2 – Maddomswood Barn – Negotiate the Purchase

| 20th September 2015 | 1 Comment

Maddomswood Barn Conversion

Meet the Agent, Due Diligence and Negotiate Purchase

The agent could not meet me to start the negotiation but the vendor could. We met the same day which was excellent and we had a walk around.

What was for sale and up for negotiation was an unlisted 18th Century Threshing Barn with planning permission for conversion to a 4 bedroom house and some land to the rear. The following drawings show what had been passed.

Maddomswood Barn, Whatlington, East Sussex Conversion Plans – North West Elevation

Maddomswood Barn, Whatlington, East Sussex – Conversion Plans – First Floor Plans

Maddomswood Barn, Whatlington, East Sussex – Conversion Plans – Ground Floor

Maddomswood Barn – Whatlington, East Sussex – Conversion Plans – First Floor

From the front it looked small but when I got to the back it appeared to double in size due to the back being a lower level than the front; also the view across the valley was beautiful.

 

Historic Barn Conversion East Sussex View from the Barn towards the valley

View of the Valley from Maddomswood Barn

 

I got my ‘this is worth serious consideration’ feeling especially at the price.

Next to the Barn was an old Milking Parlour that was being used for storage.  It was a nice building that would make a perfect annex to the Barn. Next to that was the Dairy that had already been converted. If I was to have the Barn the Milking Parlour was going to need to be included; any potential buyer would ask what the future plans for the parlour were.

Follow this link to find out how Phil and Kirsty from Location, Location, Location help me to buy property deals – Phil and Kirsty

Historic Barn Conversion Annex Milking Parlour

The Milking Parlour

I mentioned as much to the vendor and said that the parcel of land behind it should also be included. He understood where I was coming from.

Here is a plan of the buildings and land I wanted included. The Milking parlour is coloured yellow.

Maddomswood Barn Whatlington East Sussex – Milking Parlour

I went away and carried out my due diligence; land registry search, planning search, environmental search (phone masts, flood risk, contaminated land), ball park budget – £310,000 – and estimated re-sale value – £750,000/£800,000.

Once the Due Diligence had been completed I sent an e-mail to the vendor with my offer.  I decided to deal direct rather than through the agent as I had built up a rapport with the vendor. The asking price was £300,000. I was aware that the previous buyer had offered near to that price without the Milking Parlour and extra land included. My offer would be £300,000 as anything lower would be insulting.

The vendor came back to me asking for £310,000.

  • Purchase price £310,000
  • Estimated Pre-construction and Development costs £310,000
  • Re-sale estimate £750,000 – £800,000 to be verified by independent agent
  • Potential pre-tax profit = £130,000 – £180,000 – approx 18% – 22% margin – taking into account the risk this is not great but not bad

I agreed to the increase to £310,000 but reserved the right to re-negotiate pending my enquiries with planning and the generation of a more finite budget.

 

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

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  1. Adrienne Taylor says:

    Fascinating Godson. Fascinating,Godson!

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