To flip a property you buy then re-sell almost instantly.
There are several different varieties of “Flips” in the Buy to Sell market.
However for ease of use, lets talk about Flipping New Build property with a discount.
The three most important factors to consider in Buying to Sell are the Location, The Market you will sell to and the Price.
Maybe the most important factor to look at is, are there still genuine discounts around?
If you walk into a showroom for a developer and manage to knock 15% off of the list price, what makes you so sure that you could then sell on at a 15% profit? After all, if the developer does that particular deal for you, could you prospective purchaser not simply walk into that same showroom and get that same deal?
Say you buy the last plot on that development, ok now your not in competition with the developer but you are with every other development in the area… and anyone else that has the same idea as you!
A similar Buy to Sell investor could have purchased 10 of the same apartments the month before and got a 20% discount; he could sell at 5% below you and still make a 15% profit!
As you can see Buy to Sell does not seem to be the simplest way of making money!
So how do you purchase a Buy to Sell property bmv (below market value)? Why would the developer sell for that?
Well you’re definitely in a better position if you
Already have finance arranged
Are a cash buyer
Can buy multiple units.
If you are in any of these positions then you are in with a shout. Either because units the developer has pre sold have fallen through and you can complete quickly or because the developer needs to sell multiple units in a hurry!
If you are fortunate enough to be in one of these positions then we can go back to what constitutes a “good deal”, the location, the market and the price are all important.
Firstly the Location, most important is that the average £/per sq.ft. for comparables in the area is noticeably under what you are paying, also important is to speak to agents in the area and ask how quickly the comparable property is selling.