Yeah, you read that right—67% return on a single development. Here’s the breakdown:
- Site cost: £1.6M
- On-site development: £700K
- GDV: £3.8M
- Profit: £1.5M
Why a Small Developer Needs Big Wins (Not 20% Margins)
When you’re a smaller developer, a 20% margin isn’t cutting it. Sure, it’s okay if you’re turning over £10M+ every year, but we’re in a different game. For us, every deal has to be carefully selected, pass on 99% of what’s out there, and lock in the one golden deal with some real meat on the bone.
So, how did we snag 67%? Let’s take a look.
The Hunt for the Golden Deal
Here’s the thing about finding profitable deals: they don’t come with a sign that says, “Gold Mine Here! Just Polish and Profit.” Nope. The real opportunities often look like—pardon my language—a hot mess. And that’s exactly where we struck gold with our last project.
It all started with a chat. A friend mentioned a row of cottages for sale by an older landlord. These cottages were in rough shape, needed major repairs, and had tenants who’d been there for ages. Now, the landlord wasn’t interested in dumping any money into these properties, so he wanted to offload them quietly.
Why It Scared Off the Competition
The cottages weren’t listed, and the landlord didn’t want the tenants knowing he was selling. He called a friend—an agent who agreed to pass the word around, but that was it.
Most developers passed. Why? Refurbs are tricky, unpredictable, and most folks want a nice, clean slate with new builds. Refurb projects? They’re seen as a “cans of worms,” and tenants who’ve been around for years? Big developers typically steer clear. For us, this was music to our ears. With most developers taking a hard pass, competition shrank, and we had room to play.
The Game Plan: Adding Real Value
Now, just buying at a discount isn’t enough; you have to think about how to really stack the value. In this case, we planned to double the square footage by adding two-story extensions, turning each cottage from a 1-bed to a 2-bed property.
Sounds simple, right? Except everyone else had looked at this deal and thought, “Where’s the money in this?” Even the seller was baffled by our plan. But that’s because we saw what others didn’t: the area was going for £600/sq ft. We could build for £100/sq ft, meaning every square foot was an extra £500 in profit. That’s the beauty of doing the math.
In the End: A Win for Small Developers
By the time we were done, those rundown cottages were completely transformed, doubled in size, and flipped for a very happy return.
Go Find Your Blockbuster Deal
Don’t settle for boring 20% margins. Go find that overlooked property that’s waiting for the right vision (and some elbow grease) to turn it around. The golden deals are out there—you just need the guts to dig deep.
Got questions? Hit us up. Otherwise, happy deal-hunting!