How to Build the Life of Your Dreams and Make More Profit, Regardless of Your Experience
Freedom. I’d say that’s the reason that 90% of people start investing in property. We want more time with our loved ones. We want to provide for our families, or maybe, we just want the ability to travel the world.
But, if we’re not careful, all we end up doing is creating a second job for ourselves. One where we work more hours than ever before and most of the time, pay ourselves less than we’d get if we were employed! Instead of a nine-to-five, we have a job managing tenants, repairing properties and going on countless viewings.
I’ve invested in property for many years and eventually fell into this trap myself. I was working weeks and then dealing with my property portfolio on top of that.
However, my life changed and freedom finally appeared when I started investing in new-build developments. Now, I make six-to-seven figure profits on a single deal, work the summers in England and spend my winters somewhere warm and sunny. I drive the car of my dreams and most importantly of all, my family are provided for, and my children are happy.
This is my advice on how you can use property development to live the life of your dreams and work fewer hours, including how to start in development with little experience, and a few ‘golden secrets’ that will help you to make your new-build projects far more profitable.
Before investing in property, I was a busy builder, working 80–100-hour weeks on the tools. On top of that, I also decided it was a good idea to flip properties. My wife and I would move into a home and I’d do it up outside of work, before selling it for a profit. You learn as a builder that just because you can do something, it doesn’t mean you should and I ended up adding huge extensions to the houses and doing real back-breaking work.
I invested in a few buy-to-lets on the side. It was easier pre-2008 when we had things like 100% mortgages. But the glory days came to a fiery close with the recession and creative strategies came to an end. As they did, I played it safe and stopped investing.
But still, I saw others getting educated, adapting and going on to buy countless more properties. All while I stood still, albeit continuing to work 100-hour weeks. The lesson here is to get educated and take action. As Warren Buffet says, “It’s wise for investors to be fearful when others are greedy and to be greedy only when others are fearful.”
But eventually I got to the point where I realised that I was trading my time for money. I didn’t know what I wanted, but I knew I didn’t want to be working all these hours and I knew I wanted to provide for my family.
So, after a lot of toiling, I went on a business retreat. This retreat was the first time I’d ever taken myself out of my own life, sat back, looked at what I was doing, and more importantly, what I wanted my future to look like.
On this retreat, it hit me. I wanted freedom. I wanted to travel and experience life. It wasn’t about the money; it was about what money would allow me to do. I’d seen developers pulling up to sites in Range Rovers and telling me about their villas in Spain, while I was building their projects for them. I decided I wanted a piece of that life and this is what flung me into setting up my own development business.
If you’re interested in becoming a property developer, then I recommend taking a moment to think about what kind of developer you want to be. Below are some of the models you can employ.
Build-to-Rent: This is where you build new houses, refinance them, pay off the loan or investors and then add the buildings to your portfolio, renting them out and keeping the income.
Build-to-Sell: This is the model I use. Build-to-sell is where, instead of keeping your newly built houses, you sell them for a profit.
Commercial Conversions: The same principles outlined above apply here, where you can keep your finished property, or sell it for a profit. However, instead of building from the ground up, you’re usually renovating an existing premises.
The reason I choose new builds over conversions is that personally I find them easier. With land, providing you do the necessary due diligence, it’s fairly straightforward once you’re out of the ground. More on this later in the article.
But with commercial conversions (and almost all properties, for that matter) you never know what you’ll find once you start stripping the walls. You might need a rewire. There might be structural issues you didn’t notice.
The reason that I build to sell is twofold:
Again, I want freedom. I don’t want to be dealing with tenants or letting agents. I want an easy life where I can work from my phone and laptop anywhere in the world.
Your money gets tied up quickly when you refinance properties and add them to your portfolio. With build-to-sell, you get a chunk of money that you can either use to fund another, larger deal, or you can live on, for a long time.
Choosing what type of developer you want to be, depends entirely on the life you want to live and your long-term goals. There is no right or wrong answer. What works for me might not work for you, but it’s better to invest in a strategy that takes you closer towards the life you want to live, rather than further away from it.
Now, I build 3–5 units, sell them, make my profit and I have enough cash to live a good lifestyle for a year and to fund my next project. I have personally found that with £200,000 or more a year, it becomes hard to spend all your money, even while living a luxury lifestyle. You can eat nice food, go on multiple holidays and drive almost any car you want, when you have £200,000 in your pocket. The amount you need to live your lifestyle might be more or less than this, depending on your goals.
As a quick side note to the above, maybe you’re in a situation similar to me when I started, and you’re unsure what you want from life.
If this is you, then I recommend taking a day or two to yourself. No phone, no work and no friends or family. Go to the beach, or wherever you feel you’re most comfortable and bring nothing but a notepad and pen. Think about the future and how you want that to look. Don’t give yourself any limitations. Imagine that nothing is impossible.
When you have this clear vision in your head, calculate how much it will cost. How much is the car you are driving? How much is the house you live in? If you’re on six holidays a year, then how much are you spending? Once you’ve finished this exercise, you’ll know where you want to be, and how much it’ll cost to make your vision a reality.
Now you have your direction and you know what type of developer you want to be, it’s time to get started.
Unsurprisingly, my first piece of advice is to get educated. Don’t just go out there and try to buy a plot of land with no knowledge or experience! Read books and listen to podcasts at first. Take baby steps to ensure this is something you want. Then, when you are certain, invest in a mentor or training programme. Some of these can be expensive, which is why it’s worth being 100% certain this is what you want before signing up. Because if you are serious, you follow the right people and you act, then you can get that money back (and much, much more).
Success leaves clues. You don’t have to reinvent the wheel to become wealthy. Find someone who has done it and follow in their footsteps.
But, regardless of any level of education, what you’ll need is a good, strong team around you. A team who are experienced in new-build development.
After you, I’d say the second most important member of the team is your solicitor. An experienced solicitor will carry out searches on potential development sites and they’ll know what to look out for. If your solicitor isn’t experienced, then they might miss things like utilities in the ground, covenants on the land, restrictions and if the land is even registered!
You also want to build good relationships with your local estate agents. They’ll be your main source of development opportunities and your relationship with them will be the difference between whether they help you in a negotiation, or side 100% with the vendor.
A good construction company is vital. Again, you need someone with experience. However, you also need a reliable company that isn’t going to go bust midway through your project.
If you’re looking for a plot of land to develop, then I’d recommend finding sites that are no further than one hour from where you live. In the early days especially, you will be spending a good amount of time on site checking the progress of the project. You don’t want to be spending two hours plus each way in your car.
I buy plots of land in what I call ‘satellite villages’. These are villages that are around 10–20 minutes from the town centre. They’re close to the necessities, like shops and transport, but not directly in the centre where planning is harder and there’s no scenery and or parking.
These satellite villages allow you to build properties with nicer views, bigger gardens, and better parking and are typically favoured by the local council.
I prefer small sites where I can build 1–5 properties. The real sweet spot is 3–5. You can make £100,000 per property and you’re in and out within a year. When you go for sites of 30+ houses, you put everything on the line, they take longer and there’s more to consider, like the community infrastructure levy (CIL) payments and affordable housing.
If you want to move onto larger projects like this, then fine, but start small and build up.
The key to new builds is to mitigate risk before the project starts. Once you get out of the ground, in theory, things should be relatively straightforward. So, what you need to do before this point, is check that your site is a suitable place to build. Have all the relevant surveys. Have a building control surveyor look at the site before you purchase it.
Always make offers subject to planning. This way, if the surveys say you can’t build there, or your local authority refuses your application, you’re not tied in.
When dealing with a construction company, get multiple quotes and get a fixed price. It’s not like a renovation where you pay a contractor and then they hire lots of different ‘subbies’, raising your prices. There should be a set price that you’re given at the start and this shouldn’t falter, because the construction company will have the relevant people in-house.
One hundred percent funding of your sites is possible with investor finance, joint ventures with landowners or creative strategies. Although this might seem tempting, using a bank or other lender for development finance, gives you some extra protection. Lenders stress test everything and check your planning application for you. They’re experienced and if there is something you’ve missed, they’ll typically find it before purchase.
Bungalows are in short supply these days. That’s because developers tend to prefer building townhouses. After all, you can fit more of them on a plot of land and bungalows take up more space.
However, due to the short supply of bungalows, they’re typically valued much higher. Especially since they are in high demand. We’re growing older as a population and many elderly people want to live in a home where there are no stairs, easy access and a spacious garden.
Bungalows provide just this and best of all, elderly people are the perfect customers for homebuilders. Most of the time they are selling a house that they’ve owned for decades, in order to downsize, meaning they’re buying with cash. They rarely haggle on price and above all else, it’s a great feeling to watch someone who has never moved houses before, take such a big leap and buy a property that they absolutely love!
If you think of developments like running a business, then you have very little competition. Your average homebuilder is trying to squeeze as many houses onto a site as they can, with no parking, a postage stamp garden and a view of another house.
When we build bungalows, we include a nice garage, field views, and a spacious garden. They sell fast because our customers see they’re getting more value for their money.
You’ll sometimes find it easier to get planning permission on bungalows, because you’re not building up as high and blocking the natural light of neighbouring properties. Bungalows also have a higher value per sq. ft, sometimes being 20% more valuable than your standard newbuild townhouse!
Four years ago, I lost everything. My business partners at the time, emptied the company bank account and left me with nothing.
But I didn’t give in.
I jumped back on the tools seven days a week, sold my motorhome and a buy-to-let and saved up enough money to fund the purchase of the first site that I ever completed alone.
My point is, no matter the cards you have been dealt, if you stay focused, work hard, take action and believe in yourself, anything is possible.
I saw an experiment recently where someone pushed two bowling balls down a ramp to see which one would reach its destination quicker. Surprisingly, the bowling ball with a rollercoaster track, had ups and downs, arrived quicker than the one on a straight path.
Life is a rollercoaster. There are ups and downs. But remember, those downtimes, this whole rollercoaster, is what will strengthen you and get you to your goals quicker. You just have to believe.
If you would like to learn more about me, or if you’d like to comment on this article, then get in touch using the details below.
Website: https://developinghomes.co.uk/about-andy/
Instagram: @andyhubb30
LinkedIn: Andy Hubbard
