Join Paul in an all new episode, as he shares how to repeatedly make money doing flips!
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The Show Transcript:
Hi and welcome to the property side hustle podcast
Today, we're taking a long overdue look at the exciting world of property flipping – turning tired, neglected houses into stunning homes and substantial profits.
In today’s episode you’re going to learn the ins and outs of this fast-paced strategy, from finding the right deal to managing a refurb and then finally selling and handing over the keys to a happy buyer and banking those profits.
Property flipping, at its very core, is about buying a property below market value, renovating it quickly and efficiently, and then selling it for a profit.
It's not just about slapping on a coat of paint; it's a strategic process that requires careful planning, market knowledge, and a touch of creativity here and there. So, let's break down the key steps to flipping success.
First up we have step 1: The Hunt – Finding Your First Property Flip
The first, and arguably most crucial, step is finding the right property. You're looking for a diamond in the rough – a property with potential, but one that's currently undervalued. Think about properties in need of cosmetic updates, outdated kitchens and bathrooms, or even minor structural repairs. These are the types of properties where you can add significant value.
Remember the whole point is you have to see a property you can add value and force that appreciation in price by way of a refurb.
Where do you find these hidden gems? Auctions are a great place to start, offering the potential for below-market-value purchases. Keep an eye out for probate sales, where properties are sold quickly due to inheritance. Networking with estate agents and attending property meetups can also give you access to pre-market deals.
Repossession listings can be a great source of deals, and you can access a list of repossessed property on a website called repolist.co.uk (you do have to pay, but it’s worth it if you’re looking to buy a potential flip) and also don’t forget your good old online property portals like Rightmove and Zoopla are also valuable resources. Remember, speed is often key in this market, so be prepared to act quickly when you find a promising lead as you might be up against other investors also looking at their next flip.
Step 2: The Numbers Game – Crunching the Costs
Host: Before you even think about making an offer, you need to crunch the numbers. This is where many aspiring flippers fall down. Don't just focus on the potential sale price; meticulously calculate all your costs. This includes the purchase price, of course, but also legal fees, stamp duty, renovation costs (be realistic!), also any holding costs (like mortgage payments and council tax during the renovation), and your selling costs (estate agent fees, etc.).
Get multiple quotes from contractors for the renovation work. Don't just go for the cheapest option; prioritise quality and reliability. Factor in a contingency fund for unexpected expenses – because, in flipping, there are always unexpected expenses! And finally, be realistic about your profit margin. Don't get greedy. A healthy profit is good, but overpricing can lead to a property sitting on the market for too long, eating into your profits.
There’s market value and then there’s priced to sell. So, think about those holding costs if you’re going to take 6 months to sell the damn thing.
You’d be surprised how many people forget this end of the flipping process.
Step 3: The Renovation – Transforming the Space
You've secured the property, the numbers stack up, and now it's time to get your hands dirty – or, more likely, oversee the contractors. This is where your project management skills come into play. Create a detailed renovation plan, set a timeline, and stick to it as closely as possible.
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