My former boss has retired and to be occupied, he engaged in a build and sell business. He would usually buy an old house for refurbishment but sometimes he also buys a lot and build a new house. It is hard work but he was able to compose a complete team - architect, engineer, construction workers like plumber, carpenter, electrician, etc. Although the business is quite stressful, he earns 50% of his capital investment. Not bad, eh?
I also know some people who do that and much as it can be very profitable one must be prepared at times to build or renovate a house and wait for years before selling the house. A lot of your money can be held up in real estate because building does take time and finding a buyer takes even longer. If you don't have deep enough pockets "building to sell" isn't for you.
Refurbishing as become quite big business, and I'm assuming that sites like eBay will have a part to play in that. Now it's easier than ever to buy various items that, if you've got the skill, can be fixed and refurbished and sold on with a profit.
Most moneyed people here prefer to buy a house that is spic and span, it doesn't matter if it's expensive because they have no time and knowledge in having the house renovated. Some owners of old houses, like ours, are afraid of having renovations not really because of the expense but because of the difficulty in finding good workers. A carpenter of mason can do the job but can they be trusted? That is the question hounding owners of houses needing repairs.
That's one reason why landlords need to network. A lot. The best way to find great masons, carpenters, etc is via recommendation. Ask other landlords who does their repairs. No landlord would recommend workers who didn't do a good job.
When it comes to houses, especially where I live the trend is to buy an house from.an auction, do any necessary repairs and then sell it on for a profit. I often find that it's the tradesman themselves that are purchasing the property, knowing they have the skills and tools to do the jobs themselves, without the need to hire others in to do the work for them.
Definitely a smart move especially since he's reaping the rewards. This may not always turn out to be successful if proper plans and procedures aren't put in place. It's always best to have a professional team or professionals giving useful advice. The fact that he has engineer, architect etc. on board increases the likelihood of success and making the best choices as it relates to building design, materials, etc. It may be a bit costly, but it seems like an investment that could be quite rewarding, and it should be a plus if he enjoys it.
You are right with that tradesman - that they are in the position to evaluate the property and also to make an accurate estimate of the costing involved in the reconditioning of the old house. We usually encounter such problems when we needed house repairs because it is difficult to hire workers who really know the job. What more if it is a big old house that needed a total makeover, that would be risky on the part of the investor. I admire people who have the guts to invest in such projects that is so big and complex.
Doing this with buildings can indeed be quite profitable. But that's not always the case though, you need a lot of capital to start with, the right connections and possibly some skills to repair some parts yourself, and then you need to be succesfull at selling fast and for a decent price. So quite a few risks and complications involved.
A single proprietor is not fit to do a build and sell of buildings because aside from the huge capital, there is the need not only for skilled workers but also for managers and team leaders. Doing a project of build and sell of a house is manageable since you can organize a small group that would do the job. Besides, the building permit for a house is much easier to get approved than a building permit for a building.