Case study · Walton Village, Liverpool
10 Walton Village: a repossessed cannabis farm turned into £4,000 a month
The most extreme example on this site of the point we keep making: condition is a price, not a verdict. This house had been repossessed by the lender because the owner could not pay, and it had been running as a cannabis farm. The damage was real and none of it was structural in a way that could not be solved.
The numbers
| Purchase price | £135,000 | open-market auction, from the lender |
|---|---|---|
| Purchase costs | £5,000 | |
| Refurbishment | £90,000 | |
| Furnishing and licensing | £6,000 | |
| Total invested | £236,000 | |
| Valuation on completion | £350,000 | |
| Gross rent | £4,000 / month |
Strategy: Open-market auction purchase, conversion to studios, refinance and let
What made it work
- It was bought at an open-market auction — a bank sale where your offer is accepted but the property stays on the market until you complete. It is uncomfortable and it is where the price was won.
- The basement did most of the work. It was flooded and had been used for the grow; tanked and converted, it became lettable space that the purchase price never accounted for.
- No extension. The patio was left exactly as it was — the value came from reconfiguring what was already inside the walls.
- At £236,000 invested against a £350,000 valuation, a refinance at normal loan-to-value returns more than was put in. That is what Noel means in the video by an infinite return: the capital comes out and the asset keeps paying.
The full walkthrough, in Noel’s words
Transcribed from the video and edited for readability. The figures are as stated in the video and match the account given in its description.
Welcome to another success case from Property Cashflow. My name is Noel Cardona — an author, an entrepreneur, and a property investor myself.
This property is at Walton Village. It was on the market because the lender had taken it from the owner. The likely reason is that the property had been converted into a cannabis farm; the owners could not pay the mortgage, and the bank intervened.
The property had a great deal of potential, and when we saw it we moved immediately — we had to fight for it. It was an open-market auction, and the price ended at £135,000. An open-market auction is where you buy from a bank: they accept your offer, but keep the property on the market until you complete. It is annoying, but that is how they do it.
The layout is worth understanding. There was a basement, with a window that had been closed off but could be brought back. The ground floor had a room, a living room and a kitchen. Above that, bedrooms and storage space, and on the first floor a bedroom, a bathroom and a walk-in closet. A great deal of space, and an excellent layout for creating an HMO or studios — which is what we did.
When we first saw it there were gutter issues, and you can see the remains of the cannabis farm in the basement. They had broken parts of the house to use it that way. There were leaks in the kitchen too. None of it was anything that could not be solved.
The patio is not large. We did not extend and we did not need to — we left it as it was.
The basement took the most work. It had to be tanked, and there was a great deal to put right, but it produced a remarkable amount of usable space — including the part where coal was once stored, back when the house was heated by open fires.
The numbers: an asking price of £135,000, refurbishment of about £90,000, £5,000 in purchasing costs, and around £6,000 in furnishing and licences. The final valuation was £350,000, and the monthly cashflow is £4,000.
This is an asset any investor would want, and it is effectively an infinite return on the investment. There are not many of these left in the market, but they exist — they can be found, and they can be created, with a good knowledge of planning and building and by knowing your numbers and your strategy before you start.
If you want a property that does this, we source and develop them in Liverpool and the Wirral, and manage them afterwards. Or run your own numbers first on the buy-to-let calculator — free, no sign-up.