I was initially very excited about this property – but also, a little baffled about how quickly the vendor accepted my low offer.
Further due diligence revealed that there was a flying freehold issue - which meant the loft space above the property’s main bedroom belonged to a neighbour in the house attached to the back of that property… very strange layout.
So the room in the loft space was someone
else’s space, with their bedroom / bathroom above our bedroom.
I think it would’ve been very difficult to get a mortgage on that sort of flying freehold issue – hence why the vendor was desperate for a cash offer, having already had other buyers drop out.
It's no good doing a load of work on a property and then not be able to pull the funds back out - I don’t take scary risks like that, especially not with other people’s investment money.
So today’s blog has three main points…
How do you know when to walk away from a property deal?
Or in the words of Kenny Rogers: know when to walk
away, know when to run!
1. WALK AWAY IF…
A property isn’t mortgageable, or it will be very
difficult to get a mortgage on it… assuming you did intend being able to get a
mortgage on it at some point, and not just buy it cash outright and leave cash
in it. Yes, sometimes unmortgageable properties can be made mortgageable, e.g.
by adding in kitchens to make it habitable and so on.
But you can’t do much about someone else’s bit of house over your bit of house!
2. WALK AWAY IF…
The deal simply doesn’t stack. If you’re going to end up leaving way more money in than you ever imagined, perhaps the deal isn’t really a good deal at all.
3. WALK AWAY IF…
The house is a turkey. If there’s something
terribly wrong with it, which is either unfixable, or it will cost you a
massive bomb to fix it eg. major subsidence.
So those are three reasons to walk away. Unless of
course you’re super rich and are willing to pay for fixes and problems and
headaches, or can afford to leave loads of money in the problem.
Is it really worth the cost, stress and sleepless
nights?!
That’s up to you to decide, dependent on your available funds, your mental wellbeing and your risk factor!
In my view, yes, it’s a shame if things don’t work out to plan, and it’s disappointing when it rains on your parade… but it’s better that than being struck by lightning!
SO DON’T TAKE CRAZY RISKS!
It’s not worth the stress, hassle, and major risk
to yours or other people’s investment funds!
And had I known I would feature him in my blog a decade later, I would have taken much better photographs!!
