Renovating property to sell on

antiskeptic

beauf wrote: »

I think on a property you get cheap, its going to need at a minimum windows, doors, kitchen and bathrooms. Then you might have heating, boiler, roof, plumbing and or electrical issues. The more you spend the less profit you get back. So its a balancing act. It will be dictated by what the best houses in the area can command. Because thats the best you will get back out of it.

I've done the range: from total refurb and extend to quick lick. Certainly the latter is where I'd focus now, my last not needing windows, doors, rewiring, roofing. I redoored the kitchen, not even changing to countertop or sink. I used as much as I could of what was there, rolling with it but tranforming it aesthetically such that fuddy duddy became sleek and mod. Far cheaper and quicker to paint slender framed brown alu double glazed in an attractive cream... than rip out and replace with cheap, thick framed plastic. Yeah, you lose a bit on BER but no matter once you can achieve BER target elsewhere


If your model is based on being bang on trend then there is little to do but rip out and replace everything. But you can often refashion into something that is tasty whilst eschewing trend. Its quicker and a darn sight cheaper!

Prevention is better than cure .. so viewing critically with an eye on minimum intervention is a good place to start. You don't (or at least I don't) want to pass off rot as fresh and new and I aim to give someone a house without buried trouble. But at the end of the day people go for packaging rather than contents so avail of that fact.

brisan

ted1 wrote: »

i wouldn't agree with you.
Insulation- depends on scale, external wrap will never add more than it cost
heat pumps - no thanks, especially if its a retro fit.
smart wiring- most devices are wireless these days.

A good roof, smooth skimmed walls. good skirting,. nice sockets and switches, good windows, possible sky lights to lighten up dark rooms.

good use of space, good built in wardrobes

Kerb appeal ,kitchens and bathrooms sell houses
After that once its clean and bright and the new owners can put their own stamp on it
Windows ,heating and good electrics are a given on nearly all flips

antiskeptic

beauf wrote: »

I think in the current market, you could build up a decent business doing home improvements, and extensions, big demand for that. Wait for COVID and Brexit to pass by. Once the market has stabilized, then move on to bigger things.

Trouble is, building extensions is plain piece rate work whereas the whole point of flipping is to make very good money for far less input than is involved in building!

Flipping involves taking a punt and having large amounts of money tied into your investment. That has to give a return. But yeah, there are times not to going flipping and I'd be shy of it at the moment. Too uncertain..

antiskeptic

brisan wrote: »

Kerb appeal ,kitchens and bathrooms sell houses
After that once its clean and bright and the new owners can put their own stamp on it
Windows ,heating and good electrics are a given on nearly all flips

That's one route - but it's a mass market route. Offering the same product that new builds offer. And competing with new builds in the process

There are many folk who hate the idea of living in a mass market box with all the same stuff you see everywhere. Yes, a nice kitchen - but not necessarily the same thing you see in the Panelling Centre.

But there's very little out there that isn't bog standard / see it everyday. I mean, how many flips/new builds have you seen staged with the same blingy furniture and fittings?

There's an alternative to a magnolia blank canvas (or the current version: light grey) which allows the owner to put their own stamp on things. And thats to put your stamp on things, recognizing that most house owners don't have the ability to put the stamp they like onto things - they don't have the aesthetic wherewithal to do that.

And so, you do it for them - giving them plug and play lifestyle that is unique rather than lumber them with the task of figuring out how to get a magazine look. The same magazine look that they see all the time.

Its takes aesthetic ability .. but figuring out an aesthetically pleasing and individual look is a darn sight cheaper than ripping out all and sundry and replacing it with the latest gear.

This isn't a criticism of flipping that way - whatever makes money is good. I'm just suggesting that there is a market outside the standard look. And since its an underserved market, sheer scarcity of product on the market adds to price obtained.

I sold a 2 bed for more than 3 and even 4 beds in comparable societal levels in my area. Top dollar simply because there was nothing like around nor would there likely be.

Point is: if going flipping, first consider your market and your product. You don't necessarily have to plough the mainline furrow.

antiskeptic

beauf wrote: »

I think on a property you get cheap, its going to need at a minimum windows, doors, kitchen and bathrooms. Then you might have heating, boiler, roof, plumbing and or electrical issues. The more you spend the less profit you get back. So its a balancing act. It will be dictated by what the best houses in the area can command. Because thats the best you will get back out of it.

True if you are say, taking an estate house which can be directly.compared on every metric. But if you get something a bit one off and there is nothing to compare it to then you are freed from at least that monkey on your back.

There are, as I say, plenty of folk who don't want standard issue. And they are very poorly served.

That's a market to be tapped into.

brisan

antiskeptic wrote: »

That's one route - but it's a mass market route. Offering the same product that new builds offer. And competing with new builds in the process

There are many folk who hate the idea of living in a mass market box with all the same stuff you see everywhere. Yes, a nice kitchen - but not necessarily the same thing you see in the Panelling Centre.

But there's very little out there that isn't bog standard / see it everyday. I mean, how many flips/new builds have you seen staged with the same blingy furniture and fittings?

There's an alternative to a magnolia blank canvas (or the current version: light grey) which allows the owner to put their own stamp on things. And thats to put your stamp on things, recognizing that most house owners don't have the ability to put the stamp they like onto things - they don't have the aesthetic wherewithal to do that.

And so, you do it for them - giving them plug and play lifestyle that is unique rather than lumber them with the task of figuring out how to get a magazine look. The same magazine look that they see all the time.

Its takes aesthetic ability .. but figuring out an aesthetically pleasing and individual look is a darn sight cheaper than ripping out all and sundry and replacing it with the latest gear.

This isn't a criticism of flipping that way - whatever makes money is good. I'm just suggesting that there is a market outside the standard look. And since its an underserved market, sheer scarcity of product on the market adds to price obtained.

I sold a 2 bed for more than 3 and even 4 beds in comparable societal levels in my area. Top dollar simply because there was nothing like around nor would there likely be.

Point is: if going flipping, first consider your market and your product. You don't necessarily have to plough the mainline furrow.

We have flipped over 30 properties
The fact that we are sparks ,plumber ,carpenter-cabinet maker helps
All ex corporation houses with lots to do
Lino on the floor ,carpet in the bathroom .flowery wallpaper everywhere is music to our ears.
We have had interest in a lot of them from couples raised in the area before they were even finished .
WE knew the market and knew what they wanted
They had not got the money to do it themselves so were prepared to pay through a mortgage to get it done .
Knowing the market and who the buyers are is important.
A lot of people will not buy in certain council estates .
Couples born and raised in them will as they are near to friends ,family ,work etc

ELM327

Interestingly the tax rate on rental income via a company is also not 12.5 corporation tax, rather 40%!

https://liamburnsandco.ie/buy-to-let-taxation/

Tax on rental Profit is Corporation Tax at 25%…plus 15% on undistributed profits (i.e. if not drawn as salary)

antiskeptic

brisan wrote: »

We have flipped over 30 properties
The fact that we are sparks ,plumber ,carpenter-cabinet maker helps
All ex corporation houses with lots to do
Lino on the floor ,carpet in the bathroom .flowery wallpaper everywhere is music to our ears.
We have had interest in a lot of them from couples raised in the area before they were even finished .
WE knew the market and knew what they wanted
They had not got the money to do it themselves so were prepared to pay through a mortgage to get it done .
Knowing the market and who the buyers are is important.
A lot of people will not buy in certain council estates .
Couples born and raised in them will as they are near to friends ,family ,work etc

You've obviously got a successful working model. And more power to you - every builder I've ever employed hates the work (the piece rate element of it) and would love to flip. They just haven't got the starting capital.

I don't mean it as a willy waving piece but by way of example. House purchase cost €245k. All input (incl legal, sell, cert costs) was €45k. Turnaround in three months and a quick sale at €385K.

This quick-lick model (and you'll appreciate how little lick that € input buys) is what I ended up with, having previously involved myself in windows, rewire, replumbing, heating system, BER B territory.

I'd gotten those kind of PBT's before, but for much more effort and time. There's a lot to be said for the less effort model!

Call it the style over substance model - the former costing far less than the latter!

Point is, for someone entering the game, is to consider your model very carefully before putting your toe in. It took a lot of time for me to realise there are various ways - and some are less painful and risky than others.

brisan

antiskeptic wrote: »

You've obviously got a successful working model. And more power to you - every builder I've ever employed hates the work (the piece rate element of it) and would love to flip. They just haven't got the starting capital.

I don't mean it as a willy waving piece but by way of example. House purchase cost €245k. All input (incl legal, sell, cert costs) was €45k. Turnaround in three months and a quick sale at €385K.

This quick-lick model (and you'll appreciate how little lick that € input buys) is what I ended up with, having previously involved myself in windows, rewire, replumbing, heating system, BER B territory.

I'd gotten those kind of PBT's before, but for much more effort and time. There's a lot to be said for the less effort model!

Point is, for someone entering the game, is to consider your model very carefully before putting your toe in. It took a lot of time for me to realise there are various ways - and some are less painful and risky than others.

The bit in bold is the main point
Experience teaches you a lot on what will work and what wont
We rarely if ever extended a property, as you say no profit in it ,unless its to put a bathroom upstairs which meant extending downstairs

ELM327

It could be argued that REIT investment is a much easier way to invest in property.

ELM327

brisan wrote: »

[/B]
The bit in bold is the main point
Experience teaches you a lot on what will work and what wont
We rarely if ever extended a property, as you say no profit in it ,unless its to put a bathroom upstairs which meant extending downstairs

+1


The main money is in buying something from probate with 1970's interior and redoing everything in a modern clear look. Perhaps having to do some plastering and flooring too, along with check of the wiring.


Any more and you're into big money and less profit. Very easy to be margin negative very quickly on a property build.

antiskeptic

brisan wrote: »

[/B]
The bit in bold is the main point
Experience teaches you a lot on what will work and what wont
We rarely if ever extended a property, as you say no profit in it ,unless its to put a bathroom upstairs which meant extending downstairs

Levelling a just poured floor slab in the freezing cold and pissing rain by the light of two mobile phones put paid to my extension days.

Painful experience teaches you..

beauf

That kinda flip would be impressive even in Celtic Tiger. I've seen no houses recently I could buy for 140k under the going rate and add 140k of value to it for 45k and in 3 months, for what is essentially is a cosmetic quick lick. Any houses I've looked at from 80s~00s really need 30~40k min to make them habitable and attractive to a buyer and arguably 100k+ to make them compete with new builds in the same area.

I have seen houses in hindsight I could have flipped for 20~40k for a quick lick, but thats because of supply shortages and prices rising, and unexpected sales for over asking price and even bidding wars on the right property. I would not be adding any value. It would have been high risk as well as when COVID hit we could have had a complete collapse. Could have gone either way this year. Looking less risky for next year.

I think its interesting how in one thread a some predict price collapse of both house prices and rents. But in another the exact opposite in terms of flipping.

The OP asked about flipping. He was pretty much warned off it. Thread now seemed to have turned 180 to say its entirely viable.

antiskeptic

ELM327 wrote: »

+1


The main money is in buying something from probate with 1970's interior and redoing everything in a modern clear look. Perhaps having to do some plastering and flooring too, along with check of the wiring.


Any more and you're into big money and less profit. Very easy to be margin negative very quickly on a property build.

If not margin negative then certainly less than expected margin. I'd imagine there are lots of disillusioned one time flippers out there.

beauf

That said its an interesting thread. Regardless.

listermint

wowy wrote: »

Speak to an accountant. The fact that you're deliberately purchasing the house just to renovate it and sell it on is possibly running a bit close to the wind for CGT; the gain may be taxed as income (so subject to income tax, prsi and USC instead). This is especially relevant if you do it a few times.

On the proposal - imo you'd want to be getting the house at a very good price, or else be confident that the works you do yourself (at nominal nil cost) will add enough value to make it worthwhile. Realistically the best value-adds I see are things like insulation, windows, heat pumps, smart wiring, etc, but they all need to be certified or supplied/installed by 3rd parties, so how much serious value-adding work is there that you can do yourself?

insulation, windows and heat pumps need to be certified ?

antiskeptic

beauf wrote: »

That kinda flip would be impressive even in Celtic Tiger. I've seen no houses recently I could buy for 140k under the going rate and add 140k of value to it for 45k and in 3 months, for what is essentially is a cosmetic quick lick. Any houses I've looked at from 80s~00s really need 30~40k min to make them habitable and attractive to a buyer and arguably 100k+ to make them compete with new builds in the same area.

Which is why I don't compete with new builds. New builds are a commodity item and if you compete directly you have to approach a flip on commodity terms.

There are lots of downsides to new builda: identikit living, usually high density, usually crap layouts (2 beds with ensuites, a visitors bathroom landings and halls!) tonnes of kids about the place, token greenery?

Offer a distinctly different product. If there are people out there who hate the bog standard Irish product (and there are) and if they can afford to pay for it (some who hate bog standard can) then you detach yourself from commodity pricing.

I have seen houses in hindsight I could have flipped for 20~40k for a quick lick, but thats because of supply shortages and prices rising, and unexpected sales for over asking price and even bidding wars on the right property. I would not be adding any value.

My first accidental flip was in 2013, the absolute bottom of the Tiger market and the start of the new. €120K PBT on a sale price of €315k. Partly due to a bidding war. Bidding war in 2013..

That experience led me to conclude that I need to be able to 'see' €100k out before I start. Sometimes its been more, sometimes less - there is variability as you say. I couldn't start out thinking there was 50k in it only to see an overrun here or a bit of market shift there knocking that in half. Too gutting.

For me, the core lies in the right product - something which is rare and for which there is a demand. That way there's detachment from commodity pricing. Doesn't mean you can name your price but it does allow you to be sticky, knowing there isn't much place for the punter to go.

It remains to be seem whether this latest quick lick approach will always be successful - it produces much the same.kind of product. But more than that I've no interest in - big input is too much hard work!

It would have been high risk as well as when COVID hit we could have had a complete collapse. Could have gone either way this year. Looking less risky for next year.

I wouldn't share your view. I don't think we know what impact Covid will bring. Heck, Brexit dampened things down end last year and that was a local issue...which hasn't actually gone away yet. We're well overdue a recession outside of all that. Me, I'll wait and see.

And it's not as if €100k out houses come up every day of the week around where I live anyway.

I think its interesting how in one thread a some predict price collapse of both house prices and rents. But in another the exact opposite in terms of flipping.

The OP asked about flipping. He was pretty much warned off it. Thread now seemed to have turned 180 to say its entirely viable.

Viable if you have experience ( and I'm steering clear at the moment). Probably better to get in at the start of a solid rise if only starting out. Assuming you can foretell when that will be. If I knew then how little I knew then I'd probably never have started out.

antiskeptic

By the way flippers, what do you call yourselves by way of profession. 'Property flipper' goes down well at parties - folk find it interesting. But its a bit grubby as a title

antiskeptic

listermint wrote: »

insulation, windows and heat pumps need to be certified ?

Dunno about heat pumps (I suspect not though). Not insulation or windows - unless its an extension, in which case the whole extension needs to be certified as conforming to building regs.

Aren't there some new regs out regarding renovations? Haven't delved in myself but it may be that they impact - probably once you go beyond a certain level of renovation.


Another reason to consider the quick lick?

listermint

antiskeptic wrote: »

Dunno about heat pumps (I suspect not though). Not insulation or windows - unless its an extension, in which case the whole extension needs to be certified as conforming to building regs.

Aren't there some new regs out regarding renovations? Haven't delved in myself but it may be that they impact - probably once you go beyond a certain level of renovation.


Another reason to consider the quick lick?

Who certifies an extensions insulation and windows are up to building regs ? Specifically

antiskeptic

ELM327 wrote: »

+1


The main money is in buying something from probate with 1970's interior and redoing everything in a modern clear look. Perhaps having to do some plastering and flooring too, along with check of the wiring.


Any more and you're into big money and less profit. Very easy to be margin negative very quickly on a property build.

Some old period properties are very well built and there older than 70's stuff thats tired but looked after. Its less age and more how much you've to do. "Solid and open to a lick" is a requirement that can potentially be met by any age of property. A good period will obtain extra wedge merely by being period. So if it's solid to start off with your quids in to begin.


Consider two similar properties. Ones got gun barrel poking up through the floor, the other painted copper. One's got an ancient gas boiler, the others got an old packaged Grant oil fired outside. One has a mix of windows pvc and wood, the other has brown aluminium d.g. One has old fuses, the other has red/black wiring and a half modern fuse board. Ones got open scrubby back garden, the other has half the back garden taken up with a hotch potch of sheds.

Most folk can't see the ease with which the one property can be turned vs the other. They don't know the shed will be extending the sides of a skip by mid afternoon first day in. Both look a bit dauting to them but theres a world of a price difference to the quick licker.

I was in checking out a beaten up old period one time. Lots of young hopeful couples with stars in their eyes - a flippers worst enemy. I was lasering a few dimensions as I went. A couple asked me what I was doing. " Its a dry rot meter" I said joking. "Oh dear, is there dry rot??"

The other competition is other flippers who are looking to quick lick like me!

beauf

Regardless of how well built in the 1970s. No one wants to live with bathrooms, kitchens, plumbing and wiring and heating and insulation that's half a century old.

It's like a house in 1900 in the 1950s.

Any house with "character" you will rarely buy cheap in the first place. It will be overpriced and probably a money pit. 1970s wasn't really a high point of architecture and quality. You probably will find some fool to pay over the odds for some clapped out gaff.

Hats off though if you can make 100k+ on flips. Some people are just really good at making deals and money. More power to them.

antiskeptic

listermint wrote: »

Who certifies an extensions insulation and windows are up to building regs ? Specifically

Building surveyor for the general nod that the (new extension) building conforms 'substantially' to regs. If no extensions, the BER guy (the kosher ones at any rate) will ask for photos showing the insulation thickness in a few representative spots and other evidences of BER related items.

Once you use them a few times (I get my own BER done before buy to find out precisely what I've to do to get it to x level on sale) they don't give you hassle once you demonstrate you can be trusted with their professional indemnity insurance

antiskeptic

beauf wrote: »

Regardless of how well built in the 1970s. No one wants to live with bathrooms, kitchens, plumbing and wiring and heating and insulation that's half a century old.

It's like a house in 1900 in the 1950s.

Any house with "character" you will rarely buy cheap in the first place. It will be overpriced and probably a money pit. 1970s wasn't really a high point of architecture and quality. You probably will find some fool to pay over the odds for some clapped out gaff.

Hats off though if you can make 100k+ on flips. Some people are just really good at making deals and money. More power to them.

It is usually as you say. But by no means universally so. And it's those occasional houses which have been invested in, but which look as jaded and clapped out as the ones that have rubber insulated wiring, which offer a prospect on the buy side

The 100K on a 3-400K sale is more than doable - but it comes down to finding those fundamentally solid houses and, very much moreso, doing something outside the ordinary.

Anything that is prized and rare will generate a comparatively exhorbitant price - houses are no different.

I'm no great dealer, indeed, I'd be poorer than average, not having, nor really wanting to have, the hard neck required.

I suppose I'm trying to give a bit of a steer (and perhaps encouragement) to someone who really wants to get into this game. For me its an occasional activity - I just haven't got the funds to string together the 2-3 overlapping projects you need to really start cranking out the profit.

In which a word to the wise: if you've only got finance for a single house you'll have a lot a downtime.

Waiting for a house to sale agree takes time. And no estate agent will consider your bid on your next target until you do sale agree on your existing house.

And until you have cash in hand you're a weak bidder. Cash and ftb mortgage offers will beat you

Closing sales takes time. Even longer, if a sale advances and falls through - which can happen on your sell and your buy sides. Or both!

You'd want to have a second form of income available to you so as to utilize this dead time.

antiskeptic

Google the PPR for

4 Warburton Terrace, Bray. A really solid big period sold for 240k in 2012. Had surface mount electrics and never had the floorboards up!. The folks bought it as a family home, warmboarded it, electrics, plumbing and heating and the like. But didn't extend (it was big to start with). Sold in 2016 for 610K. And again recently for 810k (its an awful location with folk rat running up the street from the seafront nightclubs at closing time. Utter pandemonium - my suspicion is that the latest purchasers are in for a shock once things open up again )

Or Cluain na Greine in Shankill. Bought for 256K in 2014 (I bid about 10K less!) and after a slow flip (the flipper was, I understand, a developer knocked back by the crash seeking to get going again) sold 2 and a bit years later for 1.15mil. Granted, an extension put on and a gut job. But proof positive that there are excellent flips (or really excellent flips in this case) to be had for 'e 'oo dares'

beauf

Good insights. But they were doing it in a rising market, with shortage of supply which helps a quite a bit. Obviously they added value with the work they did.

But as you say, it can be done.

brisan

beauf wrote: »

That kinda flip would be impressive even in Celtic Tiger. I've seen no houses recently I could buy for 140k under the going rate and add 140k of value to it for 45k and in 3 months, for what is essentially is a cosmetic quick lick. Any houses I've looked at from 80s~00s really need 30~40k min to make them habitable and attractive to a buyer and arguably 100k+ to make them compete with new builds in the same area.

I have seen houses in hindsight I could have flipped for 20~40k for a quick lick, but thats because of supply shortages and prices rising, and unexpected sales for over asking price and even bidding wars on the right property. I would not be adding any value. It would have been high risk as well as when COVID hit we could have had a complete collapse. Could have gone either way this year. Looking less risky for next year.

I think its interesting how in one thread a some predict price collapse of both house prices and rents. But in another the exact opposite in terms of flipping.

The OP asked about flipping. He was pretty much warned off it. Thread now seemed to have turned 180 to say its entirely viable.

To be fair its viable if you know what you are doing and have access to labour at a good rate and are not afraid of getting your hands dirty
Cash rich receipt poor tradesmen are a blessing if you know them and work with them regularly
Its as another poster said having the experience to know the market you are selling to
We have sold a few properties without EA by young couples knocking on the door
Let the neighbours know you are selling and word gets around

brisan

listermint wrote: »

insulation, windows and heat pumps need to be certified ?

Heat pumps yes
Its an electrical installation as is in theory adding an extra socket

antiskeptic

beauf wrote: »

Good insights. But they were doing it in a rising market, with shortage of supply which helps a quite a bit.

True enough.

I'd be content with a mere 0.3mil takeaway from that Cluan na Greine in a flatter market

I haven't figured out how to flip in a worriesome or falling market though.

antiskeptic

brisan wrote: »

Heat pumps yes
Its an electrical installation as is in theory adding an extra socket

Actually, I think adding a socket to an existing circuit is just about the only thing you're allowed do anymore without being RECI. That and changing faceplates and light switches and the like.

Another reason for the quick n' lickin approach!