If you are looking to buy to flip, then it must be remembered that most potential purchasers register at an estate agent’s office looking for a property they can occupy in the short to medium term and not something that is unavailable to move into for maybe a number of years.
Therefore we advise placing a property on the market for re-sale approximately three quarters of the way through the build programme or at a time when it is possible for purchasers to walk into the property and see the aspect, size of rooms and general ambience of the completed scheme. You still may not achieve the full open market value but you will, if purchased wisely (subject to market conditions), make a good profit.
It must be remembered that properties that are un plastered or decorated always appear smaller than their true size. Before committing to any purchase it is also important to establish with the developer at what point the property can be sold on. In some instances, there are restricted covenants placed in your purchase documents restricting you from achieving a sub-
- Not selling on before the property has reached a certain physical state i.e. roof level or water tight and more commonly before second stage payment i.e 20% has been put down.
- Only allowing one sub-sale. In this instance after you have sold on your property your purchasers can only sell after they have legally completed the purchase.
- Not allowing any assignment unless you have developers consent. We have actually seen cases where the developers have asked for a share of the uplift.
- Out right refusal to assign,
Many buyer will assume they have the whole market to sell to, however in reality, funding for contracts is limited to only a few lenders and in most cases to avoid complication cash buyers are the only option. One of my company’s specialises in finding these type of specific buyers for contract assignments and with teh right legal and lend team, selling a contract can be pretty straight forward.
