Hi, this is Tom Soane and I’m absolutely buzzing because I just had an offer accepted on another house. It’s crazy I’m getting so many really good properties at the moment, so I want to talk you through it. Talk you through the numbers, talk you through what I was looking for, how I found it and so on but also what I’m hoping to achieve as an exit so this one is going to be a flip to sell, so I’m going to buy it, I’m going to refurbish it and then I’m going to sell it for a profit.
Now, this is a three-bedroom House and it’s in Southampton this time so the ones I’ve got going through at the moment Newcastle, four in Swansea and one in Southampton and one in Portsmouth as well so, you know, I’m spreading myself a bit thin I might have to stop for a little while because my cash is running out.
Anyway, that’ll all come back to me once these properties resale, so this property three-bedroom house, nice big property in a really popular area, high demand, really good schools in the area and it comes with parking as well, which is a bit of a premium down that sort of way, so picked up this place for a hundred and thirty grand and that’s been all accepted now and it’s going to start processing through the legal side now.
Now, once it’s done once I have completed the purchase of that property, it’s going to need about 30 grand spent on it.so it’s a big job and it does need a full job throughout we’re talking kitchen, bathroom, re-plastering the whole house, there’s some exterior work that needs doing, there’s obviously the floors and the walls need to be redecorated so it’s a big old job and also because of the area that it’s in I’m going to spend a little bit more money on making it a premium job.
Now, I’m doing a joint venture on this one as well because there’s a decent profit margin in it so I’m doing this project with somebody we’re just going to split it split all the costs right down the middle and then split the profits right down the middle so I’m really looking forward to that one. Now, the numbers yup like I say, I bought it for a hundred and thirty thousand there’s going to be a load of fees and stamp duty and stuff like that so I’m probably going to be all in for about let’s just round it up to a hundred and forty thousand. I’m going to buy this one cash because I’m doing a joint venture so that kind of eases the cost of borrowing a little bit and once that’s done like I said, I’m going to spend 30 grand on it and we are going to spend 30 grand on it then we will be all in for about a hundred and seventy to a hundred and seventy-five thousand including a contingency just to make sure if anything goes wrong then I’ve accounted for it, so hundred and seventy-five thousand in and it’s worth about 220 so it probably maybe 230 if I do a real premium job, but conservatively it’s worth about 220.
It’s a real popular area, high sales activity, really good schools in that area, so I can see just by looking at the activity in the sales market around the area within about a half a mile I can see it’s a very buoyant sales market at the moment, but also sales are completing as well so it’s all going well-seeing loads of sales agreed but you also have to check for the number of properties that have completed the purchases or sales in the last 12 months and that will show you that it’s yes getting lots of property sale agreed but also yes, lots of properties are completing which also tells you that financing those purchases are simple. Now, that goes towards the exit because obviously I want to sell this property so that tells me that people are going to be able to easily purchase this property with a mortgage and it just opens up the market for me to sell to and if you increase the market you increase the size of the market you’re targeting that means you’ll increase demand.
That means you’ve got more chance of selling it for a good price, so yeah, like I say a hundred and thirty grand accepted including everything I’ve allowed up to a hundred and seventy-five thousand pounds as a total capital investment, and then it’s going to resell for a minimum of 220 I think it’s going to settle for about 225 so that would be a nice 50 grand job profit in the bank and 25 grand each between me and my joint venture partner before tax, very very happy. I’ve allowed about six weeks for the job to be completed from start to finish that refurbishment, it might take a little bit less, but I’ve allowed six weeks just to get it through, so all in all from the day that I complete that property there’ll be six weeks let’s be generous.
Let’s say two months to finish that entire refurbishment get it ready for sale and if we look at the averages in the UK Market, the property will probably be on the market for a month I think but it could be more but I think it’ll be on the market for a month because of the activity in the area and the demand in the area and then I think they’ll be about 3 months to complete so I’ve got about five months from completion to completion to get my money back, that’s not bad at all when you considering I’m putting cash myself of about let’s have a think, so I’m putting cash in myself of about 85 to 90 grand and I’m going to get 25 grand profit back from that, so for me that’s around 30% profit very happy with that 30%t yield you’ll take that all day long, so it’s amazing I’m so chuffed with this property and I’m getting so many really good flips and buy to let’s and flip to let’s or buy refurbish or finance at the moment, I can’t buy them all so I’m trying to keep up.
Anyway, I thought I’d let you know this one because I’m buzzing about it I love to share these things if you got any questions about a property that you’re looking at right now or you’re going through, then give us a shout. I can help you with the purchasing, with the offering, with the sourcing, give you any advice, I can help you the refurbishment of the reselling even if you’re going to keep hold of it and let it out give me a shout I’ll help you with that, so I’ll leave that with you and I’ll speak to you all very very soon.