advice on flipping a property

crisp

hello, i have am in the process of buying a property, which I wanted to resell immediately. I have found two interested buyers and I have released the property's details to them, except the address. Now both want to view and this is my concern.

The vendor is emigrating and needs a quick sale. I wanted to buy and sell, but is there a way I can flip the property to another buyer without owning it? It will save a heap of costs. I am about 4 weeks off exchange myself and both my interested buyers are looking at other things. If I wait they will be lost. I dont want to run into the summer holidays and be left with it. At the same time, I don't mind them looking at the property but I have three concerns

1) they may try to deal with the vendor direct
2) the vendor is quite cautious and I dont want to alarm her by showing other people the property
3) the vendor may find out what they have offered me and back out or the buyers may back out if they know what I have offered and that I am doing a flip with the property.

any advice very helpful from people that have done this before.

ps is a flip and a back to back sale the same thing?

lush_walrus

Yes, back to back sale is the same thing. But if I were you I would definately wait until you have exchanged to re-market. If you stick with the same ea then they can start getting people ready to view as soon as it is in your ownership. You can not re-sell something which is not yours, but you can be ready for the moment it is.

So, wait for exchange, then get the ea going. Let them know what you are plannig to do and they can start re-contacting all of the people who have already shown interest and line the appointments up ready for completion.

If you are planning to re-sell at a higher price then finding a buyer will be slower anyway. Only the bargains sell straight away at the moment, especially baring in mind that property is about to have a temporary seasonal slump for the school holidays aswell as the obvious world cup activities.

crisp

its a private sale. I will be buying at a discount and I will be reselling at a discount. Im getting about 20% off and I will be reselling at 10% off to get a quick sale and leave some juice in it for the next buyer.

Bossyboots

I knew someone who did this on a regular basis but because of all the new money laundering rules, I don't know if the method he used is still viable.

He would have the contract drawn up but with a clause that completion be "on any name". The transfer would then contain the name of his buyer, not him.

I should warn you though that this person was not honest (eventually got done for fraud, but not for back to back sales I hasten to add) and after a while vendors began to query the clause in the contract and he did lose properties directly because the vendor believed he was trying to make a quick profit and didn't like it. He mainly bought business properties so it was simple for him to take a "business associate" to look the property over while the process was ongoing. For residential properties, he would always pick on ones that were already empty, making the showing of it to other potential buyers simple. He did make a substantial sum out of doing this until his name became known and he got caught on the other matter.

crisp

interesting. surely he would have needed the assistance of a solicitor to deal with the contracts.

silvercar

What happens about stamp duty? Do you need to pay it if you flip before completion?

Can you pass on the LA searches?

Bossyboots

crisp wrote:

interesting. surely he would have needed the assistance of a solicitor to deal with the contracts.

Yes he did. The only difference between the transactions was that the name on the contract was not the name on the transfer.

Only the person on the transfer paid the stamp duty as the person in the middle had never actually purchased anything.