Stephen! thanks again for your continued teaching - you're very watchable. I just want to ask a question about qualifying a commercial to residential purchase...Is there a rule of thumb, or sum I can use for a quick assessment of something being a good deal....Say, is there a ratio I can use to show ideal difference between purchase price/per/sq/ft to end value price/per/sq/ft?...I'm asking because knowing the difference would tell me if it would cover rebuild costs and a profit...Many thanks!
Thanks for the kind words. There’s no ratio that would make sense across the country. Unfortunately at a high level, you need to analyse each deal on the local market price per sq ft/m for residential take of your conversion build cost per sq ft and then make sure you buy commercial below that per sqft and adding your profit margin.
@@StephenDuncombetv Thanks Stephen!.....sorry, could you just explain the second part of your answer again? '...for residential take of your conversion build cost per sq ft and then make sure you buy commercial below that per sqft and adding your profit margin.' ( My plan is to do a commercial to residential conv.).
What do you mean when you say use your seed deposit monies to scale up your property portfolio over time using your same seed money that you've got. Is seed deposit, just a normal deposit?
What about this new model up here in the north east where a company is finding, buying, refurbishing and tenanting a property before handing it over? They then manage it. Sounds safe but I see one property they bought for 35k was sold two days later for 70k. So a lot of these services appear to be loaded onto an inflated sell on price in these cheap areas.
2 days later! Quick refurb... It's all about supply and demand. If the demand is there at that price, then the price is right. Noob Investors can be fooled into buying based on the yield rather than the actual price the property is worth in some areas. Hence you need to be a bit more sophisticated and use your skills as an investor to recognise that. Ultimately commercial investors will buy on yield, but the leases are a lot longer than an AST and again they need to way up the risk vs reward.
Thanks for the response. I'm in my late fifties, I am 100% debt free, have a circa 200k cash kicking around and want to invest in commercial property. I have experience as a residential landlord. Is my age going to be an issue getting commercial property finance?
Does the first commercial property I buy need to have a tenant inside, essential buying a business, only asking because the lenders I've asked won't lend to first time commercial buyers for a vacant property
If you're getting a commercial investment mortgage, yes they want you to have experience and for it to be tenanted. If you're wanting to owner occupy the commercial property you need to get an owner-ocupier commercial mortgage. Try Allica Bank for that and also talk to a commercial broker to see all your available options as an owner occuper.
@@StephenDuncombetv Thanks for the advice, I guess I'll have to buy the property tenanted, but is there a way to increase the value after buying with the tenant
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Will watch later, but hope you post more often
Will try to do that. Thanks for watching.
Always look forward to your uploads. Cheers.
Thanks. It’s great to hear that.
Stephen! thanks again for your continued teaching - you're very watchable. I just want to ask a question about qualifying a commercial to residential purchase...Is there a rule of thumb, or sum I can use for a quick assessment of something being a good deal....Say, is there a ratio I can use to show ideal difference between purchase price/per/sq/ft to end value price/per/sq/ft?...I'm asking because knowing the difference would tell me if it would cover rebuild costs and a profit...Many thanks!
Thanks for the kind words. There’s no ratio that would make sense across the country. Unfortunately at a high level, you need to analyse each deal on the local market price per sq ft/m for residential take of your conversion build cost per sq ft and then make sure you buy commercial below that per sqft and adding your profit margin.
@@StephenDuncombetv Thanks Stephen!.....sorry, could you just explain the second part of your answer again? '...for residential take of your conversion build cost per sq ft and then make sure you buy commercial below that per sqft and adding your profit margin.' ( My plan is to do a commercial to residential conv.).
.....btw, I'm talking generally and realise a more detailing number game will be needed. My question was for quick assessment purposes. Thanks again.
I’m finding it difficult to find commercial units that are tenanted, any advice on tools to use other than Zoopla?
Rightmove, LoopNet, Allsop auctions, fhp are places I look among others
What do you mean when you say use your seed deposit monies to scale up your property portfolio over time using your same seed money that you've got. Is seed deposit, just a normal deposit?
Yeah it's your deposit. I used the word 'seed' to imply you use the same money to grow your property portfolio from it.
What about this new model up here in the north east where a company is finding, buying, refurbishing and tenanting a property before handing it over? They then manage it. Sounds safe but I see one property they bought for 35k was sold two days later for 70k. So a lot of these services appear to be loaded onto an inflated sell on price in these cheap areas.
2 days later! Quick refurb... It's all about supply and demand. If the demand is there at that price, then the price is right.
Noob Investors can be fooled into buying based on the yield rather than the actual price the property is worth in some areas. Hence you need to be a bit more sophisticated and use your skills as an investor to recognise that.
Ultimately commercial investors will buy on yield, but the leases are a lot longer than an AST and again they need to way up the risk vs reward.
Thanks for the response. I'm in my late fifties, I am 100% debt free, have a circa 200k cash kicking around and want to invest in commercial property. I have experience as a residential landlord. Is my age going to be an issue getting commercial property finance?
Short answer. No.
Does the first commercial property I buy need to have a tenant inside, essential buying a business, only asking because the lenders I've asked won't lend to first time commercial buyers for a vacant property
If you're getting a commercial investment mortgage, yes they want you to have experience and for it to be tenanted. If you're wanting to owner occupy the commercial property you need to get an owner-ocupier commercial mortgage. Try Allica Bank for that and also talk to a commercial broker to see all your available options as an owner occuper.
@@StephenDuncombetv Thanks for the advice, I guess I'll have to buy the property tenanted, but is there a way to increase the value after buying with the tenant
I like your content because you focus on the both pro and con, unlike some others that are more like an Amway sales pitch
Thanks for the feedback it’s appreciated.