Buying a run-down property, adding significant value and then selling it for a profit (also known as flipping) is a process that I love. There is something about seeing a property in ruin and then bringing it back to life, which gives me a sense of fulfilment I never found in my 9–5 job!
I’ve been flipping properties since 2018, starting with a family home that my dad inherited in South Shields and now working on much larger, multiple six-figure deals. For example, a project that I’m currently buying, is a street which contains two semi-detached properties and one detached home.
Most importantly, flipping has allowed me to build a substantial cash pot, taking me from £20,000 in savings, from my full-time job, to being full-time in property, with a few hundred thousand pounds that I can use to start building my portfolio.
This is my complete guide to flipping properties. A guide that has developed over the course of the 11 projects I have completed since I started my journey in 2018.
In the cold December of 2018, my family got the news that my grandmother had sadly passed away. Her house in South Shields, which I lived in at the time, was inherited by my dad, who wasn’t sure what he wanted to do with it.
Although it was a lovely house, it needed a lot of work and we didn’t want to sell it, because we both had an emotional attachment to the place.
However, I wanted to learn something new. I always had an inkling that I’d like to get into property one day, maybe in my 40s when I was semi-retired. So, since I had nothing else to do outside of my full-time job, I decided this was the opportunity to get stuck in and learn something new.
I did most of the work myself, removing tiles, painting and managing the trades. I was constantly asking them questions and getting involved in what they did. I wanted to know everything.
It wasn’t a huge job and by the time we’d finished, we’d added over £30,000 in equity. But what meant more to me, was the knowledge I’d gained.
I moved back to Barnsley, one year later, in December 2019. Using my savings, I bought my first home, which was a three-bed semi, ‘doer-upper’. It was the definition of a flip project, with those awful maroon carpets that were popular in the early 19th century, an electric fireplace and a kitchen that was as old as me.
Using the skills I’d learnt just a year earlier, I refurbished the property after work and on the weekends. In less than 12 months, it was transformed into a beautiful home that looked like it had been built that same year. It had new carpets, a new kitchen and bathroom, gas radiators and was freshly painted throughout.
This transformation, and the fact that I’d made more than my annual salary when I sold the property, is what gave me the fire to go into property full-time and resulted in me falling in love with flipping houses.
Project Gawber:
Purchase price: £96,000
Legal fees: £2,000
Estate agent fees: £2,000
Stamp duty: (Zero, as I was a first-time buyer).
Refurbishment: £10,000
Profit: £36,000
Bought, renovated and sold within nine months.
After my second project, I used the profits to buy another, more profitable one and continued to repeat this process with each finished deal. As they say, ‘the rest is history’. On project four, I started working with the private investors to scale up business operations. But project six, also known as Project Inn, was where I ‘levelled up’ and rather than just refurbishing the property (which was a two-bed bungalow) we changed the floorplan to add more rooms by creating a wrap-around extension, adding 55sqm on to the footprint of the property.
The finished product was a , four-bedroom bungalow with three bathrooms (two more than it had when we bought it) and a healthy profit that was double the money I’d made on any project before!
Project Inn:
Purchase price: £264.500 (on the market for £280,000).
Stamp duty: £11,000
Legal fees: £3,000
Renovation: £120,000
Investor interest: £25,000
Gross profit: £93,000
Net profit: £66,000
Bought, renovated and sold in 51 weeks.
Now that you know my story and you’ve seen what kind of cash pot you can build by flipping houses, here’s my advice on how to find good deals:
Surprisingly, my best deals haven’t come through relationships with estate agents (though they are a useful source of opportunities). Most of my deals have come through Rightmove.
The way I offer is slightly different to many other investors. I’m not afraid to offer the asking price, providing it will still be a viable deal and sometimes, if it’s a really good opportunity, I’ll offer slightly over the asking price.
Why? Because my policy is to make one offer and one offer only. I put my best foot forward the first time around and I have a reputation for doing this. Now, estate agents and vendors know that I’m making my best offer ‘off the bat’, and I’m not negotiating.
I believe in being fair with your offers and because I’ve always been fair and backed up every offer I have ever made with evidence, like builders' quotes and local sales comparables, I get good opportunities at a decent price. It’s earned me a good reputation with agents too!
Your buying power when it comes to flips is the ability to move fast. This means you’re at a huge advantage if you’re buying with cash, whether that’s your own money or money raised from investors.
Typically, flip projects need a lot of work (it’s why we buy them) so they’re often un-mortgageable, or at the very least, the deal does not stack, if you’re buying it with a mortgage.
My advice is to let the agent know that you plan to move quickly and if they accept your offer, it’s a done deal that you will complete on. A fast-moving sale comes as a huge relief to them, especially when you account for mortgage surveys and all the other things that slow a sales process down.
Location is key. You can change almost everything else on a property, but you can’t change the reputation of the street or area it resides in. Street reputation is a more important consideration than the state of the property itself, providing it is structurally sound and has the potential to have value added.
Also, analyse the demographic of people who are buying in that area. If you’re buying a two-bed terraced house, then it’s likely going to be first-time buyers or couples, who are your ‘customers’. Look for local schools (ideally well-rated by Ofsted) big businesses, transport links, hospitals and anything else that will give you an indicator of who will be buying your house, when you put it back on the market.
When you know who’s buying your property and you know the area, this will give you an idea of how high a spec you need to go with on your refurb. For example, I’m now looking at properties worth upwards of £600,000 in prestigious areas, so my refurbishments need to be a much higher spec. But if you’re buying a £120,000 terrace house, in a standard area, for first-time buyers, you don’t need to aim for luxury (unless you really want to).
Other things I look for are:
Can you change the floor plan to add space or additional rooms?
Can you add an extension to the property?
How long will you be tied into the deal? You want to be in and out of the project as soon as possible.
Where can you add value? Is it through refurbishment, by installing a new kitchen or bathroom, or is it by adding space?
One ‘green flag’ for me, is if there is a kitchen and dining room separated by a wall. I have found that by knocking this wall down, you can create an open-plan dining area, which is more appealing to families. Couples and parents don’t want to be disconnected, with one of them being stuck in the kitchen, whilst the rest of the family is in a separate room.
It also looks gorgeous if you can add an island or breakfast bar where this wall was.
But if I had to sum up a good deal in a sentence, I’d say, “How can you turn the worst house on the street into the best?”
You should always conduct the first viewing on your own. Attend either a little earlier than your appointment or stay behind a little later. Spend this extra time talking to neighbours and learning everything you can about the history of the house.
If you can, then book a second viewing and bring a trusted builder with you to calculate costs. If this isn’t possible, then take lots of pictures and send them to your builder or organise a coffee with your builder to chat about the project. Make sure you bring a damp meter on your viewing and check around the windows and roof.
Look at floorplans too and make sure the layout works for your target buyer. Families will want more space, so make sure that the property either has this built-in or has the potential for it to be added by knocking down walls or adding an extension.
Treat houses on the market in your area like they’re your competition. What have they got that you don’t? Can you take inspiration from their layout or design to add additional value to your project?
When the valuer visits your freshly refurbed house, they’re going to want to see the right certificates and proper sign-offs. This includes things like your damp proofing certificate, proof of proper insulation and building control certificates etc.
Make sure your tradespeople and the council give these to you. If you don’t have them when the valuer comes, it can negatively affect the figure they give you.
Get educated before you jump into a house and start tearing it apart. You need to know what you’re doing, or at least have the right people around you, so you don’t do more harm than good.
If you want to learn, then get your hands dirty. Get involved in the refurbishment and ask your tradespeople questions about what they’re doing, how they do it and why. Don’t be afraid to push boundaries and ask challenging questions.
Finally, you need to have a clear direction right to where you want to be heading. Manage your vision, keep a constant eye on your cash flow and have a strong pipeline of opportunities. Treat flipping houses like it’s a business and remember that looking after your business is just as important as looking after an individual refurbishment.
To see my past, current or upcoming projects, connect with me on my socials and don’t be scared to say hello! I hope you enjoyed this article and I wish you luck in your own property journey.
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