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Buying BMV and getting money back out

ninja learning Sep 07, 2015

have made an offer on a BMV property? (fingers crossed). I was hoping for a family member to buy for cash, renovate the property and then me and my business partner could buy it with a mortgage getting our cash back out. 

Our objective is to recycle as much of our cash as possible as quickly as possible.   We are hoping to purchase the property for 85K, spend 10K on refurb and have it revalued at 120K-130K. So our thoughts were if we bought it as a cash purchase in someone else’s name, then remortgage it in our names (personal not LTD) we wouldn’t have to wait 6 months to get our cash out. Does this sound do-able?

So your plan is to use your own cash but pass it to a family member to buy then get it back when they sold it to you, got it.

Two problems in making that strategy work

    1. it is not what is known as an arm’s length transaction i.e. seller and buyer are known to each other and lenders don’t like that
    2. the lenders that won’t allow you to...
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Cash Buyer Only?

bridging finance Aug 24, 2015

I often get opportunities offered like this:

I’ve got an Incredible BMV in West London – for a CASH BUYER ONLY. I’ve just got the valuation done via Home track and, guess what? Its worth £716,000!

The asking price is 495,000 for a quick sale and I could get it down to 450k, as it’s a very motivated seller who needs to sell asap. Do let me know immediately if interested.

This is from a property investor who – clearly – doesn’t actually have enough money in the bank to buy the property himself.

However, he is ignoring one very important fact … this property can be bought using bridging finance, possibly with a very small cash input, subject to a bit of due diligence:

On what do you base your value of £716,000?
Is it on the market with an agent and that is the asking price? Or is it just that Hometrack says that is what it is worth; would that be supported by a RICS survey report?

Assuming its...

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Buying non-standard construction properties

Your question:

A friend of mine has just been offered an HMO in need of some work. There’s probably about £20k in the deal, so it’s probably worth looking at from that point of view. Could be flipped or end up as NMLI.


It’s a Wimpey no-fines house, ie poured concrete construction. I have heard that BM lend on these, but thinking of an exit strategy (immediate or in future) is it wise to go down this route.

If a flip, will buyers be put off by the fact there’s only one potential lender. If buy and hold, is it possible that one lender could re-assess their exposure and pull that product, making it a cash only deal?

What should I tell him?

The answer

I see this regularly… non-standard construction properties where the reduction in price comparable to similar standard construction properties in the area due to its non-standard construction results in a highly attractive yield attracts investors like moths to a flame.

There are several...

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Going full time in property too quickly can spell trouble

strategic planning Mar 05, 2015

“I am full time in property” is a pronouncement heard frequently at property meetings. My question is, are too many people in too much of a rush to get to this nirvana like state, without fully realising the adverse effect it has on their ability to raise mortgages? Would they not be better to slow down and take their time reaching that pivotal moment in their lives until the ability to raise Buy To Let mortgages in particular was much less relevant?

Being full time in property is one of the most commonly voiced goals in property circles. To be able to create enough passive income from property to be able to give up the day job and become a ‘full time property investor’. It is frequently taught and encouraged on property courses and at meetings. It is held up as the definitive status symbol, to be worn almost as a badge of honour. Speakers will spit out the term ‘wage slave’ as a form of derision almost.

There is undoubtedly great merit in finally...

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Why HMO’s don’t value up at 10 x income

I can see people are puzzled as to why HMO’s aren’t valued as a simple multiple of income by commercial lenders when commercial properties usually are.

I would suggest it is because there are some fundamental differences between the two…


  1. leases are long, up to 20 years
  2. lenders take comfort from the lease providing an increased likelihood that the loan will continue to be serviced
  3. leases are often fully repairing, meaning the tenant is responsible for the upkeep
  4. leases have built in break clauses and rent reviews
  5. the value of the property reduces considerably when vacant, in some cases by 50%
  6. the property has a designated commercial usage with the local council i.e. A1, C1
  7. the property cannot be used for a domestic dwelling if not occupied by a commercial tenant
  8. commercial tenants runs a business of whatever sort and can therefore be viewed as generally more financially aware


  1. leases are rarely longer than 12 month AST’s
  2. sometimes licences...
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