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Am I Missing Something?

R

RyanD

New Member
Hi all. My partner and I purchased a house in 2018 and renovated it throughoht that year. We purchased it for £45000, took a loan of £10000 for renovations and has been valued at £75000 as of Dec 2019. To me that is a pretty big amount, coming from a poor background and living in the South Wales valleys.

This has given me the idea of getting into property development but I'm sure there is something I'm missing as it felt too easy to make a £25k profit out of a project where most of the time I had no idea what I was doing. I understand there are fees to pay when selling and we may not get the full £75k it was valued at. But making any sort of profit out of this would be quite an achievement. I feel like the selling process is where it will all fall apart either through fees I'm unaware of or just being unable to find a buyer.

We have no plans to sell this property as we are living there but we do have the funds to purchase and renovate another property in a similar condition without taking out a loan this time. Plus I am much more confident in taking on more of the work myself, eg fitting kitchens, laying flooring, plastering, etc.

So I'm looking for advice on whether I am missing something very important and costly or I could actually make a profit out of this. Thanks for reading this long post and thanks for any replies. Sorry if I posted in the wrong place.
Cheers
 
NewOrleansHomeBuyer

NewOrleansHomeBuyer

New Orleans Property Investor
Congratulations on your first deal being such a success. You can make a successful business out of this just don't let one success get to your head. The market has been growing very well which allows you to make a bunch of mistakes and still do well. It is likely the market will take a turn downwards so this means market appreciation won't cover up your mistakes. I think you should keep going and build a business around this but just stay humble and cautious and know that it is as easy to lose £25k as is to make it.
 
T

totallyproperty

Administrator
Staff member
Hi all. My partner and I purchased a house in 2018 and renovated it throughoht that year. We purchased it for £45000, took a loan of £10000 for renovations and has been valued at £75000 as of Dec 2019. To me that is a pretty big amount, coming from a poor background and living in the South Wales valleys.

This has given me the idea of getting into property development but I'm sure there is something I'm missing as it felt too easy to make a £25k profit out of a project where most of the time I had no idea what I was doing. I understand there are fees to pay when selling and we may not get the full £75k it was valued at. But making any sort of profit out of this would be quite an achievement. I feel like the selling process is where it will all fall apart either through fees I'm unaware of or just being unable to find a buyer.

We have no plans to sell this property as we are living there but we do have the funds to purchase and renovate another property in a similar condition without taking out a loan this time. Plus I am much more confident in taking on more of the work myself, eg fitting kitchens, laying flooring, plastering, etc.

So I'm looking for advice on whether I am missing something very important and costly or I could actually make a profit out of this. Thanks for reading this long post and thanks for any replies. Sorry if I posted in the wrong place.
Cheers
Welcome to the forum! And congrats on your first successful property development :)

I think if you have the funds to buy and renovate another property (without any loan) then you are in a really strong position. Yes there is uncertainty with the market at the moment but this will present opportunities for those in a good financial position. I would recommend watching Property Forum's free webinar this thursday (23rd April at 12 midday) as it's a property development special! It focuses on how to succeed with conversations, land development and auction property during the Coronavirus crisis. I think you would find it really helpful. It's being hosted by Property Forum's CEO Nicholas Wallwork, who has had 20+ years as a successful property developer, alongside John Howards (who is a renowned developer with over 40 years in the industry).

If you register now you can submit your questions (which Nicholas and John will answer live on the show). REGISTER HERE.

Best wishes,

Kelly
 
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