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New and after advice please


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Hello all!

I found this forum by random on Google and i have had a read through some sub-sections so far and there is some very helpful advice on here.

Like others on here i suppose you could say i've accidently landed into property.

Purchased my first home 3.5 years ago for 140k, completely run down but in a great area. Spent 55k on it over 3 years but then sadly last year lost my job so i had to sell the house on. I sold it earlier this year for £290k and after paying off the mortgage/loans spent on refurbing etc i'm sat on around 165k cash in the bank doing nothing currently.

My initial intentions after selling up were to move abroad and use my Bachelors to teach english (TEFL) in Japan but COVID19 has put paid to that. I have no idea when Japan will re-open their borders so i need to do something in the meantime as i've quit my job. I quit because of the constant night shifts and i've been doing night shifts for 6 years straight now and my health is suffering due to them so i said goodbye to that nonsense. Just turned 40 and my body is saying NO MORE.

So because of that i thought about flipping houses. However i am finding the current market conditions extremely competitive. There don't seem to be any real bargain refurbs around. The nearest city to me is Birmingham but it's crazy. House sales are regularly going above asking price. If a refurb opportunity presents itself then the asking is essentially the value of the house done up minus the refurb costs. There is no leeway for profit. I know they aren't neccessarily going to get asking and i wouldn't offer it but there seems no wiggle room.

I looked at auctions thinking they were more suited for cash buyers but the properties on there are going for even higher prices than estate agents!

So i suppose after my waffle ultimately i would like to ask if you were in my shoes what would you do? Try BTL? BRR?

One idea i had was to buy property further north where house prices are much cheaper and rent out but then i'd have hassle of driving far away for major issues. Someone said hire a managing company? Any help on this also much appreciated.

Also since googling around i've come across and grew to like the idea of becoming a property sourcer for investors? Anyone have info on this please? Do i need to complete a course and become accredited in it to offer services?

 

Thanks for reading and i appreciate any advice/feedback.

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Hi,

It is tricky and the current market conditions do not make it easy. Based on our experience, I would focus on the following rather than try your hand at multiple things

  • I would make a plan to understand what I want from my property journey - is it short term, long term?. Based on the duration I would decide if I want capital returns or do I want recurring amount on a monthly basis. That should help your decision for an investment option. Make a decision tree with all the parameters to make a decision if you unsure.
  • Know your strengths and stick with it. If you have made a good profit on refurb and based on the amount you have made, I would go with refurbishing a property.
  • If you are not able to source a property for yourself, it would be hard for you to source for others. Most investors would think similar to you
  • I am personally not a fan of joining courses when there is so much content on the internet, join  networking events, groups, free webinars, read the property books. All courses can teach some strategies, you still need to put in the graft to achieve it ( not saying you will not)

Hope it helps, do not want to prescribe too much.

Thanks,

Manju

https://luminaryproperties.co.uk/

 

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Hi,

Manju many thanks for your considered reply. I have replied to some of your comments in bold below.

  • I would make a plan to understand what I want from my property journey - is it short term, long term?. Based on the duration I would decide if I want capital returns or do I want recurring amount on a monthly basis. That should help your decision for an investment option. Make a decision tree with all the parameters to make a decision if you unsure.

Yes, this is something i definitely need to do but with COVID19 and Japan closing its borders it could change any minute. If you were to ask me what i would be doing now if COVID 19 was not around i think i would say that i would buy myself a modest house, cash around 150k and then let it out, missed payments wouldn't be an issue then so i'd have say £600 pm coming in after management costs etc as well as the gradual appreciation of the property

  • Know your strengths and stick with it. If you have made a good profit on refurb and based on the amount you have made, I would go with refurbishing a property.

    Totally agree with this. I feel that refurbs are my strength and through all the work i've had done on my own home i made good tradesmen contacts. Between 2 of these contacts, whom i trust fully, they can do everything on a property

 

  • If you are not able to source a property for yourself, it would be hard for you to source for others. Most investors would think similar to y

In regards to this point i feel it may be better if i add information i did not originally include. I can find many properties that are money makers but are out of my price range. I have aorund 165k cash in the bank and i can get another 20k in terms of a personal loan ) but the houses in good areas around me with a lot of refurbs are going for the 200-210k range in bad condition. With a 30k refurb they are then going for 290k once flipped but i'm about 20k short of entering this market which is frustrating.

I've looked at bridging loans and wondered if anyone knows if its possible to get a briding loan of say 50k to top me up and do the refurb BEFORE i own the property?  Can the briding loan stay 'pending' until  i completed on the house? Is it a quick process if i complete all paperwork for them on time. It would eat into my profits by about 5k i imagine but i'd be happy to bear that while i'm building my funds.

 

 

 

Property Guru - Thank you for oyur advice also!

 

You raised some good points and ideas that i hadn't thought of such as flyering the areas i am interested in. After what you netioned about void rents etc i along with other advice i feel that i should stick to flipping houses. At least for the next 12 months or so.

I always read the legal packs in full on auction properties and i'm quite lucky to have a few friends who are legal eagles so they are happy for me to forward those packs in and clear up any queries i have. I was speaking to a fellow newbie investor at a house vieiwng the other day though and he said he got burned for around 15k in extra fees that he did not pick up but were in the legal pack!! OUCH!! Lesson learned he said.
 

 

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