Listen to this episode below:
Today I am delighted to be joined by Kevin Edge. Kevin is the founder and managing director of Civic Construction Ltd, a design and build company with over 25 years experience in the construction industry.
As well as helping clients build their dream homes, he also helps high net worth investors profit from development deals that him and his team are involved in. With some serious recognition last year In the form of an award for Property Deal of the Year from the Property Investor Awards, I’m sure he’s now got his sights set on even bigger projects.
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As we all know, cashflow is king, and this has been a real focus for Kevin up until very recently, growing it through the purchase and development of HMOs. Once he got to the stage where he had the monthly income required to support his family though, his priority has switched to new build developments.
His time now is spent on land finding and land acquisition with a goal to start development in Q3 of 2017. Without the security of the HMO income, it would have been very difficult for him to commit the time to development.
Over the course of a number of years delivering high quality projects through Civic Construction and working with local estate agents, he’s developed a strong relationship with them resulting in deals being brought to him.
Around 18 months ago, one such deal was brought to him by a local agent. The land was next to a development of 400 units and had been earmarked for a new gym and doctor’s surgery to support the all the new residential occupiers, but once the 400 unit development was complete it became obvious the gym and surgery weren’t in huge demand.
The building and land was sold to Kevin by the developer for £525,000, and came with planning permission for 4 x 2 bedroom flats. Each of these was actually turned into a 3 bedroom HMO, creating 12 bedrooms across the building.
There was a build cost of £270,000, kept low by using Kevin’s own development company. None of his own money was used as he was able to secure private finance, but this resulted in around £55,000 in finance costs. Total spend after fees etc was £865,000, and the end value was £1.72 million giving him a 99% ROI, and a profit of £854,000.
He’ll be remortgaging it £950,000 giving him £85,000 cash from a deal he put none of his own money into, and the HMOs will add around £4,000 to his monthly profit.
There haven’t been many major issues for Kevin in his own investing, as he’s seen most of the issues and learnt how to deal with them through his years in the construction industry.
One challenge he does remember though was discovering a 9 inch public drain running across on of his sites on a 4 bedroom development. It could have cost hundreds of thousands of pounds to move, but very fortunately the site had a slight slope to it which allowed a comparably easier move.
Had the site been flat though this would have been impossible, and it was a great lesson for him in ensuring you have a really thorough due diligence process in place when assessing possible sites.
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The Slight Edge – Jeff Olson
Kevin Edge’s Links & Resources
Civic Construction – Discover more about Kevin’s construction business
Google Suite – Kevin loves a good spreadsheet, but has moved across to Google Suites to help with sharing documents and maintaining versions
Upwork.com – A freelance/virtual assistant site used by Kevin to reduce his workload
Email Kevin – Got a question or looking for some advice? Get in touch with him here.