Had an interesting deal come my way, 9 properties made up of 2 / 3 bed flats with sitting tenants. Approx 30% discount to Market Value (MV are recent valuations not chancer valuations), not looked at how the company concerned is carrying them on the books yet but this is way it's been presented to me thus far.

Not being in the B2L market at moment this is an area I have limited knowledge in, so assuming that I can :

- verify values : range is £127k to 177k acquisition price against £160k to £215k MVs
- verify tenancies
- verify income (rentals are £750 to £1100)
- verify factors / fees

What would the PH B2L experts thoughts be ? What else would I want to know or do next ? What funding vehicle (I'd rather not use the piggy bank this time round beyond 20% capital into the deal) ?

TIA

Thanks Tyre - So can confirm there are not structural or imminent issues with the property, build was around 2006 i think by mainstream construction firm. In terms of tenancy issues this I need to dig into but immediate responses are no problems reported (or at least admitted to)

Property is in reasonable area, well served and reasonably desirable (in the grand scheme of properties at that value and it's meaning!)

So the question still remains, why are they so desperate to offload the package at 30% off if everything is tickety-boo?

You would need to see proof of occupancy, rental income, evidence of bad debt and agree, you would need more than 20% of your own wonga.

Maintenance/service charges are a massive pain in the backside. If the company who run these are based in Worcester (no naming and all that), then I strongly recommend you walk away now as you'll be in for a world of frustration and heartache.

You need to start back at the very beginning

Real sale values, not valuation figures.

First thing to remember is that a valuation is just the opinion of an Estate Agent or Surveyor

The sale price is the only thing you should be interested in, as this is what it will really sell for if for whatever reason you have a problem and you need to get shot of them. Find out what the local sale prices have been and how much they had to drop to sell them? How long did they hang around for?

If you are looking at this seriously then set yourself some time aside and by that I mean a week not a few hours.

You need to research these properties from the bottom up, the roads, the local and surrounding areas. The types of tenants that the properties have and the condition they have kept the properties in.

As mentioned by other posters you need to know what the Annual Service Charges for each property currently are and who runs the management companies?
What is the sinking fund and do they have major works coming up shortly?

Find out who manages the properties? Agent or the landlord? Do they actually get maintained? 9 replacement boilers will hurt you in the proverbial.

As mentioned, normally if something is too good to be true is usually is!

If everything stacks up then go for it!

This, quick maths shows £750/m on a £127k purchase gives approx 7% GROSS return, before any costs or loan interest, not that great a deal.

If they are sitting tenants then the market value will be determined by the rental income, normal factors don't apply.

I source distressed properties for a living, offering them to my investors, for a quick sale.

Offer me an apartment at 50% discount and I'd still knock it back unless I knew I could sell it the next day.

From an investors point of view, you need to go for your ' bread and butter' properties. The ones that'll earn you money when you buy.

Feel free to PM/email me and I'll help/advise you as much as I can.

Neil