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Moony

Property Ladder 16/05/2007

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Hmmmmmm - what do people make of Sarahs advice in tonights episode

to paraphrase:

"you should have held out to make more money on the back of the rapidly rising market....."

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I think someone at Channel 4 needs some maths lessons:

1.1 million of your finest pounds:

untitledsu7.jpg

Yes, this is from the actual program - 51mins in.

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Wow - this guy really did screw himself out of some dosh he sold for £1.1 million missing out on £9.9 million based on this image :lol:

No wonder Sarah thought he should have held out for more :lol:

Edited by Moony

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I did watch this and was left wondering what is going to happen to these new property developers in the coming declining market. Easy to make money in a rising one.

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I did watch this and was left wondering what is going to happen to these new property developers in the coming declining market. Easy to make money in a rising one.

I watched a repeat of this last night. At the end the commentator said go to text page 414 (i think) to see what Sarah Beeney has to say about the property market. It seemed like a disclaimer, and that she expected prices to fall, can't find it on the internet though - just thought it was interesting :)

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Guest d23
Hmmmmmm - what do people make of Sarahs advice in tonights episode

to paraphrase:

"you should have held out to make more money on the back of the rapidly rising market....."

to be fair to sarah this was early last year and prices in that area had risen 10% in 6 months (and continued rising for the rest of the year); however i think the guy absolutely did the right in the end by getting shot of that property as soon as he could, considering he was paying 3K a month in interest

not sure he did the right thing in giving up his job tho; the days of making easy money in developing in London (and presumably the rest of the country) are long gone imo

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Guest X-QUORK
not sure he did the right thing in giving up his job tho; the days of making easy money in developing in London (and presumably the rest of the country) are long gone imo

Interesting point. I imagine very little property development happens in a falling market, the margins must become a little too tight to take the risk. We're not there yet of course, but not far off.

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to be fair to sarah this was early last year and prices in that area had risen 10% in 6 months (and continued rising for the rest of the year); however i think the guy absolutely did the right in the end by getting shot of that property as soon as he could, considering he was paying 3K a month in interest

From a business POV - this was of course good advice from Sarah - the guy potentially screwed himself out of 100k - perhaps he should have jumped on the HPI gravy train as advised.

Being shrewd and timing the sale of a property to extract the maximum profit from a rising market is all part of the property development game.

Edited by Moony

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But we are not in a falling market! Prices are rising and will probably do so for the foreseable future. There is some speculation of a crash, but most economic forecasters do not see it happening. Sorry to p*ss on your bonfires.

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I did watch this and was left wondering what is going to happen to these new property developers in the coming declining market. Easy to make money in a rising one.

Let's hope the programme is maintained through 2008 and 2009.

It'd restore some moral balance to the nation to hear the EA's bargain basement valuations, and see a succession of lucked-out developers trimming their prices below cost in a desperate effort to get a viewing, any viewing, anything at all in fact to just make those nightmarish bank letters stop.

If this crash plays out like 1989-95, by the time we reach the final low the general population will be convinced that investing in property is like putting your money in a blender.

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But we are not in a falling market! Prices are rising and will probably do so for the foreseable future. There is some speculation of a crash, but most economic forecasters do not see it happening. Sorry to p*ss on your bonfires.

dude, this is HPC, prices have been "about to fall" since 2003 on here. Who knows, one day it might even happen.

/me doesnt hold breath

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No one else think the wrong price was funny? Did you notice the commas in the wrong place and the extra zero?

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Hmmmmmm - what do people make of Sarahs advice in tonights episode

to paraphrase:

"you should have held out to make more money on the back of the rapidly rising market....."

Better to sell a month early, than a second too late. :)

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Hi. I am the guy in the programme! I didn't spot the typo either.

The reality was that when I started the project I was aiming to sell for 1 million, making 100K profit. This was based on a flat market. Only a month after I'd started the buyers first looked at the property so the 1.1 million price was not based on 6 months of rising market. Of course they didn't use the bit where I said I'd made double what I planned.

There was an identical house 5 doors down which had a bigger garden which was failing to sell at 1.05 million.

Every agent I've since spoken to said I did exaclt the right thing in taking the money there and then - basically I finished the project and didn't have to wait 3 to 6 months selling it. This put me in a much stronger position to buy the next thing and of course start earning that next profit (hopefully) earlier.

Sure, I could have waited and maybe sold for more, but maybe I'd have lost my buyers, and spent an abortive 6 to 9 months finding new ones.

Property Ladder will always twist the story and edit in such a way to make "interesting TV" - while we are on the subject, the "issues" with my first project were massively over-exaggerated.

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Guest X-QUORK

David H

I'd be interested to know if you're continuing with your property development career, and will you carry on if the housing market stagnates or even drops?

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If this crash plays out like 1989-95, by the time we reach the final low the general population will be convinced that investing in property is like putting your money in a blender.

:lol::lol::lol: Or a bonfire. But by 5th November 2007 that will be the better option. :lol::lol::lol:

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Hi. I am the guy in the programme! I didn't spot the typo either.

The reality was that when I started the project I was aiming to sell for 1 million, making 100K profit. This was based on a flat market. Only a month after I'd started the buyers first looked at the property so the 1.1 million price was not based on 6 months of rising market. Of course they didn't use the bit where I said I'd made double what I planned.

There was an identical house 5 doors down which had a bigger garden which was failing to sell at 1.05 million.

Every agent I've since spoken to said I did exaclt the right thing in taking the money there and then - basically I finished the project and didn't have to wait 3 to 6 months selling it. This put me in a much stronger position to buy the next thing and of course start earning that next profit (hopefully) earlier.

Sure, I could have waited and maybe sold for more, but maybe I'd have lost my buyers, and spent an abortive 6 to 9 months finding new ones.

Property Ladder will always twist the story and edit in such a way to make "interesting TV" - while we are on the subject, the "issues" with my first project were massively over-exaggerated.

David, I thought you did the right thing too. Take the money move onto the next project. If it's in the same are then you would still benift from the rising market + the markup on the property from the development itself. good luck.

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Take the money move onto the next project.

This is what good developers do, even in a falling market and is why many people will end up sitting on, or realising a loss. As prices fall then developers will cut their profits back to keep turnover up.

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Property Ladder will always twist the story and edit in such a way to make "interesting TV" - while we are on the subject, the "issues" with my first project were massively over-exaggerated.

Welcome to the board - the same thing happened to us - hence the reason I started my webpage

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David H

I'd be interested to know if you're continuing with your property development career, and will you carry on if the housing market stagnates or even drops?

Thanks for the positive comments. Yes this is my full time career now and I am on the way with project number 3, turning a 4 bed detatched into a 6 bed, 4 bathroom place in Loughton, Essex near where I live. My "catchment area" in terms of looking for projects has been the more affluent areas of N and NE London and SW Essex - generally within 30 to 45 minutes of home. I don't think they will be doing a "Revisited, revisited" on Property Ladder, although they will be covering Rebecca's (Poole) second project in a revisited in the Autumn so maybe it will get a verbal mention.

I am 100% committed to continuing in development. When I gave up my (well paid, but increasingly unenjoyable) IT job, I wanted to commit myself 100% to doing this - it would have been very hard to continue working and do this on the side, unless I'd just given the whole thing to a builder and essentially taken less profit. By working there myself and project managing and organising the various trades, I reckonned I saved a fair amount, which was my justification in giving up my job. If it hadn't worked out, I could always have returned to IT, but luckily I haven't had to.

During the first project (Summer 2005), the market was actually pretty stagnant. My planning always assumes this and I aim to do the projects as quickly as possible.

The second project was more profitable because I added space by doing the loft and rebuilding the kitchen (actually in the same footprint, but making the space much more useable).

My other general strategy is to go for the best areas - building work costs the same in Crouch End/Muswell Hill as it does in less desireable areas and the % increase is therefore a bigger figure. (of course an expensive house will require a higher degree of spend on the finish, though).

I always work backwards when considering a project - what can I sell it for, how much do I spend to get there, how much profit margin do I want to make and therefore what should I buy it for. I have a spreadsheet covering all of these factors which often means that I can dismiss places without even needing to see them if it's clear they could never stack up. I even take my handheld IPAQ computer to viewings and in fact offered on my second project at the viewing with the agent. I think it helped show I was serious.

Bottom line - if you are providing some value add (more space, better use of it), doing the work quickly in the best areas, buying at the right price with enough projected margin, then the market would have to massively fall very quickly for you to lose out.

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Great to see people from Property Ladder posting here.

David H, I liked the larger (2nd) property you developed. Your strategy seems plausible and should work in even a stagnant (or slightly negative) market.

Well done and good luck with your new career.

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Guest X-QUORK
Great to see people from Property Ladder posting here.

David H, I liked the larger (2nd) property you developed. Your strategy seems plausible and should work in even a stagnant (or slightly negative) market.

Well done and good luck with your new career.

Ditto that.

Well done David, it sounds like you have a pretty sound strategy in place. Personally, I have no problem with value-adding property developments, it's the amatuers who try and scam as much as they can from buyers by adding a lick of Magnolia that pi$$ me off.

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