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DerekT

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  1. Thanks
    DerekT got a reaction from snookjas in How to renegotiate price after survey?   
    Hi Cathie
    Sounds like you're in an unfortunate position. Assuming the £55k valuation is based on the current state of the property as opposed to the refurbed value? Was the valuation done through the Homebuyer's Report, or through the lender (if it's mortgaged)?
    Is there a reason why you don't want to provide a copy of the report to them? You might be able to say that the survey's highlighted issues X, Y and Z, and if you're able to source and provide 3 quotes for each issue, you can then share this to the agent to try and knock down the price closer to the £55k or ask the vendor to fix the problems.
    What are the comparables like for the area? Worst-case scenario if they're not willing to negotiate down, then you can cut your losses and walk away if the comparables aren't there. 
  2. Like
    DerekT got a reaction from spillany in What would you do if you was stating again?   
    Hi jdhills
    Congrats on saving the funds! 
    You mention it's combined with you and your mate, so will this be a JV/partner arrangement? Some things to consider:
    What are your goals? As they say, 'start with why' and work down about 5 layers of why. - e.g. Layer 1: Why do I want to invest in property? To be financially free by generating £X per month . Layer 2: Why do you want to be financially free? To allow me to stop working full-time. Layer 3: Why do you want to stop working full-time? To have more time to travel, spend time with family etc...
    If there's 2 of you, then you need to discuss these together and see if they align. Does your mate have the same goals, or are they looking to invest for 5 years, then cash out? From there, you can start working your strategy - target market, location, supply/demand, property type, etc... How will you fund the purchase? Engage in a broker and accountant to see what the best way to grow the portfolio There's plenty of free education on this site, including courses about setting goals, strategy and locations. 
  3. Like
    DerekT got a reaction from damian q in Book recommendations please?   
    Hi Alex, 
    I've copied/pasted a list of books I've read in the last couple of years, hope it helps! Mix of property, entrepreneurial, mindset and auto-bio type books. Give us a shout if you have any queries. 
    I see you're based in London, so if you're in the SE or work in the city, more than happy to lend them to you too. 
    Book:
    Total recall - Arnold Schwarzenegger
    The Magic of Thinking Big by David Schwartz
    Elon Musk: Tesla, SpaceX, and the Quest for a Fantastic Future
    100 Property Investment Tips - Rob Dix and Rob Bence
    Rich Dad Poor Dad by Robert Kiyosaki
    How to be a Landlord - Rob Dix
    The Richest Man in Babylon - George Clason
    The 4-Hour Work Week by Tim Ferriss
    How to Win Friends and Influence People by Dale Carnegie
    Rich Dad’s Cashflow Quadrant by Robert Kiyosaki
    The Property Coach - Aran Curry
    Think and Grow Rich - Napoleon Hill
    The Compound Effect by Darren Hardy
    The 7 Habits of Highly Effective People - Stephen R Covey
    Black Box Thinking: Marginal Gains and the Secrets of High Performance - Matthew Syed
    The Chimp Paradox: The Mind Management Programme to Help You Achieve Success, Confidence and Happiness Paperback - Prof Steve Peters
    Awaken the Giant Within - Tony Robbins
    Man's Search for Meaning - Frankl
    Secrets of the Millionaire Mind - T Harv Ecker
    Hot to Get Rich - Felix Dennis
    Never Split the Difference: Negotiate - Chris Voss
    Quiet: The Power of Introverts in a World that Can't Stop Talking - Susan Cain
    Thinking, Fast and Slow - Daniel Kahneman
    Millionaire Fastlane - M J DeMarco
    The Power of Habit by Charles Duhigg
    The Subtle Art of not giving a f*** – Mark Manson
    Shoe Dogs - Phil Knight
    Factfulness - Hans Rosling
    The One Thing  - Gary Keller
    Outliers - Malcolm Gladwell
    Mindset - Dr Carol Dweck
    You are a Bad Ass - Jen Sincero
    Miracle Morning - Hal Elrod
    Getting to Yes - Roger Fisher
    The Marshmallow Test
    The E Myth - Michael Gerber
    The 10x Rule - Grant Cardone
    Delivering Happiness – Tony Hsieh
    The Millionaire Next Door - Stanley and Danko
    How to fail at almost everything and still win big – Scott Adams
    Property Pension Plan
     
  4. Thanks
    DerekT got a reaction from Adam T Smith in First off plan investment - Liverpool L3   
    Have you considered the alternatives for your budget and location? 
    I know it's slightly further out, but if you widen the postcode search there are well built freehold 2-3 bed terraces that are already built and ready for tenants so you're earning from month one rather than having your deposit locked away in escrow for over a year?  Probably generates the same net yield and ROI, the guaranteed rent will probably already be factored into the PP and if all flats come online at the same time, you'll be competing with everyone else looking to rent them out.
    Food for thought...nom nom.
  5. Thanks
    DerekT got a reaction from Adam Hosker in Stacking Spreadsheet   
    Might be easier if I just share the link on Google Sheets in case others want a copy.  It'll ask you to request access. Please let me know if you spot any mistakes. 
  6. Like
    DerekT got a reaction from Adam Hosker in Stacking Spreadsheet   
    Hi Jack
    Is the below something that you're looking for? If so, let me know and I can share the link to the Google sheets with you.
    Cheers, Derek

    DEAL PROJECTIONS: (enter your estimates into the yellow coloured cells)   DEAL ASSESSMENT: INPUT - PURCHASE INFORMATION   EXIT OPTION - BTL Purchase Price   £103,700.00   Total Investment Costs £39,036.00 Stamp Duty   £3,111.00   Monthly Cashflow £309.04 Legal Fees   £2,000.00   Gross Yield 7.23% Refurb Costs   £8,000.00   Net Yield 3.58% INPUT - BORROWING (enter 100 for deposit if not borrowing)   Return On Investment 9.50% Deposit 25% £25,925.00   EXIT OPTION - BTL (REFINANCING) Mortgage 75% £77,775.00   Refinanced monthly cashflow £273.13 Mortgage Arrangement Fee 1.00% £777.75   Cash Out From Refinancing £12,225.00 Mortgage Interest Rate 3.49% £228.46   Money Left In Deal £26,811.00 INPUT - BTL INFORMATION (if applicable)   Months Before No Money Left In 98 Monthly Rent   £625.00   EXIT OPTION - BTS Letting Agents Fee 10.80% £67.50   Total Investment Costs £39,036.00 Monthly Running Costs   £20.00   Total Selling Costs (includes 6 months mortgage) £4,070.75 INPUT - REFINANCE INFORMATION (if applicable)   Profit From Deal -£1,659.50 New Market Value   £120,000.00       Refinanced at (% LTV) 75% £90,000.00       Mortgage Arrangement Fee 1.00% £900.00       Mortgage Interest Rate 3.49% £264.37       INPUT - BTS INFORMATION (if applicable)       Sale Price   £120,000.00       Legal Fees   £1,500.00       Estate Agent Fee   £1,200.00      
  7. Like
    DerekT reacted to dennis hughes in 18-Yr Cycle vs General Economy   
    @derekt Human emotion is key to this, and all the technology in the world will not help, unless humans are completely factored out. And even that has its problems as one algorythm posts a "sell" which is picked up by another, and another.... you get the point.
    2008 is a case in point where market traders had spent their entire career in a bull market, they had no clue what to do in a bear market, panic, and tumbling stocks soon ensued.
    Older, perhaps wiser, perhaps not, who had been through both bull and bear markets before made some serious money, allegedly.
    These upsurges and downturns are often fueled by the red-tops, they still have influence online with click-bait headlines, so maybe nothing much has changed after all.
  8. Like
    DerekT got a reaction from jacquichall in ROI calculation   
    I kind of view cost of voids at the backend of the calcs, given that they're not guaranteed compared to the other expenses. This will depend on the area, demand, managing agent. The maintenance one covers annual certificates etc and squirrelling funds away in case the boiler breaks.
    Once all the knowns are done, then I look at the estimated annual profit and see if it can cover 2-3 months of no rent. If it does, then happy days.
    There's a field for insurance in there, just that you didn't specify the cost of it. I tend to use £200-300 as an estimate if it's a house,  depending on rebuild value. If it's a flat then the service charge you pay generally covers the building insurance, then it's up to you if you want extra.
    Yes, you'll still be subject to 3% if under £125k and through a limited company. 
  9. Like
    DerekT got a reaction from mallbn09 in What would you do if you was stating again?   
    Hi jdhills
    Congrats on saving the funds! 
    You mention it's combined with you and your mate, so will this be a JV/partner arrangement? Some things to consider:
    What are your goals? As they say, 'start with why' and work down about 5 layers of why. - e.g. Layer 1: Why do I want to invest in property? To be financially free by generating £X per month . Layer 2: Why do you want to be financially free? To allow me to stop working full-time. Layer 3: Why do you want to stop working full-time? To have more time to travel, spend time with family etc...
    If there's 2 of you, then you need to discuss these together and see if they align. Does your mate have the same goals, or are they looking to invest for 5 years, then cash out? From there, you can start working your strategy - target market, location, supply/demand, property type, etc... How will you fund the purchase? Engage in a broker and accountant to see what the best way to grow the portfolio There's plenty of free education on this site, including courses about setting goals, strategy and locations. 
  10. Thanks
    DerekT got a reaction from richard brown in Other podcasts   
    Hi Matt
    Some other ones I tend to listen to each week include:
    Bigger Pockets (a US property podcast, but offers some good content and is interesting) Property Voice (hosted by Richard Brown, who also visits this forum!) Progressive Property Podcast (has a good mix of content) Inside Property Investing (quite focused on HMOs / serviced accommodation, but has other content as well) Tim Ferriss Show (long episodes, with some you can skip, but offers good interviews and mindset/entrepreneurial insight) Michael Yardley (an Aussie property podcast, but also offers general property advice and mindset moments) Meaningful Money (as you've mentioned, a friend of the Robs, general finance podcast) That should keep you occupied for a while!
  11. Thanks
    DerekT got a reaction from bryony m in Hello! Very early stages of research and overwhelmed!   
    Hi Bryony
    You definitely have a solid foundation of funds to work with. It's best to define your goals (e.g. your why, when, how etc) so you know where you're headed on your investment journey. From there, you can then see which strategy suits your needs best (e.g. single BTLs, HMOs, serviced accommo etc).
    It's also advisable to seek professional advice from:
    Mortgage brokers, especially if you're looking to leverage, to see what's the ideal way to fund your investments Accountants - to identify the best way to structure it for your current tax situation, and also future - inheritance/succession planning Agents - it's never too early to start popping in to an agent's office, build rapport and see what the current market's like And as always, never stop learning. There's plenty of courses at the Hub and there's lots of other forums, YouTube videos, blogs, podcasts on property to absorb information from. 
  12. Like
    DerekT got a reaction from I Gee in Advice needed please - best way to get funds from trading company to property Ltd company   
    I used a broker, @simon allen to help with the financing and it was very straight forward. You just submit the info requested via his online system, like where the deposit is from, 3 month bank statements, fact find etc. 
    Being funded through the company, you will most likely need to provide a personal guarantee, which potentially means extra solicitor fees.
  13. Like
    DerekT got a reaction from I Gee in Advice needed please - best way to get funds from trading company to property Ltd company   
    Hi Ighee
    It is possible to do the holding company, but there's a few other threads on this forum where it has been suggested that this structure may make it a bit more difficult to secure financing/borrowing. It adds an extra layer of complexity for lenders so some prefer not to, best to chat to a broker (can recommend Simon Allen from Searchlight Finance who is also a member of this forum) before going down this route. There also might be more fees associated with maintaining the extra holding company. 
    Personally, I just did the inter-company loan between the SPV and trading co. But do check with the broker and accountant and maybe do a search of the forum to see if you can locate those holding company threads.
  14. Like
    DerekT got a reaction from gcb tan in Obtaining Local Area Knowledge   
    If you kind of know which part of town you're interested in, you can jump on RightMove and then look at what's available. I tend to then look at a few which are advertised across different agents, and then call each one and say I'm interested in it (even if you aren't). 
    That usually perks their ears up and I find that they're more attentive than if you were just to cold call them and ask them which area's good, what the rents are etc. If you have that base property to chat about, it tends to open them up. When you've done it with a few agents in the area, then you should have a better idea if it's decent or not. It's also good to check with both the sales and letting agents.
    With regards to researching totally new areas, you can look online for the local newspaper which may have a 'property' section. It may also highlight areas to avoid if there's always negative reports/news stories in certain streets etc. Other sites include streetcheck.co.uk, home.co.uk, mouseprice.com, streetview and forums like these. However, it's always best to walk the area and visit the local agents as you can only do so much desktop research.
  15. Like
    DerekT got a reaction from gcb tan in Advice on Private vs Ltd Company for new Landlord   
    Hi Marcus
    Surprisingly, HMRC offer quite a few guides for landlords that wish to do the calcs themselves. They even have an online course here.
    If it's your first one, then it might be best to chat with an accountant to see what's best for your financial and personal situation. You can usually have a chat with them without forking over buckets of cash, so you can still decide to do it alone if you prefer. 
    I have personally been using Rita 4 Rent for both my trading company and property SPV in the last couple of years, they're accountants who specialise in property and also the recommended tax partner for the RLA. 
  16. Like
    DerekT got a reaction from marcus v in Obtaining Local Area Knowledge   
    If you kind of know which part of town you're interested in, you can jump on RightMove and then look at what's available. I tend to then look at a few which are advertised across different agents, and then call each one and say I'm interested in it (even if you aren't). 
    That usually perks their ears up and I find that they're more attentive than if you were just to cold call them and ask them which area's good, what the rents are etc. If you have that base property to chat about, it tends to open them up. When you've done it with a few agents in the area, then you should have a better idea if it's decent or not. It's also good to check with both the sales and letting agents.
    With regards to researching totally new areas, you can look online for the local newspaper which may have a 'property' section. It may also highlight areas to avoid if there's always negative reports/news stories in certain streets etc. Other sites include streetcheck.co.uk, home.co.uk, mouseprice.com, streetview and forums like these. However, it's always best to walk the area and visit the local agents as you can only do so much desktop research.
  17. Like
    DerekT got a reaction from Lawrence in TPP 324: Is buy-to-let dead - QUESTION   
    Hi Wookash
    I guess it depends on your personal, financial and tax situation. Best to speak with your accountant to review the appropriate set up.
    As you mentioned, the funds could be saved in a bank account or distributed as a salary, however, you could also use the income to:
    Purchase more properties, or other investments  Contribute to your pension - likely to be the most tax-efficient, but also means you'll lock it away till it's accessible Distribute any profits as dividends - currently the first £2k is tax-free, and then it steps up into different tiers for tax, making it less attractive  As always, depending on what you do with the funds, it will have a tax implication.
    For me, and this is not tax advice, rather just my thoughts and what I'm currently trying to do. I would keep snowballing it and hopefully have my kid takeover the company if she wanted to when she's older. On the side, I would squirrel some of the funds away into a SIPP (pension) that is invested in a ETF or similar index fund. But, everyone's different with different goals...
  18. Like
    DerekT reacted to darren mcneill in Hello! First Post   
    Sunday 12th May 2019

    2 years ago today I received the keys for my first ever property renovation on Newchurch Road:
    I personally cannot believe it has only been 2 years.  So much has happened and the small project that I started with has snowballed into multiple companies.  I thought it would be worth taking a snap shot of exactly where I am at this moment in time:
    Purchases - On Friday I completed on my 19th purchase, with another due to complete next week.
    Rentals - The Friday completion was my 7th rental with the completion next week being my 8th.
    Rental Income - The rental income on my 8 BTL's is £3143 after mortgage costs
    Money in the bank - £40,000
    Money tied up in BTS projects - £62,500
    Money tied up in BTL properties - £ 56,500                            
     
    The main bulk of my purchases above have occurred since July 2018!  Back last August I was completing on my 4th property purchase:
    This was one of those moments that boosted my growth.  The investor that I purchased this property with also loaned me £40,000 on my unencumbered rental property (I have just paid them back this month after re-mortgaging).  That injection of physical cash then allowed me to buy and renovate 2 more properties, and then the purchases scaled up.
    In 2019 I decided to go into lettings for my clients.  As of this morning I have 19 properties either under management, renovation or being purchased by clients that we will manage.  At the moment the income from management is at £614.50.
     
    So that is where I am up to after my first 2 years physically involved in property.  I am unsure where I will be on my 3rd anniversary as you never know what opportunities arise, but what I can say is that I still have the same determination and hunger so will keep pushing forward to see  what we can do,
    You can follow my regular weekly journal below if you would like to see what we get up to each week:
     
    Thanks,
    Darren

           BTS -- BTL -- Lettings -- Sourcing
             www.fmp-investments.com
     
  19. Like
    DerekT got a reaction from jamie r in Parliament Square Liverpool L1 - RW Invest, any one have any info?   
    Hi Chris
     
    I can't comment on RW Invest as I've never dealt with them. Run your usual Google and DueDil searches and see what crops up. Can't really comment on Legacie either but based on their website, looks as those they have completed 3 developments and have a few in the pipeline. I couldn't find a company number on their site, so it was a little tricky confirming details on Companies House/DueDil. Could be this one?  CH  / DueDil
     
    Regarding the investment itself, 50/25/25 payment plan for something occurring (potentially) in early 2020 seems quite high. That's £65k + legal costs locked away for something that may, or may not be valued at £130k in 2 years time. Obviously, the higher risk, the higher the rewards, so it depends on your goals, strategy and risk tolerance. Don't forget the sales company (RW Invest) take their cut and need to cover their marketing costs (e.g. shiny brochures). 
     
    Just ensure you check what else you can get for that price that's already built within the same area. There's a lot of new builds in Liverpool so weigh up supply/demand and potential rent. 
     
    Also, assuming you're letting it out as opposed to living in it, you'll be paying service charges for the spa, gym, cinema whilst the tenant gets the benefit. Will the extra rent potential cover this? 
     
    Good luck with the research and journey! 
  20. Like
    DerekT got a reaction from jamie r in First off plan investment - Liverpool L3   
    Have you considered the alternatives for your budget and location? 
    I know it's slightly further out, but if you widen the postcode search there are well built freehold 2-3 bed terraces that are already built and ready for tenants so you're earning from month one rather than having your deposit locked away in escrow for over a year?  Probably generates the same net yield and ROI, the guaranteed rent will probably already be factored into the PP and if all flats come online at the same time, you'll be competing with everyone else looking to rent them out.
    Food for thought...nom nom.
  21. Like
    DerekT got a reaction from mason preedy in My first investment   
    Congrats Mason! 
    I'm not familiar with the M6 area so only basing on a quick Rightmove and Mouseprice search.
    Looks like a solid property that just needs a bit of modernising. 257 on the same street sold for £170k in Feb 2019 but that looks a bit more modern from the photo. 
    Rental wise there's a few within a 1/2mi radius that let and also currently being advertised, ranging from about £695 to £825 pcm. 
  22. Like
    DerekT got a reaction from kirsti p in Is Bridging the best option and where do I start with that if so?   
    Hi Kirsti
    I'm not a broker, so please have a chat with one. But I believe there are products out there that are Bridge to Let, like with Precise. It's essentially a bridging loan for the first refurb bit, then it switches to a standard BTL afterwards.
    https://www.precisemortgages.co.uk/Bridging/BridgeToLet
  23. Like
    DerekT got a reaction from simon allen in Issue with Company BTL Mortgage and inter-company loans   
    Thanks for sharing your experience, Mark. 
    Did you source the borrowing yourself or through a broker? 
    I used Simon's mortgage broking services, using an intercompany loan as the deposit and it all went through smoothly, so I can definitely recommend his services next purchase.  
    Didn't realise their value, knowledge and expertise until speaking with a few. They know which lenders to line you up with based on your situation to make the process as efficient as possible.
  24. Like
    DerekT got a reaction from richard brown in Investing remotely - Getting to view properties before they're gone?   
    There's services like Viewber that will go view the property for you and write up a report. Costs about £40-80 per viewing depending on what you're looking for. Might help your situation.
    Note: no affiliation with the company.
  25. Like
    DerekT got a reaction from emmajayne in Investing remotely - Getting to view properties before they're gone?   
    There's services like Viewber that will go view the property for you and write up a report. Costs about £40-80 per viewing depending on what you're looking for. Might help your situation.
    Note: no affiliation with the company.
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