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Exchange With Delayed Completion: Case Study

Solicitor and property entrepreneur Tariq Mubarak talks with Jay Chauhan of Berkshire Corporate

In the first of a series of a series of interview based articles looking at property deals using creative structures, Tariq spoke with Jay about how he had used an exchange with a delayed completion strategy to maximum effect. In this case-study Jay explains just and why and how he was able to agree a deal with the vendor for a 12 month completion date which then enabled him to obtain planning approval and proceed with the development works.      

Tariq: With me today is Jay Chauhan of Berkshire Corporate and we'll be speaking about an exchange with delayed completion deal he completed a few years ago. Jay, tell me a little bit about yourself, your background and how you got into property development.

JC: Thanks for having me on Tariq. I started in property probably over 10 years ago, whilst I was working in the City. I did a variety of roles from business development to project management. But whilst I was in the City, I always had an urge to get out of the City. Pretty much as soon as I got in, I wanted to leave! The corporate life just wasn't for me. I knew it from the day I actually started, so I started investing in South Wales initially. It’s a bit of a journey from London, but I was fortunate enough to have a good team down there, consisting of a project manager, a refurb team. I was just buying small deals and thought, if they were to go wrong, I felt comfortable with the sort of the money that I might end up losing. These were small, two to three bedroom houses, that I added value to by refurbishing them, then just selling them on the open market. I did a few of these whilst still working in the City. I then decided I wanted to bring it closer to home where I would have more opportunity for capital growth. Wales is nice as an area but you’d be lucky to see a one or two percent increase over five years. Where I operate now, along the M4 corridor up to West London, I achieved significant capital growth from a small portfolio of buy to let and multi-let properties that I decided to focus on after South Wales. That allowed me to then leave my City job and focus full time on my property business. I formed Berkshire Corporate a couple of years ago, which focuses on developments.

TM: Thanks Jay. Walk me through this exchange with delayed completion deal - firstly, describe the property.

JC: It was a mixed-use property - ground floor was commercial - a post-office and first was was residential - a flat. It was an owner-occupied - I think for over 35 years. The owner was operating the post office and lived in the first floor flat. It was in really poor condition - internally, you can tell it had absolutely nothing spent on it for a good few years. The owners needed an exit as they were looking to relocate to North West London, to be closer to family. I recall the business was on its last legs as well.

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