Auction Property Refurb Project… An Update

I thought I’d give you a quick update on the little refurbishment project I mentioned a few weeks ago.

If you recall, I was browsing through a property auction catalogue and spotted a three bed terraced house badly in need of some TLC. After a quick viewing I agreed to purchase the property for £56,000 before it went under the hammer. At the time of writing, that was about four weeks ago.

I immediately got an offer from an investor friend who was prepared to pay me £9,000 over and above the asking price. However, if I oversaw the refurbishment work myself I could make anything up to £30,000. The £9k was tempting – especially as it involved no work – but in the end I decided to turn the offer down and go for broke.

The property is a typical northern terraced house with front and rear reception rooms and a small two storey extension to the rear. At some point in the past the extension has been extended further to include an ‘outhouse’ with toilet at ground level and – strangely – a bedroom beyond the bathroom on the first floor!

It’s such a weird layout. You have to wander through one bedroom to get to the bathroom. You then have to go through the bathroom to get to a further bedroom beyond!

Obviously, such an original (?!) layout would drastically reduce the property’s sale value so we decided to move the bathroom to the middle of the house by ‘stealing’ a corner of the large rear bedroom. The old bathroom and third bedroom were converted into one large double bedroom. To access these new rooms we had to create a corridor through the rear bedroom which involved removing a large chimneybreast.

Downstairs we planned to remove the walls between the kitchen / pantry and the pantry / outhouse to create a much larger family-friendly dining kitchen. By doing this we would, in effect, add a second reception room for little extra cost.

Although the changes to the layout would involve a lot of work I was sure it would be worth it. The new layout – consisting of two reception rooms, large dining kitchen, three double bedrooms and a large family bathroom – would be much more saleable.

Even though I’ve completed a lot of similar refurbishment projects, I was surprised at the bad state of the house. I suspected that a lot of work would be required but the true extent of the challenge only became apparent once our building contractor started to ‘rip out’ ready for the work to commence. To give you an idea of the scale of the project, the works include:

• strip out throughout
• sand/cement render to 1.5 metres throughout
• install damp proof course
• remove two existing fire places and replace with modern units
• remove structural walls to pantry and outhouse
• fit new front and back doors
• fit new internal joinery (doors, skirting boards and architraves)
• new screed throughout
• new ceiling frames
• plasterboard / replaster throughout
• install new central heating system throughout
• level first floor by raising floorboards
• remove chimney breast to first floor
• stud new corridor to first floor
• rewire throughout
• new light fittings throughout
• install central heating system throughout
• install new kitchen units
• create new bathroom in rear bedroom
• fit new bathroom suite
• install new PVC double glazing throughout
• decorate throughout
• retile kitchen and bathroom
• fit new carpets and floorcoverings
• install new fence panels
• repoint rear walls and repaint brick work

Luckily, I know a number of excellent one-stop-shop building contractors who I can call upon to carry out all the work for a pre-agreed set fee. I’ve worked with them on numerous occasions so they know exactly what standard of finish I expect. I’ve visited the site a few times but other than that I simply leave it to the experts.

As you can see from the photos, the work to the first floor is well underway and nearing completion. They should have all the work done and dusted within the next 2 – 3 weeks.

Adding Value

We’ve added considerable value by carrying out a total refurbishment. However, by making structural improvements and changing the useable space within the property we’ve further enhanced the property’s value and desirability.

In fact, the extra work and expense has already paid off. We’ve just sold the house to a first time buyer. To keep finance charges to a minimum, we offered a few incentives to encourage a quick sale. It means we’re not making as much money out of the deal as I’d first hoped but I think that’s a small price to pay for an immediate sale on completion.

The whole project will take just over eight weeks from purchase to sale. The refurbishment is going to cost more than I’d originally budgeted due to the terrible state of the house. However, it’s involved very little of my time and energy and will return a profit of around £15,000.

So, I’m now searching for my next project. Anyone know of any houses in desperate need of a Forshaw makeover?

Part 3: Auction Property Renovation Project. Done and Dusted!

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