Our challenge: to make £100,000 in property.
Is it easy? Not if you are starting out. But it is
simple to follow a proven system that has succeeded
before you. Will it require some work? Yes. May you
make some mistakes along the way? Sure. But with a
little dedication, and armed with the right knowledge
it is very possible as this article demonstrates.
So...
Strategy
1: Buy Refurb Flip
This is a low risk, time proven strategy that allows
you to force the appreciation of the property through
refurbishment and realise the profit by flipping the
property [buying a selling – the most basic
for of property transaction] on for a profit. You’ll
need to find a property that’s run down and
needs work, with available ‘uplift spread’
on the street, and the bigger the discount, the more
the profit.
You
might not want to sell a high yielding, cashflowing
property, so find a deal that you can buy UMV [Under
Market Value] that you may have passed on before.
We bought a property for £92,500 with comps
[similar 3-bedders] on the market in excess of £145,000,
Even if you don’t achieve that figure, which
doesn’t usually happen, there’s still
room for profit. After all buying costs, selling costs
and refurb fees, we walked away with a nice net profit
after selling the property for £135,000.00.
Timescale
– 4 months: Net Profit - £24,0005.93
Geoff
Whittaker, one of our Property VIP Millionaires Club
Members, is up at almost £60,000 cash from his
first 3 deals, in less than 9 months, so could make
it...!
Watch
his video here
Strategy
2: Assisted Sale [AS]
This strategy is smart. You buy or take control of
a property [exchange on it with an ‘assignable’
contract or take an ‘option’ to buy it],
then pass it on to the investor/your customer and
take your profit from the equity, not fees. Let’s
say you source at 30% UMV: you can pass this on to
another investor or, more easily, a FTB [First Time
Buyer] at 10% UMV. They will jump all over that because
they do not expect professional discounts like you
will be able to get, and you can make a larger profit:
20% of £100K.
Timescale
-1-2months: Net Profit - £16,0000.
Total
at this stage...£40,005.93
Strategy
3: Options to Purchase
Using
an option to purchase instead of buying allows you
flexibility, much lower costs than a buy and sell,
and avoids you having to wait 6 months to remortgage.
The
seller is pretty distressed and owes £70k on
his mortgage and in the current run down condition
his property is probably worth about £130,000.
The seller is 10 days away from being repossessed
and wants’ a quick sale of £75k. Similar
properties in good condition could sell for £150k.
We
will get the seller to sign an option which includes
a lockout agreement giving us the right to purchase
the property for £70k, and locking other buyers
out for a pre determined timeframe..We will probably
spend around £9,000 adding value to bring the
property up to scratch to other proven comparables
and accept an offer of £143,000for a quick sale.
In
the mean time, we will liaise with the lender and
pay a holding sum to our solicitors to show the lenders
we are serious and we have the funds to pay off their
£4,000 arrears, which holds off repossession.
Because this is a great deal, we will give a further
£10,000 back to the seller as an equity share
and everyone will be happy with the outcome, and of
course it is a great feeling helping someone in a
less fortunate position.
Remember it’s not all about making ‘a
wad of cash’ but being ethical and stabilising
what is a bad situation for the seller.
Timescale
- 1-2 months: Net profit - £41,000.
