George Clark returned to TV last week with Channel 4's latest property show, Flipping Fast with George Clark, which is all about house flipping – buying houses cheap and renovating them to make a quick profit.
The architect is joined on the show by brother and sister duo Scarlett and Stuart Douglas, property developers and home flipping experts who have appeared on a number of real estate shows, including a special episode of “Love It Or List It” and “Worst House On The Street.” Ideal Home spoke to the duo to find out their tips for maximizing profits from flipping a home, including why choosing the right craftsman is one of the most important factors.
(Image courtesy of Channel 4)
The new show is a mix of The Apprentice and Love it or List it, with six people being given £100,000 to begin their journey of 'house flipping'. The six-part series, which began on Wednesday 25th May, explores who could make the most profit from a housing development over a 12 month period.
Scarlett and Stuart's House Flip Tips
1. Find the best contractor possible
This is essential and makes the whole process much easier, says Scarlett. She tells us: “It doesn't necessarily have to be the most expensive thing, but something that is consistent, reliable and trustworthy will make a sometimes stressful profession much easier!”
2. Work backwards to find the purchase price
Just like when buying a property for yourself, when planning a home flip you should first assess your potential profit margin. Scarlett explains: “Find out the maximum price for properties on that street, what it would cost to renovate and know the type of profit you can make from it will help you decide how much to offer on the property in the first place.”
(Image courtesy of Future Plc/Douglas Gibb)
Stuart agrees, suggesting that assessing the area as a whole can give you an idea of the potential profits: “Look at the area you plan to buy in. Is it a great location for commuters or families? Will a condo or a house give you more financial return? These are standard questions you should know the answers to before making a purchase. From here, you can calculate a renovation budget that will give you a profit if the numbers are right.”
3. Always have a backup fund
As with any real estate project, having money set aside for unexpected issues is crucial in the house flipping business. “Once you've decided on a budget figure, always include at least 10% as a contingency fund – no renovation ever goes according to plan!” says Stuart.
(Image courtesy of Future Plc)
4. When possible, work with an experienced mentor or partner.
Scarlett explains: “This is a hard business, so it's better to learn from other people's mistakes than to make your own. We all have to start somewhere, and we all make mistakes – even experienced developers. But if you can minimise failure when you're starting out, it's invaluable.”
5. Start small
Stuart's advice to beginners: “Start small and simple, this will help reduce the cost of renovation and minimise the risks.”
“Start with something like a one-bedroom flat that doesn't require major structural changes. It's OK to knock down a stud wall here and there, but load-bearing walls that require calculations from a structural surveyor can get quite complicated and expensive, especially on your first renovation.”
George Clarke's Flipping Fast airs on Wednesday at 9pm on Channel 4.