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    • will369
    • By will369 6th Jan 18, 10:23 AM
    • 494Posts
    • 93Thanks
    will369
    Buy - Do Up - Sell
    • #1
    • 6th Jan 18, 10:23 AM
    Buy - Do Up - Sell 6th Jan 18 at 10:23 AM
    Hi guys,

    So I currently live at home with my dad, 26 years old.

    In about 2 years I will have £20,000 saved. That would be for the Mortgage.


    I do eventually want to move out. But I think I will struggle on my own earning what I do.

    I live in Woodbury (Exeter). I would like to live in Exeter.

    I currently earn, after tax. £400 a week.

    What I would like to do is make money, who doesn't?

    I would like to buy a run down place, do it up, and sell it. I have several friends in the trade who can do jobs at mates rates.

    £20,000 for the mortgage.

    How much would I need to do it up? Another £20,000?

    Is there money to be made in buying a house, and renting it out daily / weekly to people?

    I might be living in a dream world thinking I can do all that with 20k? My Dad may help me and give me some money, or go in with a friend.

    Is there any advice you can give me, or is it best I just save as much as I can for the next 2 years?

    Also, is it best I set up a 5% government savings account? Or just chuck all the money in 1 basic savings account?

    Thanks guys..
    Last edited by will369; 06-01-2018 at 10:30 AM.
Page 1
    • seashore22
    • By seashore22 6th Jan 18, 10:28 AM
    • 812 Posts
    • 1,654 Thanks
    seashore22
    • #2
    • 6th Jan 18, 10:28 AM
    • #2
    • 6th Jan 18, 10:28 AM
    You haven't mentioned a mortgage. Are you expecting to buy a property and do it up with £20,000?
    • Pixie5740
    • By Pixie5740 6th Jan 18, 10:30 AM
    • 11,323 Posts
    • 15,934 Thanks
    Pixie5740
    • #3
    • 6th Jan 18, 10:30 AM
    • #3
    • 6th Jan 18, 10:30 AM
    Hi guys,

    So I currently live at home with my dad, 26 years old.

    In about 2 years I will have £20,000 saved.

    I do eventually want to move out. But I think I will struggle on my own earning what I do.

    I live in Woodbury (Exeter). I would like to live in Exeter.

    I currently earn, after tax. £400 a week.

    What I would like to do is make money, who doesn't?

    I would like to buy a run down place, do it up, and sell it. I have several friends in the trade who can do jobs at mates rates.

    I might be living in a dream world thinking I can do all that with 20k? My Dad may help me and give me some money, or go in with a friend.

    Is there any advice you can give me, or is it best I just save as much as I can for the next 2 years?

    Also, is it best I set up a 5% government savings account? Or just chuck all the money in 1 basic savings account?

    Thanks guys..
    Originally posted by will369
    Are you planning to live in the doer-upper or is your intention to keep living with your father whilst you do up and then sell the property?

    Don't be too sure about your friends doing you mates rates. They need to eat too and it's not as if you're doing this so you'll have a nice home to live in you're doing this to make a profit.
    Annual income twenty pounds, annual expenditure nineteen pounds nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds nought and six, result misery.
    • will369
    • By will369 6th Jan 18, 10:31 AM
    • 494 Posts
    • 93 Thanks
    will369
    • #4
    • 6th Jan 18, 10:31 AM
    • #4
    • 6th Jan 18, 10:31 AM
    You haven't mentioned a mortgage. Are you expecting to buy a property and do it up with £20,000?
    Originally posted by seashore22
    Edited my post mate. Cheers.


    £20,000 for mortgage.

    Not sure how much extra I would need to do it up? I know it depends what I do. An Extra 10k? 20k?
    • will369
    • By will369 6th Jan 18, 10:33 AM
    • 494 Posts
    • 93 Thanks
    will369
    • #5
    • 6th Jan 18, 10:33 AM
    • #5
    • 6th Jan 18, 10:33 AM
    Are you planning to live in the doer-upper or is your intention to keep living with your father whilst you do up and then sell the property?

    Don't be too sure about your friends doing you mates rates. They need to eat too and it's not as if you're doing this so you'll have a nice home to live in you're doing this to make a profit.
    Originally posted by Pixie5740
    I would live with my Dad whilst work is done on the house. I don't pay any rent at my Dad's.


    If there IS money to be made. My dad WILL help. I jsut need to know roughly how much I need.

    Cheers
    • Pixie5740
    • By Pixie5740 6th Jan 18, 10:34 AM
    • 11,323 Posts
    • 15,934 Thanks
    Pixie5740
    • #6
    • 6th Jan 18, 10:34 AM
    • #6
    • 6th Jan 18, 10:34 AM
    I would live with my Dad whilst work is done on the house. I don't pay any rent at my Dad's.


    If there IS money to be made. My dad WILL help. I jsut need to know roughly how much I need.

    Cheers
    Originally posted by will369
    The HTB ISA and LISA are you help you purchase your first home. You would not be purchasing your first home because you have no intention of living in the property and would therefore not be eligible for the bonus. Furthermore, you would require commercial lending not a residential mortgage, and will need to pay income tax on any profits you make flipping the property.

    You have given no indication as to what sort of property you are planning on buying and therefore what kind of property price you are looking at so it is impossible for anyone to say how much you will require, roughly or otherwise.
    Annual income twenty pounds, annual expenditure nineteen pounds nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds nought and six, result misery.
    • seashore22
    • By seashore22 6th Jan 18, 10:39 AM
    • 812 Posts
    • 1,654 Thanks
    seashore22
    • #7
    • 6th Jan 18, 10:39 AM
    • #7
    • 6th Jan 18, 10:39 AM
    I'm still not clear, you want to borrow £20,000 via a mortgage? You keep saying that you have £20,000 for the mortgage, so it's a bit confusing.

    You will also have £20,000 saved, so that's a pot of £40,000 in 2 years time. That's not much.
    • tom9980
    • By tom9980 6th Jan 18, 10:41 AM
    • 1,237 Posts
    • 3,708 Thanks
    tom9980
    • #8
    • 6th Jan 18, 10:41 AM
    • #8
    • 6th Jan 18, 10:41 AM
    You are living in dream land.

    You need to be able to buy outright with no mortgage and have enough to do the renovation.

    You will be competing against others who may wish to live in the property so they don’t care about maintaining a profit margin, they are willing to pay more for the house than you.

    You are looking to buy at the point in the housing cycle where a house price correction is looking more likely than house price rises, buying to make a profit at this point is risky.
    “In order to change, we must be sick and tired of being sick and tired.”
    • seashore22
    • By seashore22 6th Jan 18, 10:44 AM
    • 812 Posts
    • 1,654 Thanks
    seashore22
    • #9
    • 6th Jan 18, 10:44 AM
    • #9
    • 6th Jan 18, 10:44 AM
    Have you even looked at the cost of a property? You can get a 1 bed mobile home for £60,000 in Exeter. I think you're on a hiding to nothing.
    • AnotherJoe
    • By AnotherJoe 6th Jan 18, 10:54 AM
    • 7,870 Posts
    • 8,460 Thanks
    AnotherJoe
    I would like to buy a run down place, do it up, and sell it. I have several friends in the trade who can do jobs at mates rates.
    Originally posted by will369
    You might get mates rates on a house you are buying to live in, as your home. You wont on a house that's purely a business venture or if you do, you are almost literally stealing the food out of their mouth. Would you go and do someone else's job for them so they can profit from it?



    I might be living in a dream world thinking I can do all that with 20k?
    Originally posted by will369
    Yes, you are on two counts, mates rates and the money needed.
    • will369
    • By will369 6th Jan 18, 10:56 AM
    • 494 Posts
    • 93 Thanks
    will369
    in 2 years I will have 20k saved (my money).

    At this point my dad will help me, he could give me 20k - 50k.


    If I am being perfectly honest. I just want to use the money to make money. Either that in property, or a business. I just dont have much to give other then the money :/
    • will369
    • By will369 6th Jan 18, 10:58 AM
    • 494 Posts
    • 93 Thanks
    will369
    You might get mates rates on a house you are buying to live in, as your home. You wont on a house that's purely a business venture or if you do, you are almost literally stealing the food out of their mouth. Would you go and do someone else's job for them so they can profit from it?




    Yes, you are on two counts, mates rates and the money needed.
    Originally posted by AnotherJoe


    When I say mates, I mean like best mates. They will help me.

    My dad in a qualified plasterer. He built our kitchen and bathroom. So he will be useful
    • Pixie5740
    • By Pixie5740 6th Jan 18, 11:02 AM
    • 11,323 Posts
    • 15,934 Thanks
    Pixie5740
    When I say mates, I mean like best mates. They will help me.

    My dad in a qualified plaster. He built our kitchen and bathroom. So he will be useful
    Originally posted by will369
    What you are saying is that you want to use your best friends so that you can profit from their work. If they are doing work for you at mates rates they are losing out on other work where they could have been charging full rates. In other words they would be taking a pay cut in order for you to profit.
    Annual income twenty pounds, annual expenditure nineteen pounds nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds nought and six, result misery.
    • chucknorris
    • By chucknorris 6th Jan 18, 11:14 AM
    • 9,383 Posts
    • 14,075 Thanks
    chucknorris
    When I say mates, I mean like best mates. They will help me.

    My dad in a qualified plasterer. He built our kitchen and bathroom. So he will be useful
    Originally posted by will369
    I've never charged friends, even when it involved rental properties.
    Chuck Norris can kill two stones with one bird
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    • will369
    • By will369 6th Jan 18, 11:23 AM
    • 494 Posts
    • 93 Thanks
    will369
    What you are saying is that you want to use your best friends so that you can profit from their work. If they are doing work for you at mates rates they are losing out on other work where they could have been charging full rates. In other words they would be taking a pay cut in order for you to profit.
    Originally posted by Pixie5740

    If my friend was going to fit all my lights, he would normally charge say, £750. but to me he will HAPPILY do it for £500.

    That's what I mean by mates mate.
    • Mutton Geoff
    • By Mutton Geoff 6th Jan 18, 11:35 AM
    • 1,026 Posts
    • 1,091 Thanks
    Mutton Geoff
    Doing up property is a business. For that you'll need a business plan, especially to cover the downside particular as you say your earnings are low. £20k is not a lot of money in the property business.


    What I don't understand is your statement that "£20k is for the mortgage". Do you mean your £20k is the deposit and you are securing a mortgage as well?


    If I assume your 20k is a deposit and you are looking at something in the region of £140k to buy (I don't see anything much cheaper than that you stand any chance of a turn in Exeter). Your agent & legal costs over 12 months to buy/sell and pay mortgage interest/council tax/utilities etc, is going to be at least £6-7k.


    I don't think you have enough cash to make a profit and the risks for your £20k are very high. A downturn in your local market could easily wipe most of this off the value of a property.
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    • googler
    • By googler 6th Jan 18, 12:13 PM
    • 14,536 Posts
    • 9,402 Thanks
    googler
    If my friend was going to fit all my lights, he would normally charge say, £750. but to me he will HAPPILY do it for £500.

    That's what I mean by mates mate.
    Originally posted by will369
    At which point, I suggest that you actually pay him £550 or £600. That's what I think a good mate would do.
    • _CC_
    • By _CC_ 6th Jan 18, 12:48 PM
    • 277 Posts
    • 264 Thanks
    _CC_
    You'll be 28 in two years time, why not focus on saving up for a deposit for your own place? You'll be able to make full use of the HTB ISA, zero stamp duty etc.

    What you're thinking about is a business that requires enough capital to cover everything, inc. unexpected costs, and puts your own money at a high level of risk. If you owned your own home, had enough capital and a trade to make use of it may be more of a starter.
    • glasgowdan
    • By glasgowdan 6th Jan 18, 1:43 PM
    • 2,691 Posts
    • 3,020 Thanks
    glasgowdan
    What happens if, in two years time, you have met a girl and she wants to get a place together? The plan goes down the drain.

    Also, £20k is not enough to do a proper renovation of a run down house in my opinion. You'll need proper trades in for rewiring and plumbing, roofing, possibly builders for layout modifications, planning applications, then materials, time, labour on top. The kettle will be on the go constantly too

    It's not easy to make lots of money with 20k. If it was, everyone would be doing it.
    • Doozergirl
    • By Doozergirl 6th Jan 18, 2:48 PM
    • 24,212 Posts
    • 67,012 Thanks
    Doozergirl
    If my friend was going to fit all my lights, he would normally charge say, £750. but to me he will HAPPILY do it for £500.

    That's what I mean by mates mate.
    Originally posted by will369
    He’ll do it once. And he’ll say it happily to start with, but then when he’s already busy and could be earning more, there’ll be a little bit of resentment that creeps in. £750 is the true value of his labour.

    I have a few best girlfriends. One is also my accountant. I pay her the full going rate. My oldest friend is a marketing consultant. I don’t use her often but when I do, I pay her her full rate. My yoga teacher - full rate, my nail tech - full rate. It keeps us all friends because I would have to pay someone else that money anyway!

    Besides valuing your friends, which is the most important thing, mates rates are not a way to run a successful business in *developing* property (not ‘doing up’). Taking your profit from cutting other’s down isn’t a long term recipe for success. It’s always going to cost more than you think anyway, without deliberately underestimating.

    Another point - increasing the value of a property comes from increasing square footage, not from tarting them up. You either buy at such a good price that you could sell it immediately for more, you buy unmortgageable homes that are inaccessible to the vast market (that’s you out for now) or you make them bigger and take the reward from the hard work. There are, I’m sure 10 buyers for every simply outdated property out there. Our electrician was looking and was getting outbid on FTB level houses he knew would cost more to fix than the price of an already decent house. He ended up buying a decent house because he has more experience to know what houses genuinely cost to fix. The average person has little clue.

    I am sure that dad will help too, but again, his goodwill will run out quickly.

    If this is what you want to do, I suggest you live in the house and take your time. We all learn somewhere. That’s where we learned and in a rapidly rising market to cover every mistake we might have made. We never ‘earned’ money from what I would now call basic renovations. The earning came from great big extensions to add square footage and the work to fix very, very old and broken houses with skill and quality.

    It’s been great fun, I am lucky to do what I do but even I spend other people’s money these days. The recession taught us about risk and the benefit of a regular paycheck.
    Last edited by Doozergirl; 06-01-2018 at 2:51 PM.
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