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Hello Property Guru
I'm an experienced landlord and I'm interested in starting out in property flipping, but not sure how to start the journey. I hope people can share their experiences with me. Here I have some questions in mind:
1. How did you find your first flipping project? I am sure by just browsing rightmove or zoopla won't give any great help. Or should I use sourcing agent?
2. Once I have decided the location, should I use a local builder? if so, how can I find them given I am not living in the area? as I don't think the google approach is wise.
3. I know this is a very broad question but can you please recommend me any good locations for starting out flipping (at least can reduce my search area)? I live in London and I don't mind to travel to somewhere remote
4. Apart from mortgage broker, solicitor and builder, what other professions do I need when starting out a flipping project?
Thanks in advance.
how much can you put into a property purchase+refurb+fees
what return are you loking for
My first rule of flipping is not to call it flipping - it's buy/refurbish/sell. Apologies for being pedantic, but "flipping" is used by the "wealth creation" industry to make is sound as simple as possible, whereas its a serious business. In the current market conditions with the 3% stamp duty, the margins are slim. I know a friend who was doing several projects a month, but he's now moved to "buy and hold" as the margins became too slim for his liking.Buy to sell is mainly a cash/bridging activity as lenders do not like BTL mortgages being used for anything other than buying a property, renting it out, and holding it long term. Bridging is an expensive form of lending, which is why you must complete your project in a timely manner, otherwise the monthly bridging loan interest will start to eat into your profit margin.If you use BTL mortgages for this activity, you may find that you get blacklisted by the lenders by being added to the infamous "Hunter" List and then you would be unable to access further finance.Assuming you are a cash buyer, here are my answers to your questions:1. See - Top 10 Property Tribes resources to learn how to find property deals2. Use a local builder and put them on a fixed rate budget/contract. View some of their previous projects before appointing them to make sure they work to a high standard. Perhaps offer them a percentage of the profit to incentivise them to keep to schedule and feel like they are "invested" in what you are doing? Be clear on your timescales from day one and make sure the builder sticks to them.See - Top 12 Property Tribes refurbishment resources for developers3. How long is a piece of string? Start searching on your home postcode on rightmove and extend the range outwards until properties start to appear that you can afford.4. Project Manager, cleaners, landscape gardeners, estate agent.You should also have a "Plan B" if you cannot sell your project for a profit as you will have to redeem the bridging loan some way or another.
Vanessa Warwick Landlord and Co-Founder of PropertyTribes.com **If you have got value from Property Tribes, find out how you can support it in remaining a free to use community resource**