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]

Originally Posted by 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?

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.

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.

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.

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.

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]

Originally Posted by squirrel_hunter

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]

Originally Posted by 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.

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.