How to get your first property flip?

We're live.

We are live. So morning everybody, those that are watching or watching this back from the live, uh, welcome to our live today. So we—

good morning for me as well, Paul, I'm just talking at you.

Um, we recently did a poll in our group about what people are struggling with the most or what they need support with, and the biggest thing was getting their first flip. So there's lots and lots of strategies out there um, from title splits to serviced accommodation to HMO. But people want to know about their first flip. I've got a fun fact for you, Steve, actually.

Go on then, give us it.

I, I read a lot of like MoneyWeek magazines and development stuff and property things, obviously, because this is what we do. And actually, that— I can't remember the percentage, but the percentage of flips have gone down in the country especially in Yorkshire and Humber where I live. So I was like, brilliant, that just lowers my competition. So actually a lot of people are not doing it now, but obviously a lot of people are wanting to get into it. So today we thought me and Steve would have a bit of an informal chat about how to get your first flip, because there's a lot of bullshit out there of what people expect you to do. But obviously me and Steve have done this, and I do it in a conventional in a different way.

So yeah, yeah, I think my number one tip is not to go into estate agents with a box of Krispy Kremes.

Fucking hate that. It makes you want to block and delete people. As soon as I see that on Facebook, I'm like, especially at Christmas, oh, bought my agent some, some donuts. I'm like, oh, what losers.

Losers. That's not how to build relationships with estate agents.

So patronising, isn't it? Yeah, fucking hell. Yeah, done. We've done. Don't do it. So, so the main one for me, I, I've done training, we've both run networking events, and I've, and I've listened to a lot of people talk, and the main thing they say is it's numbers, but not numbers in the way you would think. So they go, right, go and view 100 properties, offer on 75, you're bound to get one. I haven't got time for that. I don't really care for that approach. So the way I go and get my first flip is I look at what— hi Christian— I look at what I'm trying to achieve first. So for a flip near me, I live near a city and I live near several towns. I actually focus on the tiny little towns around the city because there's a lot less competition and also the numbers stack a lot better in terms of capital appreciation and also cash flow if you keep it. So when you do your first flip, I still say have a number of exits because it could go wrong. The intention is to sell and the intention is not to keep it. However, if you have to keep it because it doesn't sell for whatever reason, or it takes longer than you expect— because I'm not going to say only buy a flip that you can sell in 5 days because reality doesn't always work like that. So So again, look at your numbers. What are you trying to achieve? What's your profit line? Do you want to earn £20 grand profit? Do you want £30, £40, £50, £60? And you've got to be realistic. So if you're doing your first flip and you've never got a flip before, aim about £20, £30 grand in profit and get your numbers right. So have a look on Rightmove. All mine have come actually from agents, um, on Rightmove. And I have a look at one where I want to invest in. It's always where I can be asked to drive to. I don't bully people on Facebook, but when they go, oh, I've drove 8 hours round trip for a buy-to-let, I'm like, fucking hell, like, what?

How are you going to manage that property if it's 8 hours away? Yeah, and managing the refurb and trades and everything else.

Exactly. So for me, it is a numbers game. But also what you want to do is you want to spreadsheet I've got a spreadsheet that I run the numbers through, and I do the best, worst, and median case scenario of the sell price. So you look for a property, you want it— this sounds mental— you want it to look shit. You want the pictures to be shit. You want to add value to the kitchen, the bathroom. Carpets are a number one giveaway for me. If it's got a patterned carpet, it's a deal.

Um, yeah. Yeah, and also sometimes a big clue is if a listing's got no pictures or just a picture of the front of the house.

I like them ones.

It means it's going to put people off. Absolutely.

Or they've got a pain in the ass tenant.

True. Yeah, they won't allow access.

Yeah, and then obviously, and this is a number one tip, and I've, I had a little falling out with somebody about this. I try not to buy properties with a tenant in situ that requires extensive refurbishment because it just, it just isn't worth it sometimes. Yes, you can do it, but there's easier deals to get out there. So you want the numbers to stack. So you really want to— if it's up for— I'll use one, um, me and Ryan are just doing. So we wanted to look in and around Scunthorpe We got a list of properties. We then crunched the numbers before we went on the spreadsheet, said, right, we would buy these 4 deals. Let's get those 4 deals on a viewing so we can do it in a morning, so we're not flitting about and messing about. So we did it, we got them all in the morning, we offered on all of them because we would have wanted all of them. I know, actually, no, I'm lying. We went to see 4, we offered on 2. We got one accepted, and that's the one we've bought. We offered £20,000 below market value just to chance it, and it got accepted. And that was actually off market with the agent.

Yeah, yeah. A lot of it's about building relationships with the agents because that's where people go to sell the properties.

Not with donuts though.

Not, not, not with donuts, no. What's your thoughts on sort of the letters and sort of posting out, asking people, and obviously walking the area, like, like sort of streets and putting letters through doors?

I've got, I've got two opinions on this. One, if you can be arsed and you've got a lot of time and your gut is saying that is a deal, that's a deal, that's a deal, go for it. If it's your first deal, make it easier for yourself. Go to an agent, go and do your numbers properly, and do it that way. I think if you're very creative and you've got a lot of experience and you've got opportunities coming to you, or you see an opportunity, go for it. I think if you're going to do your first deal, make it as easy as possible for yourself because there's a lot of anomalies. I've seen somebody do a very detailed video recently with a lot of holes in the deal, and to a newbie it looked fantastic. To someone who's experienced, I thought, what a load of bullshit they're talking, because they didn't nail the numbers down properly. And they were saying things like, oh, the refurb might take this long, or I haven't agreed on this price, it's a lease option. And there was just a lot of holes, and I thought, actually You've got to nail your numbers down before you buy something. You've got to nail your timeline down before you buy something. You've got to nail your exit down. So if you're going to do a flip, you need to know all of these things to be confident, and then have a worst case, best case, and one in the middle. So yeah, I live in a town where there's shitloads of derelict buildings. They would be absolutely stunning, they'd be beautiful, but what you don't see is the fact that they're Grade II listed, they're in a conservation area, The town plan is a nightmare. There's, there's no comparables. So in my town, you could have an absolutely stunning villa that's £600,000 next to a £70 grand terrace house, and that's the compa— there's very, very little compa— true comparables in this area. And then we're too far away from the city for that to count as well. There's only one illegal HMO in my town. So if you want to do an HMO here, it's, it doesn't, the comparables are really, it's a risk. So I'd say if you're looking for your first flip, de-risk it as much as possible.

Yeah. And don't get carried away and just keep adding on another couple of grand until you get offer is accepted. Know your numbers, stick to your numbers and move on. Cause there's, there's nothing worse than getting into a deal that doesn't make money.

Yeah, and there's contingencies, and I appreciate it. Like, obviously we're doing a how to find your first deal, but also how to stack it as well. So like, I've been in a house and it's like, I'd love to do it. Like, like the one me and Ryan are buying, for example, it's a big house. It's 3 nice-sized bedrooms and 2 reception rooms, and it's a massive house, but the kitchen's tiny. If I was buying it for me, I would extend it and I would knock through and have a big kitchen diner, but we're not. We're buying it for a flip. So you've got to then go, right, who's this aimed at? So we're aiming it for a family with children, for example. So we've deliberately built a fence in the garden for safety. We haven't tried to annoy the neighbour, so we've done it in a specific position. Um, the kitchen is new, we've put additional plug sockets in with built storage. Do you know what I mean? You, you do things that are worth the money in that respect. But if we was putting big steel bars in and opening it out, we wouldn't break the ceiling price in that area. So again, when you're doing a flip, be really realistic. Like, the first flip we did cost us £35,000 for the refurb, and I was blown away with how happy we was. I've got this one in at £17,000. I've halved it.

Wow.

Yeah, just from, just from the trades that I've used, the decisions we've made, and that sort of thing. And most of that money was on the plastering of the entire place because of use, like this horrible little sandy gritty wallpaper. I think it's actually meant to be outside rendering, to be honest. But without the biggest cost was the replastering of it all, which is worth it.

Yeah, yeah. And obviously knowing, having relationships with also obviously trades as well.

Yeah.

And yeah, it's obviously you said plumbers, electricians, plasterers, and everybody else that you need to get involved into your projects. It's important to build those relationships as well.

My kitchen fitter fitted the kitchen in 3 days at £120 day rate. I know. Wow. I know.

Did he come to Lincoln?

Do you know what, he drove 50 minutes to me and I didn't realize quite where he lived because he does all our Hull stuff. And I went, oh, could you go Scunthorpe for me? It's only half an hour. He was like, it's a really long way for me. I said, I'll pay you petrol, I'm not bothered, just please, I trust you. So all of my trades I've got from Lincoln. Some of them, the plasterer is from Lincoln. All right, if you ever need him, plasterer is from Lincoln, and the rest are from Hull and they've met in the middle to do it. The bathroom fit was from Sheffield, weirdly.

Wow, that's a, that's a travel.

But if you build, if you build decent relationships with people, they will travel for you. Yeah. And I haven't bought any of them donuts. I just pay them on time. That's the most important thing, pay them on time.

Yeah.

But yeah, on that note, that's how you get your first flip. I think we'll probably go into detail, um, on another live Unless anyone's got any questions or anyone wants us to cover anything specific, then just let us know.

Yeah, and if you'd like a template to sort of go through the costs, then I'm sure we'd be happy to sort of share one with you in the Secret Property Club. So just drop a comment and let us know.

Yeah, absolutely. And if anyone's got any questions in the meantime, you know where to find us. But yeah, thank you for that, and it's really sunny where you are, Steve, so enjoy that.

It's lovely. It's actually quite bright. Yeah, cool.

Right, see you later everyone. Thank you very much for joining us.

Cheers and bye from me as well.