Tired of Business, Full Time Property Developing?
Discussion
After 5 years of running a construction company, at one point employing 30+, and now employing 12, Im completely tired and fed up with the stress it puts on my life and time it takes up. Im tired employing people, I don't like my business model,it wont scale the way I first thought, I need something new. I make relatively good money and have a nice lifestyle, but the trade off for that is becoming too demanding now that I have young kids.
I have 100k to spare between me and my old man, and another 150k in equity in my own house. I have connections in every trade required, not to mention being a dab hand at most trades myself (Spark to trade) and I have access to suppliers at decent rates.
My Question is, Is it still feasible to make a good living from flipping properties? It seems everyone is in to it now.
I do work for various "Property Developers" who all seem to make money, yet all seem to be completely clueless in their approach to renovating houses.
Appreciate any tips, or feedback from anyone involved in property.
Based in the north where 100k will buy a run down 3 bed semi.
I have 100k to spare between me and my old man, and another 150k in equity in my own house. I have connections in every trade required, not to mention being a dab hand at most trades myself (Spark to trade) and I have access to suppliers at decent rates.
My Question is, Is it still feasible to make a good living from flipping properties? It seems everyone is in to it now.
I do work for various "Property Developers" who all seem to make money, yet all seem to be completely clueless in their approach to renovating houses.
Appreciate any tips, or feedback from anyone involved in property.
Based in the north where 100k will buy a run down 3 bed semi.
I've been involved in property development one way or another for the past 20 years and have no plans to stop anytime soon. In fact, I'm charging ahead in a big way this year.
You can definitely still make good money from it, so long as you find properties you can really add value to. Simply doing up dumps and selling them on works really well in a booming housing market but today I'd want to take it a stage further, like turning a house into flats or, better yet, old commercial property into flats.
One of the best things I did was speak to the local agents and become friendly with them so they offer you opportunities before they hit the market or inform you when a local landlord "might be interested in selling off some stock". Between that and auctions, I've had some steals over the years. The old saying with property is "you make your money when you buy, not when you sell" and that's a rule I live by.
You can definitely still make good money from it, so long as you find properties you can really add value to. Simply doing up dumps and selling them on works really well in a booming housing market but today I'd want to take it a stage further, like turning a house into flats or, better yet, old commercial property into flats.
One of the best things I did was speak to the local agents and become friendly with them so they offer you opportunities before they hit the market or inform you when a local landlord "might be interested in selling off some stock". Between that and auctions, I've had some steals over the years. The old saying with property is "you make your money when you buy, not when you sell" and that's a rule I live by.
Dick Dastardly said:
One of the best things I did was speak to the local agents and become friendly with them so they offer you opportunities before they hit the market or inform you when a local landlord "might be interested in selling off some stock". Between that and auctions, I've had some steals over the years. The old saying with property is "you make your money when you buy, not when you sell" and that's a rule I live by.
And that's why people hate estate agents because they have their favorites and everyone else gets the left overs, I know a guy when he goes to view a property he will leave £500 in a bag at the property to ensure he gets it, everyone else is lied to ensure the estate agent gets the result they want and not what the customer wants.I do a little developing on a part time (occasionally full time) basis. You have to know your own area and work to the property values around there.
Where I am, you can still find sub £20K one bed flats but they are not necessarily the best buy. Two identical flats in a run down area one at £20K the other at £30K , the £20K one needs new windows, a new kitchen , a rewire and decoration, the other doesn't. The £30K one is the best buy to make a profit on. As property values go up, the cost of repairs becomes less relevant.
If you plan on renting the developed property, cheap property, low rent is better. There is an artificial upper and lower limit on rental incomes which doesn't help renting high value property. I've never seen a property at less that £300 per month rent even if the property is only worth £20K . I've never seen a £200K property with a rent of over £1000. So if you have £200K to spend, you'll get £3000 a month from 10 bottom of market flats, but only £1000 from a single house for the same capital outlay.
If it's an old building, unless you're in an area where you get a huge premium on 'restored ' property or there are planning restrictions, you'd be better knocking down what's there and building new than restoring no matter how nice the old building looks. Average newbuild cost £1000/m2, average restoration cost , closer to £2000 /m2.
Where I am, you can still find sub £20K one bed flats but they are not necessarily the best buy. Two identical flats in a run down area one at £20K the other at £30K , the £20K one needs new windows, a new kitchen , a rewire and decoration, the other doesn't. The £30K one is the best buy to make a profit on. As property values go up, the cost of repairs becomes less relevant.
If you plan on renting the developed property, cheap property, low rent is better. There is an artificial upper and lower limit on rental incomes which doesn't help renting high value property. I've never seen a property at less that £300 per month rent even if the property is only worth £20K . I've never seen a £200K property with a rent of over £1000. So if you have £200K to spend, you'll get £3000 a month from 10 bottom of market flats, but only £1000 from a single house for the same capital outlay.
If it's an old building, unless you're in an area where you get a huge premium on 'restored ' property or there are planning restrictions, you'd be better knocking down what's there and building new than restoring no matter how nice the old building looks. Average newbuild cost £1000/m2, average restoration cost , closer to £2000 /m2.
Jamiecool said:
After 5 years of running a construction company, at one point employing 30+, and now employing 12, Im completely tired and fed up with the stress it puts on my life and time it takes up. Im tired employing people, I don't like my business model,it wont scale the way I first thought, I need something new. I make relatively good money and have a nice lifestyle, but the trade off for that is becoming too demanding now that I have young kids.
I have 100k to spare between me and my old man, and another 150k in equity in my own house. I have connections in every trade required, not to mention being a dab hand at most trades myself (Spark to trade) and I have access to suppliers at decent rates.
My Question is, Is it still feasible to make a good living from flipping properties? It seems everyone is in to it now.
I do work for various "Property Developers" who all seem to make money, yet all seem to be completely clueless in their approach to renovating houses.
Appreciate any tips, or feedback from anyone involved in property.
Based in the north where 100k will buy a run down 3 bed semi.
Hire an MD with heavily incentivised bonuses?I have 100k to spare between me and my old man, and another 150k in equity in my own house. I have connections in every trade required, not to mention being a dab hand at most trades myself (Spark to trade) and I have access to suppliers at decent rates.
My Question is, Is it still feasible to make a good living from flipping properties? It seems everyone is in to it now.
I do work for various "Property Developers" who all seem to make money, yet all seem to be completely clueless in their approach to renovating houses.
Appreciate any tips, or feedback from anyone involved in property.
Based in the north where 100k will buy a run down 3 bed semi.
VitzzViperzz said:
DSLiverpool said:
Listen to the property podcast, google rmp property - he can help you perfectly.
The podcast is one of the most listened to in the industry.
Which one of the podcasts is it?The podcast is one of the most listened to in the industry.
I am on the podcasts archive but there are a few of them.
Cheers
PAULJ5555 said:
And that's why people hate estate agents because they have their favorites and everyone else gets the left overs, I know a guy when he goes to view a property he will leave £500 in a bag at the property to ensure he gets it, everyone else is lied to ensure the estate agent gets the result they want and not what the customer wants.
That's a little different to what I did, but that kind of thing does happen a lot in residential. I'm after commercial property that can be converted into residential so I speak to valuers and commercial agents and let them know what I am after. They then speak to their clients to see if any are interested in selling or let me know about anything coming up before it gets marketed. The last two properties I bought weren't on the market but the owners were paying rates on empty premises so weren't exactly loving life. Everyone gets what they want and no bribery.Regarding bribing agents, anyone up against your guy needs to consider that. It's business and if that's how it works in that market then they need to either do the same, or find another market to be in.
As said above:
You make your money when you buy!
Don't get carried away and buy for the sake of it or because Dave in the pub told you that his second cousin's, uncle's, brothers, sisters, hamsters, 2nd removed niece made 100k on a house she bought!
The biggest issue to to face anyone in development is finding the right property or site. Siting back and waiting for the right thing is easy to do if you have an income.
If you pack up your day job then each week seems like an eternity and you generally start to use the money that you are desperately going to need for your project. There is also then additional pressure to hurry up and buy something.
Some of the best sites i have bought have taken a year to come to fruition and then up to 2 years to bring through planning successfully.
Its a great job and has the potential to provide a great income but as ever BUYER BEWARE
Good luck
You make your money when you buy!
Don't get carried away and buy for the sake of it or because Dave in the pub told you that his second cousin's, uncle's, brothers, sisters, hamsters, 2nd removed niece made 100k on a house she bought!
The biggest issue to to face anyone in development is finding the right property or site. Siting back and waiting for the right thing is easy to do if you have an income.
If you pack up your day job then each week seems like an eternity and you generally start to use the money that you are desperately going to need for your project. There is also then additional pressure to hurry up and buy something.
Some of the best sites i have bought have taken a year to come to fruition and then up to 2 years to bring through planning successfully.
Its a great job and has the potential to provide a great income but as ever BUYER BEWARE
Good luck
Dick Dastardly said:
That's a little different to what I did, but that kind of thing does happen a lot in residential. I'm after commercial property that can be converted into residential so I speak to valuers and commercial agents and let them know what I am after. They then speak to their clients to see if any are interested in selling or let me know about anything coming up before it gets marketed. The last two properties I bought weren't on the market but the owners were paying rates on empty premises so weren't exactly loving life. Everyone gets what they want and no bribery.
Regarding bribing agents, anyone up against your guy needs to consider that. It's business and if that's how it works in that market then they need to either do the same, or find another market to be in.
A friend of mine does something similar. He buys ex-mills and warehouses and converts them into flats to sell on. To give a rough exampleRegarding bribing agents, anyone up against your guy needs to consider that. It's business and if that's how it works in that market then they need to either do the same, or find another market to be in.
Warehouse bought for £100k
Cost to convert into 10 flats/2 penthouses £400k
Estimated selling price £100k each
He's struggling at the moment chasing trades but if you have connections then that's an advantage.
brrapp said:
I do a little developing on a part time (occasionally full time) basis. You have to know your own area and work to the property values around there.
Where I am, you can still find sub £20K one bed flats but they are not necessarily the best buy. Two identical flats in a run down area one at £20K the other at £30K , the £20K one needs new windows, a new kitchen , a rewire and decoration, the other doesn't. The £30K one is the best buy to make a profit on. As property values go up, the cost of repairs becomes less relevant.
If you plan on renting the developed property, cheap property, low rent is better. There is an artificial upper and lower limit on rental incomes which doesn't help renting high value property. I've never seen a property at less that £300 per month rent even if the property is only worth £20K . I've never seen a £200K property with a rent of over £1000. So if you have £200K to spend, you'll get £3000 a month from 10 bottom of market flats, but only £1000 from a single house for the same capital outlay.
If it's an old building, unless you're in an area where you get a huge premium on 'restored ' property or there are planning restrictions, you'd be better knocking down what's there and building new than restoring no matter how nice the old building looks. Average newbuild cost £1000/m2, average restoration cost , closer to £2000 /m2.
where can you buy 1 bed flats for less than £30k?? Got to be awful at that price no? With lovely tenants to go with them.Where I am, you can still find sub £20K one bed flats but they are not necessarily the best buy. Two identical flats in a run down area one at £20K the other at £30K , the £20K one needs new windows, a new kitchen , a rewire and decoration, the other doesn't. The £30K one is the best buy to make a profit on. As property values go up, the cost of repairs becomes less relevant.
If you plan on renting the developed property, cheap property, low rent is better. There is an artificial upper and lower limit on rental incomes which doesn't help renting high value property. I've never seen a property at less that £300 per month rent even if the property is only worth £20K . I've never seen a £200K property with a rent of over £1000. So if you have £200K to spend, you'll get £3000 a month from 10 bottom of market flats, but only £1000 from a single house for the same capital outlay.
If it's an old building, unless you're in an area where you get a huge premium on 'restored ' property or there are planning restrictions, you'd be better knocking down what's there and building new than restoring no matter how nice the old building looks. Average newbuild cost £1000/m2, average restoration cost , closer to £2000 /m2.
RanchoGrande said:
where can you buy 1 bed flats for less than £30k?? Got to be awful at that price no? With lovely tenants to go with them.
http://www.rightmove.co.uk/property-for-sale/property-65848745.html http://www.rightmove.co.uk/property-for-sale/prope...
http://www.rightmove.co.uk/property-for-sale/prope...
Here's the first three I found on the Rightmove site.
Nice area too, just that property doesn't cost much round here. You should see what you can get for a few hundred thousand.
brrapp said:
http://www.rightmove.co.uk/property-for-sale/prope...
http://www.rightmove.co.uk/property-for-sale/prope...
http://www.rightmove.co.uk/property-for-sale/prope...
Here's the first three I found on the Rightmove site.
Nice area too, just that property doesn't cost much round here. You should see what you can get for a few hundred thousand.
They don't look too bad either! Genuinely amazed by that. I guess I'm just warped by London prices.http://www.rightmove.co.uk/property-for-sale/prope...
http://www.rightmove.co.uk/property-for-sale/prope...
Here's the first three I found on the Rightmove site.
Nice area too, just that property doesn't cost much round here. You should see what you can get for a few hundred thousand.
Typing this on a phone with a cracked screen so please excuse and typos...
There are plenty of houses and flats sub £30k, all over the country. Just most of them are in areas you wouldn't really want to find yourself in, but as investments they can really stack up.
I put together a plan a few years ago to do this in the Welsh valleys. On the outskirts of popular places like Pontypridd, start buying these up and reinvesting all of the money until there was a big portfolio of them. It dawned on me just how much hassle having a few dozen Extra tenants tenants could be, plus I was busy with other stuff, so I didn't go for it in the end. Part of me really wishes I did.
You can limit the hassle and risk. I was going to use a local lettings agent with a rent guarantee scheme. 10% to find, vet and manage tenants and they would pay on the 1st month regardless. Seemed like a no brainer.
The numbers were really attractive though. Buy a house for £30k, spend £5k on it. Including fees, call it £40k per unit. With rents at £450 p/m, that's a 13.5% yield. After problems, repayment mortgage, insurance, lettings fees and You were netting £200 per property per month.
It's a volume game though and I was going to reinvest every penny. You wouldn't want a couple of these things as the money isn't attractive enough, but grow it to 100 and it's a proper business - £4m in assets, £20k in monthly income. Worth a thought!
There are plenty of houses and flats sub £30k, all over the country. Just most of them are in areas you wouldn't really want to find yourself in, but as investments they can really stack up.
I put together a plan a few years ago to do this in the Welsh valleys. On the outskirts of popular places like Pontypridd, start buying these up and reinvesting all of the money until there was a big portfolio of them. It dawned on me just how much hassle having a few dozen Extra tenants tenants could be, plus I was busy with other stuff, so I didn't go for it in the end. Part of me really wishes I did.
You can limit the hassle and risk. I was going to use a local lettings agent with a rent guarantee scheme. 10% to find, vet and manage tenants and they would pay on the 1st month regardless. Seemed like a no brainer.
The numbers were really attractive though. Buy a house for £30k, spend £5k on it. Including fees, call it £40k per unit. With rents at £450 p/m, that's a 13.5% yield. After problems, repayment mortgage, insurance, lettings fees and You were netting £200 per property per month.
It's a volume game though and I was going to reinvest every penny. You wouldn't want a couple of these things as the money isn't attractive enough, but grow it to 100 and it's a proper business - £4m in assets, £20k in monthly income. Worth a thought!
Jamiecool said:
After 5 years of running a construction company, at one point employing 30+, and now employing 12, Im completely tired and fed up with the stress it puts on my life and time it takes up. Im tired employing people, I don't like my business model,it wont scale the way I first thought, I need something new. I make relatively good money and have a nice lifestyle, but the trade off for that is becoming too demanding now that I have young kids.
I have 100k to spare between me and my old man, and another 150k in equity in my own house. I have connections in every trade required, not to mention being a dab hand at most trades myself (Spark to trade) and I have access to suppliers at decent rates.
My Question is, Is it still feasible to make a good living from flipping properties? It seems everyone is in to it now.
I do work for various "Property Developers" who all seem to make money, yet all seem to be completely clueless in their approach to renovating houses.
Appreciate any tips, or feedback from anyone involved in property.
Based in the north where 100k will buy a run down 3 bed semi.
Finding enough properties upon which you can make a profit will be your problem.I have 100k to spare between me and my old man, and another 150k in equity in my own house. I have connections in every trade required, not to mention being a dab hand at most trades myself (Spark to trade) and I have access to suppliers at decent rates.
My Question is, Is it still feasible to make a good living from flipping properties? It seems everyone is in to it now.
I do work for various "Property Developers" who all seem to make money, yet all seem to be completely clueless in their approach to renovating houses.
Appreciate any tips, or feedback from anyone involved in property.
Based in the north where 100k will buy a run down 3 bed semi.
PAULJ5555 said:
And that's why people hate estate agents because they have their favorites and everyone else gets the left overs, I know a guy when he goes to view a property he will leave £500 in a bag at the property to ensure he gets it, everyone else is lied to ensure the estate agent gets the result they want and not what the customer wants.
This will change eventually. It's only a matter of time until estate agents disappear; paying someone a massive chunk of cash to take a few pics and write a semi-literate bit of text will seem archaic. It's not that common now but give it time; selling your own house online will be like putting up an autotrader ad for your car.Dick Dastardly said:
Typing this on a phone with a cracked screen so please excuse and typos...
There are plenty of houses and flats sub £30k, all over the country. Just most of them are in areas you wouldn't really want to find yourself in, but as investments they can really stack up.
I put together a plan a few years ago to do this in the Welsh valleys. On the outskirts of popular places like Pontypridd, start buying these up and reinvesting all of the money until there was a big portfolio of them. It dawned on me just how much hassle having a few dozen Extra tenants tenants could be, plus I was busy with other stuff, so I didn't go for it in the end. Part of me really wishes I did.
You can limit the hassle and risk. I was going to use a local lettings agent with a rent guarantee scheme. 10% to find, vet and manage tenants and they would pay on the 1st month regardless. Seemed like a no brainer.
The numbers were really attractive though. Buy a house for £30k, spend £5k on it. Including fees, call it £40k per unit. With rents at £450 p/m, that's a 13.5% yield. After problems, repayment mortgage, insurance, lettings fees and You were netting £200 per property per month.
It's a volume game though and I was going to reinvest every penny. You wouldn't want a couple of these things as the money isn't attractive enough, but grow it to 100 and it's a proper business - £4m in assets, £20k in monthly income. Worth a thought!
when you put it like this it seems like a no brainer...if you did it set up as a LTD co you'd probably do OK out of it (tax wise) The other issue would be how quickly you can grow it to 100 as BTL finance has got a lot more tricky. There are plenty of houses and flats sub £30k, all over the country. Just most of them are in areas you wouldn't really want to find yourself in, but as investments they can really stack up.
I put together a plan a few years ago to do this in the Welsh valleys. On the outskirts of popular places like Pontypridd, start buying these up and reinvesting all of the money until there was a big portfolio of them. It dawned on me just how much hassle having a few dozen Extra tenants tenants could be, plus I was busy with other stuff, so I didn't go for it in the end. Part of me really wishes I did.
You can limit the hassle and risk. I was going to use a local lettings agent with a rent guarantee scheme. 10% to find, vet and manage tenants and they would pay on the 1st month regardless. Seemed like a no brainer.
The numbers were really attractive though. Buy a house for £30k, spend £5k on it. Including fees, call it £40k per unit. With rents at £450 p/m, that's a 13.5% yield. After problems, repayment mortgage, insurance, lettings fees and You were netting £200 per property per month.
It's a volume game though and I was going to reinvest every penny. You wouldn't want a couple of these things as the money isn't attractive enough, but grow it to 100 and it's a proper business - £4m in assets, £20k in monthly income. Worth a thought!
RanchoGrande said:
Dick Dastardly said:
Typing this on a phone with a cracked screen so please excuse and typos...
There are plenty of houses and flats sub £30k, all over the country. Just most of them are in areas you wouldn't really want to find yourself in, but as investments they can really stack up.
I put together a plan a few years ago to do this in the Welsh valleys. On the outskirts of popular places like Pontypridd, start buying these up and reinvesting all of the money until there was a big portfolio of them. It dawned on me just how much hassle having a few dozen Extra tenants tenants could be, plus I was busy with other stuff, so I didn't go for it in the end. Part of me really wishes I did.
You can limit the hassle and risk. I was going to use a local lettings agent with a rent guarantee scheme. 10% to find, vet and manage tenants and they would pay on the 1st month regardless. Seemed like a no brainer.
The numbers were really attractive though. Buy a house for £30k, spend £5k on it. Including fees, call it £40k per unit. With rents at £450 p/m, that's a 13.5% yield. After problems, repayment mortgage, insurance, lettings fees and You were netting £200 per property per month.
It's a volume game though and I was going to reinvest every penny. You wouldn't want a couple of these things as the money isn't attractive enough, but grow it to 100 and it's a proper business - £4m in assets, £20k in monthly income. Worth a thought!
when you put it like this it seems like a no brainer...if you did it set up as a LTD co you'd probably do OK out of it (tax wise) The other issue would be how quickly you can grow it to 100 as BTL finance has got a lot more tricky. There are plenty of houses and flats sub £30k, all over the country. Just most of them are in areas you wouldn't really want to find yourself in, but as investments they can really stack up.
I put together a plan a few years ago to do this in the Welsh valleys. On the outskirts of popular places like Pontypridd, start buying these up and reinvesting all of the money until there was a big portfolio of them. It dawned on me just how much hassle having a few dozen Extra tenants tenants could be, plus I was busy with other stuff, so I didn't go for it in the end. Part of me really wishes I did.
You can limit the hassle and risk. I was going to use a local lettings agent with a rent guarantee scheme. 10% to find, vet and manage tenants and they would pay on the 1st month regardless. Seemed like a no brainer.
The numbers were really attractive though. Buy a house for £30k, spend £5k on it. Including fees, call it £40k per unit. With rents at £450 p/m, that's a 13.5% yield. After problems, repayment mortgage, insurance, lettings fees and You were netting £200 per property per month.
It's a volume game though and I was going to reinvest every penny. You wouldn't want a couple of these things as the money isn't attractive enough, but grow it to 100 and it's a proper business - £4m in assets, £20k in monthly income. Worth a thought!
Another thing to consider, on cheaper deals, is that you can't get any competitive BTL mortgage deals on anything cheaper than £50k.
I put in an offer on 2 x £40k flats with a 12% yield a couple of weeks ago expecting a 75% LTV BTL Mortgage to be a piece of cake to get.
3 Brokers, commercial bank manager and private bank manager all on the case and all they could come up with is a boutique BTL mortgage company with ridiculous interest rates or a bank loan (secured on other assets).
The bank wouldn't use the flats as security as they were classed as "low quality assets".
If you've got the cash funds in place and don't want to use it for leverage then sub £50k properties are a fairly safe bet - certainly much better than keeping it in the bank! But to tie up all that cash when you're trying to grow a portfolio is madness.
I put in an offer on 2 x £40k flats with a 12% yield a couple of weeks ago expecting a 75% LTV BTL Mortgage to be a piece of cake to get.
3 Brokers, commercial bank manager and private bank manager all on the case and all they could come up with is a boutique BTL mortgage company with ridiculous interest rates or a bank loan (secured on other assets).
The bank wouldn't use the flats as security as they were classed as "low quality assets".
If you've got the cash funds in place and don't want to use it for leverage then sub £50k properties are a fairly safe bet - certainly much better than keeping it in the bank! But to tie up all that cash when you're trying to grow a portfolio is madness.
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