Independent Property Developers - Struggling?

[Bewdy]

Hi, I'm an independent property developer and I'm finding it extremely difficult to find properties for development at the moment where I can forecast a decent return. Is anyone else finding this?

Normally I pick up houses which have been sitting on the market for a few months which are in need of serious repair or upgrading, but even these houses are getting snapped up round here for close to asking price, meaning the margins for improvement just don't seem to be there anymore. It was already pretty hard getting over the stamp duty hurdle, but now the margins just seem to be getting squeezed even tighter and housing stock is very sparse. I'm speaking to estate agents and they have never been busier.

Is anyone else experiencing this?

 

[AllUpHere]

What sort of money are you looking to spend on property in an average year? If you are looking in 100's of K's there is massive competition, if you are able to invest millions at a time there are loads of opportunities.

 

[Bewdy]

I'm in the 100's of K's bracket......(at the moment )

 

[fisicx]

In our local area there are more buyers and renters than properties. A developer I know pays the estate agents for new property info. Costs him about £5k per month.

 

[AllUpHere]

I'm in the 100's of K's bracket......(at the moment )

It is tough at the moment. The problem is, every man, woman and their dogs are able to put a few hundred grand into buy to let. Among close family and friends, I think I know more people who own several properties than I do those who only own one. It's bound to lead to a shortage.

Are you closer to 0, or closer to a million? Are you happy with mortgages and bridging loans, or are you looking only to spend available cash?

 

[Mark T Jones]

A big part of the skill in property development is in buying.

Some years ago I was exposed to the more common practices used

They would regularly patrol their area, by car, on foot and by helicopter (drones, I imagine these days) to highlight delapidated properties - those likely to be owned by elderly people - likely to go off to homes or shuffle off this mortal coil. They would knock or post letters repeatedly offering to buy.

They would be very tight with the more professional end of the estate agent market. Obviously back-handers wouldn't be involved, because that's illegal.

They would routinely over bid (particularly on sealed bids) then whittle the price down on valuation technicalities after the bid had been accepted.

 

[WaveJumper]

Have a family member in the same business and complaining of real shortage of stock and thats the key a real shortage of properties compared to a lot of potential buyers out there at present who if it's a first time property will buy something which needs a lot of work if this means they can actually get on the property ladder for the first time.

I also have a very good friend at the much 'higher' end of the game who was telling me last week it's not unusual to get out bid (even when your in the know wink wink) in a round of sealed bids by anything from 50k to 100k

Personally I think there's so many TV programs on DIY and house renovation everyone wants to be a developer and flip a property so this has probably not helped either.