But one of the significant differences will be your construction budget. Buy a £300k refurb project, and you might spend £50k doing the work. And of that £350k investment, I’d guess that £125k of it might be your own cash. But buy a £300k conversion project, and your development budget will likely be closer to £300k – a big difference. Yet surprisingly, only £10k of that £600k total might be your own money (I know, it’s pretty great leverage, financially speaking).
This development budget increase creates two massive benefits. Firstly, you can afford to hire a main contractor rather than a jobbing builder. They will be responsible for pulling all the trades together, so you won’t have to. And by having all the construction work delivered by a single, larger provider, you’ve only got one entity to manage, and it’s less likely to go bust, go on holiday, or leave you in the lurch. Or eat all your bourbons. The second benefit is that you’ll be able to afford to hire a professional construction project manager. Remember when you imagined rocking up on site with the ‘L’ plates on? Well, you can forget that because that’s your project manager’s job. They will be your eyes and ears, keeping everyone honest and ensuring everything goes according to plan. Remember when you thought you’d get the wool pulled over your eyes at every turn? Well, your project manager has been there, done it, and got the tee shirt. They’ll have seen every trick in the book, and their job is to root out all known evils and keep you, the developer, safe from such shenanigans. It’ll be their job to ask the tough questions, have the awkward conversations, and metaphorically beat up the contractor when needed (try to avoid hiring a PM who’s less into metaphorical when it comes to contractor management).
So, what exactly do you do while all this project management is going on? A spot of golf? Take the boat out? Well, frankly, yes, if you want to. You’ll be having a weekly catch-up with your project manager to find out how things are progressing, and presumably, you’ll also be looking for your next project. The point is that you’re not working at the coalface – you’re working in the boardroom. You’re the CEO of the project. Yes, you will have to show your face occasionally, but you’ve effectively outsourced all of the ‘doing’ jobs to other people. How great is that? And the profits you’ll receive are likely to be many times more than had you done a flip, yet you do a lot less work personally.