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Found 3 results

  1. It's no secret that leveraged property investment has been very lucrative in recent decades, but people have been made bankrupt as well, especially in 2008. I'm trying to get to grips with how people with larger portfolios sleep at night with lots of mortgage debt to their name. Let's say I have one Buy-To-Let worth £200k with £150k debt against it and it's held in an SPV with a 20% personal guarantee (PG). The most I can lose personally is 20% of debt, so £30k. This isn't too scary, unless I've spent all my money it probably won't bankrupt me and it's not an insurmountable amount of money to rebuild. Anyone hoping to grow big though is going to one day end up with much more debt than this, perhaps they will end up with 20 of the same property, worth a total of £4M with £3M debt and the same 20% PG. Now they are personally liable for up to £600k! That's a much scarier amount. I can think of a few ways investors might justify these risks and I'd be interested to get your thoughts. A) prices will never fall more than 25% and so negative equity will never occur, and if the property needs remortaging at this price (which won't be possible without putting new money in because of the new value) then it can be easily sold to cover the debt. B ) before prices get anywhere near dropping by 25%, the government will step in to support the housing market C) The investor has sufficient other assets to cover any insolvency in their property portfolio I get the impression that a lot of people are either not thinking about this risk or thinking of A and B. In my eyes at the moment, only C is really that safe. If the properties are held personally or with a larger PG, then much more is at risk. As an investor grows their portfolio, they might be under the impression that they are unstoppable, but if they keep up a mortgage LTV of 75% across their portfolio, they are no more safe against bankruptcy than someone with a single property, and in fact have more to lose. Please let me know what you think, do you have a way to mitigate against these risks? Am I missing something? Thanks
  2. I'm looking at a potential investment for a flip through my limited company, but was hoping to tap into the collective wisdom on the process for these disposals. It's being sold by an "Accountant in Bankruptcy" (according to the Home Report - I'm in Scotland) but the owner is still living there. It's apparent that he's not worried about the place - wallpaper stripped off, gutters leaking, washing all hanging in the kitchen when we came to view - which I imagine is because he doesn't stand to make anything from the proceeds of sale. Or, is he making it seem unattractive so he can stay longer? omegle xender I've previously missed out on a vacant repo that was up for auction but sold the morning of the open viewing, presumably because someone made an offer that satisfied the outstanding debt, but I'm finding it peculiar that the owner still lives in this house. I t's currently marketed at OIRO 90k, home report value of 100k which is not unreasonable as nicer properties in the row have fetched more. The agent told me that the bank have declined an offer of 85 in the past, but might be more amenable to a low offer as some time has passed. Can anyone offer advice on how one might pitch a low offer to the bank/accountant, or have any insight on how the required offer amount is calculated? We'd be buying cash, and the house has been on the market for over a year so I'd be looking to offer at a significant discount, certainly less than the 85 mentioned. Obviously the fact that it's been on the market for a year is a bit of a red flag. It's a terraced cottage that currently looks in a sorry state, but has great potential. It's right next to a train station with really good commuter links, and the land in front of it is about to be redeveloped for social housing along with a new access road, traffic signals and parking provision. It was built at the turn of last century and there's a bit of damp from the leaking gutters but ultimately I think it's the general rundown nature of it that's putting people off.
  3. I'm looking at a potential investment for a flip through my limited company, but was hoping to tap into the collective wisdom on the process for these disposals. It's being sold by an "Accountant in Bankruptcy" (according to the Home Report - I'm in Scotland) but the owner is still living there. It's apparent that he's not worried about the place - wallpaper stripped off, gutters leaking, washing all hanging in the kitchen when we came to view - which I imagine is because he doesn't stand to make anything from the proceeds of sale. Or, is he making it seem unattractive so he can stay longer? I've previously missed out on a vacant repo that was up for auction but sold the morning of the open viewing, presumably because someone made an offer that satisfied the outstanding debt, but I'm finding it peculiar that the owner still lives in this house. I t's currently marketed at OIRO 90k, home report value of 100k which is not unreasonable as nicer properties in the row have fetched more. The agent told me that the bank have declined an offer of 85 in the past, but might be more amenable to a low offer as some time has passed. Can anyone offer advice on how one might pitch a low offer to the bank/accountant, or have any insight on how the required offer amount is calculated? We'd be buying cash, and the house has been on the market for over a year so I'd be looking to offer at a significant discount, certainly less than the 85 mentioned. Obviously the fact that it's been on the market for a year is a bit of a red flag. It's a terraced cottage that currently looks in a sorry state, but has great potential. It's right next to a train station with really good commuter links, and the land in front of it is about to be redeveloped for social housing along with a new access road, traffic signals and parking provision. It was built at the turn of last century and there's a bit of damp from the leaking gutters but ultimately I think it's the general rundown nature of it that's putting people off.
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