Speculative House Buying
Discussion
Just wondered whether many people have done this & if so have it been worth while.
The scenario is that last week I was handed a set of drawings for an old country house which is being transformed into apartments. The location is west yorkshire in georgeous surroundings.
I today attended a site meeting & had the opportunity to view each & every plot. On the way out of the site I asked the developer whether they had approached an estate agent to handle sales. They had, and he let me have the details.
I then phoned said agent & asked to speak to someone regarding the development who when I did said they had revieved huge interest but yet had no plans or prices to issue therefore no sales as yet.
This is the good part, I already have plans (albiet provision) and therefore know the best plots. The estate agent also implied I could reserve these plots before released to public.
The only downside I see is that no prices have been issued (I would presume approx. 350k each).
The build is over the next 18 months, with the 2 plots i'm interested in being the final 2 to be complete.
Is it an offer too good to pass up ?
The scenario is that last week I was handed a set of drawings for an old country house which is being transformed into apartments. The location is west yorkshire in georgeous surroundings.
I today attended a site meeting & had the opportunity to view each & every plot. On the way out of the site I asked the developer whether they had approached an estate agent to handle sales. They had, and he let me have the details.
I then phoned said agent & asked to speak to someone regarding the development who when I did said they had revieved huge interest but yet had no plans or prices to issue therefore no sales as yet.
This is the good part, I already have plans (albiet provision) and therefore know the best plots. The estate agent also implied I could reserve these plots before released to public.
The only downside I see is that no prices have been issued (I would presume approx. 350k each).
The build is over the next 18 months, with the 2 plots i'm interested in being the final 2 to be complete.
Is it an offer too good to pass up ?
I'm aware of a few people doing this and making a killing. But do your research. Make sure the proposed asking price is realistic. Get written agreement on the price at the start of the build, odds are that the market (esp around Leeds) will have significantly increased in 18 months.
Otherwise, if you have the cash - go for it.
Otherwise, if you have the cash - go for it.
With regards the properties, we will basically have to put down deposits (£500 each) before prices are announced. If then when the prices are announced we are still happy we would be required to put an additional £1500 each.
The value of the properties will (i expect) likely to be approx. 350k each, and although i do not have that kind of money, with the plots not being available for at least 18 months (maybe longer due to national heritage being involved) i was thinking to buy now and then remarket in say 12 months (before i needed to put any other monies in).
At worst i loose 4k, but hopefully prices increase & i make a substancial profit.
>> Edited by hobo on Monday 2nd February 15:31
The value of the properties will (i expect) likely to be approx. 350k each, and although i do not have that kind of money, with the plots not being available for at least 18 months (maybe longer due to national heritage being involved) i was thinking to buy now and then remarket in say 12 months (before i needed to put any other monies in).
At worst i loose 4k, but hopefully prices increase & i make a substancial profit.
>> Edited by hobo on Monday 2nd February 15:31
The offer does sound good, but not a sure thing. For one you've got to keep your level of profit reasonable or else they could just say 'sod it, we'll go somewhere else' and you're left with some land, which is nice but what can you do with it (cue Jeep Grand Cherokee advert)
On the other side of the coin, the saying 'buy land; gods not making any more of it' is true (ok, I did get that from the Sopranos). But on the worse side of things, can you afford to have the money tied up for a few years if the worst happens?
The expansion of development has created alot of oportunities for housing developers, so you can't hold out for huge margins. Personally If you've got the money to use, wait for a market drop and buy some run down areas within London, after some time it'll be 'redeveloped' and you can make some money.
On the other side of the coin, the saying 'buy land; gods not making any more of it' is true (ok, I did get that from the Sopranos). But on the worse side of things, can you afford to have the money tied up for a few years if the worst happens?
The expansion of development has created alot of oportunities for housing developers, so you can't hold out for huge margins. Personally If you've got the money to use, wait for a market drop and buy some run down areas within London, after some time it'll be 'redeveloped' and you can make some money.
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