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It’s all in your mind

Belief is powerful.  If you believe you can do something it gets much easier to succeed.  Of course, the opposite applies, if you don’t believe you can achieve something you will get what you expect.

I’ve been practising neuro-linguistic programming (NLP) for over fifteen years. So when I received a cancer diagnosis from my doctor in April 2016, I knew pretty much what I needed to do, to use my mind to allow my body to heal itself.  I’d been diagnosed with stage 3 (next to the worst level) in several places so I knew I had to take it seriously.

I underwent chemo as well, but I conditioned my mind so that I didn’t suffer any adverse effects from chemotherapy.  I felt perfectly healthy throughout the whole process—I never even needed to take a single day off work.

I got scanned at different points; to check progress, Eight weeks later the scan showed I’d reduced the cancer  by 90%, and in another twelve weeks I’d got...

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Making better decisions

property invrestment Dec 20, 2018

When it comes to decisions, it’s tempting to take the line of least resistance.  That’s usually choosing NOT to do something or to do nothing.  Nobody achieves success by doing nothing! 

Let me share with you something that happened to me.

In April 2016 I was diagnosed with level 3 Non-Hodgins Lymphoma, an aggressive form of cancer.  It was already in more than one location and the severity scale only goes up to 4, so I had a choice:

  • Follow medical advice and undergo chemotherapy treatment and hope it worked
  • Man up, take responsibility for dealing with it and, most importantly, take action

Having done a lot of self-development over the years, there really was only one choice for me.  I found an NLP coach and together we devised my strategy for conquering cancer, using a number of NLP techniques including meditation, visualisation and affirmation. 

I read up on holistic approaches to conquering cancer, from people who had been there and...

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Delayed completion for faster profits

q&a Dec 10, 2018

THE QUESTION

I am looking for some inspiration on a potential property.  It is a lovely property that is presently mixed use as a business and flats.

It can be converted to five flats that will fetch a premium price due to the location. The person selling is prepared to listen to options and is prepared to let us develop out the property while she still owns it, therefore, minimal cost to us at purchase.

 I have a few ideas myself but am looking for a bit of inspired creativity.

THE ANSWER

One creative solution was suggested by one of my students who recognised that this opportunity fits one of the strategies I teach on my Ninja Investor Programme workshops.

Through our brokerage, we have financed a number of projects funded exactly this way. So this is not just theory, it works and works well when the number are right.

If you have the current owner’s agreement and permission to enter the property and do the required works to do the conversion, then the delayed...

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From landlord to developer?

Most property investors are looking for existing buildings to convert, refurb and either turn into rental income or sell at a nice profit.  However, if you’re looking for a new challenge, it’s tempting to consider building from scratch.

Before you get excited at the idea of building homes to either rent or sell, you need to know about finance.  This isn’t mortgage territory – and it really isn’t bridging finance territory either.  The funding for new build projects is called ‘development finance’.

Self-build mortgages do exist for a main residence, but if the lender suspects that you’re borrowing a self-build mortgage and planning to develop and sell on, they can pull the funding at any point, regardless of what point the project has reached.

Development finance lenders have a policy of putting up barriers to entry and this lets them choose the projects that they consider have a high chance of success. 

Development...

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Buying your first property

q&a Nov 20, 2018

THE QUESTION

I’m looking to buy my first house and I have £40K in cash ready to go.  Do I:

  1. Buy it outright. Do the full refurbishment (I’m looking at 12 weeks).  It will be worth £80k once complete and rent for £500pcm. so get a mortgage at £75K  LTV, once it’s ready to let.
  2. Apply for a mortgage at £75 LTV and wait at least six months to get my equity out.

Or is there a better way?

THE ANSWER

The argument for buying with cash

  1. You can buy much faster than getting bogged down in a mortgage application process
  2. If you can buy faster, you should be able to negotiate to buy cheaper - to a degree
  3. During the refurb period you have no monthly payments to make and incur no interest
  4. Once refurbed, value uplifted and tenanted you can apply for a mortgage. Wait six months if you want access to preferential interest rates; don’t wait if you don’t

At any point in between if you manage to find your next deal and...

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Can you get 100% bridging?

q&a's Oct 30, 2018

THE QUESTION

Can you 100% fund with bridging an optioned project using planning gain as equity?

The project is a conversion of offices to residential, with planning for Change of Use.

The projected uplift in value is 35% upon consent. total circa £1m.

Although I have no actual direct experience, I do have a few very large client successes and similar smaller scale projects in my portfolio.

THE ANSWER

In terms of loan to purchase price, bridgers divide into broadly 3 camps

  1. Those that lend on the lower of the purchase price or value, exactly the same as mortgage lenders do
  2. Those that will recognise a value uplift, but put in a maximum loan to purchase percentage override i.e. the lower of 70% of value and 85/90% of purchase price. This would mean whatever value uplift you created they would still require a minimum of at least 10% of purchase price input from you
  3. Those that genuinely ignore the purchase price and lend on value

Of those, No. 3 is the rarest, but they do exist...

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Buying an unmortgageable property

property investment Oct 20, 2018

Some people will warn you that buying a property that you can’t get a mortgage on is madness.  If you listen to them you could be missing out on some great opportunities that may be unmortgageable – but are still very profitable!

Traditional lenders have a long list of types of property they won’t touch.  These include:

  • Derelict properties or properties that are in severe disrepair
  • Properties without a kitchen and bathroom
  • Properties that have more than one kitchen
  • Properties with structural defects, damp, mould, wet or dry rot, wall tie problems
  • Properties with Japanese Knotweed
  • Non-standard construction properties – like the Wimpey No-Fines homes built after WWII.
  • Properties where there’s a boundary dispute
  • A house to flats conversion that has been done without proper planning permission (or planning permission has been applied for after the fact)
  • Properties under £50K in value
  • Properties with fewer than 70 years remaining on the...
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Cash buyer – with no cash!

property investment Oct 10, 2018

Cash buyers get better deals.  They can negotiate substantial discounts on the asking price for properties, sometimes even as much as 50% below market value if there’s a really motivated seller.

The need to get a mortgage slows things down and can take months, so the ability to get the deal done in under a month can be very attractive to a seller who wants to get money out and move on.

I’ve explained how bridging works in many of my blogs, but to really see how it operates here’s a fairly typical case study.

The investor:  An experienced investor, but not with bridging finance.  He had about £38K in actual cash available.

The property for sale:  A former care home, originally a terrace of six houses, that had closed due to the owners being unable to afford to meet the Care Quality Commission standards.  It had been on the market for some time – with no interest.

The asking price:  £350,000

The plan:  To apply for...

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Buy BMV, then remortgage at full value

q&as Sep 30, 2018

THE QUESTION

A prominent member of the community has said that you can buy a property below market value (BMV) e.g. 25% BMV £150k, MV £200k) using a BTL mortgage and then remortgage six months later at MV £200k – realising the 25% difference £37.5k.

You can then use that £37.5k as a deposit for the next deal etc.

Is it actually possible to remortgage after six months at the true MV and not the actual purchase price?

THE ANSWER

The question here is not ‘can you …’, but what you are risking if you do.

With their current lending criteria, no mortgage lender is going to give you a mortgage if you are transparent about your intent to redeem within a matter of months.  That covers both selling and refinancing.

That applies regardless of whether you are happy to pay any redemption penalty applicable.

Does it happen?  Without doubt it does.  There are many investors who see being 'economical with the truth' on their...

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No cash? No problem!

property investment Sep 20, 2018

The problem with buying property as an investment is that you need to have enough money to put down as a deposit – and then it’s locked into your property for six months or more, until you can remortgage.  The days of ‘no money down’ mortgages are gone; you need a deposit to get any mortgage these days, usually 25% of your purchase price.

At this rate you’ll be lucky to add two properties a year to your portfolio, unless you have a big nest egg.

The secret is not to lock your capital into a mortgage, but to use creative financial packages specially developed for property investors.

Do you fit the buy-to-let lender’s typical profile?

Don’t lenders love property investors, because they have plenty of assets so their mortgage is secure?

No!

Buy-to-let lenders like their clients to have a nice, secure full-time job earning a minimum of £25,000 a year and have their own cash for at least a 25% deposit.  If you have too many...

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