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Language, language!

mindset Jul 10, 2019

When you’re negotiating with either vendors or estate agents, one of the key negotiation skills is to choose words that hit their ‘hot button’.

If you’ve studied sales you’ll know that there is a process to successful sales transactions.  That same process can be applied to any situation where you want to persuade or influence someone to things your way!

The simplest formula (and it’s been around for a very long time) is AIDA.  This stands for:

Attention:  You can’t sell anything if the other party isn’t paying attention, so that’s the first step - get them to listen to what you’re proposing.  This can be achieved by making eye contact to ensure their attention is with you.

Interest:  Nobody will buy if they’re not interested.  This means you need to know what’s important to this particular person.  What will make them prick up their ears?  Ask the questions to find out...

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3 Myths About Bridging Finance

bridging finance Jun 30, 2019

You couldn’t describe bridging rates as ‘cheap’, they are significantly higher than mortgage rates.  You could pay three or four times the interest rate that you’d expect to pay on a BTL mortgage.  BUT, that doesn’t mean you should run away from bridging as a funding strategy for your property investments.

Understanding how to make intelligent use of bridging will move you from the fog of the mortgage buyer mind-set to the clarity of a cash-buyer mind-set (and you don’t need an abundant bank account to get started).

While you’re focusing on the cost of bridging you’re missing the profit opportunity.  Sometimes such opportunities can be substantial, even massive.

If you could make a profit of £40K, but bridging finance cost you £10K, is that a deal you would do? 

These are the three biggest myths about bridging:

  1. A bridger will foreclose and take your property

With a reputable bridging lender (and I only...

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A great deal, but cash tied up

bridging finance Jun 20, 2019


I viewed a property last week and negotiated from £85k to £73k, but unfortunately my funds are tied up in another deal.  HOW ANNOYING!

I was wondering if there is another way to fund this as would be ideal for the list of tenant buyers that I have.


Certainly there is another way to fund this - bridging finance.  

This is one of the aspects of bridging that I teach to investors, what I like to call 'no hard cash down' funding.

Let’s just say your cash is tied up in a property you bought for £100k.  Now you could get this second property for £73k, but you can’t do it because all your £100k cash is tied up in the first property.  So here's where bridging comes into its own

A bridger would give you one loan over both your first and second properties, often up to 75% of each property, but you won’t need to borrow that much.  They would typically lend 75% of the £73k and the balance of...

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Do you really need a 25% deposit?

ninja learning Jun 10, 2019

Most mortgage lenders require a 25% deposit, based on the amount you’re paying for your property.  If you’re planning to get into property that can be a big hurdle to get over.

The days of no-money-down mortgages are long gone and are unlikely to return.  Leveraging credit cards is a decidedly dodgy way to raise funds, so where does that leave you?

There’s a strategy I call the 90% flip.

This strategy blows apart the preconception that a 25% deposit is required to buy an investment property.  Better still it works in a variety of situations. 

  • It works great for smartly presented houses where no refurb is required, but the owners are motivated to sell.
  • It also works if you want to buy a repossession.
  • It also works if you want to buy at auction.
  • Interestingly, it works if you want to sell at auction too.
  • Lastly it will work if the vendor won’t go for the 100% refurb strategy covered in the next section.

This strategy can turn around a...

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Spotting an Opportunity with Commercial Property

semi/full commercial May 30, 2019

Converting a commercial property into a residential property is a smart move – there is an overabundance of commercial properties, many that have been standing vacant for months or years.  Equally there is a shortage of housing (and lots of media coverage about the pros and cons of new build projects) – it really is a no brainer.

Commercial properties include pubs, care homes, shops, offices, schools and many more. 

However, many investors don’t realise that a commercial property without a tenant in situ is not mortgageable.  Commercial lenders’ main concern when considering whether to grant a mortgage is ‘will the borrower be able to pay the loan back?’.  As far as they’re concerned, no tenant equals no income.  No income equals no ability to service the loan, so they won’t lend.

Many vacant commercial properties remain for sale for a considerable time.  This is simply because would-be buyers lack...

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Thinking about a new build project?

development finance May 20, 2019

If you’ve been growing your property portfolio and have a few conversions and refurbs under your belt, you might like the idea of becoming a developer and building a multi-home project yourself.

You may have been watching Grand Designs, the Big Build and other similar TV programmes and feel ready to tackle a bigger project with homes to either rent out or sell.  However, it’s not as simple as a straightforward conversion.

Firstly, you’ll need specialist development finance - not a self-build mortgage or even a bridging loan.

Almost without exception development finance lenders want provable, documented, comparable experience that the borrower has successfully completed a project similar to the one they’re now seeking to fund.

These lenders have a policy of putting up barriers to entry and this lets them cherry-pick the projects that they see having a high chance of success.  Development finance is not given for ‘on the job’...

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Buying BMV doesn’t mean a full value mortgage


I've sourced a 20% BMV deal and am wondering if it’s possible to get an interest only mortgage for the purchase taking into account 80% loan-to-value, so I can purchase with a smaller deposit?


You are on a loser if you want to get a mortgage lender to lend against value and ignore the purchase price - at the point of purchase they never do.  It is always the LOWER of purchase price or value.

However, some, but not all, bridgers will lend against the value and sometimes up to 75%, but it is often not quite as simple as that.

One key factor is whether the property is or has been marketed by an agent or not. Using the example of you think the true current value is £100k but you have negotiated to buy it for £80k. If it has not been marketed a bridgers valuer may (but there’s no guarantee) value it at £100k.

However, if it has been marketed and say the asking price was £85k, then valuers would override your idea its worth...

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How do you work out the maximum price to offer?

strategic planning Apr 30, 2019

There is one thing that can seriously dent the profit in any project and that’s overpaying for the property.  An essential part of your due diligence is to work out the maximum you can afford to offer on any property, while still giving you the profit margin you need.

It’s easier to work backwards when doing this.

Start with the end value that your property will be worth once you’ve completed any work that you propose to do to it.  You should be able to find comparable values of similar properties that have sold within the last few months.

The majority of properties that investors buy are flats, terraced and semi-detached houses.  They don’t tend to buy large detached properties in five acres of ground, this means that comparable values are much easier to obtain for these types of property.

If you are buying a commercial property this may not be so easy and you may need to engage a commercial surveyor to get a true current and future value.


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Get the maximum ROI

strategic planning Apr 20, 2019

Most investors think that the only way to finance deals, when their bank account hasn’t got enough in it, is to joint venture (JV).  To maximise your return on investment there is a JV Pro-Fit Retainer strategy.

Stop giving away 50% of your deal’s profits when you joint venture and, if you do decide to set up a joint venture stay on the right side of the FCA.

  • PRO = Professional – the way you approach your joint ventures
  • FIT – Fit for purpose – ensuring your JV agreements are legal and can’t come back to bite you.

The key thing to remember is that the Financial Conduct Authority (FCA) states that you must only joint venture with someone who is categorised as a sophisticated investor.  That means you need to know about PS13/3 and what constitutes a sophisticated investor and there are seven main criteria for these.

  1. An annual salary of £100K+
  2. Independent assets of £250K+ (not including equity in their main residence)
  3. Employed...
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One building, five flats

buy to let Apr 10, 2019


If I buy a property with five flats and then split the titles and try to get 5 BTLs mortgages for the flats: would there be an issue with mortgage providers not being willing to provide mortgages in the same building?


Simple answer - yes. This issue confuses a lot of investors.

  1. You cannot be both freeholder and leaseholder, so the freeholder must be a separate entity to the leaseholder/s. Often this means using/creating a Ltd Co to own the freehold
  2. BTL lenders have over exposure rules. This means they restrict lending in any given block to 20/25% of the total number of flats. In this case, five flats means you will need to find five different lenders
  3. BTL lenders don’t like the same entity owning all the leases in a building.  So having all five leases in the name of the same leaseholder will cause problems.  You may not need five different people on each of these leases, but you will need a minimum of two each owning two or three leases....
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