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Buy with cash - and then mortgage

buy to let Jul 17, 2016



Can I remortgage a property immediately after cash purchase?


With regard to how and when you can remortgage, the method of purchase is irrelevant;  buying with cash doesn't make any difference to the property's mortgageability.  What is relevant is the lender's attitude to remortgaging a property recently bought.

Almost every BTL lender has a six month ownership restriction, preventing you from applying for a remortgage before you've owned the property for that period.

Commercial and specialist lenders don’t operate that restriction, so will accept applications at any time.

If you want to remortgage, irrespective of whether you bought for cash or not, it is quite simple; you use a lender that allows you to.

Another level of complexity enters the equation if your intention is to remortgage at a higher value than the purchase price paid. To do this almost certainly will require you to have improved the condition of the property since...

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Is it better to buy-to-let or buy, do up and sell?

buy to let Jun 27, 2016


Is it better to buy-to-let or buy, than refurb and sell?


Neither is better, they're just different strategies.

Buying-to-sell (BTS) gives you a significant cash lump sum (if you do it right) within months.

Buy-to-Let (BTL) gives you a much smaller monthly profit (if you do it right) for years to come, with the bonus of potential capital growth (depending on where you buy).

  • Some people focus on BTS because their current circumstances mean they are not mortgageable. That prevents them using the BTL strategy, up to the point where their profits establish a sufficient credit record and they become mortgageable
  • Some people choose to BTS properties that need no work doing to them, but can be sold at a profit on the purchase price paid.
  • Some people choose BTL on properties they do up because they can increase the value, get a mortgage against the higher value and have relatively little of their own cash left in the deal.
  • Some people choose to use a combination of...
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What will a bridging loan cost?

bridging finance May 27, 2016



I am considering the use of a bridging loan and would like to know:

  • What are the typical fees?
  • Over what time period can you get a loan?
  • How quick is the approval process?
  • Who provides the most competitive rates and lowest fees?


There are a number of bridging lenders and the criteria vary from lender to lender depending on your particular circumstances and the questions you ask.  It is a bit like asking:

  • How much does a car cost?
  • What is the size of the engine?
  • How fuel efficient is it?
    ... and so on

Of course, the answers will depend on what model of car you buy. So the answer to your bridging finance questions depend on the property you want to buy, what you intend to do with it and your current situation.  There are a few basic facts that will give you a ballpark view:

  • Almost every bridger charges a set-up fee, often 2%, but not always.
  • Monthly fees vary for a host of different reasons - location, property...
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How to finance the purchase AND refurb

bridging finance May 03, 2016


Does bridging lend enough to cover the purchase price and the refurb cost? If not then surely you would have to put money in. Or would you have to buy BMV and borrow % of the market value instead of purchase price?


Most bridgers lend 70% of the purchase price, but a handful lend 70% of value. This is great if you are buying BMV, as you can use the discount towards your deposit, but to buy NMD you would need a discount of 30% +.

You would still need to pay for the refurb although some bridgers will lend you money to cover that too, but it is in staged payments in arrears, so you would still need some cash. It may be possible for you to borrow the reduced amount of cash you need privately and bridge the rest.

For example: I brokered a deal last year where the asking price was £350k, a £250k offer was accepted, which meant the bridger lent 95% of purchase price. The refurb cost was £50k, the borrower spent £25k of their own cash then...

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One building, two flats

buy to let Feb 25, 2016


I'm viewing a house which has been split into two flats. I believe that the title has not been split. What are the rules for lending on a property like this? I am guessing I won't be able to use a standard BTL mortgage? Anything else I should be wary of for a property converted into two flats?


The first rule on any property divided into flats is to check with the local planners that permission to do this has been applied for and approved. Two reasons for this:

  1. It is the first thing any lenders surveyor does.
  2. If it has no PP it is unmortgageable with any lender as it is an illegal conversion.

There is an amazing number of these flat conversions that are done without PP, as the owner doesn’t think beyond 'Hey, I can get more rent if I can split it into flats.'

If you can establish it has been used as flats for a number of years you can apply to the council for retrospective PP.  Even more amazingly very few vendors actually do this; they just...

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What would you do with a windfall?

strategic planning Feb 18, 2016

This is a little different to the usual questions I get asked, but quite interesting to consider.  The windfall could come from a number of sources - an inheritance, some good property deals or - as this questioner suggests winning it!


If you won £500,000, how would you invest it to maximise your monthly cash flow?


The answer you would normally get from mortgage brokers/advisers is to use your cash as 25% deposits, get 75% mortgages e.g. you could buy 5 x £400k properties, put down 5 x £100k deposits; you could of course buy more properties at cheaper prices.

Whilst this would no doubt generate multiple fees for your broker (surely not why they advise it?!) it is also a finite use of your resources. Once you had used up your cash on 5 or 20 properties that's it; granted you should have created a good income for yourself, but your capacity to continue buying is exhausted.

As an alternative you can consider buying one property at a time -...

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How to identify a sophisticated investor

When we are JVing, what paperwork/agreements do we need to produce/sign? Others have mentioned being a sophisticated investor or an individual of high net worth. How does that translate into any agreement? Do we simply have to state we are one or the other? And what are the definitions of each?  I think I need the new JV PS 13.3.

PS13/3 is the FCA placing restrictions on the marketing of unregulated investments to members of the public.  Basically it's to control people who they consider unable to be able to work out a good deal from a bad deal

This pretty much covers any investment where the investor stands to gain (or lose) money depending how the investment performs, but is not regulated by the FCA or sold through an FCA regulated financial adviser.

It certainly covers any property deal from selling off plan Caribbean hotel rooms (remember them) to a two-up two-down refurb.

Loans on a specified rate of interest, regardless of whether the project makes or loses money,...

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A gift or a loan?

buy to let Jan 31, 2016

With regards to getting a BTL mortgage, I have been told by people that I need to show that I have the deposit in my account for the last 3 months. My in laws are selling their house for £45k and we have agreed to put this money into property investment. So if my father-in-law put that money into my account, do I have to wait 3 months before I can get a BTL mortgage or have I been told wrong?

Understanding the lender's thinking guides you to the answer.

Your solicitor has the responsibility under Anti-Money Laundering laws to provide proof that your deposit is from a legitimate source but...

BTL mortgage lenders in particular want to determine that you have not borrowed the money and it is really your own cash you are using and you are not trying to disguise the fact you are borrowing from someone/where else.

To that end they often want to see an audit trail stretching back 12 months, not 3. If chunks of money have just dropped into your account within that time, they will...

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Valuing a refurb

ninja learning Sep 21, 2015

I’m finishing up a refurb in sunny Coventry. The valuer is going round in about week, any tips to get the maximum value? And has anyone used a home staging company to dress a house & was it worth it? 

This is my recommended step-by-step approach:

  1. Make sure you are present at the survey
  2. Provide highly detailed works schedule
  3. Give plenty of ‘before’ photos
  4. Have details of comparable properties – and their selling prices
  5. Dress the property
  6. Have a copy of your own survey report.

Getting your own report done prior to the lenders survey is possibly the biggest influencer.

This is the 6 step process I teach on the Ninja Investor Programme (as well as loads of other smart tips to grow your property portfolio.

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Unmortgageable properties


I have 3 ex-council flats in concrete blocks with no mortgage on them. I have tried to get a mortgage but cannot find a lender who will lend on them. I want to use the money locked in the flats to buy more property, can you teach me how bridging finance works and if that would be applicable to these flats?


Perhaps it might help if I gave you a few simple facts about bridging finance:

    • it is short term finance taken over a matter of months
    • it is used to buy properties at one price then to sell or refinance at a higher value, sometimes referred to as forced appreciation
    • the increase in value over a short time period is usually achieved by either buying below market value, refurbing to create a higher value, or sometimes a combination of both
    • it is asset based lending whereas, by contrast, mortgages are income based lending
    • it is quicker to arrange than mortgages, allowing you to negotiate to buy properties much more quickly, rather like the speed at which a...
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