Buying and selling properties query

curve2722

Hi, we're in a dilemma where our mortgage rate comes to an end this year and our property is now valued at £300k (£180k left on mortgage), originally paid £220k. We can decide to downsize to a property to around £200k and have £100k ideally to start a long term ambition of buying and selling properties. I was thinking about buying a property 10% lower than the asking price as this will be cash and there will be no chain so spend £90k to sell £100k+ in a few weeks or months after doing some tlc to the property. Will something like this workout? Ideally itll be 10% profit after the overheads. Are sellers willing to go 10% lower to get quick sales? I thought about auctions but i dont have the experience and it would be devastating if an unexpected expense was to happen i.e. a major leak or damp in the property and therefore unable to back out on the purchase amongst other reasons. I would assume properties listed for sale (not auctions) are alot safer to assume there will be no major works involved and that the agents are obliged to inform you of any such works. I really appreciate any advise. Many thanks.

CreditCardJunkie

Depends where you are and what the market is like. In my area everything is selling around 10% over asking and within days of being listed!!

Slinky

Having cash to purchase a property isn't as rare as you appear to think it is. It's not going to get someone dropping 10% purely because you have cash.

gm0

Where to begin. For 10k.

Market can move for or against more than your projected returns for the combo of size and location

Development - if not DIY.  Fast.  Cheap.  Right.  Choose 1.

A very quick in and out and a superficial refurb that somehow mysteriously moves the value needle can be somewhat wishful thinking. TV property show reruns nothwithstanding.  If it needs a rewire.  Or floors up to do a lead water pipe. Then redecorating and fitting a salvaged new kitchen over the old wiring and floor - isn't going to convince future buyers who are awake.  It's freshened up superficially but not actually modernised and worth more as it all has to come straight back out again fairly soon to do the once in a generation things properly.  So it's still, more or less worth what you paid. And not 20% more or whatever it is for a properly refurbed one.  But somebody might think it is now livable to modern expectations.  Never can tell.  Mug punters exist. Supply and demand.

There are many risks of >10k that a survey or you can't see - and survey won't take liability off you for - but which can bury your financial plan.  Roof. Rewire.  Halfway house HMO for sex/drugs/thievery opening next door. Doesn't matter which one.  Any one can derail you totally

EAs work for seller and don't have to tell you much at all.  Due diligence is on you.  And the surveyors you appoint or don't.  Proving an EA knew something bad and going after them (when you don't have a contractual relationship with them) is largely a fools errand.  The vendor can do "don't know do your own checks" to their hearts content on the property questionnaire fed into conveyancing.  Unless they provably actively lie about condition - not just fail to tell you something by omission.  Then you are also out of luck in terms of legal recourse to seller also.  So it turns out you bought the house with genuinely life expired roof timbers or spray foam hiding that or subsidence or radon but no countermeasures or whatever it turns out to be that is going to be a major hassle to sort and a material % value killer meanwhile.

Or you can get risk free returns around the 5% level.  Or invest in something other than a single property - with none of the work and overheads to deal with.  Where you may make >10% pa or indeed - lose money in market corrections in that world.  To each.  To their own taste.

lika_86

This all sounds incredibly naive. Abandon the idea now. Focus on paying off your own mortgage, you'll likely save more money doing that than pursuing this idea.

Albermarle

Why do you want to go into the risky business of property, when you clearly know very little about it ?
Do you have good DIY/building skills ?

I would assume properties listed for sale (not auctions) are alot safer to assume there will be no major works involved and that the agents are obliged to inform you of any such works. 

Good joke !

Seriously spend some time ( a lot of time ), reading through this forum to see some of the problems you might find with buying and selling houses.

Then decide to put more money into your pension/savings instead.

TheJP

Cash from your account is the same as cash from a lender. Doesn't constitute a 10% discount, you aren't doing them a favour!