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I have been offered a property by a friend that is around £10k below market value, it has a sitting long term tenant. Landlord wants to sell quickly. Property on market for £70,000 but will sell to me at around £60,000.
My question is what would be the optimum strategy if I was selling this on as a deal as £10,000 bmv is hardly deal of the century.
Property is in o.k. condition and is a fully tenanted buy to let.
My thoughts are I could get an option and sell on to an investor as a standard buy to let with a decent enough yield (8.5%) and cash-flows money from day one as it's tenanted already.
But is there another way?
I did think about assisted sale as property could do with a refurb but the issue is a sitting tenant, so this would make a refurb difficult. I did also consider a lease option but my friend the landlord needs to realise cash the cash.
So my question really, is there another way to maximise the chances of a sale?
I have a vested interest as the Landlord is a friend and releasing the cash is the only option for them.
Thanks in advance
Buying - Selling - Sourcing - Helping Others
Hi Paul and welcome,If you introduce a buyer to a seller in any way, you are caught by estate agent legislation in order to do it legally, therefore none of the options you suggest are viable imho.The discount is so small that there is very little profit margin in it.Perhaps contact a reputable cash buyer and claim a small introducer fee?
Vanessa Warwick Landlord and Co-Founder of PropertyTribes.com **If you have got value from Property Tribes, find out how you can support it in remaining a free to use community resource**
Thank you for the reply.
I would think most reputable cash buyers would offer much lower than £60,000 given its market value is around £70,000 so not sure that is a real option. But thank you for the feedback.
I think your best option is to package up and sell for a intro fee.
We have many properties offered to us to intro on to our HNW clients who have cash sitting in the bank.
Often they want to have full management in place so you can charge upto 10% for managing it too.
Again, Paul would have to be compliant - be a member of an independent redress scheme, be registered for money laundering with HMRC, have PI insurance, and have client money protection in order to offer a management service. Not to mention that all important experience of managing properties for others!
I have all the above Vanessa so this is not a problem. However, my drive for managing tenants has long left, so that would always be outsourced. I prefer to keep my sanity in check than deal with tenants night and day. Been there and done that and not something that excites me these days.
High Net Worth Advisory - Interesting I may be in touch.
Or he could take the deal to someone that has all the requirements to intro properties and split the fee.
Cant see an issue with that.
Have you thought about selling at auction with a reserve price. Noticed a lot of properties with sitting tenents being sold that way these days whereas 3-4 years ago none were sold that way.