Property developing - how to raise the cash to get started

Doozergirl

dannyboycey wrote: »

I meant development. Or more precisely, 'Flipping'. Unless done very quickly with a very well chosen property, it is very dangerous.

Well neither the OP nor I was talking about 'flipping'. And you obviously did mean 'investment' as there's no developing involved in flipping.

Yes there's competition for a particular sort of house, which should be avoided, IMO, at all costs.

amcluesent

>I've done a couple already as a kind of hobby<

How much profit did you realise and what happened to that capital?

>he's got lots of skills<

How about a different business. Leaflet all the new-builds in your area, offering to put-right all the snags due to shoddy workmanship when the flats were thrown together?

Once rates hit 6%, easy profits from development will go, but that'll leave a lot of peeps stuck in chipboard boxes.

dannyboycey

Doozergirl wrote: »

Well neither the OP nor I was talking about 'flipping'. And you obviously did mean 'investment' as there's no developing involved in flipping.

Yes there's competition for a particular sort of house, which should be avoided, IMO, at all costs.

Since the thread title contained the word 'developing' that's the way I took it. I may of course be completely wrong?

dannyboycey

amcluesent wrote: »

Once rates hit 6%, easy profits from development will go,

In my opinion they went at 5.5% - 6% would be the final nail in the coffin, the closing of the curtains, and the starting of the conveyor belt and the sound of the organ playing 'abide with me' all in one hit!

Doozergirl

dannyboycey wrote: »

Since the thread title contained the word 'developing' that's the way I took it. I may of course be completely wrong?

Why are you talking about flipping then? A straight flip, which according to you is highly dangerous, is simple investment.

Development could mean anything from a refurbishment to a full new building.

Investing in yourself is risky if you don't know what you're doing. Build in enough of a contingency and have a bit of nounce about you and you might succeed. Same with any business.

If you have the spirit to start a business, then it should of course be thoroughly researched. There may well not be the cushion of HPI to catch you, but no-one should ever rely on this; I can't think of any other start-ups where the option of free money is even a viable one. Many areas of the country have seen very little movement in the market and people still make money or the potential profit will provide a cushion against price falls.

To someone that has watched too many episodes of Property Ladder, fine, put them off by teaching them the harsh realities (a comment like 'you've missed the boat' hardly screams of practical experience) but the OPs partner has worked in the industry. He can probably find his way around a house. They can at least research the options available to them.

If you think that flipping a property is a complete refurb then I suggest you actually do one, because finding the right property with the right maths, having the balls to take the financial risk, putting in a lot of hard graft and having the skill to make gold from dirt; managing a budget and all the tax implications, is far from 'flipping', it is very much a job.

thesaint

Doozergirl wrote: »

<snip>
To someone that has watched too many episodes of Property Ladder, fine, <snip>

Let me assure you, you can't watch too many episodes of property ladder :blushing:

dannyboycey

Doozergirl wrote: »

the OPs partner has worked in the industry. He can probably find his way around a house.

Thats a goood start - However, properties in need of a little TLC are usually the ones that get snapped up very quickly by developers. Thanks to TV property shows, many homes have already had a makeover of some sort. Just check out the pics on rightmove - the majority of homes have wood/laminate flooring and painted walls. Even simple cosmetic touches like these were not widely seen 5-10 years ago.

Finding a house with an overgrown garden, a 60's avocado bathroom sweet, floral carpets and wallpaper is not as easy as you might think.

In flipping, there are many political, environmental and economic variables though, which, if changed during the period between buying and selling, can mean that shifting the property for your desired price is difficult. Spend budgets are also notoriously hard to stick to as well.

Doozergirl

dannyboycey wrote: »

Finding a house with an overgrown garden, a 60's avocado bathroom sweet, floral carpets and wallpaper is not as easy as you might think.

Er, are you telling me that?

Doozergirl

thesaint wrote: »

Let me assure you, you can't watch too many episodes of property ladder :blushing:

I have the same boots as the Beeny. And bad hair too today.

dannyboycey

Doozergirl wrote: »

Er, are you telling me that?

You have well and truly lost me in this thread doozergirl!

Doozergirl wrote: »

If you think that flipping a property is a complete refurb then I suggest you actually do one, because finding the right property with the right maths, having the balls to take the financial risk, putting in a lot of hard graft and having the skill to make gold from dirt; managing a budget and all the tax implications, is far from 'flipping', it is very much a job.

I've done several - in UK, France and Portugal. With some, I have worked like a trojan, with others I did nothing at all and still made a profit. But like I said, those days are gone in my opinion. Until the bottom of the market is reached of course.