Top tips for successful property investing at auction
11 September 2014
Auctioneer Edward Swindells of Swindells Auctioneers has revealed his top secrets for investing in property at auction. These are based on tactics from industry experts – the people Swindells Auctioneers dub the ‘flipper’ investors.
According to Swindells Auctioneers, the ‘flipper’ investors have been successfully turning a substantial profit from multiple properties bought and sold at auction without the costs of renovation or refurbishment. This often happens in just a matter of weeks.
In April, one ‘flipper’ investor bought a property for £185,000 and sold it in July for £250,000. Another ‘flipper’ investor purchased a property at an auction in August 2013 for £140,000, which sold three months later (without any refurbishment or improvements) for £200,000.
Here are Edward Swindells' three rules for ‘flipper’ investing:
Focus on London property
In most regional parts of the UK, there is simply not the volume of stock or buyers that is seen in the capital. This means ‘flipping’ investing will not usually work anywhere outside of London. The most effective platform for ‘flipper’ investors to buy a property and turn a fast profit by selling it without any alterations is provided by London.
Don’t become emotionally attached
The best investors are those that don’t discriminate when it comes to property – they don’t care what it looks like, what condition it is in, or even where it is located. A great number of ‘flipper’ investors will buy a property blind and will never actually see it. Normally, these properties already have tenants in place, further contributing to their long term value and reducing the risk to the investor if a resale takes longer than anticipated.
Be financially clever
‘Flipper’ investors typically have access to bridging loans from specialist lenders. This enables them to buy and sell property at auction very quickly. They are able to pay off their bridging finance on the property with the first months’ mortgage payment. Then, they can sell the property again at auction in a matter of weeks. Being financially aware and having a good grasp on numbers is crucial, which is why many investors either have support from specialist brokerages or possess accountancy experience themselves.
“Most of our repeat business comes from these ‘flipper’ investors who have finely tuned the art of buying and selling residential London property at auction,” Edward Swindells said. “We strongly encourage those less seasoned investors to come along to one of our upcoming auctions and learn these valuable tactics from the very best minds in the industry.”