Discussion
Just a quick question, a friend is packing in his job in to get into property.
Basically he wants to buy a place, tidy it up and sell it for more money. (we all know its not that easy but this is the principle)
He will do all building works himself to save costs and also time is on his side with these 'projects'
Just looking at any useful resources for him that offers good advice / tips on the subject...
Any pointers?
Basically he wants to buy a place, tidy it up and sell it for more money. (we all know its not that easy but this is the principle)
He will do all building works himself to save costs and also time is on his side with these 'projects'
Just looking at any useful resources for him that offers good advice / tips on the subject...
Any pointers?
If I were im I wouldn't give up his job straight away. Unless he has hundreds of thousands of £££'s he will not be able to buy a property, ie he won't be able to borrow money if he can't realistically repay it.
Where abouts does he want to buy & sell? Are there any EA's or otherwise that have property auctions in that area?
Making money from property is getting ever more difficult....to rely on it's success is something I wouldn't do myself.
I bought a BTL in 2005 whilst still working . New kitchen and bathroom, removal of a wall and general decoration and furnishing...but I was working a double day shift at the time which gave me a few hours before or after my shift.
He will need a reliable EA that will contact him as soon as a doer upper comes onto teh market but there are no doubt several people wanting the same that are already on all the EA's books. Above all, he must check the EA's windows on a daily basis. The internet may not be updated daily but the ads in the windows often are.
And of course he should spend time driving (walking or riding) around the areas of interest just in case he notices an ideal project.
Where abouts does he want to buy & sell? Are there any EA's or otherwise that have property auctions in that area?
Making money from property is getting ever more difficult....to rely on it's success is something I wouldn't do myself.
I bought a BTL in 2005 whilst still working . New kitchen and bathroom, removal of a wall and general decoration and furnishing...but I was working a double day shift at the time which gave me a few hours before or after my shift.
He will need a reliable EA that will contact him as soon as a doer upper comes onto teh market but there are no doubt several people wanting the same that are already on all the EA's books. Above all, he must check the EA's windows on a daily basis. The internet may not be updated daily but the ads in the windows often are.
And of course he should spend time driving (walking or riding) around the areas of interest just in case he notices an ideal project.
I had thought about this myself. My brother has been in the trade for the past 30 years and can turn his hand to most things except electrics (which of course you have to get certified now anyway). He has a crap job he isn't keen on but just hasn't the confidence or commercial edge to go it alone. I thought about setting him up, paying his first year's wage to reassure him we would make a go of it and then buying somewhere for him to rennovate and we would split the profit minus his wages. Then move on to another where it was a staright forward deal, but it sounded like expliutation that my input was cash but he did almost al the work but we still split the proceeds.
He had a simlar offer a few years ago with a guy who offered to buy the premises and finance the materials and they would split the profit, but it didn't seem to work out.
E.g.
Few made up numbers: spend £100k on a house and £20k on materials. Rennovate and sell in 4 months and the cost of the lending would be say £3K. Sell for £150K and take £30K profit to split 2 ways. BUT, what about fees and CGT (stamp duty £1K, estate agents £2k, solicitiors etc 1k?+ £4K)=26K The finanacier would make £13k minus his interest charges (£3k) and the bulder gets his pay (say £7k) and 6k profit.
I also recal that companies that operate inn this way are treated differnetly for tax and capital allowances?
He has to stop working for medical reasons and also he isnt happy with his current job...
He has 80K in the house he is living in atm (shared house) 1 person is buying the other two out. He has 80k to live on / invest. (No mortgage, debts)
He is looking at the South East, Essex mainly.
Doing this ay 5, 10 years ago would be pretty easy IMO as capital growth was good and added to the sale price, these days by the time you take into consideration of the materials, time, fees, interest (mortgage) etc I rekon , and i'm not talking massive projects here, that you would probably break even.
He also isnt that fussy where he will live, its an investment not at 'home' I suggested putting in really silly offers on lots of properties, it must just be the numbers game - try and earn buying into the property?
I cant see it going really well - maybe not enough to live on throughout the years? What other options within property would you go for? Use the 80k on a couple of flats and rent? Thats not really a living with a mortgage that big???
Thanks for the comments so far.
He has 80K in the house he is living in atm (shared house) 1 person is buying the other two out. He has 80k to live on / invest. (No mortgage, debts)
He is looking at the South East, Essex mainly.
Doing this ay 5, 10 years ago would be pretty easy IMO as capital growth was good and added to the sale price, these days by the time you take into consideration of the materials, time, fees, interest (mortgage) etc I rekon , and i'm not talking massive projects here, that you would probably break even.
He also isnt that fussy where he will live, its an investment not at 'home' I suggested putting in really silly offers on lots of properties, it must just be the numbers game - try and earn buying into the property?
I cant see it going really well - maybe not enough to live on throughout the years? What other options within property would you go for? Use the 80k on a couple of flats and rent? Thats not really a living with a mortgage that big???
Thanks for the comments so far.
Piglet said:
If he's got £80k at the moment but no prospect of being able to work in the future IMO he'd be barking to put it into speculative property buying.
He can work but has been told to give up his current job as a sous chef as the long hours / strees / bad conditions are not good for him. (He had a bad motorbike crash and has lots of side effects) He can still work maybe get an office job even stay in catering if he had too but he wants to make a go of something he enjoys. Lives too short.
80k cant really get youthat much of a headstartthese days?
I think he's going to struggle in all honesty.
First of all he needs to find a good mortgage broker. Then He's going to need to find a flat/house that has potential (ie needs work and will definitely be worth more once done up).
The trouble is that there a loads of people out htere at the moment doing this. You only have to go to an auction to see how rammed the place is with people doing this.
In my opinion the key to do this successfully is that he's got to get to know an area extremely well. By that I mean he needs to introduce himself to all the Estate Agents; take them out for a drink, let them know he's in the market for a property and is able to act quickly and generally find out what's going on in his area property wise.
EA's want an easy life; they will already have their own preferred developers that they pass likely prospects on to before they even hit the market because they'll have an agreement that there is something in it for them.
If your brother finds a property in the paper 'with potential' then I can safely say that it's a dog. There'll be something wrong with it because if it was a no brainer it will have already been passed to one of their preferred developers. OK, that's a bit of generalisation but for the most part it does ring true.
I think he needs to find out which auction houses do repossesions, keep his ear to the ground and work hard at it to uncover that house/flat. I'd even go so far as to say its worth driving down every road in a given town looking at buildings either side. Spot a crap one I'd jot the address down, get the address from 192.com and write to the owners.
That's what I did in a previous job. It's f*cking hard work but if your brother wants to make this a success that's what it's going to take.
Alternatively perhaps he should work as an estate agent - you'll make some money, get on the inside and find out what's going on. I'd try and buy a flat with the 80k so he's mortgage free and take it from there. No sure if Essex is expensive but it's worth a try. If you want to pm off line I'd be happy to help. check out my profile if you want.
Good luck.
First of all he needs to find a good mortgage broker. Then He's going to need to find a flat/house that has potential (ie needs work and will definitely be worth more once done up).
The trouble is that there a loads of people out htere at the moment doing this. You only have to go to an auction to see how rammed the place is with people doing this.
In my opinion the key to do this successfully is that he's got to get to know an area extremely well. By that I mean he needs to introduce himself to all the Estate Agents; take them out for a drink, let them know he's in the market for a property and is able to act quickly and generally find out what's going on in his area property wise.
EA's want an easy life; they will already have their own preferred developers that they pass likely prospects on to before they even hit the market because they'll have an agreement that there is something in it for them.
If your brother finds a property in the paper 'with potential' then I can safely say that it's a dog. There'll be something wrong with it because if it was a no brainer it will have already been passed to one of their preferred developers. OK, that's a bit of generalisation but for the most part it does ring true.
I think he needs to find out which auction houses do repossesions, keep his ear to the ground and work hard at it to uncover that house/flat. I'd even go so far as to say its worth driving down every road in a given town looking at buildings either side. Spot a crap one I'd jot the address down, get the address from 192.com and write to the owners.
That's what I did in a previous job. It's f*cking hard work but if your brother wants to make this a success that's what it's going to take.
Alternatively perhaps he should work as an estate agent - you'll make some money, get on the inside and find out what's going on. I'd try and buy a flat with the 80k so he's mortgage free and take it from there. No sure if Essex is expensive but it's worth a try. If you want to pm off line I'd be happy to help. check out my profile if you want.
Good luck.
His biggest problem will be finding the properties. We get people through the door every day who have either had a mid-life crisis, quit their jobs (including IT Managers, Barristers, etc) and moved into property development, or are professionals who've been doing it for years. Add to them the building companies which have started specialising in this area and you've got a lot of people chasing a few run down houses. Many of our clients have given up finding property outside of auction because prices are so high, but even at auction you'll have to know your stuff to find a bargain.
Give up the day Job... Stop right there. How exactly will he pay his mortage, and trade men. It will always be more expensive than he thinks, unless he is a builder by trade, or knows the figures people work to. He will struggle to find stuff at realistic prices, but maybe one or two may come up.
He will need to be able to sort mortagges out faster than a dveeloper, otherwise they will simply put in a higher offer and out bid him.
To be sensible, when and if he views anywhere he needs to be sorting, or atleast thinking of a budget as he views, and be on the phone right away if he fancies it.
Don't give up the day job, do employ trades people, and do know who is working for you.
Do have a realistic budget, and do not in any way get personal. Know good suppliers who do know what you are after, and do not go over board thinking a ten grand kitchen will help a £106k sell faster.
Good luck to him, but I think he needs to have a think about things.
He should maybe try buying houses if and when he gets round to it from companies who advertise "we buy houses for cash"
Hope it works out.
He will need to be able to sort mortagges out faster than a dveeloper, otherwise they will simply put in a higher offer and out bid him.
To be sensible, when and if he views anywhere he needs to be sorting, or atleast thinking of a budget as he views, and be on the phone right away if he fancies it.
Don't give up the day job, do employ trades people, and do know who is working for you.
Do have a realistic budget, and do not in any way get personal. Know good suppliers who do know what you are after, and do not go over board thinking a ten grand kitchen will help a £106k sell faster.
Good luck to him, but I think he needs to have a think about things.
He should maybe try buying houses if and when he gets round to it from companies who advertise "we buy houses for cash"
Hope it works out.
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