Development – in at the deep end!

Taking on a 9 apartment conversion as a first project

Property investor/developer Dan Smith made a starting on building his own buy-to-let portfolio after working on other investors’ projects for over 20 years as a plumbing and heating engineer. Starting with BTL’s, he progressed to HMOs, though he admits he was a little cynical about the HMO concept at first.

After attending a webinar (through YPN) for White Box Property Solutions Ltd, he took the plunge and joined their three-day training course and followed up with the development mastermind programme, because he always had a dream to build his own home.

This action led Dan to purchasing his first large development opportunity of nine apartments. In an article in the June 2022 issue, he explains how he located this off-market opportunity, a social club that was originally still operational, and went on to negotiate an STP (subject to planning) deal with the vendor.

Planning approval was subject to a Section 106 stipulation, meaning he would have to give up one of the units for affordable housing. Therefore, he would have to accept a reduced value for the apartment. To top it all, the council would be able to choose whichever apartment they wanted as the affordable unit, from the development.

Given this situation, Dan decided to re-submit the planning application, reducing the number of units and the need for the Section 106, and also reducing the complexity of the conversion.

The article also covers details of some of the challenges and frustrations he faced during the conversion. These included the rising costs of materials during the Covid lockdown period and the original lender taking the funding off the table during Covid, leaving Dan to look at alternative funding methods including vendor finance, private investment and some of his own funds.

Following research into demand in the area, he came up with a split approach for his rental strategy exit, a mixture of single lets and serviced accommodation for the contractor market.

This article is a great read for any would-be developer, sharing some of the trials and tribulations of a development with the added challenge of doing it during the lockdown period!

To read the full article and case study, subscribe to YPN magazine.

Julie Whitmore

YPN writer and property investor

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