Planning permission!!! Er... has been refused. Looks like plan A is up the spout (2 x 2-bed and 1x1-bed flat). The council think that it is an over-intensive use of the site and it will lack open space amenities (garden space, I suppose that means). Actually, I rather agree... The architect says that the proposed flats do in fact conform to general standards though and that the council is incorrect in saying this. They also objected on the grounds of stacking - that is, bedrooms should be above bedrooms, living rooms above living rooms, and kitchens and bathrooms above the same, to avoid disturbance to residents of the adjacent flats. That puzzles me a bit, as the plans allowed for this: did the architect send an old version of the plan to the council?
Anyway, notwithstanding that, I must consider plans B and C. B: 2x3-bed flats. I don't see how that can be done, but I will ask the architect to see if it is feasible. Plan C: 2x2-bed flats: certainly feasible although the staircase is in a truly chronic location for this - well away from the front entrance of the house and past two downstairs rooms at least. How can the flats be separated? (It worked with 3 flats as the entrance could be moved to between the two downstairs flats.) In my area, a typical price for a 2-bed flat is £145,000, although they range from £130,000 to £162,000. So my expected return should be £290,000. My mortgage is £205,000. Costs, say £60,000, pessimistically. Profit, £30,000. Not much, but I suppose I could buy another place with it. Just about. And use the credit cards again to do it up... if the market stays OK.
Well, fine. I'm not rich yet, but there is at least a route through the maze, even with plan C.
Plan C with bad prices: final value £260,000, costs £265,000, would still have £55,000 available on credit cards to do something... maybe.
And the builders want to start in earnest on Monday. That doesn't look like it is on... and the architect is out of the office this morning so I will have to call him this afternoon.
Maybe I should just buy gold or something?
Or plan D: do it anyway, but just to rent out the flats for 4 years until planning permission becomes irrelevant. My rough calculations show that this may not be particularly viable, though, but I will have to check them again.
Thursday, September 18, 2003
Thursday, September 11, 2003
Well, to my surprise a planning officer turned up on Monday morning - no appointment or anything. He came in, measured the back garden, then left. Didn't want to see around the house at all. Hmm... I guess they are concerned to make sure that there will be enough parking space, and to see if it is practical for two of the flats to have their entrance via that garden. I think that there is space for two cars and there should be no problem with entrances. Should be OK. Maybe they will visit again to look at something else: it gives them a chance to get out of the office for a bit, especially if they don't make an appointment. Who knows? I might not be in and they will have to come out again.
A couple of the builders came in on Tuesday, from 10:30am to about 12ish. They had intended to swap two of the upstairs windows around so a small window could go in the proposed kitchen, and a large window in a proposed second bedroom, but they felt that the big window was too big and the small window was too small. OK, they are right. I shall have to buy two medium size windows. The builders finished ripping out the upstairs bathroom instead. My project manager came around yesterday to measure up, and to decide if a structural engineer is needed before we move a couple of walls about. We decided we should get a structural engineer in.
I still have one tenant upstairs, looking for a flat elsewhere, but he is going to have to move, at least to a room downstairs, as the builders want to rip out the chimney breast in his room. I must remember to tell him...
A couple of the builders came in on Tuesday, from 10:30am to about 12ish. They had intended to swap two of the upstairs windows around so a small window could go in the proposed kitchen, and a large window in a proposed second bedroom, but they felt that the big window was too big and the small window was too small. OK, they are right. I shall have to buy two medium size windows. The builders finished ripping out the upstairs bathroom instead. My project manager came around yesterday to measure up, and to decide if a structural engineer is needed before we move a couple of walls about. We decided we should get a structural engineer in.
I still have one tenant upstairs, looking for a flat elsewhere, but he is going to have to move, at least to a room downstairs, as the builders want to rip out the chimney breast in his room. I must remember to tell him...
Friday, September 05, 2003
Well, findaflame.com can wait: I am now concentrating my get rich quick efforts in another direction: property (real estate) development. I am attempting to convert my house into three flats. It depends in part on my being able to get planning permission from the local authority, as planning permission is necessary should I wish to sell the house, and even raise further mortgages on the new flats. If I just want to rent them out, it isn't necessary, but I don't want to reduce my options at this stage, and anyway, I don't think renting them out would be profitable as I would have to live in one of the flats. Three flats would probably cover my expenses, but two probably won't.
So, what is the plan, and how does it stack up financially? That is, how exactly do I plan to get rich like this? I bought the house four or five years ago, with the idea of renting out 5 rooms and living in the rest. I have done that, and it has been just about profitable overall, but the tenants haven't kept the place nice and it needs refurbishing at the very least. I bought it using a credit card since although I had a good job, I had no savings. I have never been able to build up any capital, but my credit has usually been good - not always, but usually. :-) In this country, if your credit goes bad, it stays bad for six years, so you can recover from problems eventually. Anyway, I paid £6,000 deposit, but secured a 'cashback' mortgage, so once I moved in, I got £5,000 back, so my net capital input was £1,000. The house was worth about £130,000 but because the market was slumping a bit and the developer-owner wanted out, I got it for £106,000. It has 4 rooms and a bathroom upstairs, an L-shaped living-room and another room downstairs, a downstairs shower room and a large kitchen-diner, also downstairs. In fact, it behaves like Dr Who's Tardis: it looks small on the outside, but just seems to go on and on inside.
Due to my usual money-handling incompetence (or whatever it is), I have remortgaged it twice to extract cash to cover my debts, and currently have a mortgage of £205,000. I have recently had it valued at £240,000 and was going to sell it for £230,000, but have decided against that as, basically, there was hardly any profit in it: I would not get enough money out to be able to do anything other than get a job. And I don't want a job. I have pretty much had enough of the rat race, thank you very much. Instead, the plan is to try and add value to the property, and then (probably) sell it.
Upstairs will be converted into a two-bedroom self-contained flat. Downstairs will be converted into a two-bedroom self-contained flat as well, and (using the kitchen-diner) an additional one-bedroom flat. In this area, at current prices, the new value should stack up to a minimum of £130,000 for the upstairs flat, £140,000 for the downstairs 2-bed flat, and £95,000 for the studio: at least £365,000 in total, and possibly more, if I can get good valuations and prices don't collapse too quickly (the market is weak once more). I plan to get good valuations by making sure the work done is top quality, with no cheapskate corner-cutting anywhere. I plan to pay for it... with credit cards. I have been using them for years, paying them off, getting credit limit increases every time I do, and asking for increases every now and then just for luck and now I have a truly ridiculous total credit limit of £60,000 or more, split over half a dozen cards or so. With interest-free balance-transfer offers and some careful juggling, I can borrow much of this money at quite low interest. I only need it for a few months, anyway (I hope). The conversion should cost around £50,000 to £60,000, although I also have my living expenses to add to that: it is going to be close, but I will manage somehow (one of my favourite quotes is from Dickens, "I have every confidence that something will turn up.").
Planning permission is the most likely obstacle to this plan, as they might not allow it, although according to my architect it should be allowable. Plan B is for two three-bedroom flats, but I don't know quite how that would be possible given the building's layout. Values would be about £155,000 + £175,000 = £340,000, if it is possible at all. Plan C is Plan A but renting the flats out and the heck with selling it, but as I mentioned above, that is a dodgy option, profit-wise (after four years I would be able to sell it even without planning permission as I can then claim 'established use' but with the market weak I might not want to wait four years before bailing out and converting a declining asset into cash). Most likely, Plan A with some minor changes will be allowed, but the planning authority have been on strike and haven't even seen the place yet. The strike is now over, but a month has been wasted - another mortgage payment and more down the drain. Plus, all but one of the tenants has moved out now, so there is no more free money from them to supplement my non-income.
The builders arrived for the first time last Monday, 25th August and ripped out skirting boards in three of the rooms upstairs, and removed furniture to a room downstairs. I was unable to sell much of this old stuff with classified ads, so in the end I sold the lot to a second-hand shop for £50. It is all going to have to be replaced anyway, but it seems a shame to me that three perfectly good beds, wardrobes, etc., etc., become practically worthless in such a short time. But then again, you can buy new beds for £50-£100 each so why furnish a new place with old stuff? First impressions will count for a lot when the valuer comes to call. The builders also began work in the upstairs bathroom: it needs ripping out and re-doing from scratch as it had got extremely manky (young male tenants live like bears).
A plumber was shown around the other day, to see what he had to do to provide new heating and water supplies for the new flats, and the builders are back today, ripping out more stuff upstairs.
Strategy: builders? Why not DIY? Well, I am lazy and know nothing about DIY anyway. Best left to the experts, I think. They are quick and professional (they come highly recommended and I have seen their work, which is good). I am using a friend of mine with experience of all this as a project manager at £2,000 per flat. Delegation. That's the strategy. Maybe I will learn something in the process too, but I can't count on that if I'm not supervising it myself, can I? What about the next project? Well, I will deal with that when I have to. Something will turn up...
So, what is the plan, and how does it stack up financially? That is, how exactly do I plan to get rich like this? I bought the house four or five years ago, with the idea of renting out 5 rooms and living in the rest. I have done that, and it has been just about profitable overall, but the tenants haven't kept the place nice and it needs refurbishing at the very least. I bought it using a credit card since although I had a good job, I had no savings. I have never been able to build up any capital, but my credit has usually been good - not always, but usually. :-) In this country, if your credit goes bad, it stays bad for six years, so you can recover from problems eventually. Anyway, I paid £6,000 deposit, but secured a 'cashback' mortgage, so once I moved in, I got £5,000 back, so my net capital input was £1,000. The house was worth about £130,000 but because the market was slumping a bit and the developer-owner wanted out, I got it for £106,000. It has 4 rooms and a bathroom upstairs, an L-shaped living-room and another room downstairs, a downstairs shower room and a large kitchen-diner, also downstairs. In fact, it behaves like Dr Who's Tardis: it looks small on the outside, but just seems to go on and on inside.
Due to my usual money-handling incompetence (or whatever it is), I have remortgaged it twice to extract cash to cover my debts, and currently have a mortgage of £205,000. I have recently had it valued at £240,000 and was going to sell it for £230,000, but have decided against that as, basically, there was hardly any profit in it: I would not get enough money out to be able to do anything other than get a job. And I don't want a job. I have pretty much had enough of the rat race, thank you very much. Instead, the plan is to try and add value to the property, and then (probably) sell it.
Upstairs will be converted into a two-bedroom self-contained flat. Downstairs will be converted into a two-bedroom self-contained flat as well, and (using the kitchen-diner) an additional one-bedroom flat. In this area, at current prices, the new value should stack up to a minimum of £130,000 for the upstairs flat, £140,000 for the downstairs 2-bed flat, and £95,000 for the studio: at least £365,000 in total, and possibly more, if I can get good valuations and prices don't collapse too quickly (the market is weak once more). I plan to get good valuations by making sure the work done is top quality, with no cheapskate corner-cutting anywhere. I plan to pay for it... with credit cards. I have been using them for years, paying them off, getting credit limit increases every time I do, and asking for increases every now and then just for luck and now I have a truly ridiculous total credit limit of £60,000 or more, split over half a dozen cards or so. With interest-free balance-transfer offers and some careful juggling, I can borrow much of this money at quite low interest. I only need it for a few months, anyway (I hope). The conversion should cost around £50,000 to £60,000, although I also have my living expenses to add to that: it is going to be close, but I will manage somehow (one of my favourite quotes is from Dickens, "I have every confidence that something will turn up.").
Planning permission is the most likely obstacle to this plan, as they might not allow it, although according to my architect it should be allowable. Plan B is for two three-bedroom flats, but I don't know quite how that would be possible given the building's layout. Values would be about £155,000 + £175,000 = £340,000, if it is possible at all. Plan C is Plan A but renting the flats out and the heck with selling it, but as I mentioned above, that is a dodgy option, profit-wise (after four years I would be able to sell it even without planning permission as I can then claim 'established use' but with the market weak I might not want to wait four years before bailing out and converting a declining asset into cash). Most likely, Plan A with some minor changes will be allowed, but the planning authority have been on strike and haven't even seen the place yet. The strike is now over, but a month has been wasted - another mortgage payment and more down the drain. Plus, all but one of the tenants has moved out now, so there is no more free money from them to supplement my non-income.
The builders arrived for the first time last Monday, 25th August and ripped out skirting boards in three of the rooms upstairs, and removed furniture to a room downstairs. I was unable to sell much of this old stuff with classified ads, so in the end I sold the lot to a second-hand shop for £50. It is all going to have to be replaced anyway, but it seems a shame to me that three perfectly good beds, wardrobes, etc., etc., become practically worthless in such a short time. But then again, you can buy new beds for £50-£100 each so why furnish a new place with old stuff? First impressions will count for a lot when the valuer comes to call. The builders also began work in the upstairs bathroom: it needs ripping out and re-doing from scratch as it had got extremely manky (young male tenants live like bears).
A plumber was shown around the other day, to see what he had to do to provide new heating and water supplies for the new flats, and the builders are back today, ripping out more stuff upstairs.
Strategy: builders? Why not DIY? Well, I am lazy and know nothing about DIY anyway. Best left to the experts, I think. They are quick and professional (they come highly recommended and I have seen their work, which is good). I am using a friend of mine with experience of all this as a project manager at £2,000 per flat. Delegation. That's the strategy. Maybe I will learn something in the process too, but I can't count on that if I'm not supervising it myself, can I? What about the next project? Well, I will deal with that when I have to. Something will turn up...
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