After going on Barry’s course, I used the local paper to identify any properties that I thought might have development potential in the local area. I circled all of the relevant properties and then rang up the estate agents and got the property address from them. Then I used the ProMap software to identify which of these properties were likely to have decent size plots, decent corner access gardens, wide frontages and all of the other features that make the properties attractive for development. Also, I could use the map to find out whether they were likely to be in open countryside and therefore unsuitable for development. As a result, I was able to identify about 10 or 15 properties that were worth going to have a look at. I concentrated my search in and around the Mid Bedfordshire.  That is an area where there is a great mix of different styles and periods of development.  The resulting settlements that are often quite low density and land values are quite high. There are therefore a lot of opportunities for developments and redevelopments on sites made up principally of individual houses and the land that comes with them.

One of the properties I went to see was in Cranfield. This is a house dating from about the 1840s, marketed by an estate agent only 200m from my house. The property had a very large outbuilding on the same plot and this was equivalent in size to about a three-bedroom house. The property was currently used as a domestic house but the outbuilding was used for hobby car repair and restoration. This huge barn-style outbuilding was not in good condition and would have required a considerable amount of expense to convert. It was also not particularly appealing and as a result a knock-down and rebuilding might have been a preferable option to conversion. I spoke to the vendor’s wife about the property and explained to her that the property would appeal to more people if they were able to offer the outbuilding separately. She was not able to see the reasoning behind my arguments and I so emailed a full explanation to the estate agent. Unfortunately, the agents did not appear able to make any progress to this and the property is still in the market. The price is £485,000. The house on its own would be attractive to an owner occupier, and the barns offer a viable development opportunity.  But to have to buy the house with the barns would make the entire project uneconomic for a developer. These vendors really ought to take my advice to split that property, sell it on separately and they will have a much more saleable property. They wouldn’t listen, and the property is still on the market.

The second property that I went to see was at 52 Washbrook Close in Barton Le Clay. When I looked on ProMap it seemed to sit on a plot with a very large garden.  It was a bungalow – a very, very large bungalow with very big rooms and a granny annexe.  Generally it was a very spacious property, but rather ugly and a total waste of land. The plot at the rear which I was interested in had actually already been developed by the current owner.  He had put a house on the back garden which was accessed from a main road to the rear rather than the cul-de-sac which the original house was accessed from on.  I went around with a view to putting three or four properties on this site but when I got there, it was clear that the development in the back garden would make it very difficult to carry out my original plans. The alternative was to pull down the bungalow and put three houses up on the resulting plot – but these properties would have been rather crowded and surrounded by bungalows.  This would make it very difficult to get planning permission. I did give serious consideration to this scheme, chatting to the vendor about buying a little bit of land from the new property, putting it together with the old property to make a decent site.  But when I ran through the numbers in the cold light of day it just didn’t work. There was no significant planning profit, no way that I would be able to sell the plots on for more money after getting planning permission.  The problem with that approach is that you have to do the actual construction work if you want to make any money, even though you’ve taken the planning risk.  That’s just not a sensible deal. To make this business model work financially, you have to find a way to make profit by just getting planning permission, not by constructing it.  You need to be able to sell on to a local builder to actually do the build. I was sufficiently interested in this plot to take a friend of mine around who is actually a planner himself. He works as a consultant planner in east of England and we looked at the property together but there was no way the numbers would work and that was really the project’s downfall. From the planning point of view, it was potentially possible, although likely to be controversial but from a financial point of view, it was just never going to work. I really enjoyed dealing with this vendor.  He was an old guy who’d fallen ill and he just couldn’t face the prospect of another fight with the planners, so he was looking to get shot of the site.  Once you get on a bit, the money just doesn’t seem so important anymore.  Dealing with him was easy, not because he was old, but because he was sharp, business-minded and experienced at the planning game.  If only everyone was like him, this property lark would be so much easier.

I then went around to see a a large detached property in Toddington, Bedfordshire. The seller was what you could call motivated – he clearly did not have a great deal of cash as the house was in a poor state of repair. He had just been through a divorce and was selling because he frankly could not make ends meet. The property was a very pleasant c.1930s house and it stood in extensive grounds of probably just under an acre. The garden at the back was very long and approximately 20 to 30 metres wide.  This would have made as an ideal opportunity for back land development that is putting a property in the back garden of the existing house. The neighbouring property was a bungalow which made it much more likely that a bungalow in the back garden would be acceptable to the planners. The neighbour’s property was set well back in their own plot and it would have been almost cheek by jowl with the new property, so there would be a kind of new building line on the back. I spoke to my friend the planner and we went round to have a look.  Nearly adjacent to the property just one or two doors down there was another bungalow that had been constructed to the rear of an existing property. There was obviously a story behind that and it would have been interesting to find out with the planners exactly what the rules were but sadly on this project I never got that far. I put in an offer to buy the land at the back of the property with an option.  This was because the vendor indicated that he wanted to stay in the house and raise some money. He didn’t end up taking my offer – I think he probably wanted a deal which offered him more security. He was interested in renting the house back, but that would have ruled out the option route. I never found out the full story behind why he changed his mind.

The property was not going to make sense as a buy and rent back prospect, as the rent that would have been necessary to charge would have been greatly in excess of the mortgage payments that would already be vastly less than the mortgage payments and so the property will be strongly cash negative. I did not want to get myself into situation where I was buying an enormous great house and struggling to subsidise somebody else’s mortgage and to look forward to get planning permission. There are easier property projects so I just walked away from this one.

I then went to see a property in Greenfield. This was a semi-detached house on the main road with what looked like a garage to the side that had been converted into a additional living space but on discussion with the owners, I found that the property was formerly a post office. The garage or what looked like a garage was actually an old post office which had always been separate from the main house and had as I understood separate planning consent. This would have made it a lot easier to do a conversion job on the property, subdividing it into two. The way I would have done this would be to either keep the old post office as it is and separate it from the main house or alternatively and preferable extend it up so that it became a two-story dwelling. Now, I went to the house just to do a drive by but I saw the owner coming out and I spoke to him and he said that it would be fine to go in and do a viewing. So, I went in and spent quite some time, probably half an hour to 45 minutes walking around the house and coming out with various different ideas as to how to make the subdivision work. We spoke at length, the owners and I, and we came out with a framework of the deal and that was broadly acceptable at the time I left the property but obviously the estate agent was a complicating factor when dealing with owners who are selling to agents. Most estate agents have very little experience in property investment and property development and they are often people who have limited academic education. They are frequently unable to explain to vendors the intricacies of planning permission. They do not necessarily make the effort to research the planing situation on the properties that they are selling. For example, this agent was completely unaware of the separate consent for the post office. So, when the estate agent spoke to the vendor, he managed to spoil the work that I put in and the vendor was put off doing the deal. I also took my friend, the planner, around to have a look at this particular property and he said that there were number of complicating factors. The most notable was the fact that the conversion of a semi-detached property to a terrace was a potential problem for the planners because it would mean that the adjoining property that was unaffected by the development would be made in entirety as opposed to semi-detached property and would consequently have a hit on its value or reduction in its value. He said that planners often went on gut feel and a lot of the projects that I brought to him, although they stacked up in terms of a strict definitions of planning policy would for various reasons raise a planners eyebrows and they would be looking for a reason to fail them and he said in this case that the property maybe controversial. So, as a result of the combination of the unhelpful estate agent and the potential for a controversial planning application, I walked away from this one as well.

The next property that I went to visit was a bungalow in _______________in Bedfordshire. This was again a semi-detached property and from the agent’s particulars, it looked like it only had a single driveway but when I looked on ProMap, it seemed that the property actually had double driveway and a separate garage which gave quite a potential to extend and indeed the bedroom that the estate agent’s particulars did actually detail the potential for an extension to the property which made good sense that the vendor may consider an offer that was subject to planning permission. Again I went with my friend, the planner around and he said that the site was a little bit tight and we went through numbers. The vendor was looking for a quite something £230000 to £227500 for the property. Now that was considered by the estate agent to be quite an ambitious price. What we were thinking of doing with this property was creating an extension on the side and then splitting up the extension from the main house to make two shallow style properties. One would be really the main house and the second will be almost entirely independent from the original house. One will be a one bed and one would be a two/three bed. The one bed was likely to be worth about £120,000 and the two bed was rated to be about £160,000. This took into account the fact that the property would be losing quite an amount of garden space as a result of the conversion and the property would also be able to introduce the market higher than the high price that maybe expected to sell at, so really there was not a great deal of scope in this one. The property was probably overpriced by about 20, 000 or 30,000 pounds as it was and there was a reduction in value. The estate agent advised that the resulting two/three-bedroom property which was pretty much the original property will be worth only about 160. I think potentially it might fetch a bit more but it essentially had an unchanged below plan, but quite frankly I was not really bothered about taking the risk. Again also, the development was a little bit tight and my planning friend advised me that this is again probably likely to be quite controversial.

I then went to see a property in Malden, which was a large attached property, what looked like from ProMap to be quite a large plot but on visiting the property, I discovered that it was actually on a much tighter plot than I believed from looking at ProMap, I think that the mapping information either was wrong or was out of date and the property was actually on quite a small plot. I almost walked away from it. I spoke to the vendor and decided that that probably was not the kind of property that I wanted to go for but something just let me have a double think and I ended up going in to the property to see what I could do with it. Originally the property was a bay‑fronted three-bed semi-detached 1930s house, classic period style, but it has been extensively extended and the layout was almost double fronted by the time I have gone around and it would not have been difficult to extend the property so that it was the size of the original house again. This would obviously lead to a situation where the property could be subdivided and turned into two semis. There would hardly be an extension to the original footprints of the property and no other neighbouring properties will be affected. There would also be adequate parking in the amenity land. My friend, the planner came around and saw the property and he said that he reckons that that would be quite an easy planning permission to obtain. So I was relatively positive about this one but on working through the numbers, it appeared that it was not going to be viable. The house is pretty good condition. The vendor has already had a good offer that would have made it 340 to buy. The resulting properties, I was advised by the vendor are likely to be worth £250,000 each giving a gross development value of about £500,000 to the site. The construction costs would have probably been about £60,000 pounds including architect fees and sundry costs. So with a purchase price of £340,000 that would have led to a simple mark up of £100,000 which will be split between agent’s fees, financing cost, and the cost of obtaining planning permission. This would give an adequate profit for the builder and also an adequate profit for man to underpay the planning project but unfortunately, on speaking to the estate agent, their view was that the sale values of the subdivided unit would not be as high as the vendor had suggested that it would be and the resulting values are more likely to be 230. Now cutting that potential 100 grands margin by £20,000 a side would lead to a situation where you are taking down the gross profit margin to the whole project down by £40,000 and the agents were not entirely confident of selling it at 230 price either. So that would lead to a situation where there was only potentially about £60,000 to develop a profit, my profit, planning costs, and the associated estate agents and finance cost. Overall therefore that out, was not really a project, which was sufficiently profitable to be attractive to either party. So, that had to hit the bottom.

Now after looking around all these sites, it is fairly clear that the process of trying to find a property to get planning on, to do a single site not going to rebuild has got its complications. First we got to bear in mind the complexities of the original area that we will be working in are amenable to the planners to in for a small-scale development, and my experience in my area the answer is quite simply not very. The second factor that you have to bear in mind is the local market and whether there is a sufficient mark-up for subdivided properties. Now in my area, there is a balance between there being quite a number of opportunities being the area was not terribly dense. There are a lot of properties which have the potential to be subdivided. Lot of the time, the profits are quite marginal because the prices are not quite high enough to focus on developing properties to their maximum potential. So when compared for example to some of the more affluent areas of London, there are quite a number of development opportunities but the profit margins are the reason why the developmental opportunities still exist. There are deals to be done and there are profits to be had but not in every case of the planning permission can you find a profit. A lot of the deals I looked at had to be rejected for financial reasons even though from a planning point of view they may accept. Now, the third complicating factor that you face following this business model is likely to be dealing with vendors and dealing with the planning risk. You got a simple choice, you can either run things like Barry does and investing a large amounts of money in each property and typically using a second residential mortgage like a TMV house to house product or using investors names and money to back your venture. The advantage to this is obviously that by not revealing your hand to the owner, you can usually pick up the property at a far more attractive price than would be the case if you have to negotiate for a conditional contract of any kind such as an option or a completion subject to the planning permission. This will help boost the profitability of the more marginal projects and result in a situation where you can take on more work more easily. The flip side of this is obviously that you are not having to tie up you cash in each project but also you are taking a significant risk with each project. Now, if you follow Barry’s method and go and follow the planning application process very very carefully and work out why planners are accepting or why planners are refusing development in the local area, then you can get to a point where you do have a very good ability to judge what they are likely to call. In my view I think Barry has been not only very successful but also slightly lucky perhaps in his dealings with the planning authorities. I will be surprised if there are many other people following his method could expect to match his success rate, and I think it will be realistic to build in at least a proportion of the properties within that number of planning applications that he has done so far with are going to be expected to go wrong. Now, each one could result in selling at a loss of house up to about 30 grand if you are looking to get a quick sale of the property and also you got to pay your agent’s fees, financing costs, stamp duty, etc, etc, etc. So failing to build in that risk when considering the business model is likely to lead to some trading, some thorough conversations with the bank manager. The solution in my view, in my personal circumstances to do this is to take an approach which is based on negotiating with the vendors and try and capitalise on the planning opportunity and share that benefit with the vendor. That is the only way that you can get him to accept the risk of going into business on a project where they have a significant, although in some cases quite small risk of the planning permission being rejected. It is necessary to give them some kind of incentive to make them want to do business with you on this basis. So, you can expect to get a property for something other than the rock bottom price. As I said that is my approach, I cannot boast the success that Barry has had, maybe if I take more of a robust line with the planners, buying every property and trying again and again and again until I get the permission then I would ultimately have the success that Barry has had. But in the meantime, I am not prepared to take that risk in an environment where the planners have been so reluctant to go on development. So I am going to carry on looking for properties with planning permission potential and I am advising other people to do the same. The result is that I am expecting a long haul on my hands but in the end it is going to be a situation where I have the possibility of making some very substantial profit of certain property projects. The potential gains are in tens of thousands on every project and possible up to hundreds of thousands for some of the larger sties. I have not got any early wins in the bag but I can see the potential of the scheme and I intend to carry on pursuing it. The course as a whole I would say offers a great insight into planning for people who are interested in improving their knowledge on the subject. It offers a great supplement to all the business models. The decision to make as to whether it is a business model that someone would wish to follow in its own right in exactly the same way as Barry follows it. I think it is best left to the individual. People undertaking this business strategy must bear in mind that to do it very slightly wrong will lead to very serious failure and very substantial financial loss. It is not a business model for the faint hearted and Barry got into it largely by circumstances as opposed to strategic plan to get into this particular industry. The result for him has been very successful, I am doubtless other people can be successful too but as a stand alone business strategy, I think it is important to bear in mind the risks that you could start with £100,000 and end up with a substantially reduced amount of money or possibly even nothing. There are ways of going into this type of development with a lower amount of initial investment and there are also ways of reducing the risk and moving away from a purchase only model to a risk-share model where you work with vendors and a lot of other planning coaches on the market who talk about things like options which will make a big contribution to reducing the risk. So, overall, I do recommend the course by recommending with caution. People will need to pay where it has the limitations of this business model, the risks involved and the fact that it might not work in all areas with all type of planning authority.

So, one need to be aware that to fail to carry out this particular business model would be utmost diligent is almost certainly going to lead significant financial loss. Having said that it is a great course. I am pleased that I went on it and it is a good addition to my property tool kit. I would thoroughly recommend it.

Thank you very much.