Property Developing – Learn from my mistakes – 1

| 17th June 2016 | 0 Comments

Property Developing – Learn from my mistakes

 

My Property Developing career started back in 1992 and since then I have made many mistakes – everyone does, its how you react that counts.

 

Every successful business person has failed at some point. Instead of giving up they learn, fall forward and carry on.

I refurbished houses I lived in whilst holding down other jobs. I lived in mess for many years before I had made enough money to have my own place whilst owning and developing another.

I chose the own and develop route. I could have rented a flat and bought a project but it made more sense to me to save the rent payments, have only one mortgage payment and live on site. The right decision even though I was covered in dust most of the time.

My first project was Orchard Road, Westbrook near Margate. A semi-detached house that an eighty a day smoker had left to his children. I bought it in 1992 for an excellent knockdown price of £32,000 with a 100% mortgage. The picture below is what the house looks like in 2016.

 

Property Developing - Orchard Road westbrook

Orchard Road, Westbrook

 

I was very green when it came to Property Developing and had no idea how to add value to a property. I should have extended out the back and knocked some internal walls down to open up the space. Instead I put in a new bathroom and kitchen, new windows and decorated. Once I had done this I obtained a further advance on the mortgage of £26,000 making the mortgage £58,000. Again 100% of the value.

Instead of putting the money (potential profit) aside for the next project I bought stuff…clothes, a car etc . To be honest I was 28 years old and had just met a new girl so I was showing off a bit. By the time I came to sell Orchard Road there was very little left so I had to start again.

This time I bought in a pretty village called Groombridge just outside Tunbridge Wells, Kent. I made sure this time that I retained the profit which was £60k. Nice!

 

Property Developing - mistkes I made - 2 the walks groomombridge

2 The Walks Groombridge

 

The moral of this little story is as follows:

 

Protect Your Profit!!!…in this case there was £26k profit to be had  and that was without adding value with an extension. If I had known better the £26k would have been £36k at least and I would have had enough money to start the next project…. if I hadn’t been such a shallow show off.

 

Property Developing – Learn from my mistakes

 

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Category: Construction Phase, Negotiating and Buying a Property, Property Developing

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