‘Beware of revealing your grand plans to a builder’

Ican say with confidence that I will never do better than the first property deal I ever made, although it led to my biggest mistake. A friend of mine was struggling to sell his south London flat and wanted to be bought out. As a rare laterally converted property – where two properties across one floor have been combined – I sensed an opportunity.

However, it was a risk. This was 1997 and I was just 28, had no real money of my own, and knew that if my plan didn’t work I would be in trouble.

The idea was to convert the four-bedroom flat in Wandsworth into two more market-friendly smaller properties, sell one and live in the other. It was in an elegant three-floor, detached building right on the common. There’s no reason why a smaller flat wouldn’t be snapped up.

I would rent the flat from him while the work was being done and then buy him out with the sale proceeds. To help reduce my upfront costs I offered the builders and architect a share of the proceeds from the sale. It worked. I was left with a flat to live in and my friend achieved the sale he was looking for with £160,000 in his pocket.

With a bit of luck and a plan I had jumped two rungs up the property ladder, leaving me with a mortgage-free apartment by the time I reached 30. Unthinkable now.

A year later I spotted the opportunity to pull the same trick with a property flip on the flat two floors below. I had a buyer lined up and I was going to sell it to him on the same day I bought it, at a higher value on the basis that he could split it in two. Everything was ready to go, but I went on holiday before I had paid the deposit.

Here was my first big mistake. I got ahead of myself. While I was away a builder I had asked to put together some initial quotes got wind of what I was doing, went directly to the seller and managed to beat me to it. I can’t blame him, I would have done the same in his position. As a result I lost about £250,000 of profit that I had been planning to invest in future projects.

If I’m honest I was being cheeky, getting early access to the flat and trying to get ahead of the game. You simply can’t take your eye off the ball.

There are so many things in the property world you can’t control. You can’t control interest rates, you can’t control the cost of building, you can’t often make builders go quicker.

My advice is to focus on the bits you can control; the choice of property, the price you pay for it and what you choose to spend your money working on.

It’s not only deals where I have made mistakes, I have also had my fair share of renovation horror stories. The moment that stands out is looking up from my living room and seeing the towels hanging on the towel rail in my newly refurbished first-floor bathroom. We should have had the ceiling checked first.

Here, the key is to gather as much information as possible. Don’t be afraid to ask questions. Of course you need the views of builders, surveyors and maybe architects, but go further afield. Ask your neighbours about issues they have experienced.

But over the thousands of properties I have helped view, buy, sell or renovate, the mistake I see the most often is when buyers choose properties based on the life they are currently living rather than the lifestyle they may like to have in years to come.

My advice, and I know it’s not easy, is to try to think five years ahead when you’re buying property.

Another common mistake is to constantly think about the value of your property rather than what will increase your enjoyment of living there. I’ve done this myself.

My advice here is to remember that unless you are looking to sell, the value of your house at a particular point in time isn’t important. We all know how quickly this market moves, as long as you can sit out a dip and it is the right home for you then while it doesn’t feel nice, it doesn’t necessarily matter.

But when it is time to sell, without a doubt the most common error I saw when working on my television show Secret Agent, was the failure of sellers to properly clean their homes.

And remember – be careful about confiding your grand plans in a builder, you never know who they’ll tip off.

Phil Spencer’s biggest error came about when he got ahead of himself and went on holiday before completing a deal