{UAH} Property Deal in Coventry

Frank Mujabi,

I have just been to Coventry to help my sister out with a property deal. She has a daughter there at Coventry University.She is going to second year and so has to get private rented accommodation this year. The mother decided to buy a house rather than rent- as she worked out it makes more financial sense in the long term. She got a three bed house for £120,000; I did not realise property is still so cheap in Coventry as a similar property in London would be at least £ 350,000. Anyway, we had a Financial Advisor there who also doubles up as an Estate Agent and he sorted it out. As my sister is already a homeowner in London, the lender wanted 25% up front deposit- she took an interest only mortgage for the remainder, which worked out at about £300 per month for 25 years. So her daughter will live in one of the rooms, the other two rented out to her friends at £450 per month. She thinks she got a good deal.

But while her mortgage was being sorted out, her Financial Advisor was desperate trying to sell another house on the same street. He was really desperate as  a repossession was due TODAY, unless he sold the house by 12 midday. The owner of the house got into a buy-to-let scheme, but did not have the finances to up date the property to a suitable standard so found it difficult to maintain tenants. I listened to his conversations on the phone and my mind started working at the speed of light.

Remember I told you people who had lost out in property investments in Spain won an important court victory late last year when the Spanish Courts ordered the banks to compensate all the victims who had lost their investments when the property market collapsed in 2009  and the builders could not complete the homes they had contracted to build. I had lost £30,000 in the scheme. Any way, last week we were finally compensated, and I got a cheque for £59,000, less UK taxes, to cover compound interest, loss and damage that I suffered. I was still not happy that I was getting just £29,000 after my money was locked up for 7 years, but I have accepted the compensation.

So sitting in an office in Coventry, and I heard the conversation going on in the Estate Agent's office, I decided to take a gamble. I enquired further about this house being reposessed in just a matter of hours, checked surveyor's reports, and decided to put in a bid.  The lender's bank agreed if I could come up with a CASH payment in 2 hours, they would stop the repossession. So I made a bid for £90,000, for a property similar to the one my sister just bought for £120,000, and the bank accepted my offer. But I had to raise £60,000 in cash  there and then, with a promise to pay the remaining £30,000 by Friday next week. It is the biggest gamble I have ever taken in my life. I have never before spent £60,000 in cash. But I went ahead with the deal, contacted my bank and they duly transferred the money.

The good thing is that the estate agency had ready-made student tenants to move into the house. They have a long list of students looking for accommodation- Covenrty has almost 2,00 students- it is a University City, just like Hull. He got me three tenants almost immediately, and they have in fact already signed the tenancies- at £450 per month each room. I have however to complete the works in the house by FRiday next week for the students to move in, so I have employed a builder today to install a new kitchen, bathroom and toilets, tiling and carpets in the bed-rooms and painting and basic decoration at a cost of £6,000, work which they started just now and hope to have completed by Thursday, so I can move furniture in ready for the students on Friday.

It is a real gamble, but what I am thinking is  on Monday, I can get a low interest loan from my bank to cover the £30,000 balance, and so I will own the house outright without having to take a mortgage. And with Coventry having almost 2,000 students, the house will always be rented.

I am not really a capitalist wheeler dealer, but I am beginning to look ahead as to when I retire and return to Uganda. I don't want to  have to rely on a salary, whether I am in politics or not. I want to be  completely financially independent, from my investments here ( I already own two houses) and from my pensions and retirement packages. People like Kayibanda Museveni, Otafirre, Mutebile etc have turned to  be major league thieves and hopelessly corrupt because they were all so poor to begin with and looked at politics as a means off making money and getting rich. I am in politics for completely altruistic reasons and I wish there were more people who have my mentality. We could change our country for the better.

Bobby

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