buy to sell?

sixpack434

Hi,

I want to buy a house, do it up and sell it within 1-3 months of buying it. I have heard loads of people made huge profits this way. I understand that the in order for this to work that the house has to be in a decent location and needs a little bit of doing up when buying it initially etc.

I have graduated last year and have been working since. I just managed to pay my debts and haven't got much saved up. I'm thinking of getting a 100% mortgage and getting a loan to do up the house and try to sell it as soon as it's done. I'm living in Brighton and Hove and will probably get a property around this area for this purpose.

However, I am desperate for expert advice and opinion especially from people who have been doing this.

Is this a good idea?

How big a risk is this? Do you advise me to go through it as an investment?

Success stories?

How much do you think on average I'll need to do it up?

Your feedback is much appreciated

halloweenqueen_2

it depends how much of the work you can do yourself or with friends/family. Its costing you money all the time so the longer the redevelopment takes the more money it costs you. you cannot get emotionally involved, you need to provide a blank canvas but perhaps with enough character/dressing for people to see themselves living there.
Bear in mind the sellers packs coming into force.
The money you'd need to fix it up depends on what needs doing - are you thinking of buying one that just needs cosmetic work doing to it or a bit more involved, new heating kitchen bathroom etc?
Homebase are pretty reasonable for kitchens, you need to put just enough in to make it a workable kitchen but not so much that you are overspending. A large drum of trade magnolia would suffice for all the rooms and then curtains etc (which you can take with you for next time!!) will provide the colour.
You must research who your property will be aimed at and try to pick one with as wide appeal as possible. A small flat at the top of a building will only be required by a few people whereas a ground floor flat or maisonette would suit more or less anybody.
If you are looking at family homes, see what shops, schools are available locally and wander around in the evening to see if gangs of teenagers etc are hanging about - I would if i was going to buy the place from you.
Don't go for fancy designer touches, you may love them but someone else could hate them, and they cost, for example as long as the radiator you put in works properly thats it, it does the same job and one four times as expensive.
Try and find a property with an outside space and research whether parking will be important to the people you are aiming your sale at.

halloweenqueen_2

PS good luck!
The other thing you may want to consider is buy to let mortages, you need to raise a deposit of about 15% then the rent paid to you covers the mortgage.

clutton_2

hello sixpack - i dont want to puncture your dream but you say ""I want to buy a house, do it up and sell it within 1-3 months of buying it. I have heard loads of people made huge profits this way.""

i dont think this is very realistic to be honest. The days of "Huge" profits for the amateur are gone. The average house sale (i believe) takes around 4-5 months, and it is alleged that 2 out of three sales collapse part way thru the sales process - so if this happened to you, you would have to start again. I would budget for 9 months from completion of the purchase to renovation and completion on the resale. I know this sounds a lot, but, many BTSell projects in fact lose money, as folks dont realise how much time it takes, that renovation expenditure is almost always are far far far higher than you budgeted for, and that it is generally only the professionals who make a lot of money. Sarah Beeney has shown this many times in her programmes. It really is not as easy as it looks.

what experience do you have of property development ? Do you have a builder/plumber/joiner/roofer/window company/electrician/ Damp proofing company etc already lined up ? Have you got wholesale accounts set up with Building Magterials firms already ? A good builder is Never ready to start work tomorrow, many have months of work ahead of them - one who can start tomorrow is probably a cowboy (with apologies to any builders on here who have had projects cancelled and who genuinely Are ready to start work tomorrow !!)

aloiseb

I too am a keen student of property development programmes (!) an dhave come to the conclusion that the only way anyone makes significant money now is if they have a tame buider to supervise the development, plus an army of friends or family who are good at DIY and will come and help out with most of the work for no pay.

Good luck if you do decide to go for it, though - thanks to Kirsty and Phil's recent programme on investment property, Brighton and Hove (which came 4th in their top 10) would probably give your as good a chance as anywhere of making some money.

lynzpower

I disagree with AloioseB, in that Its all very well that Kirsty & phil thinking its a great place to invest, but there was a long discussion about that programme, and thier figures just didnt stack up whatsoever.

We also had a discussion not that long ago from a young lady who was trying to buy in B&H and the only thing she could afford was right next to a well known brothel

I just dont think that there are many bargains in Brighton and Hove. Yes you might possibly be able to pick up a property where someone has karked it "cheap" but chances are you will have had other more experienced developers do the maths on it first, especially if its been on the market for a while, and worked out its not worthwhile

Auctions of course are something you need to look into but I understand that you need a hefty deposit to get a mortgage on auction properties and of course many lenders wont lend on them.

the key is finding something "undervalued" but I suspect that they just seldom exist. My freind was looking for one for her to live in ( shes from Hove) and she spent well over a year seartching for the undervalued flat, and lo and behold, it simply didnt exist. ( edited to say shes on a 36k salary too)

As you have no savings, and you are fresh out of uni, I wonder what your salary is and wonder what your expected mortgage would be on a 100% mortgage. Have you done these maths?

[Deleted User]

I would never buy a `done up` house unless done by a reputable builder. I saw several while looking for a home and the standard on many was awful, although superficially they may have looked good

Jorgan_2

Sixpack, I think you are going to struggle with this one on the information given.

Many people have made money by buying a property & doing it up. A lot of those made money in a rising & market, if they had bought the property & not touched it for two years they would have 'made' money in a rising market.

You may struggle to buy a property in need of work with a 100% mortgage. If the surveyor puts a retention on the property due to a problem with it, they won't release the 100% required, unless the problem is sorted out.

To make money on property in the current market you have to buy below market value. To do this you will have to look at everything with a business head, not an emotional one. You will have to look at many properties & put in lots of low offers. If you are lucky, somebody may come back & accept you low offer. Do your homework first, don't just put offers in on properties, then start your research & costings once they have accepted your offer.

How is the work going to be funded if you have no savings? Will you have to pay a redemption fee on paying the mortgage back? Do you have fees for solicitors, both for the buying & selling and stamp duty, if applicable for the purchase.

Money can be made on property development, its not as easy as most of us would believe. If you have done your homework & everything stacks up, then go for it.

david29dpo

i made £10000 for 8 weeks hard work.BUT from buying to selling took 6 months. for 8 weeks work, the return was great, but for 6 months? also i did most of the work myself, otherwise, forget it. i also payed cash, so no interest to pay, this would have been over £2000. a turnaround of 3 months? no way. watching sarah beeney is all very well, but in the real world? it can be done, but is far from easy.

sparkle84

Hi I live in Brighton and Hove trust me you will not make money down here all of the property is overpriced as it is and as Lynz says anything that is good value is snapped up by the professional developers - personally I think Phil and Kirsty must have been smoking crack to put Brighton & Hove 4th on their list

lynzpower

sparkle84 wrote:

Hi I live in Brighton and Hove trust me you will not make money down here all of the property is overpriced as it is and as Lynz says anything that is good value is snapped up by the professional developers - personally I think Phil and Kirsty must have been smoking crack to put Brighton & Hove 4th on their list

Smoking Crack? Not with thier smily demeanours surely :rotfl: