Maybe I shouldn’t give up so easily?

by Readers Question

9:01 AM, 13th January 2016
About 3 years ago

Maybe I shouldn’t give up so easily?

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Maybe I shouldn’t give up so easily?

I have 4 BTL’s and have decided against buying any more, but I have a niggling feeling that I shouldn’t give up so easily on property. There are people out there making a living using many different strategies, so I am thinking of trying something different – buying refurbishing and selling.dont

Nothing too ambitious to start with, kitchen/bathroom/cosmetic refurbs, maybe 1 or 2 a year (I’m also conscious about being classified as a property trader by HMRC.)

I’m based in London and have some borrowed cash I could use to allow me to buy a flat or house up to about £75k – £105k in value and allow £30k for legals, stamp duty (grrrr!) other costs and the actual refurbishment.

I guess this puts me around the midlands location wise in terms of what I could buy for that kind of money.

Does anyone have any thoughts?

Actually, my biggest fear after the property not selling as quickly or for as much as I anticipate is builders. If I knew a reliable one I would have started doing refurbs many years ago. How do I minimise risks – they are often terrible at planning their schedule and therefore causing delays, before even taking quality of workmanship into account.

Refurbing has been something I have wanted to attempt for a very long time, but I want to get it right.

Many thanks

Trying Hard



Comments

Stuart

7:15 AM, 27th May 2016
About 3 years ago

Hey Trying Hard.

A few questions.

Where are your 4 BTL's?
Do you have much equity in them you can release?
Did you borrow from friends and family and paying interest to them?
Why Midlands area?

Michael Jones summed it up perfectly in his first post and I follow the same model myself.

Buy BMV properties refurb, add value, rent out, then remortgage to release as much equity as possible.

Top this up with the occasional flip throughout the year when opportunities arise. Rinse repeat.

I build and run my BTL portfolio and property flips remotely so yeah its possible. But its imperative to do your due diligence on builders, areas, and have a strategy in place.

It took me a while to establish a great relationship with my builder one that is tech savvy has helped my workflow considerably. We use Dropbox to share pics, Google sheets to track materials, weekly budgets costs, material stock, properties viewed, bids submitted etc.. Really is a time saver and helps when doing tax returns 🙂

This way I can keep on top of things and feel more in control.

If you have any specific questions would be happy to help

Steve From Leicester

10:36 AM, 27th May 2016
About 3 years ago

Just one tip. I notice you said "Builders are often terrible at planning their schedule".

Actually they're usually very good at planning their schedule but they have a different agenda to you.

Think of it this way. Imagine a builder is instructed on three different projects by three different people. If he starts one job and works exclusively on it till its finished there's a risk that his other two customers might get fed up of waiting and go somewhere else.

However, if he makes a start on all three jobs he's got all three clients locked in. That's why so often a builder starts a job then promptly disappears. You think he's not very organised and has ended up having to juggle three jobs at once - actually that was his plan all along and from his point of view there's a sound business reason for doing so.

That doesn't help you find a reputable builder, but understanding what their priorities are does at least give you a head start when negotiating with them.

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