THE QUESTION

What are the best sources to buy BMV?  I want to take my portfolio to the next level and maximise on returns.

THE ANSWER

This is a sensible way to leverage your profits and there are a few simple rules here.

1.  Only spend time with sellers that NEED to sell.  Everyone on Rightmove wants to sell their property, otherwise why list it.  But probably 90% + are happy to let it sit there until they achieve something close to the asking price. 

What you need to find are those few sellers with a more urgent need to sell, they can’t wait 6, 9 or 12 months to get a good price.  They need to sell quicker and quicker means cheaper - in other words they’re motivated sellers.

These people may have to move for work, to look after elderly parents, finalise a divorce or want to complete probate.  They don’t have time to sit around waiting for someone to buy - and then wait for a chain to resolve.

2.  Only look at properties in...

Nobody likes to admit they’ve fallen short and as long as nobody know what you’re aiming to achieve, you never have to stand up and be counted.  But with no fire under you, will you achieve all you hope to?

This isn’t just a property thing - it’s pretty universal - but people who are wannabe investors are many.  They know it’s possible, because other people are successfully investing in many different ways, but they’re not taking action.

What holds them back?

The number one stumbling block is fear.  This is usually fear of failure - and failure when you’re dealing in assets worth hundreds of thousands can be life-changing.  However, sometimes it’s fear of success.  It sounds crazy, but some people worry about what changes they’ll have to make if they are hugely successful.

Procrastination also happens because everyone is different.  Individuals look at other investors and can always find a reason why...

THE QUESTION

Who would be a good lender for existing B&B properties, with an estimated value of £400k?

THE ANSWER

There are specific commercial lenders that lend on B&Bs.  

With very few exceptions, B&B owners will have run their B&B in a certain way.  Show me a B&B owner and I can give you a very accurate description of them and their business mind-set, a B&B owner avatar, if you like.     

With numerous B&B and guest house finance arrangements under our belt, we know there are, invariably, very big issues getting mortgage on them.  On the face of it, it looks like difficult to almost impossible to finance these properties. But, if you know the workaround to it, it means you can pick them up very cheaply.   

The first thing you need to get from any B&B owner is their last 3 years accounts, because any commercial lender wants to see how much cash the business is generating to support a mortgage payment....

THE QUESTION

I have converted an end-terrace into two flats and these are both listed for sale. The building is presently owned by the Ltd Company as one freehold, unencumbered, with individual leaseholds to be drafted to prospective purchasers once sold.

Whilst I wait for these to sell, what options exist for raising finance towards the purchase of the next project?  What LTV ratios and lending rates could I expect to be offered?  Assuming that any form of traditional bank lending is a non-starter, what type of lenders could I approach?

Having all cash tied up in this one asset obviously results in quite the large opportunity cost!

THE ANSWER

Leveraging your cash into the next deal is the perennial problem for developers and there is a simple answer to your conundrum, but if you are thinking of using a mortgage, forget it, it’s a non-starter.  No mortgage lender lends when they can see the property is on the market to sell.  Nor do they lend when they know...

When you start a career in property your first purchases are often more by chance than planned, but once you’ve caught the property bug it’s important to start thinking ahead.

It’s a fact that people spend more time planning their holidays (and that’s gone really well this year!) than planning their careers!  However, there’s been a long-term survey running that has proven over and over again that the top 5% most successful people in the world have one thing in common - they are driven by goals and follow their plans with dedication.

This means that if you want to be successful, you need some goals, a plan to achieve them and the right mind-set to help you to achieve more easily.

Goals don’t work!

Goals are dreams you’re prepared to take action on - but they don’t happen without a bit of effort. 

Firstly, goals need to be specific.  ‘More buy-to-let properties’ isn’t a goal, it’s not measurable...

THE QUESTION

Is it possible to finance a well below market value property with 100% of the purchase price via bridging - and then refinance the next day to a BTL mortgage? Doing this would you get a true valuation of the correct value when you refinance and not the BMV purchase price?

THE ANSWER

The chances of you borrowing 100% of the purchase price are remote.  The only ways you might be able to do this are:

• To pick the property up 30%+ below the asking price
• Put up a property you own already with little or no mortgage on it as additional security.

There are a few bridgers who will lend on value rather than purchase price and this will reduce, rather than eliminate, the need for a deposit.

For refinance, you won’t get it mortgaged on day one, but you can get it remortgaged within 6 months by using the right mortgage lenders.  However, be prepared to pay more than leading market rates for this.

There is only one way to get it valued above purchase price paid - do...

The biggest challenge for property investors is cash flow.  First you have to have a chunk of cash to get started - and then your cash is trapped in the property you purchase.

If you have aspirations to become a buy-to-let (BTL) landlord, then you need to find a way to build your portfolio - without it taking years.  That’s the route to quitting your day job and being able to live comfortably off your property investments.

Here are three ways to invest make quick profits and get your money out fast.

1: Flip

This means you buy a property and sell it at a profit as quickly as possible.  Why isn’t everyone doing this?  Because some people see it as too risky - but with the right finance strategy, it’s not as risky as they think.

You may refurb a property to improve its value - but some people don’t even do that.  If you can find good bargains at auction it’s actually not that difficult to resell properties at a higher price, even...

It’s not someone who wears designer suits and likes fine wines!  If you’re getting into the property market it can be tempting to get someone with money to invest in your property purchase, to help to get your portfolio moving.  But any joint venture (JV) partner who is investing cash MUST qualify as a sophisticated investor - according to the FCA.

This is also known as Directive PS13/3.

It covers a range of categories of investment - and includes property deals.  So, before you consider getting into a JV, you need to be sure that your potential investor qualifies as a sophisticated investor or falls into one of the excluded categories.

What is an Unregulated Collective Investment?

Any financial deal that offers a split of the profits and, by definition, a split of the losses; and you cannot guarantee that your project will make a profit.

The FCA’s viewpoint is that an unsophisticated investor can’t do an accurate analysis of what is - or is...