Petya Spencer reacted to Dun Saw in BTL Investment With Tenant In Situ
Please be careful with this though as it may be incorrect. When I used to let properties via an agency, whenever a tenant left, they would use the renovation photos that they took in 2008 for the first let. They did this in 2009 and 2012.
Petya Spencer reacted to richard brown in The upcoming election....
Perhaps the lack of responses to your inquiry tells you something, or at least echos my sentiments - there is a general lack of interest in politics right now!
To answer your question: Conservatives and I am a larger portfolio investor and developer.
To clarify, I am apolitical when it comes to voting and have voted for different parties at different times, so I am not a blind blue suggesting everyone should vote Conservative.
Conservatives have hit landlords hard over the past few years, so they are definitely not our friends any more, so don't be fooled that they are particularly landlord-friendly as clearly they aren't. It's just that Labour and probably the Lib Dems are even less landlord-friendly and no other party stands a chance of power in England. It's different in Scotland, Wales & NI, where minority parties can control regional policy but I don't study these regional parties so much.
So, in addition to leaving the changes piled onto us by the Conservatives, most others will add more red tape, bureaucracy, taxation and other policies that will make things even harder for the landlord investor than even the Conservatives have. For new home development & conversion, recent Conservative policies seem to be more supportive of smaller developers too.
It will all go full-circle eventually though, when the parties realise that in the absence of council housing and other very sizeable / significant providers of rental accommodation, that we do in fact provide a useful service to society really. But how long that will take is anybody's guess.
That all said, most decent landlord investors could probably live with most of the proposed changes suggested by the other parties...unless you own through a company, in which case Labour will tax you much harder that's for sure.
What do you think?
Petya Spencer reacted to richard brown in How much capital...
Haf1063 is right when he says it depends...it really does!
Traditional BTL requires a deposit for a mortgage and some extra to cover fees. Even if you buy a cheapy property, you probably will need at least £20k and that's assuming no refurb work. However, that may also not be the best investment either! So, there is an element of trade-off required and that's why raising more could be more beneficial.
There are two challenges when it comes to traditional property investment through BTL - raising the starting capital and then raising the capital for the next one all over again! It is a highly capital intensive pre-occupation.
There are some things that we could do to help raise that starting capital, although some may not be possible or even preferable, as follows:
Aggressive saving - and I mean more than the 5% to 10% of earnings...some people here have managed to save 50% of earnings! Budget slashing - in harmony with saving, a severe review of our spending habits and potentially going on a spending fast for a time, no holidays, no meals out, no expensive TV subscriptions, no branded products, no second car, , no first car, etc. Additional income streams - second jobs and home-based businesses (eBay, car boots, etc.) Liquidating assets - selling off valuable or semi-valuable items to help raise some cash Equity release - accessing equity in our home by refinancing, downsizing or even switching to renting Additional borrowing - raising money by borrowing through unsecured lending, friends & family or other joint venture structures There are also some non-traditional property strategies that enable you to get going in property with less capital...but be warned, they are more like a job or a business in their own right, such as:
From £1 to get in - lease options From a month's rent to get in - rent to rent From giving up your spare bedroom, parking space or garage - renting out space at home From giving up your time - deal sourcing or other landlord / investor services like project management, lettings management and so on The other approach is to make what you do have go further once you get started and here are a few ways of doing that:
Higher yielding strategies - e.g. HMO, short-term lets, etc. Trading to grow the snowball - buy and sell to make profit and plough it back into the next deal before you start holding assets Value-adding strategies releasing equity to re-invest - the buy-refurbish-refinance model is a good example of this...buy a property, add some value and then release some of that extra value by refinancing and going again Buddying up - work in partnership with others to make your pot stretch further, but keep in mind the returns also need to be shared too! Joint ventures - a variation on buddying up but only where you borrow the funds from a JV finance partner and repay them a fixed rate or profit share In my own case, I sat stuck for 4 years wanting to get going again in property but I didn't have the funds available to do so. Then, I realised that I could work with others and adopt a value-adding strategy to get started instead. So, with just £10k of my own money from a bonus at work, combined with £50k from a JV partner, a £50k bridging loan from a lender and also a very rare £25k contractor loan to fund some works...I was able to get going on a refurb and upgrade project, refinancing to release the funds to repay everybody and then go again. It was not easy and in fact I left my £10k in that property, so I still had to start with the funding all over again BUT if I had bought that same property ready-made with a BTL mortgage I would have needed around £50k of my own cash to do that...and I simply didn't have it at the time. It was however, the start of my property journey in earnest and I have made great strides since that deal I am happy to say. So, finding a way to get started sooner rather than later is the key takeaway here.
I have recorded something of a mini-series on this subject if you or others want to know what your options are based on a given starting fund...here are the two with the lowest starting fund requirement: http://www.thepropertyvoice.net/soundbite-episode-i-less-10000-invest-property-options/ and http://www.thepropertyvoice.net/soundbite-episode-i-20000-invest-property-i/
Hopefully, this gives you something to go on.
Petya Spencer reacted to richard brown in Has the property ship sailed
No, the property ship has not sailed...but it is sailing through some choppier waters!
As you said you are interested in growing a property portfolio, that implies a long-term buy and hold / BTL strategy...correct me if that's a false assumption.
You will therefore be looking at two key aspects of making money through property:
Annual Income - via net rental income after all costs and tax
Capital Growth - via realising an increase in the property value again after tax...with the key word being realising.
Historically, total pre-tax returns from BTL have been around 12% including both income and capital gains, with an approximate 50/50 split.
What has changed recently is taxation, which has taken a bite of the after tax returns. If we assume that the future returns will largely mirror the historic returns (a big assumption but fair to make), then all that has really changed is the after-tax position.
The two big tax changes are the SDLT 3% premium for investment properties, which increases your costs going into the deal and also therefor affects your ROI and then the Finance Bill Clause 24 mortgage interest tax relief caps and change to an allowance, which could reduce your after-tax income returns.
Put simply, you can't avoid the SDLT premium, so that's going to reduce your returns when compared to the past...although some landlords are looking to try and recover this extra cost by increasing rents. If we assume you can't pass on the cost as higher rent then clearly this impacts net income returns for the average investor...but it won't shift the income ROI from approximately 6% to 3%...it will increase your entry costs only and so 6% ROI might turn into c5.8% (6 / 100 vs. 6 / 103 is the maths behind that). So, not much different really.
As for Clause 24 - this will affect higher-rate tax payers by a fair bit, or push some basic-rate taxpayers into a higher tax bracket...and so affect these a fair bit too. I won't illustrate the maths but this could take a bigger bite out of the income returns than SDLT. Potential ways around this are: invest via a company, invest in higher yielding properties, re-arrange your affairs such that you will be less impacted by these changes (seek professional advice to do this!) or change strategy (e.g. property trading) or investment location (country).
Finally, capital growth - if all you do is sit and wait, then you should hopefully achieve some capital growth over time (it does depend on location though). But you can't spend equity unless you release it in some way...so it's actually of no use to you until and unless you can release this capital growth by either selling or refinancing (careful with over-refinancing but that's another topic). Capital gains tax is pretty much the same as it used to be, although is now less favourable when compared to other capital assets...so compared to property returns previously, no change, but compared to say capital growth on stocks and shares, it's now less attractive.
Property does still have the advantage of using leverage to grow your returns, which for the everyday investor, is not the case with say stocks and shares really. You do get some tax breaks by investing through ISAs and pensions, so if you are looking long-term then you should also consider these at least as a part of your overall investment portfolio mix (I do!).
So, in conclusion...don't sell your ticket to the good ship property just yet but do undertake a little more research on which is the best cabin to book on the ship
Petya Spencer reacted to richard brown in Now or never?
If your investment strategy is BTL that implies a long-term investment that offers income in the short-term and the potential for capital growth over the long-term. This could mean owning the BTLs for a couple of decades or more and so capital growth, whilst relevant, won't be as important as income in your analysis. Over a couple of decades, you would be unlucky not to see some capital growth no matter when you buy but you should have an income return that easily beats leaving your money on deposit too.
Warren Buffett says that timing the market is not as important as time in the market and he certainly knows about both!
You already admitted that you let one year slip by and could let another one slip by as well. So, what if house prices don't climb by 10% over the next year? What if they actually stagnate or fall? In twenty years, will it really matter that much?
Another investment principle is 'pound-cost averaging', often applied to stocks and shares but can apply to property as well. Put simply, it takes out the peaks and troughs of market price movement by buying consistently over time. Think 1 BTL every year for the next 10 years (or every 2 years instead) and you will see that you will probably buy one or two when the market is high and one or two when the market is low...but overall, you will have paid the average over the 10 years and so will ensure you have an average overall equity position too. Of course, everyone wants to only buy at a low and then sell at a high to maximise capital growth...but what about the income you may miss along the way?
The other option is to sit on the cash and then wait for the next property market crash to mop up...if you can get finance when that happens If you believe in the 18-year Property Cycle, the next crash is due around 2025 or thereabouts...that still leaves you 8 years of capital growth before that happens!
Fear and procrastination are robbers of dreams but time is also a great healer and very forgiving in most markets, including property. So, even if you're fears are correct...in time all will be put right.
Hope that helps.
Petya Spencer got a reaction from mickflynn39 in Progressive Property MSOPI Event
I totally agree!
Rob & Rob and the team are doing such an amazing job of educating us and getting us connected! I wish there was a podcast every day, I am totally addicted:)
I do go to the meet ups and find them extremely useful! I am thinking of going to the Summit too.
I only started investing property investing a few months ago and I thought that there might be some good courses to go to, that's why I asked the question.
Petya Spencer reacted to Karun Chaudhary in Progressive Property MSOPI Event
I went to the event this past weekend actually. Here are my views:
1. Inspiring - You hear a lot of inspiring stories and their social media community is very very helpful with any questions you may have on investments.
2. Eye opening - They take you through several NMD strategies which I would have never thought of in my wildest dreams. Caution - only very briefly as the detail will apparently only be available in the costly specialised courses.
3. Contacts - Forget the speakers, you meet several like minded genuine people who are all in a similar situation to you and its a great bonding and networking opportunity.
Not so sure on:
1. Up sell - The speeches are designed to leave you wanting more and with all the "today only" special offers, its hard not to get tempted when you see others signing up and FIMO comes into play.
2. Personal stories - I am not sure how to feel about this one. Every single speaker shared their own personal low point that got them into property and got teary on the stage, with the follow up comment of "my goal in life is to help as many people as possible achieve financial freedom". I want to believe them and their stories. I mean surely people wouldn't use their personal life's tragic events to mislead people ?
3. Contradiction - Each speaker talked about how much money they were making from property and if the figures are correct, I am not sure why they were so desperate on selling us the courses ? Each speaker also contradicted the one before them about their own strategy being the most profitable one.
The whole course is based around sourcing desperate vendors, buying (for cash!), refurb, and recycle. I am not quite sure how easy it will be to find desperate sellers and/or being able to borrow £200k cash from angel investors without much of a track record.
Anyways, I signed up for a few courses in the heat of the moment but now considering if I should use my cooling off period.
I'd much rather use that money on mentoring... (Rob- you listening ?? PLEASE ???)
Petya Spencer reacted to The EP Investor in Opinions please
Never compare yourself to someone else Fir Tree.
Paul is getting twice as much cashflow than you, therefore he is great and you suck.
Or.... he's investing in a different area, with a different LTV, and self managing, etc. so it's a completely pointless comparison.
The metrics that matter, in my opinion;
You need to set your own goals and limits for those. Paul might be spending £80,000 to get £400 a month cashflow. You might have spent £20,000 to get £200 a month. All of a sudden your deal looks much better!
It's hard to know whether or not a deal is good, so it's human nature to ask what others are doing. But it's a dangerous game as people who are more experienced are likely to be achieving more than you, and it can be disheartening.
So workout if the investment you've made stacks up for YOUR goals. Sometimes you won't get capital appreciation at all, and that's fine so long as the cashflow stacks up.
PS - Paul, I'm not bashing your advice at all, it's really helpful to have something to benchmark against. Just think it's important for everyone to have their own standards - to keep them honest as you said!
Petya Spencer reacted to Soraya Crowley in Tenancy Deposit Transfer
Thank you for such a thorough response. I have been raising the issue of the deposit throughout the conveyancing period and no-one, including my solicitor, has been able to give me a response that actually made any sense. I kept being told to just register with TDS as though the deposit would somehow magically wing its way to me and become protected for the tenants. So, I continued to pursue it by posting here and luckily you have come up trumps ! The tenants deposit is indeed with TDS and I am already a member of RLA too, so basically it looks like the best way forward is to have the vendor ask for the tenants permission to transfer the deposit to ourselves and then we can register it with TDS via the RLA route to get get our discounted rate. We already have the original signed inventory and condition report so hopefully, it will all be fairly straightforward. Thank you so much again Tim. Absolutely delighted to have received such a useful response to my first ever question on the hub.
Petya Spencer reacted to Tim Wragby in Tenancy Deposit Transfer
Congratulations on your first BTL I hope that it is successful for you.
The transfer of the deposit should not be too challenging but it does need to be done as the money belongs to the tenant and not you or the previous owners/landlords. There are various ways that this can be done and may depend on the scheme that you use. If it is the TDS that the money is registered with you will probably have to arrange for the landlord to pay the deposit back to the tenants, or preferably get their written permission for the landlord to pay you the deposit for you to then register it with one of the approved schemes yourself - within the 30 days that a deposit has to be registered. There may be a system within TDS that allows the transfer of registration but as far as I am aware the scheme is an insurance based scheme so the old landlord will have the money in their own account ready to pay the money back. As they no longer have any claim for dilapidations etc the whole of the deposit still belongs to the tenant.
If the scheme is in the custodial set of the Deposit Protection Service (DPS) which is another deposit scheme it is much easier to transfer deposits between one landlord and another as the money is already lodged with the scheme and not in the hands of the tenant. All you will need to do is to register your details with the scheme and get a personal registration number and the landlords then go on-line and transfer the deposit into your account number. No money is lost or changes hands and the tenants are then informed of the changes - as far as they are concerned there is no real change other than the name of the deposit landlord. The DPS is free to join and there is no charge for managing the money as they get their money paid from the interest they earn from holding the money for landlords and agents. This scheme is my preferred option as you the landlord do not have control of the tenants deposit money once it has been lodged and there is no risk of accidentally (or otherwise) spending it.
If you are planning to become members of either the National Landlords Assoc (NLA) or the Residential Landlords Assoc (RLA) you can register your deposits with My Deposits (NLA) or the TDS (RLA) for reduced fees as they charge for registering the deposit and paying for the insurance premium etc. Joining one of the above will also help you with all sorts of landlordy matters and are good vehicles for getting training and advice on how to operate best practice. Whichever scheme you do choose you must do it as soon as is practical so that the tenants are not left in limbo and you do not fall foul of the law. If you do not properly register the deposit you will not be able to serve notice of a Section 21 on the tenants to end the tenancy agreement and there are also penalties of 3x the deposit fee + the return of the deposit to the tenant if the courts get involved.
Whichever route you choose as well as registering the deposit you must also give the tenants what is called the Prescribed Information for whichever scheme you use. Each will have the blank versions available on the scheme's website but make sure you follow it to the letter as this too is part of managing the deposit properly with the above penalties invoked for breach of this too.
Lastly, make sure that you get the original signed copy of the inventory and condition report for when the tenants moved in as this will be the document that the tenants will be measured against at the end of their tenancy for dilapidations and damage. If there is not an effective version available you will have to create a new one using the current condition of the property as the benchmark - but this is harder to do as the property will have all the belongings of the tenants. If you do not have an inventory it is hard to make any realistic claims at the end as the arbitration service will most likely take the tenants side if condition at the outset cannot be proved.
I hope that this helps
Petya Spencer reacted to Joceline Phillips in Ahh. It's harder in real life
Thank you! Well, my choice of Wolverhampton was a bit of a mixture of totally unscientific and relatively carefully researched.
Firstly, it's my nearest city if I drive East, which is what I do a lot on my way to work. So with really limited opportunities to view property, it seemed like it'd make things a little simpler.
I wanted to invest in a city, and from my experience of living in London, York and Birmingham, it's lovely (and valuable) to be near to the centre of things as a tenant. There's no way I could afford to buy in prime London, Manchester or Birmingham, so rather than buying something further out, I thought I'd try to make my properties 'big fish in small ponds' rather than small fish in big ones if that makes sense? Wolverhampton fitted what I was looking for, and I enjoyed staying in the city centre for a couple of nights, so I decided to start there.
I did also do some statistical comparisons of other areas I'd briefly considered - Dudley and Walsall. My (admittedly strange and muddled) maths ended up showing me that the rental yields were better in Wolverhampton than in either of those places.
And then, I ran out of time, decided to commit to Wolverhampton rather than paralyse myself trying to check my figures over and over again, and went for it.
I wonder if the above description will be of any help to anyone. Hope so. I do think of most investors being rather more methodical and clear-headed than me, so maybe it'll be of comfort to some that I'm really not, and nothing's actually gone catastrophically wrong.
My mortgage was just approved though!
All the best, everyone
Petya Spencer reacted to Joceline Phillips in Ahh. It's harder in real life
Thank you very much for your response, Damien; it seems very impressive to me to get a monthly return of £200+ on a repayment mortgage. I shall hope to get better at spotting those properties and negotiating hard in the future. So that was very helpful to me.
In my story continued, my favourite of the estate agents I met (lovely, articulate and enthusiastic young lady who offered to stay behind after work to make sure that I could view a property she wanted me to see) telephoned me for feedback on one of the properties I'd viewed. I told her I wasn't interested in it, but that I'd liked another of the properties she'd shown me. Sadly, it had just had an offer accepted on it so I decided it wasn't meant to be. I drove back to Wales, wondering if any of the properties on my list were worth making offers on, even if only to practice doing so without feeling too much in the way of shame and social embarrassment.
The next morning, I started to compose an email to one of the agents, making an offer on an apartment, at 15% under the asking price. I felt all sweaty and guilty even typing it out. I'd just finished (but not hit 'send' thank goodness) when Favourite Agent Lady called. The person offering on the 2 bedroomed Victorian terrace I'd liked turned out not to have spoken to a mortgage company yet. So the agent, knowing that I already had, asked if I'd like to make an offer.
'How much did they agree to pay?' I asked, suspicious that she wouldn't tell me. Indeed, she said that she wasn't allowed to disclose that information. Because I'd been about to make an offer on a cheaper property than this one, I decided to flex my muscles-of-audacity a little, and make the same offer for this one. Which sounds kind of tough and impressive, I think. Except, dear reader, that I did it by email because I'm too cowardly to be so obnoxious over the phone.
It wasn't accepted, which made me pleased because, as Rob Dix says, if they accept your first offer you'll never know if you could have gone lower. I raised the offer, but not by much, with the justification that it was more than I'd been about to spend on the property I'd been in the process of making an offer on. That's a rubbish justification, isn't it? But I felt as though I needed some kind of excuse for my new-found miserliness.
That was turned down too. So I felt like a proper haggler. For some reason I couldn't get the picture out of my head; myself as some kind of super tough, glamorous hostage negotiator lady (Emily Blunt maybe) doing some life and death deal with a bad guy, whilst training a sniper's rifle (do they have rifles? I'm afraid I don't know) on him without his knowledge.... Is it normal to feel like that? Wouldn't have thought so, I'm generally prone to grandiosity. But I hope I'm not the only investor ever to feel a tiny bit important and grand during this part of the process, because it's a nice feeling. I imagine it'll be very short lived.
Then Favourite Agent Lady told me her manager had said she was allowed to disclose the other bidder's offer. It was £75,000, for a house on the market at £80,000. I'd already offered £73500 , so I got all excited and said I'd be happy to go for that price.
I'm aware, of course, that I haven't got anywhere near below market value. Because the house had only gone onto Rightmove 10 days or so before, and because it was in good decorative order and appliances/furniture were being included in the sale, I thought a first time buyer would probably have happily paid the asking price. And I got all full-of-adreneline and didn't want to miss out. Clever Favourite Agent Lady, I can see she did a great job of making me feel like I had to make a quick decison. I'm very impressed with her. Possibly less so with myself, I don't think I kept the cool headed detachment I'd expected to. However...
...I work away from home a lot and spend several months a year abroad. So my viewing opportunities are extremely limited, probably in single figures for the rest of 2016. So to make a purchase this year, I felt the need to be fairly speedy and decisive. I like the house, I think the agent will be good to deal with, I like the location, and I like the furniture that I'll be getting as part of the sale, because I'd budgeted £2000 for that, which I now won't have to spend. I get to do a bit of work on it (because the garden's a mess) so I'll feel as though I've put a little of myself into it. And assuming, dangerously, that I've got my sums right, I'll get an ROI of 9.6% and a monthly profit of over £200.
So it's not the deal of the century, but I think it should work out ok assuming no disasters along the way. I've learned loads, not least from peoples' kind responses in this thread. And I'm excited about getting through the legal stuff, and onto the next stage of the process - finding tenants who'll appreciate the fruit trees in the garden. Priority.
I know this is a pretty small deal but I hoped that by sharing the numbers and details of the process so far, it might help another wobbly little investor taking their first steps. Thanks for reading, I love the Property Hub and am so grateful for all I've learned so far, and all I'll learn in the future. Shall continue to update
FRUIT TREES. I think that's the main reason I'm buying this house. Maybe I need a JV partner next time. A sane and rational one who doesn't engage in mad fantasies about happy, rosy cheeked tenants making apple pies. For Heaven's sake.
Petya Spencer reacted to Joceline Phillips in Ahh. It's harder in real life
Righty ho. Now I begin to see why property investment isn't easy money. I just had my first day of viewing potential BTLs in Wolverhampton.
I'd found a short list of 12 which seemed to have good fundamentals. They're all within 20 minutes walk of the city centre and I chose a range of houses and apartments (mostly 2 bed) to help me get my eye in, with a view to do single lets.
I started my morning by having a quick meeting with the very helpful and kind Lee, who made contact when I posted on the Introduce Yourself thread. He warned me off one of the properties I'd thought of as a front runner because of his local knowledge. So then there were 11 properties.
One viewing was cancelled. 10.
The next is at the top of my price range but needs a new bathroom and kitchen I hadn't known about (very clever photography...) 9.
The next one, I fell in love with. Like a newbie. But it was right in the city centre, was in a lovely old airy building with charming round windows and lots of little extra, interesting things that had made it appeal to the super-hip couple who rented it. Who want to stay. And are already paying more rent than I'd have expected for the flat's size.
I already rent out a leasehold property in London, which has a relatively high service charge, so I thought I was prepared for the extra expense to be factored in. But when the agent got back to me with the service charge cost I realised it'd completely eliminate any monthly profit I'd make. So then there were 8. And I was a little crestfallen.
Then came the one on contaminated land. Which is a pity, it was really lovely. I'd already discounted it in my head, but didn't want to cancel the viewing with such short notice.
Next was a 2 bed apartment which is freehold (need to do some digging about this, suspect shared freehold but the agent didn't know). It's 'second bedroom' is a tiny little sliver of a thing probably only suitable for a preschool child who doesn't need a full-sized bed. Actually, this is my front runner for now. I'd make a £187 pre-tax profit per month. If only it was also in an historic city centre building with well behaved, happy, ultra-cool tenants...my heart is never going to mend, I can totally tell.
Next was my on-paper favourite - a modern, tidy little 2 bed house that looked beautifully decorated. God, how do these photographers do it? I work in the photographic industry, but if the photographers I work with could make me look as awesomely unlike myself as the estate agents of Wolverhampton are able to make their properties look, then I would be a very happy lady. It was absolutely tiny, and deeply ugly. Wow. 6.
And last thing, as I was starting to feel a little as though I was unravelling and had to keep checking my phone to check which property I was actually at cos my brain could no longer hold all the information, I viewed another reasonable choice. It doesn't need much done to it and would make me a £177 per month pre-tax profit.
But now I realise what an awesome task it'll be to get an ROI above the 7.5-8.5% that I realise will be the best I can hope for with any of these deals.
If anyone has any wisdom as to whether achieving an annual pre-tax profit of around £2000 for a property costing around £80,000 is a bit loony? On paper it seemed fine to me (it just means I'll need to do this 10 times, successfully, to make myself the £20,000 annual income I'm aiming for) but now I'm actually here, looking at things, it feels a little overwhelming.
I know that only an individual can decide if something's 'worth it' to them or not but a quick reality check would be so comforting, whether
it's to say 'God no, that's dangerously stupid' or 'yes, that's fairly standard for a single let if you only have a 25% deposit'.
Tomorrow I'm doing the last five properties on my list, and I shall update accordingly.
So my thoughts so far are 'WOW this is fun' 'God, this is awful' and 'wouldn't it be nice to have an extra £10,000'. Which, I expect, always feels like the case.
Thanks for reading, and thanks in advance for any words of advice. When I know more, I shall do my best to give back.
Petya Spencer reacted to DezzaT in Every 'Resource of the Week' in one place
After spending the last 3 months listening to the back catalogue of the Podcasts, thought I would upload the spreadsheet I was using to keep track of all the shows and resources, building on Bakedbeans' list. It goes up to the most recent Podcast from Thursday (27/04).
Most of the resource links are to the Chrome/Android version as that's what I use, so apologies to the Apple folk.
Hope this helps the other new Hubbers!
Petya Spencer reacted to Lilla D in Ltd Co. BTL Mortgages General Query
James - yes, you're right, there are lenders who can accept day 1 remortgages at the original purchase price, but there are only a few. Some can also accept quick remortgages from auction finance and bridging finance, but not in case of a cash purchase. In addition, some of the lenders, who can accept less than 6 months, have minimum property values higher than what the planned purchase price may be based on the original post. Net, the short answer is yes, lenders in general will expect 6 months ownership, but in exceptional circumstances less might be accepted.
Darren - thank you for the extra details re the Ltd company. Indeed there are more lenders available now than a year ago, when the government changes around taxation were introduced and expecting more lenders to come forward.
Re rates, it depends on the purchase price and therefore the lender options, but let's say that rates are available from 3-3.5% with arrangement fees of £1k-£2k. APR, let's say 4-5%. Then of course valuation fee of a few hundred pounds and money transfer fee of £30-£50. At the other end of the spectrum, there are rates for 7-9%, so dependent on the actual case details, chances are that you'll be somewhere in between
Petya Spencer reacted to Stuart Phillips in Ltd Co. BTL Mortgages General Query
Lilla's points are all excellent, and i would agree with all of them wholeheartedly.
I also think APR's are utterly worthless. I assess the value of a mortgage based on how much you will pay in total over the period you will be committed for. Ultimately you want to hand the least amount of money over to the lender, but you might prefer to avoid upfront fees and are happy to pay more in total to spread that cost across the premiums. Mortgage sourcing systems, that most brokers will use calculate this automatically and allow the inclusion/exclusion of things like added arrangement fees, cashback etc. A broker should then save your preferences so further quotes fit your particular preference. The one thing that will always be a factor, and not included in this method ulation is the arrangement fees you will pay to remortgage. Longer term deals reduce the number of these over the life of the mortgage.
Ive just spoken to Target, who administer the Help to Buy Scheme post completion for London Help to Buy agents, and who advised that there is no restriction for directors of a limited company, the rule regarding additional home ownership applies to personal ownership only. I recommend that your directors speak with their own Help To Buy agents though and confirm the same before committing as couldn't find specific written confirmation and this was just discussed verbally.
My recommendation on value is ensure that post refurb, the property will definately be wort at least £75k, below this figure your options drop dramatically.
A caveat to Lilla's point about day 1 remortgages, is that within the 56 months the value of the proper cannot be higher than the original purchase price, meaning you cannot draw against the value added by refurbishing. You might want to review this strategy i wrote about that mitigates this without needing to wait the 6 months, using bridging, but with less guesswork: http://www.aaltomortgages.com/6-month-rule/
(Admins - If posting own links is prohibited, let me know and i'll post the text to a forum post, and link to that instead)
Petya Spencer reacted to oli_lowrie in Ask An Architect- free advice for anyone interested!
The most common mistake of newbie developers is definitely biting off more than they can chew.
Without this sounding too much like a pitch, the way to avoid this is to consult an experienced professional before you make an offer. As well as being able to spot possible showstoppers, they will be able to explain the process and team required to deliver the project. They can then help you get the team in place in a timely manner if you choose to make an offer so that you can hit the ground running.
Most architects are happy to do an initial meeting to scope out a property for free if they think that there will be future work with you, so take them around when you meet the agent and listen to what they have to say.
Cheers for the question-
Petya Spencer reacted to oli_lowrie in Ask An Architect- free advice for anyone interested!
I am an Architect, and would love to answer any questions you have on planning, design, construction etc etc.
I am starting a blog called AskAnArchitect, and will feature the answers on the blog too.
Petya Spencer reacted to Guest in Don't have deposit for your BTL? You can make income from summer lets
Do you find that income from your work or invested properties doesn't make you enough money for your next BTL?
Would it be good to invest very little of your money but have high return on the investment everyone is looking for?
I can tell you with certainty, that is possible.
Im currently talking to guys who have some mobile/park home on 26 different sites at the South (Devon and other areas) and they assured me that people are making on average anything from £205 per week (in April) to £435 per week (in August). Their sites are open 11.5 months in a year and makes great profit for investors.
Personally i don't believe what people say but i always look for some PROOFS. So, ive requested more information with financial statements and awaiting to have all the details this week.
If you are interested in making some extra money or you wish to know what i'll get in the reports and statements- let me know and i'll share the details with you too.
Have a fantastic and prosperous live!
Petya Spencer reacted to Amjed Khan in Hello from yet another newbie
Welcome. If your first offer was accepted I would be worried about you. Keep looking for deals. It's still possible to get bmv deals but getting harder. I'm investing in Manchester although I have a property in Birmingham too. Good luck.
Petya Spencer got a reaction from kish151 in Hello from yet another newbie
I feel very privileged to get a message from you!
I did put my first ever BTL offer on and it got rejected, but that was the plan! Now, its silence time...just as you suggested! I won't get it BMV but it still makes sense and I think it's going to be a great start for me!
Thanks again! I can't even begin to describe how grateful I am to be able to learn from you guys!
The podcasts are so insightful and enjoyable and the courses on here are just fantastic... and yes, I have left a 5 star reviews on iTunes and on all of yours and Rob D books on amazon.
Have a lovely evening!
Petya Spencer got a reaction from Daz Lingard in Hello from yet another newbie
I am Petya from Birmingham. I am just starting out on my property investing journey.
I have always loved property and have always wanted to invest in property but I always thought that it's for the rich people only.
One day, I was really fed up at work and I thought to look for business ideas on YouTube. I watched a few videos and many of them recommended Rich Dad Poor Dad...what an eye opener! I was hooked.
I then watched all of Andy Walker's videos and read his Monoperty blog and I was sure that property is the way forward.
I only discovered the property hub by posting on The Bigger Pockets youtube channel, they are the US equivalent of The Property Hub, and one of the members recommended to search for the meet ups in the UK. I couldn't believe that I hadn't found the property hub before! I have now listened to pretty much all of the podcasts and watched all the courses on the website and I am going to the Birmingham meet up in April. I am so happy that I finally found them. Thanks Rob & Rob for your incredible advice and what you are doing for all of us!
I have released some equity from my house and I have a deposit to buy my first investment property. I have found a 2 bed flat near where I live and I think I am going to put in an offer on it.
I hope to meet some of you on the meet ups soon!
Thanks for reading and I will be posting details of my deal for your comments on "Critique my Deal"
All the best!