How I Built 6 Houses From Scratc
I went to visit my latest property development site and in this article, I’ll be giving you a breakdown on how I built the six houses from scratch.
As you may remember, I did an article last year stating that I’ve just bought a piece of land which cost me 330,000 pounds.
I was going to build six houses from scratch and the end value was going to be 1.35 million which was going to cost me around a half a million pounds to build the houses.
All the three available houses have been rented out for about five to seven hundred and fifty pounds each as we're refinancing some and selling some because it was a joint venture agreement which I’ll write you through.
I’ll talk through the figures, how it was exactly financed and how much profit I’ve made through the properties.
Whenever you do property development, you always need a little bit of faith because you need to be able to see it first and then make it happen.
Most people couldn’t imagine that I was going to do it and I really had faith it was going to happen with the 500,000 pounds allocated towards the project.
When you just built a brand new house, it's usually shiny as you can sell it at a premium price and with the help to buy scheme, people are paying a lot for new builds as they are refinancing them which is an okay thing to do but for me, that was always an exit strategy.
However, after a few years when they lose that shiny new feeling, the house prices drop a little bit in value and that's the reason as to why I’ve chosen to take the profit from four of the houses while my joint venture partners take the profit from the remaining two houses.
Now with my four houses, I’ve chosen to sell them as I want to get my money and put it into a new project whereas my joint venture partner has chosen to refinance.
As it happens, I was the financer behind the whole estate as I got a million pounds of my own money into the project. I never borrowed any money to get it going.
You won't find it at the company's house because it's all done in my joint venture party's company and in his name but I’m taking the majority of the profit and therefore, it works for me as every pretty much deal that I do is a joint venture because sometimes I’ll put the money in while sometimes someone else will put the money in.
Joint ventures are a really good way to grow your development company fast and so, this has worked out super well for us since the houses have been occupied by some of the best tenants I’ve had.
I sometimes do things myself but there are so many people coming to me with development opportunities and therefore, the guy that came to me with this opportunity was like, Samuel, I’ve got a piece of land and I’d love to build on it but don’t have the money. Can we joint venture on it?
We negotiated something like180,000 pounds in about 6 to 12 months.
My partner is a local who can keep an eye on the property for me because it's passive and I don’t have to manage the builders or find any builders and overseeing. It's a win-win and every joint venture is different but if you can find deals like this one, don’t hesitate to hop in.
I haven't been talking about this deal a lot because when I first announced it, people were saying there's no way I was going to build those houses and I just thought, actually you know what, I’ve got a really good team and we've structured the deal well as I did my due diligence before coming on the deal and thought, well, let's just wait and see what happens and now it's all finished with a GDP of 1.35 million.
When you're buying a piece of land, it's important to be able to see once they're built, how rentable are they going to be or how saleable are they going to be?
If you if you want to do deals like this, you've got to get the knowledge first because you can have all the money or save for it but if you haven't got the knowledge, how are you going to be able to add value?
There's so much that can go wrong but won't if you have the knowledge or if you're joint venturing with people that have the knowledge. People say that I just sell people dreams of becoming property investors or developer starting with no money is not legitimate.
However, I believe that if you've got the knowledge to find deals and the skill to negotiate but haven’t got any money, guess what, you can build houses like this because my joint venture partner approached me with the piece of land as he didn't have the money at the time to build and so we set up a joint venture and just because he had the knowledge and the skill to find the land and contact with the builders, he ended up succeeding.
He's made six figures just over the last year in this estate and he hasn’t even done the work by himself because he wasn't the project manager or a builder. He just found the land, put the builders together, and presented the opportunity to me. In this case, this wasn't a no money down deal for me because I paid for the whole thing.
If you want to joint venture on any deals, get in contact: [email protected]
Video at the project start – https://www.youtube.com/watch?v=jpfFv…
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