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richard brown

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About richard brown

  • Rank
    Obsessed member!

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Profile Information

  • Property investment interests
    Value-adding refurb
    Single let
    Holiday / short-term let
    Trading / Flips / Development
    Selected overseas markets
  • My skills
    Commercial & strategic property investment specialist
    Knowledge sharer & mentor
    Blogger / writer
  • My goals
    I have 3 principal aims (my SMART goals are more specific):
    1. Through property to generate an income stream that would allow me to chose my lifestyle, location and daily activities that would include fun-filled 'work', helping others to grow & develop and lots of travel, leisure pursuits and that kind of stuff!
    2. To write at least one book...more likely 3 ;)
    3. To coach and mentor others - enjoying thanks & 'likes' for the free content along the way
  • Interests outside property
    My family, sport, travel, music and occasionally throwing myself out of an aeroplane at 10,000 feet, free-falling for the first 7,000 :)

Recent Profile Visitors

4,660 profile views
  1. Hi Mark This is a simple one as far as I am concerned...pick the route where you can add the most value. Usually, that's with a house, although if you get a flat in need of a refurb or where you can extend the lease that could work too. With houses, besides a refurb, you can also extend, convert a garage or the loft to add valuable living space (subject to doing the ROI on any project), you also split it into rooms...or flats even...you can't usually do these things with a flat (the exception being where you can reconfigure the payout to add a bedroom for example). The reason for saying this is that capital growth is unpredictable but forced capital appreciation is a far more predictable way to add value, which will then be compounded with any natural capital appreciation that follows. You might respond by saying you want to be more passive and not undertake a project...but you may want to in the future when you realise that's a sure way to realise an equity gain...or you could sell on to someone else that 'values' such potential and will pay for it. Best Richard
  2. Hi Tom The best advice I can offer is to seek out and pay for professional tax advice on your plans here, for yours and your mother's / family's sake. It sounds like a wrong move could prove quite costly for someone... Best Richard
  3. I feel your pain Dennis, sorry to hear this. Let us know what you end up doing about this one...perhaps switching lenders and also valuation firms might get a result? One tip could be to test the zero value issue with a member of one of the other major panel providers, such as Allied. Or, some lenders will accept your own valuation if re-typed/addressed to them...not the regular ones mind you, so enlist a good broker to support you there. Also, there are some 'known problem children' when it comes to valuers in certain regions...an experienced broker, such as Simon Allen at Searchlight Finance usually knows who best to avoid for your case. For those who are not familiar with the pain and stress that can be caused by valuers...check this podcast out: http://www.thepropertyvoice.net/soundbite-property-horror-stories-part-7-valuers/ However, on the good news front...I had a bit of a bad run with valuations until a recent HMO revaluation post-refurbishment was undertaken by Kent Reliance and found their valuer to be a breath of fresh air! I had been conservative in my expected valuation basing it on 7 x the gross rent multiple but he valued it above my personal view by adopting the net yield investment valuation method (with a little guidance from my letting agent), which was perfectly valid and fair...just a bit of a shock given my recent experience that's all. My broker tells me that these things even out and it also helps if we adopt the Stoic Philosophy I have found Good luck...and remember the fake Latin expression: Illegitimi non carborundum
  4. Hi Chris I don't see it as a major problem in diluting down your investment. If you are planning to sink say £100k as deposits in 3 x BTLs or say £60k into a holiday let (or pro rata) it is not as if you are looking at a 5x or 10x your 'regular investment' level, but just 2x, so no great concern there. Holiday lets should offer a better potential NET return at say 16 weeks occupancy for a seasonal holiday let compared to a regular BTL for the decision to be worthwhile...as income is far more variable as I am sure you appreciate. Possibly of more concern is the notion of a JV as your first investment, however. How well do you know the partner, what sort of agreement will you have, what are your roles and what is your buyout/exit, dispute resolution/deadlock and decision-making criteria for the partnership? If you already know all the answers to these questions and will commit them in writing and are confident in working with the JV partner, then crack on. If not...well perhaps getting a little more experience yourself first might be a better place to start? Don't get me wrong, JVs are a great way to scale your reach in property, so I am not against them by any means. It's just that you should consider all the potential for disagreement and fall out with a cool, clear head before you go in...as if it gets to dealing with such matters in the heat of the moment when emotions are running high it will end in disaster most likely. Best Richard
  5. Exchange with delayed completion is a very good workaround here - good suggestion!
  6. OK, so you are wandering into an area called 'sale and rent back', which is a regulated area and so best avoided. You need to be approved to undertake such a scheme, which for a one-off purchase is not worth it (and unlikely anyway). Equally, you will always be advised to buy a property with vacant possession to avoid issues with sitting tenant rights, etc. That all said, a lot of this goes on below the radar...especially if it is for a temporary basis on a license type of agreement instead of an AST...I am not suggesting you do that though... Best Richard
  7. Some tips in this podcast episode for you Charlie: http://www.thepropertyvoice.net/soundbite-property-horror-stories-part-7-valuers/ After a run of recent down-valuations, I had one that came in ABOVE my expected value...my broker did ask if I wanted to appeal it I guess if we look at the upside of a down-valuation, we will have more in-built equity and as a result a lower mortgage = higher cashflow each month. It is hard to take, but over the long-term, things do tend to even themselves out a bit...even if they don't feel that way at times. Stick with it. Best Richard
  8. Hi Rockwood There may be some merit in 'doing' your first project if you want to be an effective project manager later on. However, if you already have those skills then the value of the doing part to learn the ropes is diminished clearly. Besides that, you have a straightforward 'opportunity cost' calculation to undertake. The money saved by 'doing' the work yourself compared to the time and costs saved (or income forgone)...not ignoring a value on your own time...if subbing the work out. Quality should also be a consideration. Based on your stated info, you would be able to work an average of the equivalent of 3 days per week for around 18 weeks (approximately 54 days), which probably translates to around £8k based on £150 a day labour rate (adjust accordingly). That seems like a lot, so I can see how tempting it might be. Contrast this against the additional costs involved by doing it yourself in terms of additional finance and holding costs (council tax, utilities, insurance, etc.) and the loss of rent due to a slower pace. My guess is that would work out less than £8k, which on the surface would suggest the DIY approach would make sense. It might be hard to factor quality in as a cost, but a good professional job should lead to a higher end-value and higher rent as well in most cases. The other really big issue for me whenever I get involved in this type of discussion is the return on time investment or ROTI. True, I may be able to save up to £150 per day by doing this work myself (actually less once the additional costs from taking longer and lower quality are factored in). However, for me personally, I get much bigger returns on my time for finding a deal with say £15k profit or a JV/private investor that I pay less to than a traditional financial institution. Let's say for an illustration that this adds up to £20k on a single property refurb flip/BRR project. However, if I invested the 54 days (which would be a lot) into finding the next deal and funding it more cost-effectively, which will save/make me around £20k, then that's equivalent to £370 per day instead of a maximum of £150 a day saved by doing the work on this project myself. Looking at it this way, why would I ever be tempted to spend 54 days of my time to save a maximum of £8k if I could apply it to make £20k instead? Most investors ignore this altogether and if you only plan to pootle along and do say one project per year or something like that, it will probably not resonate with some of the readers. However, I am now undertaking between 8-12 projects per year in two different countries and so I get paid a lot more for finding and funding projects (many of which are much bigger than indicated here). So, for me, it makes no sense at all to save this money by doing any of the work myself. As the old saying goes...those who know how usually end up working for those that know why Best Richard
  9. Hi Larry I guess the question you should be asking is 'am I getting value out of this day?'. If you answer yes, then it' seems perfectly reasonable to pay for such a day in my mind. I might be more concerned with the free day in some respects...no such thing as a free lunch after all That said, people operate to different business models and charging structures. Running a full day event with an investor is quite a large overhead after all. Cost wise, probably £50 to £350 if in a group (depending on size) and potentially up to £1,000 if solo with a suitable 'knowledge transfer' from an experienced investor/sourcer taking place. Best Richard
  10. 'Marketing and bookings only' is the normal service of a property manager in this sector. 15% is par. They usually charge extra for 'turnarounds' i.e. laundry, cleaning, maintenance, meet and greet (this last one could vary), etc. Check what is included in the marketing and bookings fee, in particular, which OTA platforms are included in their marketing and are there any extra fees involved (e.g. OTA booking fees, card payment fees, fund transfer fees, OTA listing fees, etc.). The best agents will advertise across multiple platforms (Airbnb, Booking.com, Home and Away, Tripadvisor, etc.) and also their own website. Specifically, ask if the OTA fees are included within their fees or are extra. Also, ask them to demonstrate their track record with occupancy and average rental rates (per week/night). You should also do a bit of testing as a potential customer and look at their existing booking calendars to gauge the actual rates and availability on offer. Finally, I suggest you model the profitability based on standard occupancy rates for the sector. This is c16-20 weeks for a seasonal holiday let or 50% to 70% for a busy city-break type of location. You should aim to at least break even at 12 weeks (HL) and 50% (CB). The occupancy above this is where you usually start to make a reasonable profit. Don't forget the tax breaks as well...
  11. What do you actually get for that fee though Tom? Be good for everyone's benefit to share the market info
  12. There is nothing stopping you from using a residential mortgage and then having lodgers. Could be a plan?
  13. Hi Paul When you say you can raise 80%, is that via a residential or BTL mortgage? First thought that came into my mind was to talk it over with the owner and see if you can come to an arrangement. I previously offered a buyer a 5 year loan to part-fund a deposit, I also offered a 'gifted deposit' to another one. Another angle is a lease option but that depends on how you plan to raise the 80%. Message me if you want to chew the cud a bit. Best Richard
  14. Hi Barry The go-to lender for expats is usually HSBC, especially if you qualify for HSBC Premier. Here are other options beyond those mentioned already: https://www.mortgagestrategy.co.uk/tml-launches-first-expat-btl-products/?__s=vzrhuwwozn2dzukgxqjg & Shawbrook Bank. Let us know how you get on. Best Richard
  15. Hi Stuart You just need to look at what happened with Crossrail to understand the rumours. It has massively exceeded budget (several times) and also been delayed at least twice, losing its CEO in the process. I guess that puts the HS2 project under the microscope even more. If I were a betting man, I would be evens on the Birmingham line being built and odds against the wider HS2 extension, perhaps excluding the Manchester leg at some point. I know nothing in reality though, so this is pure speculation on my part. Best Richard
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