Case Study: Turning an Asbestos Challenge into a Profitable Investment
| Property Overview | |
| Location | South East England |
| Purchase price | £300,000 |
| Layout | 4 Barns and 1 Farmhouse |
| Building Work Financials | |
| Deposit Required | £110,000 |
| Money Spent On Building Works | £1.2 million |
| Exit Values | |
| Timescale | 2 years |
| Valuation | £3.1 million |
| Profit | £1.6 million |
| ROCE |
Price Reduction Due To Asbestos (estimated)
| Asbestos Financials | |
| Property Type | Farm |
| Purchase Price | £300,000 |
| Challenging Factor | Extensive Asbestos In The Barns |
| Estimated Savings | £150,000 |
| Additional Asset | Farmhouse Plot Value £400,000 |
| Asbestos Remediation Costs | |
| Asbestos Removal | £11,000 |
| Asbestos Waste Bins | £3,250 |
| Total Asbestos Removal Costs | £14,250 |
Introduction:
In the world of property investment, challenges often pave the way for exceptional opportunities. This case study shines a light on our farm purchase that initially faced hurdles due to asbestos contamination. However, these obstacles turned into an opportunity, resulting in substantial savings and additional assets.
The Farm Purchase:
We set our sights on a promising farm acquisition, priced at £300,000. Despite its potential, the property struggled to find a buyer at auction due to the significant presence of asbestos in the barns. Little did other buyers know that this perceived setback would soon become a source of advantage and large profits.
A Costly Asbestos Dilemma:
Recognizing the asbestos issue as a challenge rather than a roadblock, we decided to tackle it head-on. We allocated £11,000 for professional asbestos removal and an additional £3,250 for specialised asbestos bins to ensure safe disposal. This proactive approach was the first step toward generating significant 6 figure profits.
Savings Beyond Expectations:
As the asbestos was removed and the property became asbestos-free, we experienced significant increased site value. The property had initially been priced higher when selling in the auction market, reflecting its potential value without the asbestos issue. By acquiring it at £150,000 less than its estimated worth, we made a significant saving and equity increase which could be used to raise further funding.
A Valuable Bonus:
But the story doesn’t end there. During the course of negotiations, we secured an adjacent farmhouse plot thrown in for free. This additional asset had an estimated value of £300,000, adding further profit potential to the investment.
Conclusion:
The story of this farm purchase serves as a testament to the potential opportunities that can arise even in challenging circumstances. What initially appeared as a roadblock due to asbestos contamination became a savvy investment that not only saved £150,000 but also secured an additional £300,000 in potential profit. This case study highlights the importance of creative problem-solving and seizing opportunities, even when faced with hurdles which might put other developers off purchasing.
