A SAVVY 28-year-old has been flooded with praise after revealing how he increased the value of a block of dated flats from £250k to an estimated £800k in just five months.
Ryan Green, who is a property developer from North Wales, explained how five months ago he and his team purchased a block of 4 apartments at auction for £250,000.
In a clip shared to TikTok (@greendevelopments), he went on to explain the additional fees incurred along the way, which included £1,500 in auction fees, £12,450 in stamp duty.
They also had to fork out £4,650 in broker fees, lender fees and legal costs, giving them a total purchase price of £268,600.
Ryan noted how they gave themselves a £100,000 budget to renovate the entire building on top of their original purchase price.
Now, with an estimated 10 days to go, he added they’ve just got some redecorating work to finish off in the remaining apartment.
Taking social media users on a tour of the newly renovated project, he showed just how far the development has come in just five months – with the space looking almost unrecognisable to before.
They’ve even managed to soundproof each space using acoustic insulation between floors and double boarded ceilings.
Wow, what an amazing investment, very well done!
Social media user
“We have an estate agent booked to come next week to give their valuation but after doing some market research we estimated each apartment to be worth around £200k each, increasing the property value from £250,000 to £800,000,” he said.
Ryan added that in total, including all fees and renovation costs, they spent £118,600.
They also used six months of a potential 12 month bridging loan which cost them £12,961, giving them a total of £381,561.
Sharing their future plans for the property development project, he said: “We will now refinance the property at 75% LTV (Loan to value) which means we will be able to pull out £600,000 minus our total spend, which leaves us with a profit of £218,439.
“We will then run all 4 apartments as holiday lets which will generate over £120,000 per year.”
It’s no surprise the post quickly went viral, racking up a whopping 736k views and several comments from very impressed social media users, with many quick to congratulate Ryan on his success.
“Wow truly inspiring,” enthused one.
A second praised: “Wow, what an amazing investment, very well done!”
A third commented: “I remember the 1st time you showed them and the transformation is great. A £100K well spent!”
Meanwhile, a fourth noted: “Absolutely love it!”
And another chimed in: “It’s incredible! Well done!”
Property auctioneer reveals how to prepare and what to avoid if you're considering a bid at auction
By Jessica Clark
Andrew Parker, lead auctioneer at SDL Auctions, advises the following:
Check the legal documents
One of the most important things you can do when you’re preparing to buy a house at auction is read the legal documents in full.
If you’re the winning bidder you’re legally bound to buy the property, so you need to be aware of any hidden costs.
It could be worth paying a legal professional to check them over for you – any cash spent now could save you a fortune in the future.
Be on the look out for buildings with cladding or non-standard construction – this will be detailed in the documents and you might want to avoid those traps.
Andrew said: “Buyers must read the legal pack and they must read special conditions of sale.
“I would always recommend people pay £100 to go to a solicitor to read it for them, because you might not know what you’re looking at.”
He added: “You can’t breeze into it and hope it works out because that will end in tears.”
Set a budget and be realistic
When you arrive at – or log on to – an auction, you should have already set a budget – and make sure you stick to it.
Also calculate how much you might need to spend on any renovations or decorating.
Andrew pointed out the difference between a reserve price and what the property might actually sell for.
Some people see the reserve price and think that’s what they might end up spending on the home.
But that’s actually the minimum price the seller is willing to accept, so it’s likely to be more than that.
You should always compare the price with other, similar, properties in the area to make sure you’re getting a good deal.
You’ll also have to pay fees on top of the sale price.
The amount is usually a percentage of the final price, but will differ depending on what kind of sales mechanism is used.
For example, if it’s an unconditional with fixed fee sale, SDL would charge you an extra £1,074.
But if it’s a conditional sale with reservation fee, you will have to pay a minimum of £6,000 extra.
Check the legal documents thoroughly for details of extra charges and don’t forget to factor in stamp duty.
It’s important to get your finances in order before the auction.
Some high street banks will give you a mortgage for auction properties but you could also explore specialist lenders.
If you opt for the latter, you’ll need a bigger deposit.
But many vendors prefer cash buyers, which means you’d need to pay for the whole house up front.
Never buy without viewing
It could be tempting to buy a home without viewing it if you spot something at a super-low price.
But if a property has a bargain basement price, there’s usually a reason for it.
It might need extensive renovation work, for example.
Andrew is clear that you should never bid on a property without seeing it in person first.
He said: “In the north east there are still properties you can by for less that £20,000
“What I would say to people is that there is generally a reason for that and I would make sure that you really do do your homework before you get involved.
“It is quite common for investors to buy something in the north east that they’ve not seen and think that it’s spectacularly good value for money because it was only £25,000.
“But you may find that that’s the one house on the street where the curtains look nice but the rest of the street is all boarded up.”
You can arrange a viewing by contacting the auction house that is listing the property.
Just like buying through an estate agent, you’re entitled to have surveys and searches done before deciding whether the house is right for you.
This will cost you money – and you might not end up buying the house – but it’s money well spent, especially if you’re an auction newbie.
There are different levels of surveys, and how much it will cost depends on which one you opt for and the value of the property.
Most go for a mid-level survey that looks at what repairs and maintenance will need to be done, as well as issues such as damp and whether it meets current building rules.
A more thorough check is recommended for houses in a poor condition, and the surveyor will beyond surface level issues such as in the attic or under floorboards.
A survey could set you back between around £500 and £1,000 – but it could be less if the property is worth under £100,000.