Property Developing

[squirrel_hunter]

The org is a mighty diverse place so I'm hopping someone will be able to give a little advice. Let me paint the scene...

I'm renting and have been since graduating, I've been doing my best to save and I have a little deposit I want to spend on a house. Trouble is the prices are way more than I'll be comfortable with as I'm buying on my own. So looking around I find a 2 bed near the town center that needs a little work. Now when I say a little I mean a lot. I'm going to see it tomorrow but I know its going to need a roof, windows, possibly electric and heating, and then decorating, think new kitchen and bathroom.

But looking at the prices of similar properties for example the house next door, there is a big gap between the asking price of the property I'm looking at and the price that the other house went for back in 2005. Now I know some prices have gone down but from what I hear we are back to 2005 prices. So this makes me think that I stand a chance of making a go of this even after paying for the work needed.

Now for my problem. If I use my deposit savings to finance a mortgage at if I'm lucky 10%, and taking an interest only type to keep repayments down as I intend to sale it quickly, I'm not left with much. Well I'm not left with anything really. So how do I finance the renovation? How have other people done it?

If I do it right I can get myself on the property ladder and get a good foot hold there. If the market drops I would move into the property until the market picks back up. Its a gamble but anything like this is and I accept the risk but I think I could make a go of it if given the opportunity. Your thoughts please?

[Old Git]

The org is a mighty diverse place so I'm hopping someone will be able to give a little advice. Let me paint the scene...

I'm renting and have been since graduating, I've been doing my best to save and I have a little deposit I want to spend on a house. Trouble is the prices are way more than I'll be comfortable with as I'm buying on my own. So looking around I find a 2 bed near the town center that needs a little work. Now when I say a little I mean a lot. I'm going to see it tomorrow but I know its going to need a roof, windows, possibly electric and heating, and then decorating, think new kitchen and bathroom.

But looking at the prices of similar properties for example the house next door, there is a big gap between the asking price of the property I'm looking at and the price that the other house went for back in 2005. Now I know some prices have gone down but from what I hear we are back to 2005 prices. So this makes me think that I stand a chance of making a go of this even after paying for the work needed.

Now for my problem. If I use my deposit savings to finance a mortgage at if I'm lucky 10%, and taking an interest only type to keep repayments down as I intend to sale it quickly, I'm not left with much. Well I'm not left with anything really. So how do I finance the renovation? How have other people done it?

If I do it right I can get myself on the property ladder and get a good foot hold there. If the market drops I would move into the property until the market picks back up. Its a gamble but anything like this is and I accept the risk but I think I could make a go of it if given the opportunity. Your thoughts please?

We did this with our 1st house 20 years ago, left just the 4 walls & roof, everything else went in the bin.
You need luck, and a lot of time & or money.
Unless you are part P / Gas-safe etc.etc. in each trade, you need to pay someone, can turn out very expensive hobby.
And..... you will have no time left for anything else, it takes forever doing evening / weekends etc.
Friends say they will help, but after the initial buzz, when it starts, they have lives to carry on as well, so help less & less.
If you gona do it, do it to live in, there is no such thing ( in my experience) in a novice quick turnaround without shed loads of cash to spend on it & then it may or may not sell once it is done.
Very high stakes poker type thing in the short term.

--------only my experience you understand.

[Ed]

You have PM

[squirrel_hunter]

Thanks Old Git. I'm willing to put the time in, just hope I have the luck, but the money is the problem. Unfortunately I'm not in a trade but I'd want to do as much as I can not only to keep costs down but to learn.

You're right about doing it to live in. Done up it is something I would consider, yes theres no garage but the front door opens onto the pavement so if I take out the internal wall that is the hall way I'd drive my bike straight in to the front room.

Yes the stakes are high, but I've got to try something or I'll be stuck renting for ever.

Ed, thanks, you've got mail.

[Orpheus]

Ive not really got any great knowledge or experience on this, but ill try and help as its something ive thought about a lot.

I cant imagine the price next door sold for in 05 is still the actual value of the house now. Also if you plan to do work yourself, be realistic in what you are actually capable of. Try and get a realistic idea of what stuff will cost, like try and get quotes for stuff.

Also, i work in a plumbers merchant and have just finished a 4 year course in it, so i could probably give you an idea of what that side of it will cost.

[kitkat]

so what you are really asking is can all plumbers, carpenters, plasterers, sparks on the forum help you out free of charge and you will pay them when you sell. Good luck. Only experience I have is watching programs on tv, looks very expensive. Dont know if this is the right market to start this sort of project. Good luck though.

[Demonz]

Do it. The worst thing that will happen is you will come out a lot smarter than before with less money on your pocket. Sometimes the experience will give you the greater gain ect. It was the best thing we did to get on the ladder here, incl learning the system/process of house buying. Sorting priorities and planning and the satisfaction of finishing the project is rewarding in itself. Plus you have a solid network of advice here. If you can live in it - even just one room and have water/loo working, power, then why not.

[dirtydog]

Unfortunately I'm not in a trade but I'd want to do as much as I can not only to keep costs down but to learn.



How good are you at DIY though? My old landlord wanted to start doing up houses but the fact he didn't have the know how or time to do work himself made it a non-starter due to the costs.

I'm not sure how the prices there are compared to the prices here for trade but to put in a new boiler/heating system you could be looking at £5000! A fitted kitchen will set you back a couple of grand as well. Bathroom would be at least £800 plus materials

[gruntygiggles]

so what you are really asking is can all plumbers, carpenters, plasterers, sparks on the forum help you out free of charge and you will pay them when you sell. Good luck. Only experience I have is watching programs on tv, looks very expensive. Dont know if this is the right market to start this sort of project. Good luck though.

I don't think for one second that Squirrel is asking that.....just for the advice of the friendly peeps of the Org.

[gruntygiggles]

Squirrel, I said yesterday that if you could buy, it would be good, but make sure you get a few quotes for all the different bits of work before you buy as you might be suprised at how much this can cost given the amount of work there. How old is the house? Is it in a traditional terrace in an old part of town? Sometimes buildings don;t have to be listed in order for you to get a grant for renovation, so check that out, although it may only cover the exterior.....it would help with the roof and windows!

Have a really long think about whether or not you could cope with having all your bike bits in the house that you've just spent thousands of your own money on. Is there a garden or space where you could fit a large shed for working on the bikes in?

The advice about the help of friends is good too.....it can be quick to dry up. Everyone wants to help ripping things out and painting......but aren't going to be that bothered about the boring stuff in between.

It goes without saying that you'll have the help of me and Stretchie on evenings and weekends where we have nothing on and you know we'd rather come and help you than do other stuff half the time anyway, but we can't bring a great deal of skills with us....just general dogsbody skills really. Oh, and the dogs will christen any garden you have for you!

If you make all the checks and it looks good, go for it, but don't just do it because you can....there will be other properties out there for you even if you have to rent somewhere a while longer.

[timwilky]

Legislation has made things a little more difficult for the competent DIYer, I have had to stop doing domestic electrics as I am not part P. I have friends who I have worked with in the past who are. But with the way work is I don't feel happy just asking them to sign it off for a couple of pints. I would rather they actually got to earn their living.

Similarly when I have had to ask Corgi registered (now gas safe) to do jobs for me. they have told me to do it myself. OK as I have always lived in the house, but if I had intended to sell I then need the appropriate install certs.

Where you might be able to save money, is get yourself on a weekend plastering course. probably cost you about £500 for a couple of weekends but you should come away competent at dob+dab boarding and skimming. fitting a nice cornice hides any dodgy bits tieing ceiling/walls.

Plumbing/kitchen fitting is a piece of p1ss, although for the first time it might be worthwhile getting somebody who knows what they are doing to show you how to use a mitre jig for the worktops, a quick tip here, use matching splash back, cut it to fit exactly between worktop and overhead cupboards looks far neater than tile and a damm sight quicker to fit,and looses any imperfection in the wall. use a reasonable supplier, colour matched carcassess look far better than the standard white with disguise pannels etc.

floors, unless they are in excellent condition, rip them out and lay 22mm P5 chipboard flooring. So much quicker than trying to put right a few dodgy boards, you find they have all shrunk over the years, creak like mad and at the end of the day you will want to lay something on them anyway so why waste time makeing them look "nice". The programmes go on about original features. What they really mean is rubbish that takes up room, spoils the clean lines. Lay laminate and then fit new skirting on top, again looks neater/cleaner than putting beading round the edges.

The roof is the hardest part, you say it is directly onto the road. You therefore have issues with scaffold and where to place a skip. I would estimate you would probably require a minimum of £2500 for a two up/down mid terrace for a re tile, Again it is easy for the competent DIYer. However, you need to be comfortable working at height and also really need some insurance should you start dropping bits into the street etc.

OH I enclose a link to my local merchants price list (http://www.cwberry.com/ProductCat.aspx). I know they are no where near you but it at leasts gives you a clue as to what you should be paying for materials and not the B&Q/wicks inflated prices

[dirtydog]

I don't think for one second that Squirrel is asking that.....just for the advice of the friendly peeps of the Org.

'twas meant in jest :D

[gruntygiggles]

'twas meant in jest :D

I know.....didn't word that well.......I didn't want people to think that's what he might have been asking for.

I'm just a numpty :smt040

[anna]

You have PM

[Red Herring]

Loads of first timers buy properties that need a "little work", and things like redecorating, and even floors and plastering are skills you can learn at your own pace in the comfort of your own home (literally). After all, the worst that can happen is you have to do it again, says he who has now plastered his hallway three times, but got it right in the end.
The show stopper could be any structural work, including the roof. These are the things that need to be got right and you won't have endless time to complete, especially if it involves scaffolding out into public space (the pavement). They are also the things that unless you can show you have the means to do properly will stop you getting a mortgage on the property. You should at least make sure you have the financial plan to do such things before starting. I've done it twice, well once and a half including our current property and we've been here ten years....fortunately I've a very understanding wife!

[squirrel_hunter]

Thanks for all the advice and pm's. Been to see the place today and all I can say is its amazing how some people live.

The property is a repossession and is a bit of a mess. But looking through that I can see a lot of potential. So after a looking around I've come up with a little list of what needs doing:

Roof is leaking, its leaked through into the back bedroom and taken part of the celling out. Its been leaking for some time.
Windows and doors all round front and back. Patio doors at the back would make the most of the very long garden. (£2000)
Needs rewiring. (£1000)
Needs replumbing and a new boiler. (£5000)
New kitchen. (£2000)
New bathroom toilet. It currently has a shower in one room and loo in the other. If I knock the rooms into one I'll be able to get a bath in and make it look much nicer. (£1000)
Extensive redecoration throughout. Carpets or laminate flooring needed. (£1500)
Now for the big bit. To make the most of the property you need to make the downstairs one big open plan room. This gives the problem of knocking down the interior walls which I assume to be structural as they are brick and not stud. This then gives the bigger problem of moving the stairs. They currently run through the middle of the main structure and ideally need to be against one of the side walls. This is what other properties on the street which have been redeveloped have had.

So thats where I am at. I've added a few prices that I know of, feel free to suggest worst and best case scenarios for the roof and the stairs or tell me if any of those estimates are out.

This may be a bit of a biggie but I think that something like this is the only way I'm going to be able to do it.

[andywilson460]

I have done this a couple of times - doing up one at the moment.

I would thoroughly recommend it, as you will learn so much (as has been mentioned before). However don't enter into it lightly - You will need money for bills, council tax, any trades that you need to buy in and to live (fuel, insurance, mobile phone monthly costs etc), it's too easy to see this as a money making scheme rather than a risky business.

You learn how to do things properly and quickly. I have just taken the last week off work and re-wired the current house - the electrician I am working with on this build agreed my wiring plan (I drew up circuit diagrams, grades of wire, cable routes etc) and he is testing and checking the install throughout the 1st/2nd Fix. It took 1 day to pull up the floors and remove the old wires, 2.5 days to install the new wires and 1 day for switch pulls, TV distribution and backbox installation. I don't ever get involved with the consumer unit or big power - that's the job of a professional, especially with the Part P regs.

Plumbing/Central Heating can follow a similar theme, with Corgi engineers fitting the Boiler and connecting up the pipes/gas (do not mess with Gas ever). but you can work on the pipe runs and rad installation etc....

The biggest time saving is doing all the labouring/clearing/decorating and remedial work yourself. Roofing should be done by a professional, but is it really knackered? or can some more basic work be done to solve the problem? Also think about how you will get rid of the rubble/waste if it's in the town centre. Skips are always difficult in these places as everyone and their dog will put things in there, council sometimes help you out with this and will come and collect dumped settees etc, but I have found it better to buy a cheap estate car and use it to do tip runs, then clean it and sell it at the end of the project. The last Merc I used cost me £100 in depreciation and servicing over the year for the last house I did.

I think you can do a house that needs a rewire, central heating, new kitchen, new bathroom, re-decorate and some cheap carpets for about £11000 - but do you have that sort of money spare on top of your deposit for the house - as you will need the money to pay for all the bits and pieces and professionals.

Other unseen costs are tools - have you got the tools to do all the jobs. At the least you will need:

Decent Saws
Decent Screwdrivers
Cordless Drill
SDS Drill
Disc Cutter / angle grinder
Ladder
Steps
Paint Brushes/Rollers/Trays
Planes and Chisels
Spirit Level
Hammer
Spanners and Sockets
Adjustable Wrench
Mole Grip
Pliers (Needlenose and normal)
Wire Cutters
Stanley Knives
Hack Saw
Inspection Lights (for night working)
Wall paper steamer
Wall paper scrapper (used for loads of things)
Tape measure
Wire/Joist detector


I'm sure that there are loads more I have forgotten, but these are the basic tools.

Think about your programme of work - the order you need to do things in - this means you won't have professional trades people sitting there waiting for equipment, materials or other workers completing their work - their wages are coming out of your pocket, so plan it carefully and agree all rates upfront regardless of how long it takes. If they say the cost of the job will rise get them to requote and include all materials they will need in addition to before, reassess to see if it is still an option.

The last thing to not forget is the time commitment. It will take over your life. People I work with always ask me what it's like, and that it must be great fun, all I say is it's relentless. You just can't really take a week/weekend off. You should be working after work and all day at the weekend, you will be very tired and will miss all the weekends out with your friends/on the bike BUT it will end, and you can enjoy all those things when it's finished - but if it's a first time project I would allow 1 year to do it.

It's great fun, but bloody hard work. And make sure you don't pay the 2005 price. That is almost certainly the current value. If you have to do 15-20K worth of work you should be offer AT LEAST that under the current value. Use property Bee in Firefox to see how the price of the property has changed over the past year/months, also have a look at what Zoopla is suggesting the house should be priced at - try nethouseprices as well.

Always be a savvy buyer and do all your homework, you can always get the trades in before you put an offer in and get them to quote for it, that way you can use them as bargaining chips. I'd rather someone did that than try and gazunder me (has happened to me) as it leaves an awful taste in the mouth.

[andywilson460]

Just read your recent post. Think you should allow £2000 for your rewire if you are doing it yourself and getting someone to sign it off. If someone is doing it for you will be about £3000 inc. Vat

[speedplay]

I'll happily let you have a kitchen and joinery at cost price if you need it, just let me know.

Rob

[gralln9]

i am a carpenter
if i can answer any questions for you just pm me
will gladly offer any help i can