Case Study | Michelle & Douglas

For a couple with no prior residential or commercial property experience, their first deal was a great one. This property has 13 streams of different income, which was what attracted Michelle and Douglas to this deal in the first place. 

This property lies just off the high street, in an affluent town called Ayr in the west coast of Scotland. 

The aim of this project was to add value without any cost, just through simple lease work and removing a management charge that was once there due to the previous occupier. 

As soon as this deal was purchased, they instantly managed to profit 40K. If you would like to find out more about how this is possible join the Community it’s free and watch the video above for the full story.

Purchase Price: £240,000

Current Value:   £280,000

Current Profit:   £40,000

Rental Income:  £26, 900


Investment Strategy

As a lot of deals out there are being sold by baby boomers, this deal is no different. In this case, the occupier wanted to semi-retire, therefore, selling this property was his ideal scenario as he wanted more time to ride his 3 wheeler motorbike around Scotland and why not… if not now then when. 

The property was originally on the market for £340,000. Michelle and Douglas purchased it for £240,000 with a valuation of £280,000. As you may remember in other case studies adding value by buying value at purchase is incredibly important and is what we preach at Taylor Capital. As value investors we believe protection and return of capital is far more important than return on capital and as such we always like to bake in value on the day of purchase.

So how did Michelle and Douglas manage to buy these 13 income streams £40,000 below market value? This was simply because they found out exactly what the occupier wanted, spoke to the tenants and came up with a deal that worked for everyone, a true holistic win win approach as we advocate.

After buying value we also like to add further value, hence, de-risking the investment even further by simple asset management strategies where possible and this transaction is no different. If you would like to learn how you can apply these creative commercial strategies, then join the Club, it’s free and you can register below.

 

Project Financials

The increase in value hugely reduces risk and creates a lowly geared investment that will produce income for decades to come and will most certainly survive and thrive during the next economic correction. Another huge benefit of commercial are the yields, this one kicks off 15% that allows you to de-risk further by now having the ability to pay down debt. We all know there is good debt and there is bad debt though at some point in your life the best debt is no debt!

Taylor Capital taylorcapital.co.uk
Case Study "No Money Down - M&D"
Purchase Price 240,000
Current Profit 40,000
Current Value 280,000
Improvements Simple Asset Management Strategies
Annual rent 26,900

Service Based Businesses

Michelle and Douglas first commercial property is a parade of shops “n” uppers with 4 commercial local service based businesses on the ground floor and a 9 bed HMO on the uppers.

Project Gallery

The property was acquired for £240,000, which following a valuation of £280,000 meant Michelle & Douglas had immediately gained £40,000 profit. If you are interested in securing profitable deals like this one then be sure to join the Taylor Capital Club - it's free!