In a video for my YouTube channel, I visited a commercial property flipping deal recently bought by one of my students, Stacy (who's part of the Property Investors’ Academy). She bought it for £120,000. She then turned it into residential use above and below. The property is now worth £250,000. She then refinanced the property, pulling out more than her investment amount! I highly recommend watching the full video (above) to see exactly how she did it.
Commercial property flipping can be extremely profitable, especially with recent changes to permitted development rights. In this article, I will give you 3 commercial property flipping lessons to learn from Stacy’s investment. If you find the information in this article helpful, please consider sharing it on social media. I’m on a mission to get property and financial education to the masses, but I need your help to do it!
1. Buying Cheap Commercial Property
A lot more people are working from home these days and buying products online, rather than from retail shops. This means there are a lot of commercial properties that are empty. Even shops and offices that are tenanted may be being rented out at low rates. This means there is a lot of opportunity right now for commercial property flipping.
You can buy commercial property very cheaply because commercial property is valued based on the income it's producing. So if it happens to be producing a low income or if it happens to be empty, you can often buy it dirt cheap! You can then turn it into residential property, bringing up its value. You may think that this will require a long and difficult process of acquiring planning permission, but this may not be the case…
2. Permitted Development Rights And Commercial Property Flipping
The government recently made changes to permitted development rights. Now, you can change a shop or a commercial property (Class E) into a residential property (Class C3), or into a block of flats, without even needing to get planning permission. This massively increases the value.
You don't need to get planning permission, but you do need prior approval. Basically, it's just an application. The form is easy to get through. They will then send you a letter explaining that if they don't respond within 56 days, you can get on with the work. This is much easier than applying for planning permission and makes commercial property flipping a lot easier. Now you can sell the property at a profit, but that isn’t your only option…
3. Adding Value And Refinancing When Commercial Property Flipping
When you convert a commercial property into a residential home, you will be doing so to increase its value. This means it is often a great opportunity to refinance, pull your money out, and keep the property! If you only turn part of the property into a residence, as Stacy did, your property will be valued as a commercial property. This means that it will be valued based on the rental income. This often means higher valuations and is much more predictable.
Whether you decide to sell the property or refinance, having people to help you at each stage of the process is essential. The best way to find a community is to attend property events. Luckily, I have just such an event coming up…
Learn Commercial Property Flipping And Other Strategies
If you want to learn commercial property flipping and other property strategies, why not learn from a property expert? Join me at my next training event!
On the course, you will learn how to:
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Become a property investor using other people’s money so that you can get started straight away
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Utilise the 5 different types of raised finance so that you know exactly what to offer and when
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Find the perfect properties for the BRR strategy
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Recycle your money so that you can ‘rinse and repeat’
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Build a power team you can trust, so that you can save time and money
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And much more!
Tickets are only £1, and you can get yours here. If you are ready to take action, I hope to see you very soon!
