Want to Know How it's Done? Mark and Jackie's Property Success
Want to know how it’s done? Read this riveting story of Mark and Jackie’s most recent property deal
In our last blog, Building business partnerships in the property sector, we revealed how PMA founders Mark Lloyd and Jackie Reeves met.
And to highlight how this partnership works, we’d like to share the story of one of their recent property investment successes from 2016/17.
Looking for a new deal
In July/Aug 2016, Mark Lloyd was on the lookout for new deals.
Usually he doesn’t use online portals as there can be too much competition from other investors. However, he was browsing the commercial section of Rightmove and came across a plot of land just under an acre in Farnham that was on the market for just £50k.
At only £50k, the site obviously had some kind of problem, but Mark and Jackie like these type of deals as they put off a lot of other investors and developers.
It turned out that this was a probate sale. The story behind it was that, in 1967, a builder had purchased the plot (and the house that was there at the time) and promptly knocked the house down. He obtained planning to replace the house, and this was granted. That planning expired, and he reapplied, and again it was granted.
However, in 1989, when he decided to apply for planning for two houses, it was refused by the local council. He appealed and was turned down with the comment, “Just because there was a house there previously doesn’t mean one will be permitted again.”
Mark did some more research and found what looked like a ransom strip owned by the town council - but the town council hadn’t existed for years. The local council had no record of it and nor did the county council, however, the council representative had an idea it may be Highways. On Mark’s behalf, he contacted them, and sure enough, the land belonged to Highways, and they had right of access over it.
Mark went to the local planning department who knew a lot about the plot as there had been many builders and developers interested. Mark was not deterred as he felt many would be put off by what he’d just discovered - the entire site had a Tree Preservation Order attached.
Mark, Jackie and their other business partner on this deal, Paul Merrick, felt it was worth a punt. They knew there would be many other potential bidders who saw it as a cheap site and worth the gamble, so their initial thought was to double the asking price. But then they thought, what if someone else did the same?
They decided to add another £5k on for good measure and put in an offer of £105k. Next, they needed to get their bid handed in. Because there were still a few unknowns to establish, they decided to put in a conditional bid (even though the terms asked for an unconditional bid).
Mark drove to the offices to put in the bid, and to his surprise met a joint venture partner of one of their mentees also putting in an offer (they’d clearly been taught well). It was thanks to this partner that Mark, Jackie and Paul won the bid as she pointed out various important pieces of information that Mark had left off the outside of the envelope, which would have meant the bid would have been discarded. (Mark later discovered hers was the second highest bid at £75k.)
With their conditional bid accepted, they put in for a pre-application, which came back within two weeks – but to their dismay, the council said it would not support an application for a building on the site.
Further discussions between Mark, Jackie and Paul resulted in the decision to bring in another couple of investors as they didn’t want to have money tied up for what could be a long haul. Though it wasn’t a massive amount each, they wanted to have their cash working. Due to illness, Paul had to pull out of the deal, and Mark and Jackie spoke to one of their joint venture partners who replaced him.
One of the keys to this project was getting a good team together starting with an architect. Mark contacted various local firms who seemed too busy to consider the site. Eventually, he met with an architect on site, but this person didn’t fill him with confidence that he could get the plans through – so back to the drawing board.
Mark scoured the local council planning portal for architects – looking for those who were getting applications in and accepted - and one name stuck out. When Mark and Jackie met him on site, he gave them confidence as he’d already got similar sites in the area through the process. His fees were five times that of the previous architect they’d met, but they didn’t want to scrimp and instructed him to proceed.
‘Always pay your advisors well’ Rich Dad, Poor Dad by Robert Kiyoski
The architect felt they would get just one shot, and, therefore, should stick with one property, albeit a large one - approximately 3000-3500 sq. ft. For the next 12 months, they had every survey possible carried out on the site. This uncovered even more issues: otters, bats, badgers were all found. However, throughout this process, the architect gave them immense confidence the path they were following would ensure the highest possible chance of success - but even he expected it to go to appeal.
Overall, they spent £25k on surveys and architect fees. Then in October 2017, planning was granted with the first attempt for a 3200 sq. ft. grand design type property. Since then, the plot has been valued at between £450k and £500k, giving Mark and Jackie and their joint venture partners a healthy profit over the purchase price and costs totalling £130k.
As the property would be better suited to a self-build, they decided to sell the plot with the planning gained. It was recently put on the market at OIEO £500k and at the time of writing, an offer £450k has been received.
Want to learn more about property investment from our property mentors?
Look out for the next PMA Mentoring Programme; we’ll be running one in Jan/Feb 2018.
Our property investment strategies are designed to equip you with everything you need to get out there and make your mark in the world of property.
Join our Facebook Group to ask property questions, share knowledge, vent frustrations – and, you never know, it could also lead you to potentially lucrative deals.