3 Bed End Terrace, Salford. (Manchester) M6
Rent-Back at £545 pcm. + Cash-Back + Cash Flow Positive.
Value: £85,000 Price agreed £65,000 23.5%BMV. (£20k BMV).
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See below for example Mortgage Product illustration.
Qualification date: Thursday 9th Oct.
I have been asked to find a buyer for this 1960’s built 3 bed (2x doubles, 1 single) in the great re-generation area of Salford, Manchester. It’s a long term (4 years anyway) Rent-Back by vendor who’s got into financial trouble (due to illness) and needs the cash to get sorted and reduce his monthly outgoings. I’ve agreed the rent at £545 pcm which vendor tells me is comfortably affordable. This house is not far from the University, has had a new combi-boiler fitted recently, kitchen is only 18 mths old, Bathroom (1st floor) has white suite with electric shower over bath and there’s a separate WC downstairs. Most decoration is described as good and although the landing has not been done for a while the vendor is on with it as I type and will finish it himself as well as fitting new carpet. Tiny garden at front of house. Yard at rear with brick built shed. Neighbours are said to be Doctor, Midwife, Taxi driver etc.
I can’t guarantee that RICS valuation will come in at the £545 agreed with the vendor, but it will certainly come in more than is required to achieve the mortgage examples shown below and remain cash flow positive.
Due Diligence.
Seems to be various different house types in street and nearby so exact comps. are difficult to assess. Suffice to say that I expect the property will value up as shown without too much effort. (I’m sure you’ll try it a bit higher).
Rents for similar nearby are in the £500 - £595 bracket and with 2 beds bringing up to £525. So this 3 bed looks good at £545.
Example Mortgage illustration:
Bristol & West / Bank of Ireland, both have similar 85% LTV products available to enable a mortgage of the full 85% (£72,250) with monthly re-payments of just under £440 pcm.
These figures do not reflect any changes since the 0.5% interest rate reduction yesterday so may well be improved upon if lenders apply the 0.5%).
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The vendor has been advised that the purchaser will pay up to £500 towards their legal expenses.
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