I’m often asked what I do. The easiest way to answer this is to provide you with an insight into my day.
This is a pretty usual day for me I wake up fairly early and get to a site I’ve been working on for the last few weeks. I’m coverting a detached 1960′s house to include a loft space. Under new planning laws it’s easy to convert loft’s under the new ‘permitted development laws’ that allow any devleopment to take place as long as it’s under the maximum of 30% of the overall property foot print but I am not a planning expert so always see your local authority planners to discuss your ideas first. They’ll be able to tell you if you need to nmake a plannign application or not.
The loft is nearing completion and has all the structural and first fix plumbing and electrical cables in place. So we’re gearing up for the insallation and plasterboard. I have a number of jobs on site today;
- Finalise the order for the windows – unfortunately I couldn’t do this until now as we didn’t now the exact frame size requirements.
- Place an order for plasterboard – I have an account with Travis Perkins who have a local branch, I normally overorder my requirements as they can always go back. to be short of materials is a no-no as this will slow the tradesmen down who I’m paying for.
- Building inspector visit – I have an inspection today from the local building inspector. He’s a good guy and points out mistakes before they happen rather than the other way round. This makes life on site alot easier. He’ll be working of the orginial plans to ensure we comply with the engineers drawings and the work is carried out to a good enough standard.
After the Building inspector’s visit I have a flat to go and see. It’s a dump.
Uninhabitable so it’ll be hard to raise finance off it. So if I went for it I’d need to raise finance on another property or seek a second mortgage. Whilst this seems risky it is the life of a developer. I noticed the the lease on the flat was below 70 years, whilst this would not normally be an issue the cost of financing and the legal costs of extending the lease does not put this opportunity in a good light.
I do some quick sums in the car over a sandwhich (it’s all glamour in property development) then it’s back to the site to make sure the trades are happy. I pay my main builder on ‘staged’ payment terms and all the materials go through me. So I just pay for labour. This means I can keep track of the original estimated hours and what they’re acutally doing. I pay specialist trades like electrician, plumber and platerer on a fixed price basis. This way they invoive me once I can see value in the property.
I meet a friend who is carrying out a development nearby who has has some issues with a plumber. I see that the plumber has left the job without fixing some of the connections making it uncertifyable in the eyes of the building inspector. So the developer will have to get someone else (who’s qualified) to come and finish the job off. It’s a nightmare when trades go wrong. I don;t normally loose sleep over financing but I do loose sleep over trades leaving site without delivering, it always ends in tears and a small claims court case for a non payment of bill. These sort events just eat away at your day.
It’s 5 pm and I head back to site. I have a small office there with internet connection so I carry out some research on the flat I saw earlier than day. I check out the recently sold prices on the land registry can see that prices went on a bit of a climb during the last 4 months. I have a feeling they’re going to slow down when I look at comparable properties on the market. It’s really hard to do this work on site as their are so many distractions, but it’s important to focus.
I add up the cost of refinancing another property, the cost of extenting the lease from the freeholder and the cost of development and marketing and it looks really tight, I would have to offer 30% less than the current asking price to see a £15k profit (which is my minimum allowance). I call the agent and explain, It’s new to the market so I’m not hopeful. I also know that the vendor is a professional landlord with a large portfolio so he can aford to wait for a better offer. I put a note in my diary to check back with the agent in 2 weeks to see if he’s had beter luck else where. We’ll see, sometime these opportunities come back in.
It’s 6pm and too dark to work so the builders pack up and secure the property. I head home for chilie con carne and a glass of red.