What is Title Splitting as a strategy?
- Title Splitting, as it is commonly referred to as a property strategy, is one where we purchase Multi Unit Freehold Block (MUFB), containing both multiple residential and or commercial units and disaggregate them from each other, via a legal process.
The idea being that the sum of the parts is worth more than the whole.
- The reasons for engaging in Title Splitting.
- Less Competition:
- Due to the nature of the assets being purchased, ie Multi Unit Freehold Blocks the competition tends to be less than buying traditional single dwellings. This reduced competition means that you should be able to negotiate better deals with sellers, who are serious about selling their portfolio.
- Its highly lucrative given the instant cash flow you can generate, buying positive yielding rental businesses, with the advantage of being able to add more value.
- Clever ways to add value:
- When you buy the right block of flats, those unloved and tired looking ones, most of the value comes from sourcing, legal and refinancing activities.
- Super charges the size of your portfolio:
- It’s a great strategy to allow you to grow your property portfolio quicker than buying single units at a time.
- Cost Effective:
- It’s cheaper to buy a block of for example 8 units and pay one transaction fee and SDLT than buy 8 single units at a time when you think in terms of legal costs, valuation costs, bank arrangement fees and so on.
- If you secure BMV blocks of flats you can potentially recycle all of your capital out to be used onto the next purchase.