Flipping Fixer Upper a la Sara Beeney in "Property Ladder" Cork Area (Jan 2007)

M

mincie

Guest
I would like to buy a 3rd property in Cork city centre North or South.
I have a budget of €250 - €300K for this propery and ideally would like something which is need of repair and refurbishment. The idea would be to sell it on and make a profit similiar to that series "Property Ladder" with Sarah Beeny.

  • Does this market exist in Cork - are there "fixer uppers" still out there
  • What kind of profit could I anticipate to make on this ?
  • Can you advise me of particular areas which i should be focusing on
  • Has anyone out there have experience of doing this - how difficult did it prove.
Thanks for your help.
 
Re: Property Ladder

It's harder to turn over property in Ireland than in England because of the much higher rate of stamp duty here. You are essentially starting 10% down on your investment already.

Don't know much about the Cork market either.

I just watch Property Ladder for Sarah Beeny!

Peadar
 
Re: Property Ladder

hi,
there are a few good opportunities still out there for flipping but my advice would be to look for the flipper and then look at anything similar in the area for sale do a cmparison and see if you can make your's better and add a bit of value to it
i have seen a few about so pm me if you are intereested and i can point u in a few directions or alternatively i can throw the links up here
 
Re: Property Ladder

can i add.. i am not currently in a position to take on a project myself but i am more than happy to pass along anything i see about that has potential
 
Re: Property Ladder

I'd be very careful unless you have extensive experience in the building trade. The only people I've seen who have been able to do this reasonably successfully are small time builders, who specialise in extensions and small houses and who can use their employees on their own projects when they've nothing else going on.

Non builders are simply hoping that the underlying property value will go up and that is where they make their money - i.e. they buy something for €200k, spend €100k on it, sell it for €350k - but if they hadn't done any work to it, it would have sold for €260k anyway. (i.e. after spending €100k on the house, they've "lost" €10k).

One interesting thing I've seen with properties in the city centre is that often the price for the property (in very poor condition) is €250k, while the max. price for the property brought up to a reasonable condition is €375k, but the work required to get it to this standard would be minimum €150k - even for a builder. Basically the estate agent has no idea about the costs of renovation, and is hoping that whoever is buying is equally ignorant.

My advice: That ship has sailed.
 
Re: Property Ladder

Superman said:
One interesting thing I've seen with properties in the city centre is that often the price for the property (in very poor condition) is €250k, while the max. price for the property brought up to a reasonable condition is €375k, but the work required to get it to this standard would be minimum €150k - even for a builder. Basically the estate agent has no idea about the costs of renovation, and is hoping that whoever is buying is equally ignorant.
Click to expand...
I agree on your general point - there are very few circumstances in which "flipping" stands to make any money, unless you're able to hive off a site from the garden or something like that, and you can spend more than the same house in good condition will cost.

I don't think it's purely ignorance about renovation costs that gives rise to the lower price differential you refer to, though. It can be worth it for owner occupiers to buy the renovation project at an apparently high price if there's a different stamp duty threshold, and their total spend doesn't exceed [projected increase in value + difference in transaction costs]. Even beyond that, it's sometimes worth it to owner occupiers to spend more to have a fully personalised house if they intend it as a medium to long term home.

But it's not [IMO] a good move for short-term investors, and transaction costs are so high that you'd have to know the market very well indeed and be doing something out of the ordinary to have any reasonable prospect of making money. To the OP: definitely not a wise move if you have to ask if there's such a market!
 
Re: Property Ladder

Dreamerb said:
I don't think it's purely ignorance about renovation costs that gives rise to the lower price differential you refer to, though.
Click to expand...
I'm thinking of specific examples of houses in the city centre area - Shandon, Blarney St. etc. which are specifically sold as "investment properties".
 
Re: Property Ladder

Flipping a la Sara Beeney doesn't work at this stage in the Irish market as a rule, for lots of reasons. Exceptions, as someone pointed out, are houses on large sites where annother house can be built, with or without demolishing the existing one.

The major problem in Ireland seems to be the unrealistic prices that the market will pay for houses needing renovation versus 100% ok houses in the same area. The price differential is simply not high enough, and labour and materials are too expensve here.

In the UK, the market is more sensible about the value of a fixer-upper, and buyers generally won't go beyond the market value that allows for profit after having done the necessary work. I would always advise people who want to repair/flip to go to the Uk and do it there, better chance of getting a margin. Labour costs are far more realistic and materials are that bit cheaper.

The other side of this coin of course is that when market conditions arise where the houses needing repair are priced keenly, it probably means that the market is cooling and the price post-renovation will have dropped. Hard to win in this area in Ireland unless you can add value in some other way, such as commercial use or adding another house to the site.
 
Re: Property Ladder

i still think there are some flippers out there and once you have a plan and a budget and stick to both there is money for the taking..
also there are some very good fixer uppers that would make a good rent if you kept them after the refurb..
as for Sarah Beeney... what a fab looking woman
 
Re: Property Ladder

Superman said:
I'm thinking of specific examples of houses in the city centre area - Shandon, Blarney St. etc. which are specifically sold as "investment properties".
Click to expand...
If they're in multiple units, perhaps that's what makes the difference - that they're longer term investment? Or maybe you're right and that sector of the market is quite reliant on the invidious combination of naivete and greed. [In the property market in Ireland?... :eek: How could I suggest such a thing?].

Still, I've bought as my new PPR a serious fixer upper, and it will probably (though by no means guaranteed) have more money spent on it than we would then recoup if we were to sell on immediately - and that is because of a combination of the stamp duty differential, and the fact that we'll be customising it to what we want.
 
Re: Property Ladder

Dreamerb said:
If they're in multiple units, perhaps that's what makes the difference - that they're longer term investment?
Click to expand...

This is taken into account by the estate agent. As with underestimating the cost and extent of renovation, they generally overestimate the number of units that could be put in - a "sure you'd definitely get a small one bedroom apartment in there" type attitude. This may indeed be possible in some cases - provided you don't care about obtaining Planning Permission, meeting minimum standards under the Building and Fire Regs. and thus selling on.
 
Hi , and welcome back to AAM, Its been a while!

I think it is unlikely that you will get a response to your question in this thread as it is over four years old and the OP is not a registered poster.

It was worthwile re reading the thread for auto's marvelous contribution:

auto320 said:
Flipping a la Sara Beeney doesn't work at this stage in the Irish market as a rule, for lots of reasons. Exceptions, as someone pointed out, are houses on large sites where another house can be built, with or without demolishing the existing one.

The major problem in Ireland seems to be the unrealistic prices that the market will pay for houses needing renovation versus 100% ok houses in the same area. The price differential is simply not high enough, and labour and materials are too expensive here.

In the UK, the market is more sensible about the value of a fixer-upper, and buyers generally won't go beyond the market value that allows for profit after having done the necessary work. I would always advise people who want to repair/flip to go to the Uk and do it there, better chance of getting a margin. Labour costs are far more realistic and materials are that bit cheaper.

The other side of this coin of course is that when market conditions arise where the houses needing repair are priced keenly, it probably means that the market is cooling and the price post-renovation will have dropped. Hard to win in this area in Ireland unless you can add value in some other way, such as commercial use or adding another house to the site.
Click to expand...

Title expanded to reflect question more fully.


aj
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