When to use Yellow Apricot - property developers |
YELLOW APRICOT WORKING FOR PROPERTY DEVELOPERS
A Yellow Apricot auction is a property developers dream. Not only can the developer sell a property instantly with no hassle and receive the money 28 days later, he or she can also buy a property instantly, knowing that the purchase will go through in 28 days time.
The quick time in which the transaction will go through ensures that the cash flow and property turnover is maintained, giving the property developer control over what is sold and when and giving him or her control over when to buy a property.
Example:
Mr Boron is a property developer who has been dealing in properties for the past 10 years and has built up a portfolio of 20 properties. He uses Yellow Apricot Auctions often to sell his properties as their fees are low and they get the job done. He bought 2 properties at a recent Yellow Apricot Auction. The first property is run down which he bought for £58000 expecting to spend £20000 on it and to sell it for £100000. The second property was bought for £85000 which needed a cosmetic refurbishment and which he would let out for £500 per month.
Unfortunately, Mr Boron missed the fact that the first property needed underpinning and he had not got the property surveyed prior to purchase. By the time underpinning is carried out, in addition to the other works needed, Mr Boron would not recoup his investment. He successfully refurbished the second property and let it out. He decided to resell the first property in the next Yellow Apricot Auction without doing anything to it.
At the Auction, the property sold for £59000. Although Mr Boron made a small loss overall due to the buying and selling costs, selling the property at Auction and giving the headache of underpinning to somebody else let him find another property and turn his money around in a more thoughtful way. It is most probable that the person who ended up buying this problem property was too a property developer who would do the property up and let it out. Making an immediate profit would not be a priority as in years to come the value of the property would rise, making the investment even more worthwhile.
« back |
