FEATURE
Page 4 • Your Property Network Magazine • Issue 19 • January 2010
FEATURE
Your Property Network Magazine • Issue 19 • January 2010 • Page 5
managing your property
Page 6 • Your Property Network Magazine • Issue 19 • January 2010
EDUCATION
Your Property Network Magazine • Issue 19 • January 2010 • Page 9
EDUCATION
Page 10 • Your Property Network Magazine • Issue 19 • January 2010
EDUCATION
Your Property Network Magazine • Issue 19 • January 2010 • Page 11
EDUCATION
Page 12 • Your Property Network Magazine • Issue 19 • January 2010
EDUCATION
Your Property Network Magazine • Issue 19 • January 2010 • Page 13
EDUCATION
Page 14 • Your Property Network Magazine • Issue 19 • January 2010
EDUCATION
Your Property Network Magazine • Issue 19 • January 2010 • Page 15
FEATURE
Page 18 • Your Property Network Magazine • Issue 19 • January 2010
FEATURE
Your Property Network Magazine • Issue 19 • January 2010 • Page 19
EDUCATION
Page 22 • Your Property Network Magazine • Issue 19 • January 2010
EDUCATION
Your Property Network Magazine • Issue 19 • January 2010 • Page 23
buying
Your Property Network Magazine • Issue 19 • January 2010 • Page 25
buying
Page 26 • Your Property Network Magazine • Issue 19 • January 2010
buying
Your Property Network Magazine • Issue 19 • January 2010 • Page 27
FINANCE
Selection of Latest Mortgage Products (correct at time of going to print)
Rate
Type
Period
Arr Fee
Max LTV
Tie in
3.29%
Tracker
28/02/2011
3.5%
60%
None
3.74%
Tracker
28/02/2011
3.5%
70%
28/02/2011
4.09%
Tracker
29/02/2012
3.5%
70%
29/02/2012
4.70%
Tracker
2 years
2.5%
75%
2 years
5.69%
Fixed
28/02/2013
3.5%
70%
28/02/2013
Your Property Network Magazine • Issue 19 • January 2010 • Page 29
FINANCE
Your Property Network Magazine • Issue 19 • January 2010 • Page 31
FINANCE
Your Property Network Magazine • Issue 19 • January 2010 • Page 33
FINANCE
Page 34 • Your Property Network Magazine • Issue 19 • January 2010
FINANCE
Your Property Network Magazine • Issue 19 • January 2010 • Page 35
managing your property
Page 40 • Your Property Network Magazine • Issue 19 • January 2010
refurb & Rennovation
Page 42 • Your Property Network Magazine • Issue 19 • January 2010
refurb & Rennovation
Your Property Network Magazine • Issue 19 • January 2010 • Page 43
refurb & Rennovation
Your Property Network Magazine • Issue 19 • January 2010 • Page 45
What What have Kevin Brittain, Nigel Carter, Keith Keith Wooley, Barry Miller and Adam Piers to nam to name just a few got in common?
They are am They are amongst 200 investors who have made around £5 million of equity from deals we ha deals we have sourced this year in the UK! Impressive eh? We have seen many investors clean up so far in 2009, making between £100-200,000 in equity across various property deals, for as little as £6000 per deal. How well have they set themselves up for life? I’d say pretty well - I don’t know many people saving £100,000 in a year.... That is the power of investing in property, and getting strong leverage and good cashflow.
We have been sourcing for around 5 years, and we have seen big changes in the property market over those 5 years! Some have been good, some have been tough, but it has been a case of adapting to the changes in the various markets, and making the most of them. What have been the main changes we have seen in the UK? Well the “credit crunch” in the UK, has had a big impact. Previous buy to let mortgages were very easy to get, at 85% LTV on a self certified basis. Now buy to let mortgages are currently at best 75% LTV of the purchase prices for existing properties, and 65% LTV on new build properties – and self certified mortgages are no more. I think most people would agree that the lenders were far too irresponsible with some of the lending previously, you had people earning £20,000 per annum who were getting self certified mortgages up to £200,000 in value, with rental coverage of barely 100% - not a good deal for the lender or the borrower! So this has restricted prices on new builds, and properties over £150,000 as they are far tougher to fit for buy to let purposes. The end of the market we have always concentrated on, properties priced between £60-120,000 have seen some slowing of prices, as mortgages have also become tougher for first time buyers – with lenders again looking for borrowers to have some deposit to put down. However rental yields have stayed strong. So prices overall have dropped an average of 1012%, with new build flats dropping around 20-25% from their peak – however on houses in particular prices have started to grow again – an average of 2-3% in the last 6 months according to most indicators. What does this currently mean for investors? Well as always any serious investor is looking to secure properties at a good level of discount – the price you pay and level of discount will be crucial for any property investor, and the performance of their assets. We source existing properties at a minimum of 20% below current valuations – so this is around 30% below the peak valuations in 2007 – that is a huge discount! This is around 2004 values of properties. Let’s look at an example: So the property was worth £70,000 in 2004 In 2005 £80,000 In 2006 £90,000 In 2007 £100,000
In 2008 £90,000 In 2009 £90,000 We will secure this property for an investor at around £70,000 ie around 20% below current values, and 30% below the peak valuation in 2007. As you can see buying at these values – around the values from 2004, gives you strong instant equity, and a fantastic investment – knowing you have bought at low prices, with a strong yield. Apartments With apartments the changes have been even more dramatic due to the changes in lending, plus the prices being too high initially. An average 2 bed apartment say in Liverpool would have seen values of: 2006 - £170,000 2007 - £180,000 2008 - £145,000 - 20% drop 2009 - £145,000 We aim to secure the properties around 30% below current valuations ie around £100,000! So a massive 45-50% discount from their peak values! We had never recommended apartments in the UK until this year – because as you can see based on values above, the figures work for us now, based on yields and affordability – these values are back down to values from around 10 years ago, and for us now they work – based on the huge level of discounts highlighted above. This will continue into 2010, with values staying fairly flat, but most likely rising slightly over the 12 months – I would suggest around 2-4% as an average increase. Lenders have found their feet again, and are getting more confident about lending, although are still keeping to sensible lending criteria. We shall continue to source some excellent deals – with the level of discounts highlighted above, making 2010 a phenomenal opportunity to get some excellent equity, and become a highly successful investor! An example of a property deal: 3 bed house valued at £100,000 Mortgage at £75,000 We can secure this property for a net price of £80,000 – so investor can get into the deal with £20,000 of equity, and we can package this up so you can buy into this deal for just £6000! So for £6000 can get £20,000 of equity…! On a 75% interest only mortgage, your monthly repayments will be only around £240 a month, and with rent of around £450 a month, your monthly cashflow will be comfortable. We source properties all around the UK – Scotland, N Ireland, Wales and most of England – and can assist with management of all the properties we source, giving you a complete package from point of reservation through getting the mortgage with one of our team of brokers, to getting all legals organized, through to management on completion! We have re-opened our Portfolio Building Pro-
We have seen many i 2009, making betwee gramme, which allows you to gain this sort of across various prope equity, and a positive monthly cashflow for very £6000 per deal. little money in! How well have they s We had been looking at all our options to offer insay pretty well - I don vestors a further “Armchair” style service that can £100,000 in a year.... help them carry on with their busy lives but also help kickstart their investing and build up some That is the power of i significant equity! ting strong leverage We have put together 2 basic packages for investors to sign up to, where perhaps you are too busy to check every deal for yourself or would like to We have been sourcin make sure you are not left behind and actually have seen big change achieve the goals you want to achieve! those 5 years! Some have been goo Package 1 it has been a case of the various markets, For just £23,999 + VAT, we will: What have been the m 1. Choose you 4 properties with £80,000 equity in the UK? within the next 6 months Well the “credit crunc 2. Help with the full buying and management impact. process Previous buy to let m 3. Go for positive cashflow properties get, at 85% LTV on a 4. Give an excellent mix of properties! Now buy to let mortg 75% LTV of the purch Package 2 erties, and 65% LTV self certified mortgag Or for £43,999 + VAT, we will: I think most people w 1. Choose you 8 properties with £160,000 equity were far too irrespon within the next 9 months previously, you had p 2. Help with the full buying and management annum who were get process up to £200,000 in va 3. Go for positive cashflow properties barely 100% - not a g 4. Give an excellent mix of properties! borrower! This allows you to build up a huge nest egg, or So this has restricted pension while you carry on with your busy lives, properties over £150 knowing you are going a long way to securing your to fit for buy to let pu financial future! The end of the marke trated on, properties Let’s look at the return on Investment have seen some slow have also become tou Invest £24,000 - buy 4 properties at an averwith lenders again lo age of £80,000 (purely for this example) with some deposit to put d £60,000 mortgage. Immediately turn £24,000 into However rental yields £80,000. This includes all buying costs! So prices overall have 12%, with new build fl Let’s say in 5 years time prices have risen just 2% from their peak – how per annum. prices have started to Each property is now worth approx £90,000. of 2-3% in the last 6 Your £24,000 is now worth £120,000, assuming a indicators. neutral cashflow (in reality would expect this to be What does this curre positive). Well as always any se secure properties at So if you have a 5 year plan, can turn £24,000 into price you pay and lev £120,000 ie sell properties at realistic prices of for any property inve £90,000 each after buying costs. their assets. Let’s say you have a 10 year plan We source existing pr 20% below current v Let’s assume properties rise at say 3% per annum 30% below the peak from years 5-10. Remember while 3% seems a low a huge discount! Thi rate you have a highly leveraged property so your properties. return is much higher.
Let’s look at an exam So the property was In 2005 £80,000 In 2006 £90,000 In 2007 £100,000
have Kevin Brittain, Nigel Carter, Wooley, Barry Miller and Adam Piers me just a few got in common?
mongst 200 investors who have made around £5 million of equity from ave sourced this year in the UK! Impressive eh?
investors clean up so far in en £100-200,000 in equity erty deals, for as little as
set themselves up for life? I’d n’t know many people saving .
investing in property, and getand good cashflow.
ng for around 5 years, and we es in the property market over
od, some have been tough, but adapting to the changes in and making the most of them. main changes we have seen
ch” in the UK, has had a big
mortgages were very easy to a self certified basis. gages are currently at best hase prices for existing propon new build properties – and ges are no more. would agree that the lenders nsible with some of the lending people earning £20,000 per tting self certified mortgages alue, with rental coverage of good deal for the lender or the
d prices on new builds, and 0,000 as they are far tougher urposes. et we have always concens priced between £60-120,000 wing of prices, as mortgages ugher for first time buyers – ooking for borrowers to have down. s have stayed strong. e dropped an average of 10flats dropping around 20-25% wever on houses in particular o grow again – an average months according to most
ently mean for investors? erious investor is looking to a good level of discount – the vel of discount will be crucial estor, and the performance of
roperties at a minimum of valuations – so this is around valuations in 2007 – that is is is around 2004 values of
mple: worth £70,000 in 2004
In 2008 £90,000 In 2009 £90,000 We will secure this property for an investor at around £70,000 ie around 20% below current values, and 30% below the peak valuation in 2007. As you can see buying at these values – around the values from 2004, gives you strong instant equity, and a fantastic investment – knowing you have bought at low prices, with a strong yield. Apartments With apartments the changes have been even more dramatic due to the changes in lending, plus the prices being too high initially. An average 2 bed apartment say in Liverpool would have seen values of: 2006 - £170,000 2007 - £180,000 2008 - £145,000 - 20% drop 2009 - £145,000 We aim to secure the properties around 30% below current valuations ie around £100,000! So a massive 45-50% discount from their peak values! We had never recommended apartments in the UK until this year – because as you can see based on values above, the figures work for us now, based on yields and affordability – these values are back down to values from around 10 years ago, and for us now they work – based on the huge level of discounts highlighted above. This will continue into 2010, with values staying fairly flat, but most likely rising slightly over the 12 months – I would suggest around 2-4% as an average increase. Lenders have found their feet again, and are getting more confident about lending, although are still keeping to sensible lending criteria. We shall continue to source some excellent deals – with the level of discounts highlighted above, making 2010 a phenomenal opportunity to get some excellent equity, and become a highly successful investor! An example of a property deal: 3 bed house valued at £100,000 Mortgage at £75,000 We can secure this property for a net price of £80,000 – so investor can get into the deal with £20,000 of equity, and we can package this up so you can buy into this deal for just £6000! So for £6000 can get £20,000 of equity…! On a 75% interest only mortgage, your monthly repayments will be only around £240 a month, and with rent of around £450 a month, your monthly cashflow will be comfortable. We source properties all around the UK – Scotland, N Ireland, Wales and most of England – and can assist with management of all the properties we source, giving you a complete package from point of reservation through getting the mortgage with one of our team of brokers, to getting all legals organized, through to management on completion! We have re-opened our Portfolio Building Pro-
gramme, which allows you to gain this sort of equity, and a positive monthly cashflow for very little money in! We had been looking at all our options to offer investors a further “Armchair” style service that can help them carry on with their busy lives but also help kickstart their investing and build up some significant equity! We have put together 2 basic packages for investors to sign up to, where perhaps you are too busy to check every deal for yourself or would like to make sure you are not left behind and actually achieve the goals you want to achieve! Package 1 For just £23,999 + VAT, we will: 1. Choose you 4 properties with £80,000 equity within the next 6 months 2. Help with the full buying and management process 3. Go for positive cashflow properties 4. Give an excellent mix of properties! Package 2 Or for £43,999 + VAT, we will: 1. Choose you 8 properties with £160,000 equity within the next 9 months 2. Help with the full buying and management process 3. Go for positive cashflow properties 4. Give an excellent mix of properties! This allows you to build up a huge nest egg, or pension while you carry on with your busy lives, knowing you are going a long way to securing your financial future! Let’s look at the return on Investment Invest £24,000 - buy 4 properties at an average of £80,000 (purely for this example) with £60,000 mortgage. Immediately turn £24,000 into £80,000. This includes all buying costs! Let’s say in 5 years time prices have risen just 2% per annum. Each property is now worth approx £90,000. Your £24,000 is now worth £120,000, assuming a neutral cashflow (in reality would expect this to be positive). So if you have a 5 year plan, can turn £24,000 into £120,000 ie sell properties at realistic prices of £90,000 each after buying costs. Let’s say you have a 10 year plan Let’s assume properties rise at say 3% per annum from years 5-10. Remember while 3% seems a low rate you have a highly leveraged property so your return is much higher.
buying
Page 48 • Your Property Network Magazine • Issue 19 • January 2010
buying
Your Property Network Magazine • Issue 19 • January 2010 • Page 49
buying
Page 50 • Your Property Network Magazine • Issue 19 • January 2010
buying
Your Property Network Magazine • Issue 19 • January 2010 • Page 51
buying
Page 52 • Your Property Network Magazine • Issue 19 • January 2010