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What is Flipping?

Flipping is one of the more well-known strategies and is used to generate capital quickly. The idea with Flipping is to acquire a property for as little cost as possible, usually in poor condition, and then renovate or refurbish the property to make a profit when the property is then sold on. With this strategy the profit margin will depend on three things; firstly how low the initial cost of acquiring the property is, secondly how low you can keep the costs of the work to the property and then how high the re-sale value of the property is. Time is also an important factor with this strategy, as the longer the project takes, the higher the costs will be.

What is BMV?

BMV stands for ‘Below Market Value’ and it quite simply means buying a property at a % below the average sale price within the area. The % can vary, but it requires an element of discount which then enables the investor to generate a stronger yield than would normally be achieved, to re-sell the property for profit, or re-finance the property at market value to release equity.

For example:

Purchase Price £100,000
Market Value £125,000
Re-mortgage @ £125,000 to release £25,000 to use for the next deal 


Flipping/BMV’s – One of the most commonly used investment strategies has been Flipping or as we like to call it, Flipping Adding Value. Two of the most commonly asked questions we receive are:

  • Can you source cheap properties?
  • Can you source Below Market Value properties?

We are pleased to say the answer is “yes” and “yes”. It is something we always specialise in and we invest heavily in finding and creating these opportunities.  Prospect Investors Club can offer an effective and affordable, Below Market Value, property sourcing service for all our members.

Realistically, you are not going to find 25-30% Below Market Value properties anymore. However, the many resources we have invested in, including sourcing companies, adverts, leaflet dropping, business partners, websites, email marketing, social media, company relations and many more means we can still source Below Market Value properties and properties where you can add significant capital and additional cash flow.

Upon successfully becoming a VIP member of Prospect Investors Club and following a consultation with one of our investment specialists, you will be provided with leads of Below Market Value properties and properties where you can add significant value that we would recommend for Flipping.

Please find below a selection of recent case studies of properties that our clients have Flipped.

House flipping investment strategyThis is a case study of a two bedroom end of terrace property which is located within a popular residential area of Reading, making it an ideal Flip. The house required refurbishment throughout and damp treatment but the end product was a desirable two bedroom end of terrace property suitable for young families, single professionals and couples. The property was resold within a week generating £33,000 profit.

 

We specialise in sourcing the very best Below Market Value properties in Berkshire and Surrey.

Our experience, knowledge, contacts and partnerships mean that our investors can rely on us sourcing properties with genuine discounts, which can be inflated with value to build a substantial asset base. We also recommend and specialise in piggy-backing strategies, looking at Below Market Value properties combined with Buy-to-Lets, HMOs, Flipping, JV’s and more!  We offer as much free information as possible and even carry out the due diligence before we qualify any leads, though we always recommend that an investor carries out their own due diligence and makes their own decisions, but we will always package the leads to make it as simple as possible for you.  

There are many different ways to finance the Flipping strategy and a lot of investors use cash, different types of mortgages, bridging, joint ventures or a combination of these methods. Please find below some of the best rates available for mortgages.  For further information on bridging finance please contact one of our investment specialists first.

Top tips to Flipping properties:

  • Always aim for a minimum of 20% profit
  • Always do as much due diligence and research as you can
  • Look at the Land Registry for sold prices
  • Always be pessimistic
  • Know your valuations as well as your areas
  • Know your target audience when it comes to selling
  • Know all your local estate agents, by their first name!
  • Know the costs involved and have a back-up plan
  • Things will go wrong - understand the costs and implications
  • Set realistic timescales
  • Always get at least three competitive quotes from builders
  • Will it rent out? – have a plan B
  • Manage your borrowing
  • Knowing your customer when you are purchasing properties
  • Don’t rely on short term capital growth, rely on residual income and long term capital gain
  • Never scrimp on inventories, tenant checks, risk assessment, ensure that you fully manage your property and take care of all your needs
  • Make sure you have the right accountant to maximise profits and minimise tax liabilities
  • Make your money when you buy the property! 

There is so much to take into consideration when purchasing any type of investment property to ensure that you make your money when you buy and minimise risk and maximise return on your investment.

We are here to help you every step of the way, arrange a free one to one meeting with us today, call us on 0118 955 9712 or email us at This email address is being protected from spambots. You need JavaScript enabled to view it..

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