Right let’s go and find your first property project.
There’s a few things you should do before stepping out. Firstly, time to do some internet research. Take a look at rightmove and zoopla in the areas you’ve identified as profit potential. Take a look at the asking prices, identify the agents in the area, make notes. Take a look at Google maps to see distances from train stations, parks, schools this will help you identify who you would be selling to once you’ve completed your development. Be the expert!!
Find your area
There is no easy way to say this but you need to get out there. Get out of the house and find ‘Your’ streets. Look for the next up and coming area near you., look out for the skips, this is a sure sign that other developers are investing in these streets and it’s on the up.
The best advice that was given to me was to look for the worst property on the best street. When you see a tired property in a good location there is always room for improvement and profit. With this in mind try to avoid cul de sac’s where every house will have a ceiling price, instead look for streets where there is a variety of housing stock. If you’re looking for a flat look for ex council owned blocks, these will on all become privately owned so it’s a good time to look. Additionally have a look at where the new flat developments will be, buying a flat near these new developments could be rewarded by an increase in local amenities like bars and shops which add to an area’s value.
Get to know the agents
Everyone likes to hate estate agents. But you need to make them your best friend. Once you’ve identified your first development area you should list every agent who operates in there. Give them a call, introduce yourself, tell them what you’re trying to achieve, the sort of property you’re looking to buy, your financial position and your ideal vendor. The first few weeks they’ll send you through all sorts of stale property that’s overpriced and unworthy, but they are just doing their job, work with them, let them know you need a development and something that offers ‘Potential’, let them know that you will sell through them once you’ve completed your development – Keep them incentivised and stay friends you’ll need them.
I’ve worked with many of the same agents over a long period of time. They need developers like you and you’ll need them to get the best price for your projects so make time to pop in and talk to them, they’ll know what a market is doing. If the lights are on at 7pm you’ll know they’re busy but if the office is full you’ll know things are a bit tough.
Read the local rag
Many properties offered by banks (probate) have a legal requirement to advertise any offers publically before an offer can be accepted. These adverts are usually offered in the legal notices of a local paper. Check them weekly and don’t be afraid to counter offer.
Local papers can also be a good source for private ads, where plots and property can sometimes be found from private sellers in the classified sections.
Find the auctions
Auctions remain the favourite hangout for some investors, although in recent years the popularity of buying at an auction has increased as more and more people have tried to buy a bargain at auction. This has led to many developers seeking other ways to find their projects as some auction properties are seen to go well above their private treaty price.
That said if you do your homework and understand your costs you’ll know what you limit is. Just make sure you stick to it. Every time you bid above your limit is profit that you are losing. Someone else might be willing to work for free but you are not. You need to make clear profit from every development you undertake.
You can find a list of auctioneers here.