly over-budget. Because we bought the property at a good price we were able to still make a good profit.  They say you make your profit when you purchase, and this project proves that point. We also have a contingency fund for all our projects.

We put the property on the market with the same Estate Agent we bought it through, and it had lots of viewings. This turned into a bidding war. We accepted an offer, but their mortgage provider’s surveyor put them off due to the past subsidence, so the sale fell through. The same thing happened with the next purchaser.

The third purchaser eventually went ahead, and the sale went through for £225,000. However, this third purchaser took a long time to complete as they were in a long chain.

There were a few lessons to learn from this project:

  • Don’t buy a property with historic subsidence unless you plan to retain it long-term.
  • Avoid markets where there is a likelihood of a property chain, or make an allowance for it in your exit strategy.

We have now changed the type of property we deal with and avoid the downsizing/ retirement market unless there is a particularly good deal, in which case, we will allow for a longer re-sale.

 

Watch the video for “before and after” photos of this project.