Advice from experianced developers regarding renovation for profit

[Jamiecurrie]

Hi.

Like many I have a strong desire to pursue a career in property development .

I'm 26 and bought my first place 5 years ago , which has gained some equity , although not enough LTV to remortgage . I have a family member as a tenant and the mortgage is covered by the rent . The property is not mortgaged as BTL.

I bought our current house 2 years ago as a repossesion and done major renovation work adding 25% equity .

We have recently remortgaged our main place and have 20k cash in hand , and still around 50k equity in the house.

The practical side of renovation is covered , I have extensive experiance in construction. I also have excellent contacts and can tackle most trades , although I'm an electrician to trade.


Anyway , rather than waste 20k on a new car I got thinking whether I can start my career in property .

Ok the snag. Currently on my salary I'm almost maxed out with regards to how much I can borrow , I reckon I could finance another 40/50k max.

There are plenty of small flats/houses at auction at that kind of money needing extensive work done .

I dont really want to invest long term at the moment so the idea of snapping up cheap property to rent does not appeal .

My question to the more experianced is ;

Is it wise to start off with such a small project ?

I know the profit will be small 5-15k.

I am worried about the market for folk looking to buy 50/60k houses.

For example 1 bed flats are more likely to rent than sell.

Should I hold off and aim more towards family 3 bed type propertys ?

I'm just a little scared that I'm going to invest around 10/20k on a refurb and I end up having to rent the place out , tying that cash up.

Any advise is really appreciated .

Thanks.

Jamie (glasgow)

[Dougie_tps]

Hi

There's no problem at all in aiming at small developments first. It's a big learning curve.

In relation to the market though, there is some optimism out there but generally there isn't that many buyers out there at the moment. That's the situation down in the south anyway.