There are a few things you could do that end up big, expensive or time costly mistakes on your buy to let flip or property investment. Here are my top mistakes that I made, so you don’t hopefully make the same ones too!
Mistake One: Choosing the wrong solicitor before knowing which lender I’d be using
How do you choose the wrong solicitor do you ask? Well some people can get frustrated at theirs but I never actually realised when getting a buy to let mortgage in a limited company – it’s somewhat different from buying residentially.
When you find a solicitor when buying your own home, you take it for granted that the solicitor can act for your lender as typically residential mortgages are with big names and banks that everybody recognises. Each solicitor’s firm has to be on that lenders panel. It means your solicitor has to apply either individually or through central bodies to be on the panel of lenders which means that the bank trusts that solicitor to act on their behalf when finalising the mortgage, redeeming any previous mortgages and handling the funds.
It’s widely common and available in the residential market so you don’t even need to think about it 99% of the time.
However, the lender I went with for my buy to let, bearing in mind it was a limited company in a group structure I had limited options, in the end we went with Kent Reliance, however I had already started conveyancing and searches on the property with my first solicitor, who were brilliant.
Then, I realised when it came to the lender, often they go for dual representation – where your solicitor looks after both your side of the purchase and the legal side for the lender – and Kent Reliance I found out, only had about 6 or 7 lenders on their entire panel, meaning I couldn’t use my instructed solicitor to carry on as the lender wouldn’t be able to work with them.
So – we finished the searches then I moved over to a bigger firm called Irwin Mitchell who were on the panel of solicitors for Kent Reliance and we carried on.
It wasn’t the biggest mistake in the world, but meant explaining this to the buyer that I’m swapping, caused a small delay and is easily avoidable.
Mistake Two: Underestimating the refurbishment costs
If you’ve watched the videos of my buy to let refurb from start to finish you’ll notice that the numbers do change and they’re never quite the same. Because that’s exactly what happened – the numbers changed.
When I analysed the property I had assumed a GDV of about £130,000 which at the time was totally accurate, this didn’t factor in the crazy market we’ve seen over the past year, but that’s a good thing so I wouldn’t necessarily call it a mistake.
However, I had budgeted about £10k on the refurbishment after putting together a schedule of works, working out what I was able to do versus where I needed to subcontract it out to tradesman. Now the problem wasn’t my accuracy of quoting up a refurbishment, for the works that were included, it was pretty spot on, but two major things changed which added about £7000 onto the total making the total refurbishment cost about £17k all in.
Now I made a conscious choice to up the refurb budget because I was aware of the hot market – if the market was flat or in decline, I would have made a business and strategic decision not to overspend as much as I did.
Originally I was going to salvage the kitchen, spray the cupboards and clean them up, possibly put new handles on to make it look ultra modern with refreshed tiling and new flooring. However when I got into the property on the first day I noticed that there was a cigarette burn in the laminate worktop so I couldn’t really salvage it, and upon closer inspection in the cooker, cupboards and drawers – they were an absolute state.
There was a rat infestation and droppings were everywhere, tonnes of spiders and i just needed to rip the whole thing out and start again rather than trying to clean it all up and paint the doors. So I decided to get a whole new kitchen including cooker hook, oven and hob.
I also missed during the viewing that half the windows were single glazed. I had in my head that everything was double glazed, and I wasn’t wrong to some degree – I remember opening and look at double glazed windows. It wasn’t until half way through the purchase that I looked at street view and spotted that the front of the house had half single glazed and half double glazed – not a common thing.
That plus new front and back doors which were also wooden single glazed – that added an extra £3500 that was completely unexpected for about 5 new windows and 2 doors, I also had to replace 2 massive windows on the back that had faulty locks and handles.
And then I did decide to splash out on some luxuries like new spot lighting in the kitchen and bathroom as well as way bigger scope for plastering and boarding new walls as I had to take a few walls back to brick due to old leaking pipes that needed re-doing.
So my lesson learned here – isn’t that I need to get better at pricing up the work, it’s being more vigilant during viewings, taking recordings and being careful about what I scope in and out of a refurbishment. Or atleast have a contingency where there’s enough profit in the deal to factor in an overspend.
Mistake Three: Adding joinery & carpentry whilst plaster was drying
I never really expected this one, and to some people it’ll be super obvious but when you’re doing a renovation the number one thing you DO NOT want to do, is try to do any joinery or wood work while plaster is drying in the house.
We had re-plastered about half the house so that’s a lot of water that’s drying up and when you plaster a house, you’ll noticed tonnes of condensation on windows, window sills and generally the place feels damp due to the humidity in the air while the plaster is drying out.
I made the mistake of booking a joiner to come in about 2 days after plastering, so while everything is drying, we began fitting doors, bearing in mind this is temporamental enough as it is fitting them into old wonky council fitted door frames from the 50s.
On the day they were fitted, everything was sort of ok – the joiner took 2 days and blasted through that and the worktop on the kitchen and did a good job.
However – the next day, I get into the house and almost all of the doors no longer fit, at all – you couldn’t put the door into the actual door frame as they’d fully hit against the architrave.
The reason behind this, is because when you put dry wood, into a very humid, wet environment – they act like a sponge, soaking up all that humidity in the air – if you mulitply that by several doors, they all have a good drink and soak up a tonne of moisture to match that of the air in the house – which means they change size. So all those nicely fitted doors, were completely non fitting within 24 hours.
So I had to get the joiner back round to re-shave the doors.
Thankfully he didn’t charge me for this – but definitely a rookie error. After plastering I’ll be making sure the main focus from that point is getting the house dry first before doing any kind of joinery.
Mistake Four: Not properly planning layout
Now, when doing any kind of house renovation, it’s really key to plan. Fail to prepare, prepare to fail. Now I had done a full measurement of the house, drawn this up on CAD and even created 3D walkable renders of the house that you can check out in the full playlist. I tried to understand how furniture would fit in each room, how the kitchen would be laid out and where items would go in the house so that it becomes a home.
However, and this is debatable if it’s my fault or just having a lazy tradesman – it’s kind of both, but the buck stops with me as a project manager to ensure people get things right.
I sent all the plans to my plumber for the kitchen so he could re-plumb some of the copper pipes as we ripped out the old ones and started new. Between the old kitchen layout and the new kitchen layout – the sink had been moved over to the right to allow more space for the hob and also following building requirements of spacing between an electric hob and sink. This caused 2 problems that I just didn’t factor in.
Firstly – my plumber didn’t move the location of the stopcock to match the new layout of the kitchen, which meant because the sink had moved to the right, the stopcock is now located behind the oven which is not easily accessible at all if the water needs to be turned off. Annoyingly – all the taps were put in the right place with the feed pipes below so it’s annoying the plumber didn’t think to also move the stopcock when moving the pipes over for the sink, a little bit of proactiveness would have been great in this scenario.
So there’s a separate lesson in having a good team. My plumber was a bit of an old-schooler, a little bit defeatist and was reluctant to do some of the things I was asking like putting pipes behind plasterboard rather than surface mounted.
Secondly – again because we had started moving things around it meant that the new sink was now directly below a double plug socket – so naturally that had to be plugged up by the plasterer and I had to have a new socket installed which meant more work for the electrician.
Often when you’re planning out big refurbs and changing layouts of kitchens and bathrooms etc it’s really good to draw a full plan of the house and mark out every single socket, switch, fire alarm, smoke alarm and make sure you’re not making those kind of mistakes – spending that little bit of extra time planning to that level of detail will mean you’ll be able to avoid expensive mistakes costing the equivalent of a day rate for each mistake to get a trade in to make changes and correct the mistake.
Mistake Five: Not getting started, sooner
Lastly, isn’t quite related to the renovations or a big mistake, but more of a hindsight observation – I wish I had gotten started earlier.
I spent a lot of time researching, analysing, studying, understanding the world of property which definitely was not time wasted at all. But once you’ve learned the basics – it really is up to you to take action, get out there ,start viewing and making actual offers that you’re serious about. Lots of people sit on their hands trying to learn as much as possible, or doing viewings but not making offers.
The reality is – if you’re not making offers on properties then you won’t have any chance of having one accepted – so really you have to get out there and do it. It took me a year between setting up my limited company and getting the first offer accepted, this was partly down to COVID and the market shutting but that meant a year of accountant fees before getting that first property.
In hindsight, I loved working on the project, it was a really enjoyable process, tough at times and I learned a lot but It’s given me a tonne of confidence to now look at scaling up the business and working on bigger strategies. Offer accepted on a large personal renovation project as well as planning the funds for the next project within the limited company which will likely be an HMO.
Everything is figureoutable – so don’t be worried about knowing every single detail, roll with the challenges and learn how to problem solve by doing and that will get you through 99% of a renovation project.