4 – Maddomswood Barn – Re-negotiate & Purchase

| 20th September 2015 | 0 Comments

Maddomswood Barn Conversion

Re-negotiate and, all being well, proceed to purchase

Some time passed …the drawings with the revised design ready and I had finalised my budget. It was time to re-negotiate.

You will see from the drawings that the point of entry into the barn has been moved to the side; we did this as the best part of the property is the view from the back. The original planning had the entrance and parking focused to the front; our parking was now behind the milking parlour so as you drove down off the farm track and walked to the door you would be able to take in the view of the valley. Further to this the reveal to the screen at the front has been reduced. The bedroom is now in the side extension and the kitchen is located where the snug used to be. There are several other minor changes.

This revised scheme will add value.

Maddomswood Barn Whatlington East Sussex – Elevations

Maddomswood Barn Whatlington East Sussex – Plans

The original estimated budget of £310,000 was not enough. Additional Planning/Architect costs plus funding charges and more than expected groundwork and roofing costs had increased the budget estimate by £30,000 to £340,000

I obtained an independent re-sale valuation and my original estimate was spot on at £750,000 – £800,000.

I was going to have to re-negotiate a new purchase price in the region of £280,000.

I met with the vendor to re-negotiate around their kitchen table with my laptop open to the budget. I explained the situation and made sure they realised that the conversion of the old Barn was going to be a risky project. Its condition was not great and there would be a lot of unknowns which would have an impact on my budget and any contingency.

I made my reduced offer and after a bit of to and fro we agreed on £287,500. For this they agreed to resurface the farm drive from the Electric Gates to the main road, renew the corrugated sheeting on the large Dutch barn, tidy the fence to the sheep barn and paint the Farm Buildings; all would dramatically improve the street scene.

  • Purchase price £287,500,000
  • Pre-construction and Development costs £340,000
  • Re-sale estimate £750,000 – £800,000 verified by independent agent
  • Potential pre-tax profit = £122,500 – £172,500 – approx 16% – 21% margin – still not great but not also still not bad

Full steam ahead to purchase. Solicitors informed. I created my Construction Programme, Cashflow Forecast which was aligned to the budget.

All the legals took place and I completed the purchase on the 22nd of July 2015

 

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Category: Maddomswood Barn, My Projects, Negotiating and Buying a Property, Property Developing

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