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  • FIRST POST
    • 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 2
    • lincroft1710
    • By lincroft1710 6th Jan 18, 2:56 PM
    • 10,180 Posts
    • 8,272 Thanks
    lincroft1710
    Heíll do it once. And heíll say it happily to start with, but then when heís already busy and could be earning more, thereíll 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 donít 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 Ďdoing upí). Taking your profit from cutting otherís down isnít a long term recipe for success. Itís 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 (thatís you out for now) or you make them bigger and take the reward from the hard work. There are, Iím 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. Thatís where we learned and in a rapidly rising market to cover every mistake we might have made. We never Ďearnedí 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.

    Itís been great fun, I am lucky to do what I do but even I spend other peopleís money these days. The recession taught us about risk and the benefit of a regular paycheck.
    Originally posted by Doozergirl
    Wise words
    • gycraig
    • By gycraig 6th Jan 18, 7:07 PM
    • 417 Posts
    • 305 Thanks
    gycraig
    So you want your dad to put in more money than you and you want to exploit your mates labour so YOU can turn a profit at the expense of there time.

    Sounds like a cracking business model
    • somethingcorporate
    • By somethingcorporate 6th Jan 18, 7:13 PM
    • 8,860 Posts
    • 8,563 Thanks
    somethingcorporate
    So you want your dad to put in more money than you and you want to exploit your mates labour so YOU can turn a profit at the expense of there time.

    Sounds like a cracking business model
    Originally posted by gycraig


    Some people!!!
    Thinking critically since 1996....
    • Cakeguts
    • By Cakeguts 6th Jan 18, 9:58 PM
    • 3,523 Posts
    • 4,874 Thanks
    Cakeguts
    Not going to work. You will never get a chance at buying any houses that will make you any money. The best ones will always go to builders or property investors who pay cash. If you need a mortgage then interest on the mortgage repayments will eat into any chance of a profit.
    • Doozergirl
    • By Doozergirl 6th Jan 18, 11:55 PM
    • 24,215 Posts
    • 67,017 Thanks
    Doozergirl
    Not going to work. You will never get a chance at buying any houses that will make you any money. The best ones will always go to builders or property investors who pay cash. If you need a mortgage then interest on the mortgage repayments will eat into any chance of a profit.
    Originally posted by Cakeguts
    We never paid full in cash. In fact, we had commercial mortgages at higher interest rates. Lower LTVs too though. We all start somewhere. The attitude of ‘never’ gets you nowhere.
    Last edited by Doozergirl; 07-01-2018 at 12:00 AM.
    Everything that is supposed to be in heaven is already here on earth.
    • Margot123
    • By Margot123 7th Jan 18, 9:24 AM
    • 515 Posts
    • 519 Thanks
    Margot123
    I'm sure the OP's first post coincided with an episode of 'Homes Under the Hammer'.

    There are programmes on doing up cars on other channels; they're much more realistic for newbies.
    • AdrianC
    • By AdrianC 7th Jan 18, 9:46 AM
    • 16,090 Posts
    • 14,374 Thanks
    AdrianC
    If you buy a property that needs that much refurbishment, is it even going to be mortgageable?

    One thing's for sure - you're going to be competing with experienced professionals to buy at anything approaching a realistically profitable price, and they've already got all the contacts.

    Oh, and don't forget that if you're buying with the intent of improving and reselling, then it counts as a business activity, so you're going to be paying income tax on your profit.
    • Doozergirl
    • By Doozergirl 7th Jan 18, 9:48 AM
    • 24,215 Posts
    • 67,017 Thanks
    Doozergirl
    I'm sure the OP's first post coincided with an episode of 'Homes Under the Hammer'.

    There are programmes on doing up cars on other channels; they're much more realistic for newbies.
    Originally posted by Margot123
    Are they? I donít know the first thing about cars and donít really care either. Why would I have done that if I loved architecture and design? Most of us buy houses too.

    OP, there are books out there. Sarah Beeny wrote Profit from Property or suchlike and she does know what sheís talking about. Even the presenters on HUTH are clueless. I canít allow myself to watch it as they talk such rubbish about building work; often complete untruths.

    OP, if you want to buy a house and fix it, do it. But try and learn from wherever you can. This board is full of people who say Ďyou canítí when Ďthey donítí but someone has to. I do think itís much more financially viable and easier to learn by living in any project as your own home first and taking it slowly. It isnít easy, it isnít guaranteed money, but itís yours and you can take time and care over it. Quality is important, have integrity - Iím glad that your conversation does include plastering and electrics etc. Thatís a good start.
    Everything that is supposed to be in heaven is already here on earth.
    • AdrianC
    • By AdrianC 7th Jan 18, 9:50 AM
    • 16,090 Posts
    • 14,374 Thanks
    AdrianC
    OP, there are books out there. Sarah Beeny wrote Profit from Property or suchlike and she does know what sheís talking about.
    Originally posted by Doozergirl
    Yep, she figured the best way to profit from property - get well paid to present a TV series or four, then write a bunch of books off the back of it. Lucrative!
    • Davesnave
    • By Davesnave 7th Jan 18, 10:33 AM
    • 23,965 Posts
    • 90,172 Thanks
    Davesnave
    I'm sure the OP's first post coincided with an episode of 'Homes Under the Hammer'.

    There are programmes on doing up cars on other channels; they're much more realistic for newbies.
    Originally posted by Margot123
    I'm not sure about that. Unless there's an aptitude and a serious interest, cars are just a lower-priced way of losing money.

    What's realistic is starting small and learning by making small mistakes in something one enjoys and is passionate about, not diving-in at the deep end and hoping mates will bale you out.

    I would say the OP needs to gain at least one building skill to start with and go from there. If this means working on others' projects first and learning on the job, then so be it.

    I've learned so much by helping others carry out work on my home in the past few years. I don't think watching You Tube videos, helpful though they are, comes close, but it's all part of the mix.

    In the business I started years ago, I became proficient at one thing and then switched when I saw what had the best potential for me and the way I could work. I didn't make a huge amount of money, but it was enjoyable and I made many good friends through it; something that continues today.

    I suppose a willingness to learn a skill and the possibility of enjoying the work is what's missing from the OP's posts. For example: "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 :/"

    They almost seem to be writing themselves off before they start by seeing investment capital as the main factor in success.

    As the man once said, "It doesn't work like that!"
    'A society grows great when old men plant trees whose shade they'll never sit in.'
    • AlexMac
    • By AlexMac 7th Jan 18, 11:59 AM
    • 1,983 Posts
    • 1,742 Thanks
    AlexMac
    It might work; and you'd develop useful skills of decoration, carpentry and DIY along the way if my (and Doozergirl and Davesknave's) experience is anything to go by... but if you live near me, you'll need a time machine, as you've missed the boat if you want to make loadsa money!

    Case study; I bought a 2-3 bed wreck at auction for £67k - call it £70k with fees, etc, then spent £25k doing it up (new; roof, kitchen, bathroom, wiring, boiler, c/h, plumbing, decor, flooring and carpets).

    Funded by a £60k loan and £35k of my own money (a redundancy windfall, savings and earnings over the 5 months it took to do up; luckily I was living cheaply nearby with my partner who was still in work, and I was getting some work)

    Let it out for 2-3 years then sold for £180k. So a great success...

    BUT; that was 30 years ago; in 1997, in an area where prices suddenly took off (more luck than judgement on my part) Hence the "Time machine" remark.

    The house is probably worth £450-500k now and that much work would cost two or three or more times that budget. Putting it way beyond the reach of the average amateur wannabe DIY developer (like me at the time!)

    But the idea of buying your own do-upper or extendable property to live in; with or without lodgers is good if you live in an area where you can still buy within your budget? There won't be the meteoric price inflation of the late 90's and 'noughties (nor, hopefully, the 20% drop which some areas saw in 2007/8), but buying your own home will probably be the best investment you ever make
    • Cakeguts
    • By Cakeguts 7th Jan 18, 1:58 PM
    • 3,523 Posts
    • 4,874 Thanks
    Cakeguts
    It might work; and you'd develop useful skills of decoration, carpentry and DIY along the way if my (and Doozergirl and Davesknave's) experience is anything to go by... but if you live near me, you'll need a time machine, as you've missed the boat if you want to make loadsa money!

    Case study; I bought a 2-3 bed wreck at auction for £67k - call it £70k with fees, etc, then spent £25k doing it up (new; roof, kitchen, bathroom, wiring, boiler, c/h, plumbing, decor, flooring and carpets).

    Funded by a £60k loan and £35k of my own money (a redundancy windfall, savings and earnings over the 5 months it took to do up; luckily I was living cheaply nearby with my partner who was still in work, and I was getting some work)

    Let it out for 2-3 years then sold for £180k. So a great success...

    BUT; that was 30 years ago; in 1997, in an area where prices suddenly took off (more luck than judgement on my part) Hence the "Time machine" remark.

    The house is probably worth £450-500k now and that much work would cost two or three or more times that budget. Putting it way beyond the reach of the average amateur wannabe DIY developer (like me at the time!)

    But the idea of buying your own do-upper or extendable property to live in; with or without lodgers is good if you live in an area where you can still buy within your budget? There won't be the meteoric price inflation of the late 90's and 'noughties (nor, hopefully, the 20% drop which some areas saw in 2007/8), but buying your own home will probably be the best investment you ever make
    Originally posted by AlexMac
    So cost of £95k plus lost earnings over 5 months plus interest on the loan. Minus selling costs. With the benefit of the rise in prices gave you a profit.

    I know someone who bought a house for about 7k in another country did nothing to it at all and then sold it for over double a few years later just due to the town it was in going up in popularity and also value. Timing is everything.
    • Gwendo40
    • By Gwendo40 7th Jan 18, 4:00 PM
    • 29 Posts
    • 16 Thanks
    Gwendo40

    Case study; I bought a 2-3 bed wreck at auction for £67k - call it £70k with fees, etc, then spent £25k doing it up (new; roof, kitchen, bathroom, wiring, boiler, c/h, plumbing, decor, flooring and carpets). ......


    BUT; that was 30 years ago; in 1997
    Originally posted by AlexMac
    So your probably looking at at least doubling them refurb costs today
    • capital0ne
    • By capital0ne 7th Jan 18, 4:15 PM
    • 259 Posts
    • 126 Thanks
    capital0ne
    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.

    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?
    Originally posted by will369
    You have the right idea - well done, but it will need a bit of commitment and abit of luck, I would say go for it.
    But lets get things straight.
    Your dad is 26 yrs old!
    in 2020 you'll have £20,000 - so you could get a mortgage of say £80k and you could buy a property for £100k
    You would like to live in Exeter, well, you may be able to, but now (or 2 yrs time) you'll live where ever there is £100k home which you can spend say £5k to do it up (mates rates you mentioned) and then sell on for say £150k - do this four or five times and you should have a mortgage free home in say 5 or 6 years time if it all goes to plan.

    Record and watch Homes Under The Hammer BBC1 weekdays at 10:00am (or as you're a youngster stream it to your phone).

    And one more thing - save more, dump your expensive phone contract (PAYG), dump your gym membership - go for run instead, stop buying your Lattes at Costa, and dump expensive sandwiches . - you may have none of these but one way to increase your lumps um for house purchase is to see what you can cut to save.

    Then open things like a Flexsave account that pays 5% if their conditions are met - there are other accounts that can help/

    Good luck
    • seashore22
    • By seashore22 8th Jan 18, 7:42 AM
    • 821 Posts
    • 1,658 Thanks
    seashore22
    This may be of interest:

    http://forums.moneysavingexpert.com/showthread.php?t=5031618

    3 1/2 years ago the op posted an almost identical thread and are no further forward with their plans.
    • Doozergirl
    • By Doozergirl 8th Jan 18, 8:06 AM
    • 24,215 Posts
    • 67,017 Thanks
    Doozergirl
    You would like to live in Exeter, well, you may be able to, but now (or 2 yrs time) you'll live where ever there is £100k home which you can spend say £5k to do it up (mates rates you mentioned) and then sell on for say £150k - do this four or five times and you should have a mortgage free home in say 5 or 6 years time if it all goes to plan.

    Record and watch Homes Under The Hammer BBC1 weekdays at 10:00am (or as you're a youngster stream it to your phone).
    Originally posted by capital0ne
    You gotta love someone who doesn’t read anyone else’s answers and then chimes in with something utterly ridiculous.

    £5,000 goes nowhere to ‘doing up’ anything. The audacity of people thinking that they’re so much brighter than the majority of house buyers makes my blood boil.
    If you take on a house that needs work, do the goddam work. Everyone deserves a decent house and no one deserves to make a profit from hiding problems or carrying out shoddy work.

    £5k isn’t mates rates, it would be slave labour or the OP’s salary sacrifice and low quality fittings.

    I can’t allow myself to watch HUTH as half the people literally paint over the cracks. I’ve ‘after’ results too many times where the damp patches are already coming through the paintwork. It is an awful program, the presenters know less than I do and regularly speak mistruths about planning and listing etc and they never actually get to the bit on the program where someone else has actually bought and completed on the damp ridden hole from them.

    If one could genuinely spend £5,000 fixing a £150k house, it would sell initially to someone (not the OP) for £145k. If you can buy it for £100k, then you would be able to sell it straight on for £145k.

    If you did all the work yourself to save money it’s either a salary sacrifice, in which case you’re not heading towards mortgage freedom, you’re earning a wage.

    Do it in your ‘free’ time and you’re extending ownership and incurring interest. That’s fine if you need a home anyway.
    Last edited by Doozergirl; 08-01-2018 at 8:08 AM.
    Everything that is supposed to be in heaven is already here on earth.
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