Property Development With No Capital

There are many ways of making money, but over recent years

one stands alone as being a virtually proven way to make

money, with security built in at the same time.  Few

businesses are as secure, nor offer a chance to make

thousands of pounds for a single, simple deal.

Property dealing is no small time opportunity, and it's far

from risk free, but the potential rewards make it well worth

considering.  It is the one method where people have become

very rich very quickly.

Property investment used to be the preserve of the very rich,

but over taahe years property ownership has become more

widespread and much simpler.

Though property prices have risen sharply over the last

couple of years, it does not mean that profits cannot be

made.  Simply that a greater investment is required -

offering, of course, subsequently higher profits.

SUCCESS WITHOUT CAPITAL

In the past, to succeed, you needed thousands of pounds of

ready cash.  A loan wouldn't do, and in fact was rarely

available to newcomers.  Nowadays however this is no longer

essential.  A very meagre capital sum - even no capital at

all - can mean success.  And just one project can generate

all you need for future developments.

Before starting, see how much money of your own you can

raise.  See if you can borrow from friends and relatives,

perhaps for a share of any profits.  If you can get a few

hundred to start with, then that is a very good start.

Next, check out the potential for raising capital.  Financial

institutions are keen to lend you money, but it is as well to

take professional and independent advice on this.  You could

raise a mortgage on any existing property.

A final way to get finance is to get people to come in with

you as a syndicate.  Place 'Capital Wanted' advertisements in

newspapers, or reply to the 'Capital Available' ones.  The

basic idea is that you invest your time while others invest

money, but that the proceeds are divided equally at the end. 

It can work - get a solicitor to advise and set up the

syndicate though.

MORE PROFESSIONAL ADVISERS

Property investment must be dealt with in a very careful way,

so you will certainly need expert professional advisers to

help you.

If you are trading with other people, a limited company may

be a good idea.  Take the advice of a solicitor on this in

any case.

Banks are a useful contact for advice on finances and

handling money.  You will also need an accountant.

Insurance brokers can identify all the different types of

cover you might need.  Architects and surveyors can help with

assessing and valuing property and drawing up plans for the

work you will do.  Some can even arrange and supervise all

the work too.

The statutory planning and building authorities - at the

local town hall - are not only a source of information on

regulations, but can provide much general advice too.

All in all, remember that although property can be

exceedingly profitable, there is an element of risk involved. 

You must take professional advice from all of these advisers. 

Otherwise it is quite possible that you could lose money.

Once ready to go ahead, there are several types of project

you could consider.

PROPERTY RENOVATION

This area offers some of the biggest profits.  Basically, you

just buy run down property, restore it and quickly resell. 

Opportunities are available for those without capital to form

a syndicate.

Look for suitable property locally.  Ask to buy it rather

than waiting for 'For Sale' boards.  Of course, a lot of old

cottages etc. have been done up already, but property

deteriorates all the time, so there are continuous

opportunities.

Once located, a surveyor can advise on renovation costs of

property in a poor condition, and hence suggest if a profit

might be possible.  Set a budget for the renovations and, as

long as you stick to it, a property profit is virtually

assured.  Of course, the fluctuation of prices can be a

problem, but also an advantage.

VIEWING AND SELLING

Those with a keen eye can make money by simply buying

property which they consider to be undervalued.  Perhaps

someone needs to sell desperately to move.  Then re-selling

when prices are higher.  Watch the movement of the market and

take advice from an estate agent - you might pay one a

retainer.

BUYING AT AUCTION

Further careful studying of the property market and the

auction scene offers a chance to buy auctioned property at

20% plus off the normal market price.  Rarer than in the

past, but still possible.

BUILDING

For those interested in a major project, then building a

property offers enormous potential for profit, especially in

areas where property is scarce.  This can make one-third

profit on the price of the property.

There are several books on self-building to advise you.  One

snag is that it can be hard to raise capital to buy vacant

land.

RE-DECORATION

Some properties will not sell because of poor decoration.  A

good way of making fast money is to buy such property,

re-decorate it simply, then sell.  It really does work. 

White painted walls sell over hideous and unusual wallpapers!

The scheme operates best in conjunction with renovation, but

can work as a decorate-only project, i.e. no structural work

etc.

SUB-DIVIDING

Properties from older days were invariably large to

accommodate large families and their servants etc.  However,

modern families require, and can only afford, much smaller

properties.  Hence one of the major property projects is in

sub-division.

The typical way of doing this is to buy a large Victorian or

Edwardian house and divide it up into flats.  Often this is a

very simply business.  Sometimes it is more complex and would

require an architect to design the sub-division.

If this project can be operated in conjunction with

renovation, then so much the better, but it doesn't have to

be.  Such is the project that it's even possible to buy quite

new houses and do this too.

Profits are possible on the basis that smaller homes are much

more valuable per square foot than large ones.  So, for

example, a property worth œ250,000 as a whole could easily be

worth six flats at œ70,000 each.

A NOTE - HOLIDAY PROPERTIES

Where any of the property renovation or conversion projects

can be applied to holiday type rental property, then the

profits will generally be rather higher than for full time

residential.  Original cost may be higher too - but not if

you can find an area within a couple of hours of a major city

- good for weekends and holidays.

COMMERCIAL PROPERTY

At one time, commercial property was nowhere near as

profitable as residential property.  Since the latest price

boom however, all of this has changed and office, factory and

warehouse property especially, can be very profitable.

One of the most lucrative opportunities is the buying of

large commercial units and sub-dividing them into smaller

units for today's boom in small business.

Whereas at one time the trend was to convert residential

property (large houses etc.) into commercial property, the

reverse is now true.  So, for example, mills, factories, even

shops, are very profitably renovated and converted into

homes!

SUMMARY

Many property projects are very ambitious, but, in fact, most

of them can be started without any capital via the syndicate

method as discussed.  If you have got the ideas - and the

ideas are here - there are people who will put up the money. 

Making property a virtually, if not totally, capital free

project!