A Week Of Catching Up And Uncertainty About Whether? And Why?

byAlanJE

2.3K followers

1 month ago

Hi Everyone,

I hope you have had a great week so far, wherever you are in the world?

My week has been pretty busy with a lot of uncertainties and risks all converging on one particular project, the conversion of an empty office into 5 flats.

Today I attended a site survey for an evaluation of a building that I am planning to convert to 5 flats, 2 x 2 bedroom and 3 x 1 bedroom size, in an old building that I have negotiated to purchase subject to planning permission , which is now in hand.

There are many complex steps in trying to purchase any building involving all aspects such as:

1. Legal Title of the building, a lot of checking and legal searches are involved.
2. Legal checks on title and any covenants that may apply to the building, that may restrict its use, rights of way that need to be preserved or wayleaves that may apply.
3. The current value of the building in its current use (this one is an empty office).
4. The proposed value of the building once it is converted under the new planning permission and approval to change the use class(it will become the 5 x flats that I mentioned).
5. The likely costs of design and construction to make the conversion from office to residential space, and all the necessary fees from professional designers and the Building Control Office, and warranties.
6. The likely timescale to undertake all the foregoing works including securing all the necessary code approvals and final approvals.
7. How the new value will be achieved, eg by selling the flats, in order to repay the purchase and development costs loan.

All the risks need to be thoroughly appraised and evaluated and reports prepared by professionals so that the lender of the funds to carry out the purchase and development of the buildings are fully protected at all times during the above process that may take several months to complete; possibly more than a year in fact including the time to sell off the flats once converted.

The process is becoming more and more onerous and I am not sure that I have the energy to keep on doing this sort of thing. New building code requirements have come in which have increased the technical difficulty of carrying out this sort of work, such as new fire regulations and sustainability requirements.

And dont even ask about the difficulty of securing the skilled tradespeople to carry out this sort of work.

Despite the critical housing crisis in the Uk, the road towards creation of those new houses and flats is strewn with difficulties that may trip you up at any time. Credit checks and cross checks are like a minefield to be negotiated by unwary and wary alike. Only the fortunate few may reach the end of the journey. It is a little like nature is selecting only a few candidates to carry on, like salmon jumping each waterfall and rapid in order to reach their spawning ground:-)) I hope I make it??.

I´ll keep you posted about my current journey as you may find it amusing why anyone would want to actually do this. Yes, you must have a strong Why?

What is your why? Are you enjoying what you are doing?

Have a great remainder of the week and weekend ahead! By the way I am speaking onstage with Liam Ryan at the weekend, as part of an expert panel concerning wealth creation by property investment and development, and Ill update you about that next week.

Cheers

Alan