After watching a few of your video I’ve taken the jump and purchased a shop with two flats above. There’s a good space at the rear ideal for conversion to two more flats you are a inspiration
Great post 👍🏻 One correction however; Nottingham is actually one of the fastest growing property areas in the England right now. It’s outperformed London in terms of growth constantly over the last few years (obviously London has been largely flatlining)
Great purchase and good to see this style of conversion being done, as these style of layouts of this age have so much space and features just like other properties have. I just done an exact style of conversion in SW London and looks great once done to residential. Let me know if you want to do a vid on my finished project. 👍
I love this little project. In my village there was a Chinese restaurant with betting office next door. The whole conversion was done for a Martins but the betting shop became residential.
Hi Ranjan, this is Debashish Sen from Kolkata, I have been watching your videos for some time and I would say again that you are doing a great job. I would request you to please make a video on, if there's any opportunity for nationals with foreign passport especially from India to invest in UK properties and regarding any mortgages he/she can opt for and where to get related advices and so on and so forth. As you are definitely aware of the fact that property prices here in India are almost same as that of UK if not more and here in India I think there are a lot of people like me who will definitely love to invest in the UK if given proper information and knowledge. Hope to get a video in this topic soon. Regards/ Debashish Sen
Hi. Great video and very informative. But - I understood that flats above (or behind) commercial premises are difficult to mortgage and therefore receive a lower mortgage valuation or are difficult to sell as buyers find getting finance more difficult. Did this factor into your calculations ?
The model of having a private investor sounds really appealing. If this example if no profit was made when they sold the shop and flat would Kiren still get 50% of the money the investor put into the company as Kiren owns 50%.
Great project. I do have a question on the layout. From the video it was not very clear how are the entrance doors for the smaller shop and the flat are being created? Do you an additional door(alley way) that will give access to the flat already?
Ranjan pleasure meeting you last Weds. Really entertaining insight to how you make your videos it was fun participating. My questions revolves around the SPV. Which do you do first? Form the SPV then buy? Or secure property purchase and then form the SPV? There are ramifications for both scenarios.
Great content Kiren and Ranjan, very enlightening. How do you know you got a good deal on the unit or BMV? Does it work differently to residential by pricing at £/sq. M?
Very simplistic formula: End Value - Cost of getting to end value - Cost of financing - Your 'get out of bed cost' = Purchase price Start with the end values and work backwards to get to purchase price. When working out your desired return or get out of bed cost, remember to factor in risk, ie greater the risk, the greater your return Everyone will have a different 'get out of bed' cost depending on where they are in there journey and other options they have available to them. With these sort of deals its not so much a question of what the property is worth and thats what I will pay for it, but more a question of, whats's it worth with easily realisable PD gain, how much do I need to make and arriving at the minimum you can get away with paying while making all your figures work
Commercial property is typically valued differently to residential on a yield basis - it also depends on the tenant and terms of the lease in place. As Ranjan has said below, the way to calculate a viable purchase price is work backwards. But the biggest variable is End Value though as you've rightly pointed out. Buying commercial and converting to residential is not *always* the right way to add value to a commercial space. It could be as simple as structuring a new lease (or just getting a lease in place). Worth speaking to a local valuer to get a feel for what yield certain types of property/tenant will achieve. The number in commercial that is dictated by the market is primarily the rent/sq.m. But a difference in yield can make a *massive difference* to capital value. It can be complex, but that opacity is what provides opportunities.
S S You would have no hope if you don’t have the money already lined up . If I was the vendor in this particular sale I’d be stipulating 28 days max or all you will attract is chancers. Up north the competition isn’t as stiff .
Great content thanks. One question, do you have to provide a wc and basin for the shop, and if so was this difficuilt to incorporate into the revised layout?
I don't know whether you have to but I have never considered not to. It would be very difficult to rent a shop if there was no where to make a cup of tea or take a leak! ...Wait for next video for layout.. is simple to incorporate at back of shop.
Thanks for the insight, about to offer on an old bank on a secondary high street with the uppers forming 4 natural flats. Any recommendations for conversion when the uppers are solid brick walls? Looking forward to seeing how it progresses.
sounds like great deal. if upper parts of bank was used as B1 (office), then you have very flexible pd options available to you. re solid brick walls, leave up to structural engineer. All you have to do is ensure the scheme you want to create is profitable enough to ensure extra costs in removing load baring walls etc
Tristan, do you mean with solid walls they form 4 natural flats already? If so (assuming four flats is sufficient) then you are in a good place. Otherwise, you may need to get an engineer in to determine which walls are structural walls. Fingers crossed you have a build that either: i) Works with 4 flats - in which case get M&E in and just give it some TLC ii) Limited structural support and previously B1 use - in which case get creative with how many flats you can fit there to improve return If it wasn't previously B1 use and you have structural problems, you really need to dig into viability of construction costs ahead of acquisition. Speak to an engineer or experienced QS
Can the future buyer get a mortgage on this type of property? Not sure if a bank would lend to potential buyers? Or this is target it for cash buyers only?
Ranjan Bhattacharya - Succeed In Property nice one! I guess your buyer looked into same mortgage options like buying a flat above commercial property? You guys used a bridge loan to 60% finance this project. Are there any other finance options for such permitted developments other than bridge loans?
Roof lights in a flat roof are PD as well. Yes you would get the permission for a flat under PD but the question is, how marketable it woul dbe without windows. The approach I recommend is to get the PD for change of use to a flat and apply (if necessary) for changes to external envelope (ie new windows and doors) under a separate full planning app. All taught on the weekend workshop www.bakerstreetworkshop.com
@@ranjanbhattacharya-succeed7617 What if there was no option to add any windows to the side elevations at all? Would converting the rear of the shop into an office/serviced office be the next best option?
You need to watch the video in full, and in particular the video taken after completion of works ua-cam.com/video/SdwN1q5HIzA/v-deo.html. There is separate access to the rear from a residential side street. The flat even has a lovely garden. (BTW: Its been sold now)
Hi. It is mentioned in the video. She developed the relationship with her JV investor first. At the auction you need 10% when the hammer goes down, which was provided by her JV equity partner. The rest was due on completion 28 days later, which was met from bridging and her JV partner. Hope this helps. (This is one of many Joint Venture structures we teach on the commercial property weekend workshop. Full details at baker street workshop.com
Join Ranjan LIVE for FREE 90-minute deep dive into repurposing commercial buildings & investing in commercial property, this Sunday, at 7pm. FREE REGISTRATION AT www.succeedinproperty.com/free-training.
The deal structure is explained in the video. 65% of purchase is bridging loan. The 35% deposit and refurb cost has been put up by her JV equity investor. The proeprt has been purchase in an LTD company, the shares of which are split 50:50 between Kiren and her equity JV partner. Kiren is putting in all the work, none of the money and getting 50% of the deal profit.
@@ranjanbhattacharya9147 Better if you are the investor just taking profit for no effort - obviously not everyone has time to find the deals or has the time to do the development or money to invest. End goal is to be the investor or middle man linking deals for investors to developers. That way you skim profit and no work. Friend is taking a 5% profit on a £5.6 million project - no bad for just linking some people.
@@ranjanbhattacharya9147 Can we assume that the shop and the 1 bedroom flat will be remortgaged on a commercial loan and what would be the expected take valuation of the freehold of both units?
After watching a few of your video I’ve taken the jump and purchased a shop with two flats above. There’s a good space at the rear ideal for conversion to two more flats you are a inspiration
Wow Kiren got steeeze! Love her decor and her tenacity.. She’s fabulous ❣️
After watching a few of your video I’ve taken the jump and purchased a shop with two flats above. There’s a good space at the rear ideal for conversion to two more flats you are a inspiration
how did this go, any update. thanks.
There seems to be a theme with hats going on. - What an amazing project. Well done Kiren Gill - Great Video Ranjan
Great watch! Would be interesting to see a full financial breakdown of all the costs included and how to find quality builders!
Great post 👍🏻 One correction however; Nottingham is actually one of the fastest growing property areas in the England right now. It’s outperformed London in terms of growth constantly over the last few years (obviously London has been largely flatlining)
Great purchase and good to see this style of conversion being done, as these style of layouts of this age have so much space and features just like other properties have. I just done an exact style of conversion in SW London and looks great once done to residential. Let me know if you want to do a vid on my finished project. 👍
Will it be ok to have a conversation in your project? Getting into this myself, a bit of guidance will be great. Thanks.
Did you ever make that vid?
Hi Kiren and Ranjan well done and congratulations
Well done Kiren & Ranjan. Great project, great video - can't wait to see the outcome !
I love this little project. In my village there was a Chinese restaurant with betting office next door. The whole conversion was done for a Martins but the betting shop became residential.
Lol. I died at the pink helmet comment.
Hi Ranjan, this is Debashish Sen from Kolkata, I have been watching your videos for some time and I would say again that you are doing a great job. I would request you to please make a video on, if there's any opportunity for nationals with foreign passport especially from India to invest in UK properties and regarding any mortgages he/she can opt for and where to get related advices and so on and so forth. As you are definitely aware of the fact that property prices here in India are almost same as that of UK if not more and here in India I think there are a lot of people like me who will definitely love to invest in the UK if given proper information and knowledge.
Hope to get a video in this topic soon.
Regards/ Debashish Sen
Thanks for the video. Very informative. Where can I research this particular permitted development right.
Quality Watch, two nice people. Shirt has cool effect in the camera as well 08:40
Hi. Great video and very informative. But - I understood that flats above (or behind) commercial premises are difficult to mortgage and therefore receive a lower mortgage valuation or are difficult to sell as buyers find getting finance more difficult. Did this factor into your calculations ?
That looks like an exciting venture 👌
The model of having a private investor sounds really appealing. If this example if no profit was made when they sold the shop and flat would Kiren still get 50% of the money the investor put into the company as Kiren owns 50%.
Brilliant work. Well done.👏🏻👏🏻
Great project. I do have a question on the layout. From the video it was not very clear how are the entrance doors for the smaller shop and the flat are being created? Do you an additional door(alley way) that will give access to the flat already?
This is such an informative video! So happy I found your channel.
Glad it was helpful!
Ranjan pleasure meeting you last Weds. Really entertaining insight to how you make your videos it was fun participating. My questions revolves around the SPV. Which do you do first? Form the SPV then buy? Or secure property purchase and then form the SPV? There are ramifications for both scenarios.
Form SPV before exchanging contracts (or exchange contracts with contract being assignable, and form SPV prior to completion)
How can you get around the natural light issue if you have one? Can you add windows without full planning?
Hello Ranjan love your videos, Question i want re mortgage my warehouse, can i get interest only on commercial please?
great buy
Great content Kiren and Ranjan, very enlightening.
How do you know you got a good deal on the unit or BMV? Does it work differently to residential by pricing at £/sq. M?
Very simplistic formula:
End Value - Cost of getting to end value - Cost of financing - Your 'get out of bed cost' = Purchase price
Start with the end values and work backwards to get to purchase price.
When working out your desired return or get out of bed cost, remember to factor in risk, ie greater the risk, the greater your return
Everyone will have a different 'get out of bed' cost depending on where they are in there journey and other options they have available to them.
With these sort of deals its not so much a question of what the property is worth and thats what I will pay for it, but more a question of, whats's it worth with easily realisable PD gain, how much do I need to make and arriving at the minimum you can get away with paying while making all your figures work
Commercial property is typically valued differently to residential on a yield basis - it also depends on the tenant and terms of the lease in place. As Ranjan has said below, the way to calculate a viable purchase price is work backwards.
But the biggest variable is End Value though as you've rightly pointed out.
Buying commercial and converting to residential is not *always* the right way to add value to a commercial space. It could be as simple as structuring a new lease (or just getting a lease in place). Worth speaking to a local valuer to get a feel for what yield certain types of property/tenant will achieve.
The number in commercial that is dictated by the market is primarily the rent/sq.m. But a difference in yield can make a *massive difference* to capital value. It can be complex, but that opacity is what provides opportunities.
Hi Ranjan how would you go about securing a deal if the vendor wanted to exchange within the 56 day for PD?
S S
You would have no hope if you don’t have the money already lined up . If I was the vendor in this particular sale I’d be stipulating 28 days max or all you will attract is chancers. Up north the competition isn’t as stiff .
very interesting and I am tempted.
What’s stopping you >>> www.succeedinproperty.com/workshop
Great content thanks. One question, do you have to provide a wc and basin for the shop, and if so was this difficuilt to incorporate into the revised layout?
I don't know whether you have to but I have never considered not to. It would be very difficult to rent a shop if there was no where to make a cup of tea or take a leak! ...Wait for next video for layout.. is simple to incorporate at back of shop.
When looking for commercial shops to buy does the place have to be freehold?
Can't wait to see it!!
Ranjan!!!!!! I love the intro music! Cant wait for my first Baker street in Sept. !!!
how much will the refurb cost ?, I presume the bridging loan will be repaid by way of remortage is this correct ?
Refurb & costs etc. Will be the subject of the second video.
Hi from where we should get the money for auction?
Does anyone know what is the threshold for the shop to be business rate free?
Hi it's all great i havn't got all those skills is it really that easy for someone without corperate backiround partner in condruction?
It looks easy doesn t it. Hmmm
Looking forward to the 2 day commercial course in October :-)
Ranjan!!!!!! I love the intro music!
How can I look for builder to do the job for conversation flat?
Thanks for the insight, about to offer on an old bank on a secondary high street with the uppers forming 4 natural flats.
Any recommendations for conversion when the uppers are solid brick walls?
Looking forward to seeing how it progresses.
sounds like great deal. if upper parts of bank was used as B1 (office), then you have very flexible pd options available to you. re solid brick walls, leave up to structural engineer. All you have to do is ensure the scheme you want to create is profitable enough to ensure extra costs in removing load baring walls etc
Tristan, do you mean with solid walls they form 4 natural flats already? If so (assuming four flats is sufficient) then you are in a good place. Otherwise, you may need to get an engineer in to determine which walls are structural walls.
Fingers crossed you have a build that either:
i) Works with 4 flats - in which case get M&E in and just give it some TLC
ii) Limited structural support and previously B1 use - in which case get creative with how many flats you can fit there to improve return
If it wasn't previously B1 use and you have structural problems, you really need to dig into viability of construction costs ahead of acquisition. Speak to an engineer or experienced QS
Can the future buyer get a mortgage on this type of property? Not sure if a bank would lend to potential buyers? Or this is target it for cash buyers only?
The flat was sold last month to an owner-occupier buyer with a mortgage
Ranjan Bhattacharya - Succeed In Property nice one! I guess your buyer looked into same mortgage options like buying a flat above commercial property? You guys used a bridge loan to 60% finance this project. Are there any other finance options for such permitted developments other than bridge loans?
I noticed when I was reading my agreement that my BTL mortgage provider doesn't lend on freehold flats (leasehold only). Is this common with lenders?
Would something like this work in a city like Leeds?
If there was no light-well and windows to the rear, would this conversion be feasible?
Roof lights in a flat roof are PD as well. Yes you would get the permission for a flat under PD but the question is, how marketable it woul dbe without windows. The approach I recommend is to get the PD for change of use to a flat and apply (if necessary) for changes to external envelope (ie new windows and doors) under a separate full planning app. All taught on the weekend workshop www.bakerstreetworkshop.com
@@ranjanbhattacharya-succeed7617 What if there was no option to add any windows to the side elevations at all? Would converting the rear of the shop into an office/serviced office be the next best option?
Where is the front door to the flat? Postman good with this?
You need to watch the video in full, and in particular the video taken after completion of works ua-cam.com/video/SdwN1q5HIzA/v-deo.html. There is separate access to the rear from a residential side street. The flat even has a lovely garden. (BTW: Its been sold now)
How do you go to Auction with no money?
Wanting to get started in developing.
Hi. It is mentioned in the video. She developed the relationship with her JV investor first. At the auction you need 10% when the hammer goes down, which was provided by her JV equity partner. The rest was due on completion 28 days later, which was met from bridging and her JV partner. Hope this helps. (This is one of many Joint Venture structures we teach on the commercial property weekend workshop. Full details at baker street workshop.com
what is the rental value of the shop once all works done?
This will be about £15k
Ian Taylor
Zero from March 2020 onwards
Great content!
Hahaha.This is so amazing.
Great content. Are you going to make pink you "stitch" for these videos ;)
Now there is an idea!
@@ranjanbhattacharya9147 I look forward to the royalty check :P
Join Ranjan LIVE for FREE 90-minute deep dive into repurposing commercial buildings & investing in commercial property, this Sunday, at 7pm.
FREE REGISTRATION AT www.succeedinproperty.com/free-training.
Does the commercial property have to be a freehold property
to do this deal one would still need a 35% deposit plus the refurb cost.
The deal structure is explained in the video. 65% of purchase is bridging loan. The 35% deposit and refurb cost has been put up by her JV equity investor. The proeprt has been purchase in an LTD company, the shares of which are split 50:50 between Kiren and her equity JV partner. Kiren is putting in all the work, none of the money and getting 50% of the deal profit.
@@ranjanbhattacharya9147 Better if you are the investor just taking profit for no effort - obviously not everyone has time to find the deals or has the time to do the development or money to invest. End goal is to be the investor or middle man linking deals for investors to developers. That way you skim profit and no work. Friend is taking a 5% profit on a £5.6 million project - no bad for just linking some people.
@@ranjanbhattacharya9147 Thank you for your great content and interesting tips which I always look forward to, ;-).
@@ranjanbhattacharya9147 Can we assume that the shop and the 1 bedroom flat will be remortgaged on a commercial loan and what would be the expected take valuation of the freehold of both units?
Poor Kiren...7:29...isn't it men who look 'dashing'...?
Good job + she’s hot
Click bait
Fooling....
Too much jibberjabber get to the point man. 4 minutes.tops.
After watching a few of your video I’ve taken the jump and purchased a shop with two flats above. There’s a good space at the rear ideal for conversion to two more flats you are a inspiration
It's been two years since you left the comment, how did the property purchase turn out?