Buying a Property Portfolio

[Craig01]

Hi,

I am thinking of making an offer for a local business which specializes in rented accommodation, as I am friends with the company director and know he is looking to retire in the next 2 to 3 years.

The company comprises of about 40 properties and has a sale value of £3.5m.

What is a reasonable offer price? And who are the best people to speak to with regards to a mortgage?

Look forward to your replies

[tenant29]

Hi,

I am thinking of making an offer for a local business which specializes in rented accommodation, as I am friends with the company director and know he is looking to retire in the next 2 to 3 years.

The company comprises of about 40 properties and has a sale value of £3.5m.

What is a reasonable offer price? And who are the best people to speak to with regards to a mortgage?

Look forward to your replies

1. The average value seems to be 90,000 per unit. What part of UK are you located ? Is the portfolio sale value at 3.5 mil based on market valuations made by professional surveyor on all 40 properties ? There are one or two companies advertising in national daily papers offering a quick sale at 80% of market value and this would be the break-up value of the company.

2. What is the gross and net profit ( excluding loan interest ) for past 3 years ? Are tenants on AST tenancy agreements ?

3. the Home page of this website has a news article ( see 26th Feb 2006) identifying lenders up to 10 Mil limit for BTL property portfolio.

[Craig01]

The average value seems to be 90,000 per unit. What part of UK are you located ?

North Wales about 10 minutes from chester

Is the portfolio sale value at 3.5 mil based on market valuations made by professional surveyor on all 40 properties ?

Yes

What is the gross and net profit ( excluding loan interest ) for past 3 years ?

Not sure on these details yet, but i know that the annual rental income is about 200k

Are tenants on AST tenancy agreements ?

75% are on AST & 25% are on 3 year leases

[tenant29]

Next step is to find out what size of loan is available from a BTL lender

[MarkD]

Hi Craig,

I should be able to help with this if you still require assistance. I'd be happy to discuss the propertyt portfolio at any time.

[Paul_W]

Have you considered buying th shares in the company?

Talk to an accountant or a tax adviser, you could save the seller lots of money in CGT and other taxes if they have to withdraw the properties from the company first.

Perhaps you could reduce the price based on the amount saved