Category Archives: Finding property

Can you make money on Repossessed Property?

Property DeveloperOK, repossessions come with bad karma, but I’ve heard plenty of stories of developers making money out of buying repossessed property. The temptation of buying a repo is led by the thought of a bank seeking a quick sale and a property that is tired and requiring modernisation.

The truth is there are some repo properties that fall into this category and some developers are lucky enough to buy at below market value. But for the vast majority of repo’s (and certainly in my expereince) it’s hard to find a bargain with a repo. Here’s why.

Once a property become vaccant it is normaly ‘given’ to a mangement company who has the job of looking after the property and the overall responsibily of getting the best price for the bank (thier client). The management compnay will secure the property and instruct an estate agent to act on their behalf to sell the property. All well and good.

So, the agent rings around their list of developers and on day 2 the property recieves 10 viewings. And on day 3 there is an offer; it’s reasonable enough and the buyers in a good position so the agent puts the offer forward to the management company. Then, surprise, surprise, the offer is rejected.

Here’s what’s going on. The management has the responsibily for getting the highest price possible for the property. This is fair enough. What people don’t know is the management compnay (who you’ll never come into contact with) are paid a retainer to management property. This is normally done on a weekly or monthly basis. So tell me, why would any management company want to sell a property quickly, even if it was a great offer?

The problem with repro buyis is just this. Management companies don’t always, in my opinion, act in the interests of their clients but the interestes of themselves.

The other problem with repro buying is that they tend to be very heavily marketed. Even when an offer is made the agent has to publicly advertise the offer before accepting it. This makes it easy for other interested buyer to counter offer leaving both agent and buyers with a potential line of guzzumpt offers as well as line of peed off buyers.

Whilst I’ve never been able to buy a repro at a price that was right for me, I do know people that have. The trick, they say, is to work with the estate agent. Most expereinced agents know the situation with management companies, so they’re reluctant to put offers forward too early. By working with an agent they will save their time and expense and you get to put in the offer at the right time. A time when the management company is expecting the property to sell.

Of course, many repos go straight to auction which may be a better sales route for both buyer and the bank. So if you still think you can get a bargain from a repro try the auctions first. You’ll avoid the management agents and the counter offers and it could be a far better route.

Finally, and it goes without saying really, repos come with a history. An evicted family who lost their family home or just someone who bit off more than they could chew. Whilst you might see your purchase as business transaction any new neighbours might not. Any repro purchanse needs to be handled with sensitivity and diplomancy from the outset.

 

 

Property developer Style Negotiation

Property DeveloperI’m often writing about how being a property developer is not a “Get rich quick” route, but in this post I’d like to point out how some good negociation techniques can help deliver you a life changing porperty deal that could set you up for life.

Let me explain. 5 years ago I was developing flats in South West London. I was given the opportunity to by a detached 3 bed house. It was a munter. It had been on the market for over 12 months and every agent in the area couldn’t shift it. I had just sold a flat and was looking for another to develop. The house had caught my eye in the local paper some 10 months ago so I was surprised to see it again online. I called the agent to understand what was going on. They told me that there had been a number of buyer fall through and the seller was now desperate to move on. The asking price was well in excess of what I could afford, but the economic climate was against everyone in 2008, so I thought I’d put in a really low offer to see what reaction I got.

I thought the agent would call me back with an out right “No” but to my surprise he tried to negotiate with me. Now here’s my first tip in the art of negotiation. When you have nothing to loose (i.e. nothing to sell) you are in the winning position and you have to use it. Stand your ground whenever an agent tries to necotiate the price up. Remember there is always more development opportunities around the corner, don’t get blinded by this one opportunity, their will be others.

Back to my story. When I refused to move from my original offer price (30% below the asking) I was expecting things to go silent. 2 days later I got a call…

“Are you sitting down” said the agent. “my client would like to accept your offer”.

I had managed to buy a 3 bed detached house for the price of the 2 bed flat. This was a life changing deal and it was all because I knew the vendors position and how long the property had been on the market. Proof that sometimes you need to stand your ground when you know you are in a winning position. Proof that you should always make a note of propoerty that struggle to sell and deliver highly motivated sellers. Proof that you can make life changing deals even when the property market is in the toilet.

Most of the time being a property developer is pretty hard work. Finding development, raising finance, construction, and then the same again but every now and again you get given (by chance mostly) a life changing opportunity that can truely change things around.

London Property Developers

London Property DeveloperLondon stands alone as a property market in the UK. A transient Place where people from all over the world come to work, study and live. This gives the London Property Market a unique status as one of the world most expensive places to live. An average house prices is nearly £500k and a 1 bed flat is close to £200k, compare that to the national average house price of £240k and you can see why London can be an expensive place to live.

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Find Property for Development

Find Property DevelopmentLooking for property for development? Dont know where to start? New to property development? You’ve probably been tempted by a few companies promissing to offer a list of reprossession and pre auction properties for a ‘small fee’ from a Google search. I know, I was in the same boat. Some years ago I didn’t know where to start. The estate agents all seemed to want so much and I understood it was their job to get the best price they possibly could for the properties they wanted to sell.

I needed a way of buying property cheap.
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Four Reasons why you should become a Property Developer

Property DeveloperBecome a property developer and your life instantly fills up with stress and strain. So why do so many people take the plunge and become a property developer? Here I try to list the four main reasons why developing property can be the best move you can make. But be warned property development isn’t for the fait hearted. Borrowing large sums of capital can be risky and in some cases people can become bankrupt owing money back for the rest of their life. But if you understand the risks and you’re prepared to see hardship and the stresses and strains that being a property developer can bring you  an amazing lifestyle, if you’re prepared to knuckle down and deliver.
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How to make money from property

Property DevelopmentSo here is the big question, “how to make money from property”!

I’m not going to gloss over this or give you some easy to follow formula that will guarantee unbelievable wealth. Every Property developer I’ve ever met has had more than their share of stress. But, making money from property is possible if you know what to look for and how to manage a project. I’ve been developing for over 20 years now and I’ve made more than my fair share of mistakes. I’ve brought too high and I’ve sold too low. I’ve spent too much and I’ve also not spent enough! Over those 20 years I’ve always learn from my mistakes. So whilst this formular might not work for everyone, if I was to go back to 1993 and give myself some advice, this would be it.

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Raising finance for your Development Project

Property Development FinanceBeing a property developer carries considerable risk that normal employees know nothing about. The greatest of these risks is the need to borrow in order to finance your project. If you are uncomfortable with borrowing large amounts then property development probably isn’t for you.

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Is property development right for me?

Property DevelopmentProperty development for me was never just about making money. In my 20′s I commuted for 2 hours a day, I worked doing something I didn’t belive in, working for someone I hated. I was renting and most of my income went on rent, commuting and post work socialise. I had very little savings and the future worried me a bit.

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