The Ultimate Guide to Flipping Your First House (& Buy, Refurbish, Refinance)

House Flipping - How to Flip a House

⏱️ 25 minute read

📅 Written on 8th August 2020

Looking to get started as a property investor?

Work your way through our 6 part property investing guide for beginners

Part 1:

 

How to create a property business plan

Part 2:

 

2020 Property Investment Strategies

Part 3:

 

Calculate Yield & ROI on Investment Property

Part 4:

 

Buying Property Through a Limited Company

Part 5:

 

Best HMO Investment Areas in the UK

Part 6:

 

How to flip a house as a property investor

Chapters

Chapter 1

The Definitive Guide

 

Are you binging on ‘Homes Under The Hammer’?

 

Maybe you’re new to property and have caught the bug. Before you jump in. 

 

Check out this ULTIMATE guide on how to flip a house.

 

Today I’m going to show you exactly how house flipping works.

how to flip a house

In this comprehensive guide, I’ll cover:

So if you want to learn how to get your first property flip and make it successful, you’ll love this updated guide.

 

Let’s get started.

Chapter 2

What is house flipping?

House flipping in the UK is an area a lot of investors want to figure out. Especially when new to the industry. 👌

 

 

Let’s begin with the basics. This helps us work out a common understanding of what this strategy is. 

 

 

Flipping a property means buying a property. Typically below market value. 📉

 

You then sell relatively quickly at a higher price. Benefiting from the equity generated. 📈

 

 

Depending on whether you sell or refinance it’s known as a few different names:

When flipping a house, it doesn’t always involve a refurbishment. 🛠️

 

You might be REALLY lucky and get your hands on a below market value property. And it’s low enough to sell it relatively ⏳ quickly. 

 

You’ve seen them on Homes Under The Hammer. Some inexperienced person gets their hands on a cheap house. 😬

 

They don’t make any changes the property. And make themselves a tidy £10k profit. 

 

Sickening, I know. 🤦‍♂️

 

These deals don’t fly around very often, so don’t expect this on your property journey. Often they’re properties in bad conditions. They need capital to refurbish them into a livable condition. 💷

 

Or more desirable. That’s how most property investors generate value in house flipping. 

 

As well as refurbishing a property, there are a few other things that decrease the value:

The property might only have a super short lease. And let’s say it costs £15,000 to renew.

 

This might add £30k onto the price of the property once you solve it. The property might also have Japanese knotweed or structural issues. Lenders don’t like lending money if a house has these issues.

 

If you can buy it, fix it, you’ll make the property more desirable. Typically you can do this with cash.

 

Pro Tip: When you see a listing on Rightmove or Zoopla that say’s ‘CASH ONLY’ – this includes usually includes bridging finance. Not a lot of people realise this. 

Chapter 3

How does house flipping work & how much money can you make?

Flipping a property in the UK can be very lucrative. It’s easy to add tens of thousands of value. Remembering that the average salary is around £30k. You can sometimes 💰 generate that in one deal. 

 

It’s lump sum based. So you’d get a lump sum at the end of every project. There’s no regular income ♻️ like in Buy-To-Let properties. 

 

You do of course benefit from capital growth 📈 in buy-to-let. But this is over the long term.

how to flip a house calculation

If you plan to sell the house. Here’s an example:

 

🏠  Purchase Price: £120,000

💷  Costs (Refurb + fees): £20,000

🏷️  Sale: £160,000

🤑  Profit: £20,000

 

Flipping a house means the price you bought it for, is below the market value. And you find a way to ‘realise’ it’s true value. Through fixing problems 🛠️ or making it more desirable. 

 

Most non-investors want a nice home 🌻 to move into. With no problems. A structural issue scares them. They don’t want to have to fight to get a mortgage. 🙅‍♂️

 

That’s where you come in. 

 

There are typically 2 exit strategies whilst flipping a property.

 

You can either sell it, to realise your profits straight away. Which we have covered. Or you can refinance it, pulling out the equity. 

 

Refinancing might mean that you leave some money in the property. But nowhere near what you put in.

 

For example:

That’s not the healthiest deal in the world. But talented property investors with a keen eye 👀 can spot money in money out deals.

 

This means when you refinance you pull out ALL your money.

 

Typically these are on houses in the far north of the UK. Where property is VERY cheap.

 

Examples I see amongst the Instagram community are:

 

🏠  Purchase Price: £42,000

💷  Fees & Refurb: £12250

📈  GDV / End Value: £85,000

🔚  Exit: All money out + £9000 profit + keep the house

 

It is possible! It takes a lot of work to find these. But they do exist.  ✅

 

As you can see in that example, not only did the investor pull their money out. They got £9000 PROFIT! On top. Plus kept the house when they could then let out to a tenant. 🙋‍♀️

 

So they benefit from pulling money out. £9k profit. Future rental income. AND capital growth. 

 

Still with me?


You can also work out Return on Investment on a deal as well. I’ve covered this in my other guide. I recommend having a read of that.

how to work out return on investment

On our original example:

 

🏠  Purchase Price: £120,000

💷  Costs (Refurb + fees): £20,000

🏷️  Sale: £160,000

📈 Profit: £20,000

The purchase was ÂŁ120k and the costs were ÂŁ20k. The profit was ÂŁ20k.

 

£20,000 / £140,000 = 14.2% Return on Investment. It’s better than the banks! A good ROI in the industry is around 20%. So this particular example would be good, but slightly under.

 

Here I’ve included the actual property price (Including the finance on the property if you had a mortgage). So if you JUST did it based on cash YOU put in if you had a bridging loan or mortgage.

 

Your total cash in would be ÂŁ50,000 at 75% LTV (ÂŁ30k deposit + ÂŁ20k refurb). With a ÂŁ20k profit.

 

ÂŁ20,000 profit / ÂŁ50,000 money in = 40% ROI.

 

As explained in my other property yield & ROI calculation guide calculating ROI can be done in different ways. It’s subjective. 

 

Having something closer to 20% allows for any risks in the project. Extra costs. Mistakes. Delays. Undervaluation. So you have a safety net in case your costs are greater.

Goal Setting Guide

Free Goal Setting Guide

Are you struggling to find focus in your property business? Do you have a clear, tangible and measurable plan of action? Download this free handy goal setting guide that explores wherey you are today, your financial literal and north star lateral goals – and what you need to do to bridge that gap to meet your goals. 

Chapter 4

Property Flipping & Tax

ALWAYS speak to an accredited and registered professional regarding tax advice to understand your own situation and latest rules. 💼

 

So far we have covered what is known as pre-tax profits. Sounds great at first, right? 

 

But then the taxman 💸 gets his hands on your money!

 

If you do the property in your own name, this will be different depending what tax bracket you sit in. Or if in a company, depends on corporation tax on company profits at the end of the year. 

 

It’s more tax-efficient at a basic level to do this through a company. If you earn £30,000 per year in your job. And then make £30,000 profit from a flip. You instantly become a higher rate taxpayer. This means 40% tax above the HMRC threshold. 

 

As corporation tax is lower than the higher tax bracket. Plus companies come with many benefits in terms of clever accounting. It is often better. ✔️

 

Of course – you should ALWAYS speak to an accountant to get the correct advice for you.

Chapter 5

How do I find the right property to flip?

Sourcing the right house flipping project is always a struggle for a lot of property investors.  🏔️

 

When you’re investing in property, as a beginner, it’s the biggest hurdle 🤾‍♂️. Especially to get started. 

 

I suffered from a HUGE amount of procrastination. And avoiding getting stuck in and finding a property.

 

Since the pandemic, and the stamp duty holiday. There are HUGE amounts of demand. Properties are going over asking price. Being snapped up 🏎️ quickly. Other time in the market it’s slower. You can offer well below market value. And likely get accepted.

 

It really depends on the economy. 

 

To find the right property deal, you should be looking at:

 

🟢  Auctions (Avoid the BIG UK auctions. They’re too popular. Go for local ones)

🟢  Walking / driving around your area and finding unloved properties

🟢  Finding signs in windows / not listed in the online portals

🟢  Estate agents

🟢  Your network/investor community

🟢  Sourcers

🟢  Local marketing

 

No particular route is easy. It’s a matter of trying a few and see if any resonate best with you. The key is that you’ve started looking.  🔍

 

Knowing your area is crucial. This helps you understand typical property prices. Good area and bad areas. For example, is one street rough, the other is fine. Local schools. Transport links.

 

This will ensure that your first house flipping project is on the right lines from the start.

Chapter 6

Why is your house flipping area important?

It’s more because of your exit strategy. If you’re looking to sell.

 

If you bought a property with the intention of selling to an investor.

 

They will want a good deal on it. 

 

If you sell to owner-occupiers. For example, a family wanting to live in the local area. They’re more emotionally connected to the property. This means bidding wars can start. They bid more because they fall in love with the property.

 

This means better profits for you. 

 

Estate agents can be your best friend if you treat them well. Have a chat with one about the local area. Where sells quickly. Where’s the high demand areas? 

 

They’re usually more than happy to tell you.

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wtfpropertyinvesting1.2K followers🏡 What The Flip: Property Investing 🏗️ S. Yorkshire 👇 YouTube & Newsletter 🌿 Giant Leaps Begin with Small Steps
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Should you buy in a limited company or in your own name? 🤷‍♂️⁠ ⁠ This week I explore the key factors that affect whether a limited company is right for you. Different factors like tax, your income and your future property goals will make a difference. ⁠ ⁠ You should be thinking about:⁠ ⁠ ⚡ Are you a basic, higher or additional rate tax payer?⁠ ⚡ What long term plan do you have?⁠ ⚡ Have you thought about succession planning?⁠ ⚡ Do you require a salary or can you reinvest the profits?⁠ ⁠ It can be a little overwhelming when figuring it out. At the end of the day – speak to an accountant who will be able to sit down and understand your own individual circumstances. Ltd companies work in some scenarios and not in others so it\’s about checking in with your plans and finances to work out what is best for you. ⁠ ⁠ 👍 Double-tap and please subscribe to the channel!⁠ ⁠ PS – I also have a newsletter where I send out updates on property videos and my own projects that I\’m working on. Check it out on my website!⁠ ⁠ ⁠ #hmo⁠ #coliving⁠ #property⁠ #properties⁠ #propertybusiness⁠ #propertydevelopment⁠ #propertydeveloper⁠ #propertymanagement⁠ #ukproperty⁠ #propertyinvestment⁠ #propertyinvestor⁠ #propertyinvesting⁠ #propertypodcast⁠ #buytolet⁠ #landlord⁠ #financialfreedom⁠ #passiveincome⁠ #propertyladder ⁠ #ukpropertymarket⁠ #propertynews⁠ #propertymarket⁠ #business⁠ #entrepreneur⁠ #propertymanagement⁠ #entrepreneurship⁠ #entrepreneurlife⁠ #houseofmultipleoccupancy ⁠ #sharedhouse⁠ #spareroom⁠ #bedroominspo
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How to start a property business 🔥⁠⁠🧮 New YT Vid – link in bio!⁠ ⁠ Continuing on from my beginners series to help brand new property folk looking to get started with no upsells and no BS – In this video, I run through 8 things to consider when starting your property business in the UK. ⁠ ⁠ It took a good year to create my property business plan, understand what strategies are best for me and eventually starting the property company structure which leads me to today where I\’m ready to make my first move and really get started and hit the ground running. ⁠ ⁠ You should be thinking about:⁠ ⁠ ⚡ What\’s your long term aim?⁠ ⚡ What strategies are best for you?⁠ ⚡ How much time do you have?⁠ ⚡ Are you building your knowledge?⁠ ⚡ Understanding your area⁠ ⚡ Speak to professionals (accountant, broker)⁠ ⚡ Understand your numbers⁠ ⚡ Get out there and do it!⁠ ⁠ It can be a little overwhelming when getting started. This video will help give you some focus on making your next steps⁠ ⁠ 👍 Double-tap and please subscribe to the channel!⁠ ⁠ ⁠ #hmo⁠ #coliving⁠ #property⁠ #properties⁠ #propertybusiness⁠ #propertydevelopment⁠ #propertydeveloper⁠ #propertymanagement⁠ #ukproperty⁠ #propertyinvestment⁠ #propertyinvestor⁠ #propertyinvesting⁠ #propertypodcast⁠ #buytolet⁠ #landlord⁠ #financialfreedom⁠ #passiveincome⁠ #propertyladder ⁠ #ukpropertymarket⁠ #propertynews⁠ #propertymarket⁠ #business⁠ #entrepreneur⁠ #propertymanagement⁠ #entrepreneurship⁠ #entrepreneurlife⁠ #houseofmultipleoccupancy ⁠ #sharedhouse⁠ #spareroom⁠ #bedroominspo
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I\’ve explored 8 risk factors for next year 🔥⁠⁠🧮 New YT Vid – link in bio!⁠ ⁠ Will the market crash next year? Nobody knows. Every video, every podcast, every news headline – is all opinion. Expert or not. I\’ve just released a new YT video looking at the factors that COULD make some kind of impact.⁠ ⁠ The bottom line though – property is a long game so if you\’re strategy fits, keep calm and carry on. If you believe in the 18-year property cycle, we\’re meant to be in the mid-cycle dip right now. The reality is, we don\’t really know. There are too many uncertainties in unprecedented times. It could go up or down, but historically, property goes up over the long term. ⁠ ⁠ As business owners and property investors, we can monitor horizon risks, however:⁠ ⁠ ⚡ Understanding pent-up demand⁠ ⚡ When the stamp duty tax break ends⁠ ⚡ Brexit & market uncertainty⁠ ⚡ The end of the furlough scheme⁠ ⚡ Rising unemployment⁠ ⁠ These may have some effect next year⁠ ⁠ Have a look through the video – see what you think and let me know! Do you have any thoughts on next year?⁠ ⁠ ⁠ 👍 Double-tap and please subscribe to the channel!⁠ ⁠ ⁠ #hmo⁠ #coliving⁠ #property⁠ #properties⁠ #propertybusiness⁠ #propertydevelopment⁠ #propertydeveloper⁠ #propertymanagement⁠ #ukproperty⁠ #propertyinvestment⁠ #propertyinvestor⁠ #propertyinvesting⁠ #propertypodcast⁠ #buytolet⁠ #landlord⁠ #financialfreedom⁠ #passiveincome⁠ #propertyladder ⁠ #ukpropertymarket⁠ #propertynews⁠ #propertymarket⁠ #business⁠ #entrepreneur⁠ #propertymanagement⁠ #entrepreneurship⁠ #entrepreneurlife⁠ #houseofmultipleoccupancy ⁠ #sharedhouse⁠ #spareroom⁠ #bedroominspo
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My first 30 days on YouTube 🔥⁠⁠📹⁠ ⁠ My original goal this year was to start a podcast but without a big audience, it can be very hard to gain velocity, and there\’s been an influx of new property podcasts recently, so I pivoted to a platform where fewer property people are. ⁠ ⁠ What I learnt & achieved from being on YouTube for 30 days⁠ ⁠ ⚡ I filmed, edited and uploaded 6 videos⁠ ⚡ I gained 15 subscribers⁠ ⚡ The videos were viewed almost 500 times in 1 month⁠ ⚡ The channel got over 16 hours of watch time⁠ ⚡ One video really popped (250+ views) which was about using Notion⁠ ⁠ The aim is to keep uploading valuable videos and enjoy the process of scriptwriting, filming and editing my property knowledge & combining my business skills, risk management & UK financial services & banking experience on probably the most vulnerable platform in front of a camera and see where it goes!⁠ ⁠ — The Pros–⁠ ➕ I\’ve had some people reach out who really resonated with some of the videos which was awesome. Mainly from newer investors who find my beginners journey very relatable. ⁠ ⁠ ➕ I\’m really happy with the engagement on the videos so far, I\’m pushing my editing skills on every video. ⁠ ⁠ — The Cons –⁠ ➕ It\’s hard work managing all the ideas, scripts and then filming & editing which from start to finish can take 6 to 8 hours for an 8-minute video.⁠ ⁠ ➕ It\’s hard not to get wrapped up in the YT analytics questioning why a video hasn\’t got views or checking to see how many likes you have. I need to do this less. ⁠ ⁠ ⁠ 👍 Double-tap and please subscribe to the channel!⁠ ⁠ ⁠ #hmo⁠ #coliving⁠ #property⁠ #properties⁠ #propertybusiness⁠ #propertydevelopment⁠ #propertydeveloper⁠ #propertymanagement⁠ #ukproperty⁠ #propertyinvestment⁠ #propertyinvestor⁠ #propertyinvesting⁠ #propertypodcast⁠ #buytolet⁠ #landlord⁠ #financialfreedom⁠ #passiveincome⁠ #propertyladder ⁠ #ukpropertymarket⁠ #propertynews⁠ #propertymarket⁠ #business⁠ #entrepreneur⁠ #propertymanagement⁠ #entrepreneurship⁠ #entrepreneurlife⁠ #houseofmultipleoccupancy ⁠ #sharedhouse⁠ #spareroom⁠ #bedroominspo
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NEW YOUTUBE VIDEO LIVE! For those who are new to property, this video simplifies ROI & Yield 🔥⁠ ⁠ ⁠ Back to basics this week! I have a range of followers (thank you!) from experienced veterans but also people newer who have reached out to me so this one is for you!⁠ ⁠ This video for beginners explored in 6 minutes:⁠ ⁠ ⚡ How to simply calculate ROI + example⁠ ⚡ How to easily work out Yield + example⁠ ⚡ A framework of what costs to include⁠ ⚡ I also explore why everyone\’s definition of ROI is different. ⁠ ⁠ Full Guide: wtfpropertyinvesting.com/how-to-calculate-property-yield-roi⁠ ⁠ If you don\’t fancy watching the video – here are the calculations:⁠ ⁠ ➕ ROI = Annual Profit / Money Put In⁠ ➕ Yield = Annual Rental Income / Price of Poperty⁠ ⁠ You\’d shocked to know that many property investors (the ones who aren\’t engaged in the awesome Instagram community) will buy a property off the cusp without running the numbers. Sometimes there are hidden costs that are unexpected that blow your budget but you can show:⁠ ⁠ ➕ Business Sense⁠ ➕ Risk Management⁠ ➕ Financial Understanding⁠ ⁠ by running your numbers. This will ensure you don\’t put yourself at risk of going into negative equity on a refurb project. The key is understanding those numbers, buying at the right price and not overspending the budget you set in the refurb to achieve your correct ROI – with a bit of contingency baked in. ⁠ ⁠ 👍 Double-tap and let me know if you found this useful!⁠ ⁠ PS. I have a newsletter over on my website where I send out weekly thoughts and interesting books as well as share my own property journey as a beginner. Link in bio.⁠ ⁠ #hmo⁠ #coliving⁠ #property⁠ #properties⁠ #propertybusiness⁠ #propertydevelopment⁠ #propertydeveloper⁠ #propertymanagement⁠ #ukproperty⁠ #propertyinvestment⁠ #propertyinvestor⁠ #propertyinvesting⁠ #propertypodcast⁠ #buytolet⁠ #landlord⁠ #financialfreedom⁠ #passiveincome⁠ #propertyladder ⁠ #ukpropertymarket⁠ #propertynews⁠ #propertymarket⁠ #business⁠ #entrepreneur⁠ #propertymanagement⁠ #entrepreneurship⁠ #entrepreneurlife⁠ #houseofmultipleoccupancy ⁠ #sharedhouse⁠ #spareroom⁠ #bedroominspo
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NEW YOUTUBE VIDEO LIVE! I analysed over 324 data points for the best HMO areas in the UK! 🔥⁠ ⁠ This powerful data explores:⁠ ⁠ ⚡ Room Rental Rates⁠ ⚡ House Prices VS Room Rates⁠ ⚡ Supply VS Demand⁠ ⁠ Full Guide: wtfpropertyinvesting.com/hmo⁠ ⁠ If you don\’t fancy watching the video – the winner is Warrington with 1.4 people looking for every room available meaning there\’s lower competition.⁠ ⁠ Northern cities did very well with the likes of Leeds, Sheffield, Manchester, Nottingham and Liverpool all showing strong possibilities (Beware of Article 4 though).⁠ ⁠ Southern cities, naturally have strong rents but not huge compared to the north, the gap is quite small. And London although has great rents, has low ROI & Yield due to high property prices.⁠ ⁠ Check out the video for the high-level findings of the data, let me know what you think!⁠ ⁠ 👍 Double-tap and please check out the YouTube video!⁠ ⁠ PS. I have a newsletter over on my website where I send out weekly thoughts and interesting books as well as share my own property journey as a beginner. Link in bio.⁠ ⁠ #hmo⁠ #coliving⁠ #property⁠ #properties⁠ #propertybusiness⁠ #propertydevelopment⁠ #propertydeveloper⁠ #propertymanagement⁠ #ukproperty⁠ #propertyinvestment⁠ #propertyinvestor⁠ #propertyinvesting⁠ #propertypodcast⁠ #buytolet⁠ #landlord⁠ #financialfreedom⁠ #passiveincome⁠ #propertyladder ⁠ #ukpropertymarket⁠ #propertynews⁠ #propertymarket⁠ #business⁠ #entrepreneur⁠ #propertymanagement⁠ #entrepreneurship⁠ #entrepreneurlife⁠ #houseofmultipleoccupancy ⁠ #sharedhouse⁠ #spareroom⁠ #bedroominspo
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Something a little different today. SEO or otherwise known as search engine optimisation 🚀 & DOMINATING google. ⁠ ⁠ Although new to the property world, I work in a bank by day and also freelance as a graphic designer / SEO expert.⁠ ⁠ I have been doing this for about 10 years 🔥 ⁠I\’m already seeing some killer results from my website for big terms. Still lots of work to do though!⁠ ⁠ I knew as a part of getting started in property, I wanted to document the journey and build a solid brand to do that in the process, so I can share valuable and honest content as a way to give back to the Instagram community that taught me so much.⁠ ⁠ Separately, I also teach the skills needed to learn SEO over on skillshare.com with a video course that\’s about 1hr 50 minutes. It\’s relatively new but some good reviews coming through already. ⁠ ⁠ To give back to the more experienced developers on here – if you\’re struggling to get traffic via Google – I\’ve attached a completely FREE link to my SEO class if you click on the link in my bio you\’ll see a button to go to my skillshare.com class.⁠ ⁠ The link is a 2-week free trial on Skillshare (so just remember to cancel your skillshare membership once you\’re done), although there are tonnes of other creators on there who teach photography, project management and other stuff so might be useful for your business!⁠ ⁠ 👍 Double-tap and please check out the class for free! No strings.⁠ ⁠ PS. I have a newsletter over on my website where I send out weekly thoughts and interesting books as well as share my own property journey as a beginner. Link in bio.⁠ ⁠ #hmo⁠ #coliving⁠ #property⁠ #properties⁠ #propertybusiness⁠ #propertydevelopment⁠ #propertydeveloper⁠ #propertymanagement⁠ #ukproperty⁠ #propertyinvestment⁠ #propertyinvestor⁠ #propertyinvesting⁠ #propertypodcast⁠ #buytolet⁠ #landlord⁠ #financialfreedom⁠ #passiveincome⁠ #propertyladder ⁠ #ukpropertymarket⁠ #propertynews⁠ #propertymarket⁠ #business⁠ #entrepreneur⁠ #propertymanagement⁠ #entrepreneurship⁠ #entrepreneurlife⁠ #houseofmultipleoccupancy ⁠ #sharedhouse⁠ #spareroom⁠ #bedroominspo
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NEW YT VID: Giant leaps begin with small steps. I see loads about \’goal setting\’ – nothing about habits 🤷‍♂️⁠ ⁠ Amongst all the property content I see online, there\’s loads on goal setting and everybody is talking about it. It\’s healthy to set goals and set your direction. This week I explore \’Atomic Habits\’ by James Clear and cover the top summary from the book. It\’s really fascinating! 🔥⁠ ⁠ This amazing book talks about how goal setting is merely determining the outcome/s you desire. Setting a goal doesn\’t guarantee you\’ll actually meet it…⁠ ⁠ Instead, we should be focusing on systems, processes and forming those habits that bring us closer to those goals we set. ⁠ ⁠ Please check it out! Link in bio⁠ ⁠ wtfpropertyinvesting.com/youtube⁠ ⁠ Even by focusing on tiny changes, over time, and with the compounding effect – you could see remarkable results. ⁠ ⁠ 👍 Double-tap and let me know if you focus only on \’goals\’ our \’outcomes\’ or if you also focus on your processes and habits to get there!⁠ ⁠ PS. I have a newsletter over on my website where I send out weekly thoughts and interesting books as well as share my own property journey as a beginner. Link in bio.⁠ ⁠ #hmo⁠ #coliving⁠ #property⁠ #properties⁠ #propertybusiness⁠ #propertydevelopment⁠ #propertydeveloper⁠ #propertymanagement⁠ #ukproperty⁠ #propertyinvestment⁠ #propertyinvestor⁠ #propertyinvesting⁠ #propertypodcast⁠ #buytolet⁠ #landlord⁠ #financialfreedom⁠ #passiveincome⁠ #propertyladder ⁠ #ukpropertymarket⁠ #propertynews⁠ #propertymarket⁠ #business⁠ #entrepreneur⁠ #propertymanagement⁠ #entrepreneurship⁠ #entrepreneurlife⁠ #houseofmultipleoccupancy ⁠ #sharedhouse⁠ #spareroom⁠ #bedroominspo

Chapter 7

Why is the type of property important?

This all comes down to knowing how to increase value. In my target area, there’s a lot of 2-bed 🛏️ terraced houses.

 

They have old layouts where the rooms are HUGE.

 

By reconfiguring the layout you can create a third bedroom in the property. This means the value increases as the house becomes a 3 bed. 

 

3-bed homes also work really well for first-time buyers and second-time buyers. So you’re not limiting yourself to a smaller market who are interested.

 

You might also find you’re competing 🥊 against other investors working on other strategies.

 

For example, 3-bed terraced houses in cities are POPULAR for HMOs. This is where a house is rented out by the room to young professionals. Or students.

 

They can cashflow quite high, investors sometimes pay more. As their numbers work.

 

As your strategy is different they may be willing to bid more than you. So bear this in mind. 🧠

Chapter 8

What makes a house flip possible?

Buying a pristine house with pristine bath 🛁 and kitchen. Is not going to generate you great returns.

 

You need to be looking for a property that needs problems solving or work done. 🏚️

 

Also, the seller should be in a position where they need or want to sell quickly. This means you can both create a win-win deal. ⏳

 

They sell the house quickly. You get a good deal. You’re both happy. 👍

 

A lot of amateur or first-time investors aim for easy houses. I call these floral carpet flips. They often have outdated decor. But otherwise no huge problems. It just needs a 🎨 refresh. 

 

They’re cheap, easy to refurb and low risk. 🛠️

 

But everyone’s doing it. So it can be competitive. Everyone else is doing what you’re doing. 

 

So by looking at more niche problems, structural issues for example. Will remove most of the competition.

 

The one barrier stopping people getting into property is finance. 🏦

 

Check out how to unlock cash for flips below.

Finding the right finance for a flip

Money can be a huge barrier for property investors. You absolutely need some capital to work with to start with. If you’re not there… get saving. 

 

If you have a good deposit then read on!

rent to rent
WTFPROPERTYINVESTING1.2K followers🏡 What The Flip: Property Investing 🏗️ S. Yorkshire 👇 YouTube & Newsletter 🌿 Giant Leaps Begin with Small Steps
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Should you buy in a limited company or in your own name? 🤷‍♂️⁠ ⁠ This week I explore the key factors that affect whether a limited company is right for you. Different factors like tax, your income and your future property goals will make a difference. ⁠ ⁠ You should be thinking about:⁠ ⁠ ⚡ Are you a basic, higher or additional rate tax payer?⁠ ⚡ What long term plan do you have?⁠ ⚡ Have you thought about succession planning?⁠ ⚡ Do you require a salary or can you reinvest the profits?⁠ ⁠ It can be a little overwhelming when figuring it out. At the end of the day – speak to an accountant who will be able to sit down and understand your own individual circumstances. Ltd companies work in some scenarios and not in others so it\’s about checking in with your plans and finances to work out what is best for you. ⁠ ⁠ 👍 Double-tap and please subscribe to the channel!⁠ ⁠ PS – I also have a newsletter where I send out updates on property videos and my own projects that I\’m working on. Check it out on my website!⁠ ⁠ ⁠ #hmo⁠ #coliving⁠ #property⁠ #properties⁠ #propertybusiness⁠ #propertydevelopment⁠ #propertydeveloper⁠ #propertymanagement⁠ #ukproperty⁠ #propertyinvestment⁠ #propertyinvestor⁠ #propertyinvesting⁠ #propertypodcast⁠ #buytolet⁠ #landlord⁠ #financialfreedom⁠ #passiveincome⁠ #propertyladder ⁠ #ukpropertymarket⁠ #propertynews⁠ #propertymarket⁠ #business⁠ #entrepreneur⁠ #propertymanagement⁠ #entrepreneurship⁠ #entrepreneurlife⁠ #houseofmultipleoccupancy ⁠ #sharedhouse⁠ #spareroom⁠ #bedroominspo
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How to start a property business 🔥⁠⁠🧮 New YT Vid – link in bio!⁠ ⁠ Continuing on from my beginners series to help brand new property folk looking to get started with no upsells and no BS – In this video, I run through 8 things to consider when starting your property business in the UK. ⁠ ⁠ It took a good year to create my property business plan, understand what strategies are best for me and eventually starting the property company structure which leads me to today where I\’m ready to make my first move and really get started and hit the ground running. ⁠ ⁠ You should be thinking about:⁠ ⁠ ⚡ What\’s your long term aim?⁠ ⚡ What strategies are best for you?⁠ ⚡ How much time do you have?⁠ ⚡ Are you building your knowledge?⁠ ⚡ Understanding your area⁠ ⚡ Speak to professionals (accountant, broker)⁠ ⚡ Understand your numbers⁠ ⚡ Get out there and do it!⁠ ⁠ It can be a little overwhelming when getting started. This video will help give you some focus on making your next steps⁠ ⁠ 👍 Double-tap and please subscribe to the channel!⁠ ⁠ ⁠ #hmo⁠ #coliving⁠ #property⁠ #properties⁠ #propertybusiness⁠ #propertydevelopment⁠ #propertydeveloper⁠ #propertymanagement⁠ #ukproperty⁠ #propertyinvestment⁠ #propertyinvestor⁠ #propertyinvesting⁠ #propertypodcast⁠ #buytolet⁠ #landlord⁠ #financialfreedom⁠ #passiveincome⁠ #propertyladder ⁠ #ukpropertymarket⁠ #propertynews⁠ #propertymarket⁠ #business⁠ #entrepreneur⁠ #propertymanagement⁠ #entrepreneurship⁠ #entrepreneurlife⁠ #houseofmultipleoccupancy ⁠ #sharedhouse⁠ #spareroom⁠ #bedroominspo
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I\’ve explored 8 risk factors for next year 🔥⁠⁠🧮 New YT Vid – link in bio!⁠ ⁠ Will the market crash next year? Nobody knows. Every video, every podcast, every news headline – is all opinion. Expert or not. I\’ve just released a new YT video looking at the factors that COULD make some kind of impact.⁠ ⁠ The bottom line though – property is a long game so if you\’re strategy fits, keep calm and carry on. If you believe in the 18-year property cycle, we\’re meant to be in the mid-cycle dip right now. The reality is, we don\’t really know. There are too many uncertainties in unprecedented times. It could go up or down, but historically, property goes up over the long term. ⁠ ⁠ As business owners and property investors, we can monitor horizon risks, however:⁠ ⁠ ⚡ Understanding pent-up demand⁠ ⚡ When the stamp duty tax break ends⁠ ⚡ Brexit & market uncertainty⁠ ⚡ The end of the furlough scheme⁠ ⚡ Rising unemployment⁠ ⁠ These may have some effect next year⁠ ⁠ Have a look through the video – see what you think and let me know! Do you have any thoughts on next year?⁠ ⁠ ⁠ 👍 Double-tap and please subscribe to the channel!⁠ ⁠ ⁠ #hmo⁠ #coliving⁠ #property⁠ #properties⁠ #propertybusiness⁠ #propertydevelopment⁠ #propertydeveloper⁠ #propertymanagement⁠ #ukproperty⁠ #propertyinvestment⁠ #propertyinvestor⁠ #propertyinvesting⁠ #propertypodcast⁠ #buytolet⁠ #landlord⁠ #financialfreedom⁠ #passiveincome⁠ #propertyladder ⁠ #ukpropertymarket⁠ #propertynews⁠ #propertymarket⁠ #business⁠ #entrepreneur⁠ #propertymanagement⁠ #entrepreneurship⁠ #entrepreneurlife⁠ #houseofmultipleoccupancy ⁠ #sharedhouse⁠ #spareroom⁠ #bedroominspo
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My first 30 days on YouTube 🔥⁠⁠📹⁠ ⁠ My original goal this year was to start a podcast but without a big audience, it can be very hard to gain velocity, and there\’s been an influx of new property podcasts recently, so I pivoted to a platform where fewer property people are. ⁠ ⁠ What I learnt & achieved from being on YouTube for 30 days⁠ ⁠ ⚡ I filmed, edited and uploaded 6 videos⁠ ⚡ I gained 15 subscribers⁠ ⚡ The videos were viewed almost 500 times in 1 month⁠ ⚡ The channel got over 16 hours of watch time⁠ ⚡ One video really popped (250+ views) which was about using Notion⁠ ⁠ The aim is to keep uploading valuable videos and enjoy the process of scriptwriting, filming and editing my property knowledge & combining my business skills, risk management & UK financial services & banking experience on probably the most vulnerable platform in front of a camera and see where it goes!⁠ ⁠ — The Pros–⁠ ➕ I\’ve had some people reach out who really resonated with some of the videos which was awesome. Mainly from newer investors who find my beginners journey very relatable. ⁠ ⁠ ➕ I\’m really happy with the engagement on the videos so far, I\’m pushing my editing skills on every video. ⁠ ⁠ — The Cons –⁠ ➕ It\’s hard work managing all the ideas, scripts and then filming & editing which from start to finish can take 6 to 8 hours for an 8-minute video.⁠ ⁠ ➕ It\’s hard not to get wrapped up in the YT analytics questioning why a video hasn\’t got views or checking to see how many likes you have. I need to do this less. ⁠ ⁠ ⁠ 👍 Double-tap and please subscribe to the channel!⁠ ⁠ ⁠ #hmo⁠ #coliving⁠ #property⁠ #properties⁠ #propertybusiness⁠ #propertydevelopment⁠ #propertydeveloper⁠ #propertymanagement⁠ #ukproperty⁠ #propertyinvestment⁠ #propertyinvestor⁠ #propertyinvesting⁠ #propertypodcast⁠ #buytolet⁠ #landlord⁠ #financialfreedom⁠ #passiveincome⁠ #propertyladder ⁠ #ukpropertymarket⁠ #propertynews⁠ #propertymarket⁠ #business⁠ #entrepreneur⁠ #propertymanagement⁠ #entrepreneurship⁠ #entrepreneurlife⁠ #houseofmultipleoccupancy ⁠ #sharedhouse⁠ #spareroom⁠ #bedroominspo
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NEW YOUTUBE VIDEO LIVE! For those who are new to property, this video simplifies ROI & Yield 🔥⁠ ⁠ ⁠ Back to basics this week! I have a range of followers (thank you!) from experienced veterans but also people newer who have reached out to me so this one is for you!⁠ ⁠ This video for beginners explored in 6 minutes:⁠ ⁠ ⚡ How to simply calculate ROI + example⁠ ⚡ How to easily work out Yield + example⁠ ⚡ A framework of what costs to include⁠ ⚡ I also explore why everyone\’s definition of ROI is different. ⁠ ⁠ Full Guide: wtfpropertyinvesting.com/how-to-calculate-property-yield-roi⁠ ⁠ If you don\’t fancy watching the video – here are the calculations:⁠ ⁠ ➕ ROI = Annual Profit / Money Put In⁠ ➕ Yield = Annual Rental Income / Price of Poperty⁠ ⁠ You\’d shocked to know that many property investors (the ones who aren\’t engaged in the awesome Instagram community) will buy a property off the cusp without running the numbers. Sometimes there are hidden costs that are unexpected that blow your budget but you can show:⁠ ⁠ ➕ Business Sense⁠ ➕ Risk Management⁠ ➕ Financial Understanding⁠ ⁠ by running your numbers. This will ensure you don\’t put yourself at risk of going into negative equity on a refurb project. The key is understanding those numbers, buying at the right price and not overspending the budget you set in the refurb to achieve your correct ROI – with a bit of contingency baked in. ⁠ ⁠ 👍 Double-tap and let me know if you found this useful!⁠ ⁠ PS. I have a newsletter over on my website where I send out weekly thoughts and interesting books as well as share my own property journey as a beginner. Link in bio.⁠ ⁠ #hmo⁠ #coliving⁠ #property⁠ #properties⁠ #propertybusiness⁠ #propertydevelopment⁠ #propertydeveloper⁠ #propertymanagement⁠ #ukproperty⁠ #propertyinvestment⁠ #propertyinvestor⁠ #propertyinvesting⁠ #propertypodcast⁠ #buytolet⁠ #landlord⁠ #financialfreedom⁠ #passiveincome⁠ #propertyladder ⁠ #ukpropertymarket⁠ #propertynews⁠ #propertymarket⁠ #business⁠ #entrepreneur⁠ #propertymanagement⁠ #entrepreneurship⁠ #entrepreneurlife⁠ #houseofmultipleoccupancy ⁠ #sharedhouse⁠ #spareroom⁠ #bedroominspo
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NEW YOUTUBE VIDEO LIVE! I analysed over 324 data points for the best HMO areas in the UK! 🔥⁠ ⁠ This powerful data explores:⁠ ⁠ ⚡ Room Rental Rates⁠ ⚡ House Prices VS Room Rates⁠ ⚡ Supply VS Demand⁠ ⁠ Full Guide: wtfpropertyinvesting.com/hmo⁠ ⁠ If you don\’t fancy watching the video – the winner is Warrington with 1.4 people looking for every room available meaning there\’s lower competition.⁠ ⁠ Northern cities did very well with the likes of Leeds, Sheffield, Manchester, Nottingham and Liverpool all showing strong possibilities (Beware of Article 4 though).⁠ ⁠ Southern cities, naturally have strong rents but not huge compared to the north, the gap is quite small. And London although has great rents, has low ROI & Yield due to high property prices.⁠ ⁠ Check out the video for the high-level findings of the data, let me know what you think!⁠ ⁠ 👍 Double-tap and please check out the YouTube video!⁠ ⁠ PS. I have a newsletter over on my website where I send out weekly thoughts and interesting books as well as share my own property journey as a beginner. Link in bio.⁠ ⁠ #hmo⁠ #coliving⁠ #property⁠ #properties⁠ #propertybusiness⁠ #propertydevelopment⁠ #propertydeveloper⁠ #propertymanagement⁠ #ukproperty⁠ #propertyinvestment⁠ #propertyinvestor⁠ #propertyinvesting⁠ #propertypodcast⁠ #buytolet⁠ #landlord⁠ #financialfreedom⁠ #passiveincome⁠ #propertyladder ⁠ #ukpropertymarket⁠ #propertynews⁠ #propertymarket⁠ #business⁠ #entrepreneur⁠ #propertymanagement⁠ #entrepreneurship⁠ #entrepreneurlife⁠ #houseofmultipleoccupancy ⁠ #sharedhouse⁠ #spareroom⁠ #bedroominspo
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Something a little different today. SEO or otherwise known as search engine optimisation 🚀 & DOMINATING google. ⁠ ⁠ Although new to the property world, I work in a bank by day and also freelance as a graphic designer / SEO expert.⁠ ⁠ I have been doing this for about 10 years 🔥 ⁠I\’m already seeing some killer results from my website for big terms. Still lots of work to do though!⁠ ⁠ I knew as a part of getting started in property, I wanted to document the journey and build a solid brand to do that in the process, so I can share valuable and honest content as a way to give back to the Instagram community that taught me so much.⁠ ⁠ Separately, I also teach the skills needed to learn SEO over on skillshare.com with a video course that\’s about 1hr 50 minutes. It\’s relatively new but some good reviews coming through already. ⁠ ⁠ To give back to the more experienced developers on here – if you\’re struggling to get traffic via Google – I\’ve attached a completely FREE link to my SEO class if you click on the link in my bio you\’ll see a button to go to my skillshare.com class.⁠ ⁠ The link is a 2-week free trial on Skillshare (so just remember to cancel your skillshare membership once you\’re done), although there are tonnes of other creators on there who teach photography, project management and other stuff so might be useful for your business!⁠ ⁠ 👍 Double-tap and please check out the class for free! No strings.⁠ ⁠ PS. I have a newsletter over on my website where I send out weekly thoughts and interesting books as well as share my own property journey as a beginner. Link in bio.⁠ ⁠ #hmo⁠ #coliving⁠ #property⁠ #properties⁠ #propertybusiness⁠ #propertydevelopment⁠ #propertydeveloper⁠ #propertymanagement⁠ #ukproperty⁠ #propertyinvestment⁠ #propertyinvestor⁠ #propertyinvesting⁠ #propertypodcast⁠ #buytolet⁠ #landlord⁠ #financialfreedom⁠ #passiveincome⁠ #propertyladder ⁠ #ukpropertymarket⁠ #propertynews⁠ #propertymarket⁠ #business⁠ #entrepreneur⁠ #propertymanagement⁠ #entrepreneurship⁠ #entrepreneurlife⁠ #houseofmultipleoccupancy ⁠ #sharedhouse⁠ #spareroom⁠ #bedroominspo

Chapter 9

How to finance house flipping

Typically, a standard mortgage is not going to be suitable. A buy-to-let mortgage might work sometimes. But not to flip a house properly if you’re looking to sell. 

 

You can technically do it. Lenders don’t like it though. That’s not how the product is designed. You risk the lender demanding the mortgage back in full if they find out. 

 

The lender will have allowed the mortgage and drawn down the funds in the understanding that you’ll be renting out the property long term. 

 

If you abuse this, it might mean that lenders blacklist you. They won’t want to lend to you. Also, remember this information gets shared with other lenders. 

Buying a property flip using cash

If you’re fortunate enough to have a large pot of money 💰, you can buy the property in cash and finance the refurbishment as well.

 

This is super quick ⏲️ and easy. There are no mortgage applications. No reel of documentation and paperwork. There’s no interest on the finance!

 

However, there’s an indirect cost by using ALL 🍕 of your own money in one deal. This means tying it up whilst the project completes.

 

Let’s say you had £60,000. You could purchase a house up north for that price in 2020. Manage the refurb. Then sell.

 

But you’ve lost out on opportunity cost here. You’re not leveraging your money as well as what you should be. This means a low return on capital employed.

 

Whereas you could use 2 x £30,000 deposits to work on 2 houses. That means double the work. But it also means you can likely realise more profits from the two separate property deals. 🍕🍕

 

And you start with the same amount of money. 🤷‍♂️

Buying a property flip using bridging finance

Bridging finance is used commonly in the developer and investing world. It’s a short term mortgage, often cash to bank account 🏦 is quicker. 

 

It’s perfect for a flip or developing. The downside is that it’s more expensive. But as it’s quicker it allows you to create profits quicker so it all bakes into your sums. 

 

Speak to a broker to get full information but typically you can also finance your development costs ⚒️. On the right product. With a 30% deposit.

 

Ever wondered how property investors buy land and build a house. How do they have so much money?

 

If they’re not using joint partner investors finance. It’s likely they are using a 30% deposit with 100% finance on land and build costs. This, of course, comes with ‘caps’ which lenders use specific calculations. This helps manage risk.

Goal Setting Guide

Free Goal Setting Guide

Are you struggling to find focus in your property business? Do you have a clear, tangible and measurable plan of action? Download this free handy goal setting guide that explores wherey you are today, your financial literal and north star lateral goals – and what you need to do to bridge that gap to meet your goals. 

Chapter 10

What calculations should I run to evaluate a property?

Even though it looks easy on TV. Flipping a property is hard work. ✋

 

Make sure your numbers are correct. And profitable. Otherwise, it’s not worth it! 

 

Once you have the numbers analysed on a property. When flipping you typically have 3 areas where you can tweak your deal.

 

➕  The sale price of the property

➕  The costs on fees and refurbishment

➕  The price you purchase the property for

 

There’s a famous saying investors commonly use. You make your money when buying a property. Not when selling it. 

 

This is very true as buying at the right price can set an entire deal. If you buy too high you’ll minimise your profit margins. 📏

Chapter 11

How to Maximise Your Selling Price

Selling the property is the first area we’ll look into. ☝️

 

If you don’t understand the true market value of a property when done up. Or don’t understand the ceiling price of an area.

 

You could purchase a property that doesn’t gain the value you expected in your figures. ⚠️

 

Adding things like extensions, extra bedrooms are all a great way to add value. But also these will add to the costs of the refurb on the property. Meaning greater capital required. 💰

 

You need to understand how to research selling prices of your local area. This is known as researching comparables. Typically investors look at the past 2 years. 

 

The key is to find identical properties. Head over to Rightmove to look at sold prices.

 

Enter the street or postcode area that you’re looking at. Then set the search radius to around 0.5 miles around your search location. 🏘️

 

If there are no good comparables you can look further. The further you go out the less reliable prices will be. 

 

As mentioned above, an estate agent is also your best friend here. 

 

Have a chat with a local estate agent and ask them about their thoughts on prices. They’ll know the area very well. 

 

If your house is in an area where it takes months to sell a property. You’re going to have a long ride realising the profits. If it’s in a popular area where properties are snapped up quickly. It’s going to be easy selling up at the end.

Chapter 12

How to cost up a buy-to-let or refurb for a flip

To truly work out a potential profit in a deal. And properly calculate Return on Investment (ROI), you need to accurately know your costs. 

 

Let’s run through the main costs you’ll come up against when flipping a house. 

 

🏠 Stamp Duty

Always speak to a professional or check the HMRC website for latest rates. At the time of writing this, there’s a stamp duty holiday. Up to £500k. To calculate stamp duty you can use this handy calculator here. 

 

📝 Professional Costs


Your professional fees and costs will include:

  • ➕ Solicitor for buying
  • ➕ And for selling
  • ➕ Estate agent fees
  • ➕ Broker fees
  • ➕ Surveys
  • ➕ Project manager (If you use one)

 

🏦 Finance Product Costs

If you’re using a bridging loan, you can pay arrangement fees. Broker fees. And also pay monthly interest, for example, at 1% a month. 

 

Speak to your broker about the costs of the finance product you use for your flip.

 

⚒️ Building, Tradesman & Refurbishment

This is where the majority of your cost will come in. You’ll probably see on Homes Under The Hammer, a lot of amateur investors completely underestimate these costs.

 

They’ll buy a property in a DIRE condition. And estimate £5000 to bring it up to standard. 

 

And in reality, it ends up costing ÂŁ20,000. They have to budget 4x the amount they were working off.

 

You’ll have unexpected costs and possible mistakes. 

 

Unless you’re in the market for premium housing. Don’t kit a house out with the most expensive magnet kitchen. 

 

You don’t need to be an expert at predicting costs. But having a good rough guide will help get those numbers close. 

 

Once you have an idea of rough costs. Add 15% for contingency. This accounts for unknowns and mistakes if you’re new. 

 

Here’s a rough estimate of the cost to refurb a house in 2020:

 

  • ⚡ Kitchen ÂŁ2500
  • ⚡ Bathrooms ÂŁ2000
  • ⚡ Decorators ÂŁ1500
  • ⚡ Carpets ÂŁ1500
  • ⚡ Central heating ÂŁ3000
  • ⚡ Rewire ÂŁ2000
  • ⚡ Doors Exterior – ÂŁ600 
  • ⚡ Doors Interior – ÂŁ75 each
  • ⚡ Roof – ÂŁ3000
  • ⚡ Windows – ÂŁ350 each
  • ⚡ Landscaping – ÂŁ100 a day per person
  • ⚡ Gutters – ÂŁ600
  • ⚡ Damp – ÂŁ2.5k to ÂŁ3k whole house (1m2 ÂŁ400)
  • ⚡ Plastering ÂŁ300 per room
  • ⚡ 10% contingency
  • ⚡ 10% miscellaneous

Running Costs

These are costs associated with just having the property. 

 

These include:

  • ➕ Insurances
  • ➕ Utility Bills
  • ➕ Council Tax
  • ➕ Ground Rent / Service charges if leasehold

 

Buying the property

The most obvious cost of a property! 

 

If you can get a good deal on a property then it will allow you room and flexibility in the deal. 

 

The balance of buying and selling the property is around:

 

➕Selling the property for the best price possible

➕ Reducing your costs in refurb or running

➕ Buying the property for the lowest price possible. 

 

By understanding your upper limit, you’ll know how high your offer can be. Before it becomes non-profitable when factoring in refurb costs. 🙅‍♂️

 

If you know how much a property will sell for at the end. How much it costs for refurb. And lastly the profit margin you’d like to make.

 

This will give you a figure to offer on the property. 

 

Let’s break it down into an example:

 

🏠 Sale price: £120,000

💷 Minus your costs: £20,000

💷 Minus Profit: £20,000

🏦 Purchase Price = £80,000 (£120k minus £20k costs and £20k profit)

 

If you want to ensure you get £20,000 profit, if you offer over £80,000 then to retain the same profit you’ll need to lower your refurb costs. So it’s all a fine balance. 

 

However, if you bought for £80,000. Then your refurb came under your estimate. You’d make more profit. 

 

It’s not uncommon, that the price you need to make a deal work, isn’t right for the seller. Sellers want the highest price too. 

 

This means if you enter a bidding war you’ll come up against different people. Someone might be able to do the job cheaper than you.

 

Someone might be willing to make less profit. It might be a family who wants to live there and not bothered about profit. 

 

Or, an amateur investor who doesn’t know their numbers.

Chapter 13

What is involved in a property flip refurbishment?

So now you’ve found a great property. The numbers work well. And your offer has been accepted and the property is yours. 🍾

 

The next step is getting down and dirty into the refurbishment. 🔨

 

You could do this yourself if you have the right experience. Or you could hire a builder and expert team ⚙️ to manage it for you. 

 

This can be a scary part as costs vary massively between contractors. 

 

It’s key to be on top of the refurb process. If you’re not doing the work yourself, keep control of the costs. Know what’s coming in. And what’s going out. 📋

 

There are two main ways when looking after the refurb on a property project:

 

1) Hire a contractor, known as a project manager. They’ll have access to their trusted tradespeople who work for them. 

 

2) Hire the tradespeople directly, whilst you manage the wider project. 

 

Each of the options has its pros and cons. Using a project manager is going to be more expensive. But if you’re far away from your investment property. They’ll save you A LOT of time 🕐 and hassle.

 

Your time has a cost. Remember that spending 4 hours driving to and from your property might not be worth the cost of paying a project manager more money.

 

Understanding your timeline is also going to ensure that you have a handle on costs long term. If you overrun your project. It will cost you extra and eat into your profits. 

 

If you have a main contractor, agree on the schedule of works. Then get it in writing. 📑

 

ALWAYS build in contingency into your project. There is always something unexpected that crops up. These things require extra money and time. 

 

One of your trades might not turn up. Materials might not arrive. Things break. It’s the reality of managing a refurb project. 

 

If you’re using a bridging loan, remember any delays will mean that you need to hold onto the project for longer. And you’ll incur extra 💸 interest.

Manage your project manager

The biggest error you could make is not keeping an eye 👀 on what’s happening. 

 

Contractors can get lazy. It’s not uncommon for builders to tell a few white lies. This is because they need cash to fund their next project. Without having done any work on your property.

 

If you take your eye 👀 off the ball, things have a high chance of going wrong. ❌

 

Ideally, you should be at your project every 📅 week. You don’t have to be there every day. But be present and be visible. Show your builder or project manager you’re keeping an eye on them. 

 

If your builder asks for payment for a job. Ensure you SEE the job complete before you send any money. If you’re a distance away, ask your builder to send a video and photos of everything. This proves it’s ✅ done.

What is an exit strategy?

There are two ways to exit the project. The first is simply selling 🔖 the house. The second is refinancing onto a longer-term mortgage. 

 

If you’re looking to sell, or let – a key technique is staging 🎍 the property.

 

This means making a property look like it’s lived in. Decorate it nicely. You don’t have to go overboard. But enough to help someone envision living there is great. 

 

This helps agents get more viewings. And will convert to a sale or let agreed. 👍

 

If you can get two buyers to fall in love with your property. They’ll start a bidding war. This is great for your end price. 

 

You should engage an estate agent early and talk to them about your plans. They’ll have lists of people interested. And they’ll do the hard 💪 work for you.

 

If you’re planning to refinance the property and it turns out your refurb is more expensive. You might have to sell the property 🏠 instead. 

 

Knowing, and planning for the various scenarios. Is called planning your exit strategies. Always have a backup exit strategy. This means if something goes wrong. Or the market changes. You have a plan B.

Keep pressure on your buyer. If you’re selling.

Many house purchases can fall through. Ensure that you keep pushing your estate agent and buyer to force things through as quickly as possible.

Have documentation ready and don’t hold up your estate agent or solicitor.

Chapter 14

In Conclusion

House flipping is a very fun a lucrative strategy. Many beginner property investors use this method.

 

It can sound daunting to get involved. Take it step by step. Do your research and trust your numbers. 

 

The key is to get out there and start viewing properties. Plan your potential risks and build in contingency.

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