How I Work Out What to Offer on a Property

For a Buy and Sell (Flip)

Flipping a property (buying, renovating, and selling) is pretty straightforward, if the numbers work.

Here’s my process:

Step 1: Work out the Done-Up Value (DUV)This is what the property will sell for once refurbished. I find this by looking at recent sold comparables in the area, consulting with valuers and utilising my years of experience in the South Wales property market.

Step 2: Work backwards from the DUV

From that number, I subtract all my costs and contingencies, including:

• Refurbishment

• Solicitor fees

• Broker fees

• Buildings insurance

• Survey costs

• Utilities

• Estate agent fees (for selling)

• Stamp duty

• The cost of borrowing (investor interest, bridging finance, etc.)

• My profit target

The figure I’m left with? That’s my maximum offer.

Step 3: Check the ROI makes sense.

Let’s say your total investment is £300,000 but your profit is only £20,000, that’s not a good return, in my opinion. You want to ensure your profit is in line with the risk and capital involved.

---

For a BRRR (Buy, Refurbish, Rent, Refinance)

For BRRR, you’re holding the property, not selling it. That means your offer needs to make sense based on long-term returns and the mortgage you’ll refinance with.

Here’s how I calculate it:

Step 1: Start with 75% of the DUV

This is typically the ideal mortgage you’ll get after refinance.

Step 2: Make sure all (or most) of your costs fit inside that 75%

That includes:

• Purchase price

• Refurb

• Legal fees

• Finance costs

• Any other costs

If your total costs come to less than or equal to 75% of the DUV, you can pull most (if not all) of your money back out on refinance, and that’s the goal.

Step 3: Check the cash flow stacks

The property should cash flow at least a couple of hundred pounds, after mortgage payments, letting agent fees, operating expenses, etc.

If the rent doesn’t comfortably cover everything with money left over each month, it’s not a deal.

---

Final Thoughts

Always make sure to run the numbers thoroughly based on worst case scenario and make sure that your offers reflect the risk/reward balance of each deal.

Want to see the numbers behind a real deal I’ve done? Drop me a message, I’m happy to share examples and walk you through my process in more detail.