Historical property case study
Buying property from receivers: the £180,000 Sefton Park acquisition
In 2012, we bought a newly converted freehold block near Sefton Park for £180,000. The lasting lesson is to understand the circumstances of a sale, then investigate the property and the terms with care.
The Sefton Park purchase
In my original account, I described buying a newly converted freehold block of flats in a period building near Sefton Park, Liverpool, from a Manchester-based receiver in 2012. The developer had gone into liquidation.
Our published property sourcing track record records the acquisition as 3 two-bedroom apartments and a plot of land, purchased for £180,000 through a receivership negotiation.
| Location | Sefton Park, Liverpool |
|---|---|
| Year acquired | 2012 |
| Property recorded | 3 two-bedroom apartments and a plot of land |
| Purchase price | £180,000 |
| Purchase route | Negotiation with a receiver |
The £180,000 is the historical purchase price. It is not the total cost of the investment, a current valuation or a realised profit. The example demonstrates a purchase route and an approach to research.
Understand the reason for the sale
A property can reach the market because of circumstances affecting its owner or developer. Those circumstances may create an opportunity, but they do not establish that the building is sound or the asking price is attractive.
Find out who is selling, in what capacity, and what they need to achieve. A receiver, an administrator and a mortgage lender selling a repossessed property are different roles. Your solicitor should establish the seller’s authority and the documents required for the particular transaction.
The Nara guide to property receivership explains the receiver’s role and responsibilities. A receiver selling a property has duties concerning the price obtainable in its circumstances. It is not safe to assume that a receiver will accept any low offer.
Give the receiver a credible proposal
Establish the process for submitting an offer and the information the selling agent or receiver requires. Set out the price, funding position, proposed timetable and any conditions clearly.
Being able to proceed matters, but only promise a timetable your solicitor and lender can meet. Clarify which documents remain outstanding and what could delay exchange or completion. A clear proposal makes it easier for the other side to assess your position.
Our Liverpool property sourcing service includes identifying opportunities and helping coordinate the buying process. The appraisal still has to justify the price.
Inspect the building and check the paperwork
For a converted block, establish exactly what the title includes and how the apartments are occupied. Ask your solicitor and surveyor to investigate the conversion, relevant permissions and completion documentation, access, services, fire safety and any outstanding works.
Check the tenancy documents and evidence of rent actually received. Inspect shared areas, the roof and the structure as well as the individual flats. A recently converted building can still have defects or missing documentation.
Land included with a purchase needs its own checks. Confirm its title, boundaries, access and any restrictions. A plot of land does not by itself establish development permission or value. Our property investment checklist provides a framework for organising the questions.
Appraise the investment on today’s evidence
When assessing a new opportunity, use current comparable sales, rental evidence and quotations for the work. The HM Land Registry sold price service can help with residential comparisons, but a block may need specialist valuation advice.
Include acquisition costs, borrowing, insurance, maintenance, management and any initial works. Model the income of each apartment and the costs of the building as a whole. Our rental yield guide explains why gross rent and spendable cash are different figures.
If you are keeping the block, consider the practical block management arrangements at the same time as the purchase. Shared repairs and services need a plan.
The lesson for a disciplined investor
The useful part of the Sefton Park story is the connection between the circumstances of the sale, the asset and the purchase price. Investigate all 3. A low price deserves research just as much as a high one.
An experienced property mentor can help you challenge your assumptions, recognise gaps in the evidence and bring the right questions to your professional team. The legal and technical checks still belong with the appropriate specialists.
For another example of how the sale process affects a purchase, read our conditional auction buying guide. Different routes require different preparation, with the same discipline over the numbers.
About Dominic Farrell
Dominic is a property investor, developer and mentor, a director of Tuna Fish Property, author of Property Auctions: Repossessions, Bankruptcies and Bargain Properties and host of The Property Auctions Podcast. Explore his experience and approach to property mentorship.
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Developed from the original Tuna Fish article. Historical figures describe the recorded case. Illustrative calculations are examples, not forecasts. Obtain professional advice appropriate to your transaction.
