How do you Flip properties but not own them?

by Readers Question

13:30 PM, 15th December 2016
About 2 years ago

How do you Flip properties but not own them?

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How do you Flip properties but not own them?

I have number of properties that I have sourced and want to flip to other investors at a profit, but do not want at any point to own them. Flip

How do I this?

The only way I can see of doing this is using an option, but this will reveal to the vendor how much profit I am making on the deal.

Many thanks

Tim



Comments

Neil Patterson

13:34 PM, 15th December 2016
About 2 years ago

Hi Tim,

What would be your input or investment in increasing the value of the property?

Would you be looking to do refurbishment work? Maybe then you could consider working with investors in some form of JV?

If there is any sniff of an Option Agreement or nondisclosure a purchaser will not be able to obtain a standard mainstream bank mortgage, which will limit your ability to sell on.

Tim Gray

14:28 PM, 15th December 2016
About 2 years ago

My input is to increase the value by splitting the title. These properties I am flipping are blocks of flats on a freehold title and I will pay for the vendor to split the title prior to completion.

Neil Patterson

14:44 PM, 16th December 2016
About 2 years ago

How would you stop the Vendor just doing that themselves though, when they realise you are not the purchaser?

Or letting you pay for it and pulling out.

Tim Gray

16:05 PM, 16th December 2016
About 2 years ago

Reply to the comment left by "Neil Patterson" at "16/12/2016 - 14:44":

There are various ways. Firstly, I could put an option in place. Secondly, I have already pointed out to the vendor that I will be flipping the property to an investor and that they will probably need a BTL mortgage and to that end they would need the title split. Most of these investors (and estate agents) do not realise the property increases once title is split! and therefore won't realise what I am doing. I am not too concerned with this problem, my concern is how to flip the property that I know can be done as I know someone that does this but he won't tell me unless I go on his expensive training course.

Neil Patterson

16:25 PM, 16th December 2016
About 2 years ago

It is likely to be an option agreement, but be careful with these as I said BTL lenders do not like them.

I have seen these pre Credit Crisis and the borrower can be sued by the lender for nondisclosure if all the facts are not presented upfront.


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