Refurb Hull - Lounge After

Our first buy to sell project in Hull, and how you could do one too…

We started flipping properties in 2016 and this one was our first. We had been investing in the local area for seven years at this point so we knew that it was competitively priced the moment it went up online; the viewing was booked in for the very next day.

TIP You can set up automated alerts on Rightmove to be notified when new properties are listed that match your specific search requirements. You can configure these to ensure you don’t miss any properties coming to market in your area and to get one step ahead of the competition when it comes to viewings and offers.

On arrival it was clear that the price had caught the attention of other would be purchasers, but much to our delight the other viewers were turning their noses up at the property, with one refusing to even go upstairs. As it transpired the property had previously been rented to a family and fourteen (!?) cats. Now we’re animal people, but this one took the biscuit. Not surprisingly the property was not in the best condition, visually or nasally, but where there’s muck there’s brass, as the saying goes in Yorkshire, so we set about pricing up the job and getting our finances in order.

Some of our before / during pictures:

When you’re looking to undertake a buy to sell project you need to consider your finances and the availability of lending quite carefully. Mortgages are long term financial products, so they’re simply not appropriate when you’re looking to flip a property in a short time frame. Undoubtedly this does happen anyway, but knowingly taking on a traditional residential or buy to let mortgage with flipping in mind is mortgage fraud, and there’s a good likelihood that this would also invalidate any subsequent insurance that you take out, leaving you at risk should the property catch fire or flood during your renovation. There’s also a risk that your lender catches wind of what you’re doing when you come to redeem your twenty five year mortgage six months down the road. This can lead to you being blacklisted by lenders, which is something you absolutely have to avoid if you’re looking to build up a portfolio or to transition into professional property investment. All in all it’s really not worth the risk.

When looking to finance a buy to sell / flip your main options are:

Buying outright in cash (great if that’s an option!)
Bridging finance (short term lending that’s more expensive than traditional mortgages but less expensive than unsecured lending)
Private lending (friends / family / other investors – negotiate a monthly interest rate on the loan and have a loan agreement drawn up with your solicitor)
Joint venturing (pool your resources with other investors who are looking to achieve the same thing as you)
Credit Cards (The interest free balance / money transfer offers available today can last for years, but the rates that they revert to are extremely high. You need to be very sure of what you’re doing here but it can be great way of getting quick access to cheap lending. Tread carefully!)

We funded this first purchase and the subsequent renovation through a combination of cash, private lending and credit, which meant that for the purchase itself we were ‘cash buyers’ (i.e. not waiting for a mortgage to be approved and released and not being tied up in a chain waiting to sell). I’ll cover the importance of that and how it can work to your benefit in a later article, as it helped us to secure this deal despite a sale being agreed initially with a third party.

This three bed terraced property was a corporate sale (repossession) and was advertised on the major property portals by the appointed local agents. Positioned towards the top end of Welbeck Street in HU5, it’s within strolling distance of a great choice of cafes, bars and restaurants on Princess Avenue as well as a highly regarded primary school. It’s also just round the corner from the grand, imposing victorian residences of The Avenues; arguably one of the most desirable residential areas in Hull. We knew that the resale demand would be high from first time buyers, as well as having the potential to catch the eye of buy to let investors looking for high quality, low maintenance single lets in the area.

The house needed pretty much everything doing, and wouldn’t necessarily have been ideal for first timers had we not had experience in renovations through our rental business. Following a full program of refurbishment that took us three months (a focus for improvement with subsequent projects) we created a crisp, modern starter home that we dressed to impress with furniture and soft furnishings that we’ve gone on to reuse in each of our flips since. We agreed a sale on this one for £3,000 over the asking price to the first couple through the door on the open day, 48 hours after being advertised on the major property portals. This set a new ceiling price for the street, which was certainly nice to achieve on our first venture.

TIP If you’re looking to sell a refurb you need to invest in dressing the property. Staging transforms a property into a home; helping a buyer to visualise themselves living there and how they could personalise the space to their own tastes. This is epsecially important when targetting inexperienced first time buyers. There’s a reason house builders like Persimmon, Taylor Wimpey and Barratt Homes all stage their properties, and it isn’t because they like traipsing round Dunelm on the weekend.

Schedule of works:

Complete rewire / new consumer unit & electrical sign off
New boiler & gas safety sign off
Roof beams reinforced
New UPVC doors front and back
Plastering / skimming throughout
New kitchen + tiling
New bathroom + tiling
Decorating throughout
Furnishing and staging ready for sale

Purchase Price – £73,000
Renovation + Fees – £22,000
Sale Agreed – £118,000

….and the after pictures: