Opportunities in Distressed Assets: It’s a Buyer’s Market
- Distressed Assets Team
- May 20
- 3 min read
It’s auction day, and while we have a few potential lots lined up, we’re holding fire unless we can secure them within our maximum bid limits.
Today, I successfully acquired a property through a ‘best and final offer’ process that aligns perfectly with my personal investment strategy, though it differs from that of my mentees (and they know exactly why).
22% Gross Yield | 18% Net Yield
The property is currently under-rented, rated EPC C (thanks to a past grant-funded upgrade), and already tenanted. I’ve met the tenants, a lovely couple who invested in a new kitchen and flooring themselves. They’re happy to stay on, having lived there for years, with a modest 12% rent increase, which remains well below market value. Based on the revised rent and the purchase price, the gross yield is 22%, and net yield is 18%. Not bad.
At market rent, we could expect 29% gross, 25% net.
Comparable Sale: Not Quite Apples to Apples
A nearby property in the same block recently sold at a conditional auction. After adjusting for fees, it went for 7% more than ours. But it's not even comparable:
· One-bedroom v our two-bedroom.
· EPC rating E v our EPC C.
· Old electric heating v new central heating.
· No insulation v ours fully insulated.
· Requires a full kitchen replacement v ours fully upgraded.
· Needs complete refurbishment v ours in very good condition.
· Ours is cash-flowing from day one, while the other needs at least £12,000 - £15,000 in upgrades to meet EPC C and be rentable.
Lesson: Even at auction, you have to be an astute investor and seek value. Some auction properties are worth avoiding while others should be embraced. Experience is the key.
Freehold Apartment Blocks in Liverpool
We’ve also had two off-market freehold apartment blocks in Liverpool come on the books. We'll be assessing those next week. I anticipate strong interest at the right price.
It’s a Buyer’s Market
The UK real estate market currently favours buyers, as the economy evolves and government housing legislation kicks in. With interest rates falling and rental demand rising (supported by strong net migration), now is the time to act. Secure your future today, rather than looking back with regret.
Not All Properties Are Created Equal
Real estate isn’t homogenous. If you’re a BTL or BRRR investor, steer clear of new-build city-centre apartments. Instead, focus on high-yielding terraced houses in larger towns and cities. These typically offer better net returns and avoid hefty service charges that can eat up months of rental income.
Another Example: Anfield
One of my mentees recently picked up a fantastic deal just a stone’s throw from Anfield Stadium. A few weeks later, a comparable (but inferior) property with lower rent in a less desirable location was sent to me by an agent, priced 41% higher than what she paid. This isn’t an anomaly; it’s a recurring theme. Just skim through my book or our website materials to see more examples.
Final Thoughts
This is the time to take decisive action. The deals are out there, but only if you know how and where to look.
Buy wholesale, not retail. Good luck, and take massive action.
If you want help, just call or e-mail me directly
Enjoy your day.
