We have been keeping ourselves insanely busy over the pandemic. The blog had been running for a year and when it came to renewing the licenses I thought I would be writing plenty more. Turns out that wasn’t the case. We had a newcomer to the family, we bought another house for flipping and of course had our normal jobs to go to as well.
Why did we want a “doer upper”?
We had almost come to the end of finishing bits of the renovation we started in our own home (bar the kitchen). A good friend of mine had also finished renovating his. Between the two of us we had realised we had a pretty wide set of skills developed over the previous years to actually renovate a house to a good standard. After 6 months of searching we found a house nearby that ticked all the boxes.
- Walkable distance to public transport
- Catchment area of Outstanding Ofsted schools
- South west facing garden and a double garage
- Uncared for and rough around the edges
The house was a 2 bed semi that used to be part of the local authority stock. It had an impressive garden meant that flipping would be no issue when you see what you get dealt when it comes to new builds!
The first and most important flipping step!
We acquired the house for £82,000. This number was the culmination of a several back and forth calls and emails ensuring we got the best price. Of course we had to be mindful not to offend the seller. Whilst it was listed for £85,000, there were bids that went over the asking price with estate agents licking their lips at the prospect of a decent commission. We however, priced up all the work that needed doing, examples including a large reroof of a garage with fibreglassing and we knew that our flipping opportunity would be seriously hindered if we spent a few thousand more than necessary. Because of this determination and lack of emotional attachment, we walked away from the deal when the numbers didn’t stack up for us.
As we we told there were several other buyers at the ready we assumed that the house was gone. Low and behold they rang back a day later with the final figure that both parties could agree on. It’s just worth highlighting that estate agents always seem to have an endless list of potential buyers but suddenly they all get cold feet. Stand your ground!
Budget
Being first timers at the flipping venture we wanted to go small scale and keep it simple. We both agreed that we wanted to do high end finishings that we ourselves would be happy to live in. There’s no point putting in sandpaper carpet that’s going to be ripped out on transfer day, if you want to do that then may as well leave the original carpet in! We’re strong believers in potential buyers looking at the overall house image, any corners cut will just be highlighted and stick out like a sore thumb.
Being pragmatic, our budget was fairly loose as we knew to expect the unexpected and not be burnt down the line. We estimated a cost of between £5,000 and £10,000 to have the house complete for sale. This included the ongoing cost of council tax, mortgage, utilities etc.
The flipping work to be done
- Soffits and fascias
- Flooring throughout
- Accessible bath replacement
- Doors and hardware replacement
- Garage reroof
- Radiator replacements
- Rewire
- Wall surfaces
- Full kitchen replacement
- Improve garden
Where we spent money on the pros
Guttering
The guttering was done by pros only because we didn’t have scaffolding and didn’t fancy our chances doing it for the first time on ladders. To get this done on the 3 sides of a semi detached cost us £1,100. This was essential as over the course of the 5 month renovation, we had several starling birds appear in the house as they were getting in somehow. This addressed that problem! You could argue about not getting this done for flipping but that’s pretty unethical when you know it could be sorted out. You’re also likely to have a buyer address it in a house survey on the sale of the house.
Electrician
This was about £1,500 which is significantly lower than the cost of a full rewire. The reason for this was due to us carrying out a lot of the grunt work involved with rewiring. We pulled all the relevant floorboards up and removed existing sockets and wires which would be replaced. Prior to this the sparky found a few faults in the setup and it is generally easier and cheaper to do a full rewire on a renovation than paying the sparky to fault find. It also means that any potential buyer doesn’t have to worry about doing this work themselves for a couple of decades.
Gas
It’s illegal to do you’re own! Connecting the gas hob was done by a gas safe plumber. All the water plumbing was done by ourselves and the boiler was serviced by a pro.
Carpet fitter
Not sure if we will ever try it? The carpet fitter is paid independently from the shop so the shop doesn’t have a huge incentive to push them. All we know is that we’ve seen some terribly fitted carpets by pros so it’s clearly not an easy job!
The rest of the flipping was DIY
We learned how to fibreglass flat roofs and sourced it ourselves. All the radiator upgrades were done by us, whether it was using push fit or soldering copper! Laminate flooring and lining walls (a waste of time, we will pay for a plasterer in future houses!)
We spent between £9,000 and £10,000
On renovating, not including stamp duty (second property) and legal fees. How did we do it?
Facebook Marketplace
10 years ago I bought myself a lovely guitar (Mexican Telecaster) on Gumtree for £200. I didn’t need it and it was on for £250. It was more boredom to see if I could get away with a measly sum and to my surprise the seller was happy to part with it. It almost seemed like a favourite past time scouring gumtree for random items. Today however it seems the entire market has shifted onto Facebook. It’s no surprise as the interface is significantly better and more accessible to technophobes. With this larger market of users comes a lot more available products!
The whole house was pretty much kitted out with parts sourced from the marketplace. Of course we made sure it was all excellent condition hardware. We found sellers from affluent backgrounds who were selling perfectly fine items only because they were bored of it. Maybe they fancied an upgrade? Examples include perfect condition a Type 22 radiator for free and a full new build kitchen with hob and oven for £700. My personal favourite was finding luxury large format porcelain tiles. 7 square metres of it for £50 which would have been over £400 at retail.
What was the house worth?
3 Estate agents and a mortgage valuer valued the house at a comfortable £135,000 before considering bidding wars. After taking out the purchase fees and none renovation related costs the flipping profit comes to just under £40,000 (before tax). The tax varies significantly if you are in the higher threshold. There, it would make sense to purchase under an LLC. If you’re on the standard band then the difference between LLC and individual purchaser is a lot smaller.
It’s important to note that this was carried out for 5 months in 2021 which saw nationwide house prices increasing. Whilst this is a healthy profit I’m sure that had we got the keys and sat on the house doing no work, the house probably would have sold for £10,000 more than we bought it for, a flip with no effort! But of course with property the market can go down so the risk is always there when going into a venture!