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Packing in the day job

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  • Packing in the day job

    I currently work full time in an office job doing Computing/IT stuff.

    I bought a mid-terrace at auction in the South West three years ago and will finish the improvements in a couple of months. I paid 148,000 and reckon it'll sell for 170,000. I've done everything myself (except plaster skimming and CORGI work (I know my limits)) and now have all the tools and the skills.

    My wife and I are thinking of moving home (up North) with our £22,000(ish) and I'm thinking about going into property development full time.

    I'm thinking of buying something cheap (e.g. 50-90k) and turning it around in 2-3 months before selling it and doing another one.

    My wife's wage would cover the tiny mortgage and keep both of us fed.

    What do you guys think of this as an idea? Am I nuts..?

  • #2
    If you're dedicated and determind do it. Don't let anyone tell you can't do anything. I say go for it if you really believe in yourself.
    Portugal Property for Sale

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    • #3
      On the assumption that you do get the £22k profit that you seek (which can't really be your true profit - you must have spent something on the improvements, surely?), and you do buy something up to £90k and resell it for another £10-20k profit, doesn't this place your resale slap bang in first-time-buyer territory? Isn't it the FTBs who are having difficulty getting mortgage finance, and wouldn't that make the resale somewhat... difficult?

      What's the general market like for £100-110k homes in your target area? Are they selling well? Are they achieving asking prices? Are they selling quickly?

      I'd suggest some enquiry along these lines before you jump in. Keep us posted on whether or not the current one sells for £170k, too..... have you had local agents around to give their opinion on its market value, or is this truly your estimate?

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      • #4
        Thanks for the feedback - there's some genuinely useful points there.

        The 170k figure is a best guess based on the experience of my neighbour who is selling at the moment - I've not had it valued yet as there's still a little more work to do.

        I was hoping to aim at the low end with the resale properties simply because it seems feasible with the capital I'd likely have, though I'll have to look into whether there is a buying market.

        We've spent about 12k doing this place up, and to be fair, we've done it more for sentiment and rather that as a business interest. Much of the profit that I expected has been hit by the drop in prices (~25k).

        Again, thanks for the feedback.

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        • #5
          If planning to make a living at it, the speed at which you are capable of (or become capable of) turning it around is something you need to know - because that will detrmine what property price range you operate within. There's a big difference between doing up a property with no timescale attached, and doing them up in a way that provides you with a living. It's not so much about your personal DIY or trade skills, as about your skill at organizing and co-ordinating.

          Turning something around for a net gain of say £10k (after ALL fees/taxes/etc) is pretty useless if you only manage to get one property a year done - but is obviously much more appealing if you can do it do it repeatedly in 2 months each time. If you know that you are likely to take 6-8 months, you obviously need to be doing it with properties in a higher price band, where a similar percentage uplift in value might make you enough to pay two-thirds of your annual needs.

          I've seen several examples of couples who, having done up one property with no fixed timetable, find that working to a timetable and efficiently co-ordinating trades is not so easy - and the job takes 2 or 3 times as long as anticipated. Or they've managed to meet their programmed deadline - only to find that selling it adds 2 months longer than hoped for.

          If you do go ahead, I would suggest maintaining an honest diary of progress and costs, so you are able to analyse where your strengths and weaknesses turn out to be, so you know which areas to address before the next project.
          Renovation opportunity, 3b det., Carmarthenshire
          http://www.webbo.weebly.com

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