Selfbuilder interested in developing full-time...

[muddyboots]

Greetings all

First post on here.

Over the last couple of years I've more or less completed a large selfbuild project, whilst maintaining my day job. The idea of turning to property development fulltime has been gnawing away at me for a while; I feel like I've leart a lot from the selfbuild process and have made a number of contacts that I've enjoyed working with. I also enjoyed the working environment.

At the moment I'm just at the ideas stage, wonderning what the options might be...
- look for land, build from scratch, sell (hopefully for profit)
- look for land, build from scratch, rent out until such day as prices increase again
- take on a renovation project, sell
- take on a renovation project, rent out

Also wondering about the merits of ditching the dayjob and running the project fulltime, to take on some of the management & work myself to save costs, or to keep the job and get my builder to take on the work.

Anyone else ever taken a similar plunge, or have comments on any of the above ?

Cheers

[aquavit]

Yes - I have done this. Found a plot two years ago, after protracted negotiations and planning issues finally purchased the land in September 2007 - just as the credit crunch started! Started scraping the ground in November last year and the build was pretty much finished by July 2008. I managed it myself whilst retaining the day job but also ended up doing quite a bit of hands on (installing UFH, insulation, building decking etc.). My plan was to go full time property developing and I was some way down the path of purchasing my next plot and I had negotiated the sale of my business which was to fund my new career. In the meantime of course the credit crunch took hold. Initial valuations for the house before buying the plot were £350k - £375k. As we got near to finishing an asking price of £325k looked more realistic with my agent suggesting selling for around £315k. This would still realise a profit but three months down the line we've had two viewings, no offers and have now reduced to £299,950.
I've baled out of the other plot, having spent around £3k on fees, and paying a mortgage on the unsold development we're getting close to being in a minus situation. Like you, and for the same reasons, I would love to be doing this full time but that dream has been dashed by the current economic climate. I'm now left "jobless" with a huge liability and an uncertain future. I feel very angry about the banks and the government ****ing up the economy and as a direct result massively affecting my life.
Hope that helps!

[Scott Butcher]

I guess the answer as to whether it is a good idea somewhat depends on your opinion of when the housing market bottom out and begin increasing again.

Opinions on this vary wildly.

If you have the finance to support yourself for a long period and can take a long term view of things, then it could still be a good idea.

In the current market, you could potentially but properties rather cheaply and perhaps their is still a profit to be made. Also, you may be able to get more competitive prices from builders as their work is drying up too.

Ths real issue is always going to be how long you could hold onto the property without selling it. Things to consider include are you going to need a mortgage for purchases of land/properties? How would you pay for it? How long could you continue paying for it without an income?

It's not an easy decision and I suggest you think very carefully before throwing in the towel with your current main source of income.

[sharon333]

I would suggest the same. It sounds like a big step in your life.

[Builder SC]

In order to avoid capital gains, you are best living there for a couple of years to maximize your profit while the housing market recovers.

The real question is can you afford to do this and are you prepared to take such a risk?

Only you can answer this question.