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Terms and Conditions
As mentioned, our deals have the following characteristics:
Large discount to current market value - typically 15%-25% below current market value to you. This is typically 30%-35% or more below peak 2006/07 prices.
Low value. We source the lower-to-middle end of the market - as they are easier to 'stack up' for mortgage purposes, and are the type of property that is most easily let. Properties are typically around £70,000 to £100,000 in current market value (in other words, your price will be anywhere from £50,000 to £75,000). Many of our deals are much lower value, we have had several deals under £60,000 current market value.
Cashflow positive. 2 and 3 beds in Liverpool can command around £425 - £495 pcm for the former, and £495 - £550 pcm for the latter. With current mortgage rates, you could expect a typical property to be cashflow positive by around £50 - £150 pcm, after management fees.
Rentable types - typically two and three bed terraces and semis. We do get offered newbuild apartments but tend to dismiss them unless they are on a small scheme and are low value and easily let. More expensive or larger properties we tend to offer at increased discount.
Volume - we were sourcing around 10-15 deals per month depending on the time of year. During the Christmas period and the Summer holidays, enquiries go down - but Spring and Autumn tend to be our busy periods.
Minimal work required. We 'take properties as we find them' - as the vendors tend to be distressed, and in need of an urgent sale, not vendors who have been preparing the property for sale on the open market. However, most require minor cosmetic work and upgrade only and we can manage this for you. Remember - properties are valued by the surveyors in their current state, so any work you do would be likely to pay for itself many times over in terms of 'forced capital appreciation'.
Timescale - most deals complete in 4-6 weeks. We had nailed it down to 3-4 weeks in every deal last Spring, but the lenders have increasingly become more bureaucratic, causing delays in making a full mortgage offer.
How our service works
Registration is free and you simply send us your details and get added to a database. See the Registration page for more info. When we have a suitable deal, it gets emailed to the database and we offer it 'first come, first served'.
You subscribe to an email list, which sends you information on the latest deals as soon as they become available. The emails contain comprehensive information such a property condition, local area info, photographs and expected values, rental assessment, etc. You email or call back, when you see a deal that you want to go for. You have to become a registered investor to be eligible to apply for a deal.If we accept you for the deal, you must then pay the reservation fee (stated in the deal email), to secure the deal. This is fully refundable at any time during the next 24 hours 'cooling off period', or if the purchase fall through due to no fault of your own, or if the property does not value up as we say, or if there is any unexpected concerns brought about by the survey.Once we receive the reservation fee, we can send over other info - due diligencve we have gathered, valuations if any, the full address, and any other info we have.The next 24 hours are your 'cooling off period', for you to do your own research into the proeprty. If its not for you, you can withdraw and we will give you a refund of your reservation fee. If you proceed, you must apply for a mortgage straight away (unless you are not subject to mortgage finance). We prefer you to use one of our recommended brokers but if you already have a broker, we must have their details and your permission to discuss the case with the directly. You will need to pay a mortgage broker fee and a mortgage valuation fee, this will of course vary and depend on the broker and the mortgage product applied for. Normally, you will not have to pay a broker fee if the deal falls through before you get your mortgage offer. The mortgage valuation cost is at your risk. The property then gets valued by your lender's nominated surveyor, and provide=ing everything is oOK, you should receive a mortgage offer within a week or so afterwards. After we pass the valuation hurdle, you will need to assist the brokers and our nominated solicitor by completing all necessary paperwork and swiftly returning it. We will manage the rest and keep you up to date. As completion nears, we can begin to plan whatever refurb or minor cosmetics are required, and even market the property for a tenant. Upon completion, we will ensure the property is fit for completion, and can transfer the property to a letting agent of your choosing. We have three letting agents we work very closely and will find one to match your proeprty, the area, and tenant type.
Why we are different
Other companies claim to offer 'ready made deals' and 'packaged deals' - but they are usually not the complete service. For one, we specialise in a small geographic area - so we can offer the add-on services we do, have local knowledge and contacts you can take advantage of, provide full due diligence for you, and full control of the deal from start to finish. Other companies source property through mass advertising (usually through internet advertising, where all vendors routinely overvalue their property so they get offered more!), and leads come in from all over the country.
It is impossible to know about all areas of the UK, the viability of predicted market values, never mind actual photos or comprehensive property condition reports - because some bloke has simply contacted them by phone, and 'done the deal' that way. These companies have very little control over the deals - consequently there is a high 'fall through' rate because of this. Normally, the T&Cs of these companies mean that it is you that pays for the privilege of finding out the deal is overvalued, or the vendor has been gazumped by another cashbuyer.
Please DO NOT consider doing any deal where some deal seller tries to tempt you into 'no money down' finance. While this was possible in the past, now the lenders are clamping down on this. DO NOT RISK IT - its mortgage fraud. For more info, please contact us directly, and we can send you informationon why this is the case.
Also, be very wary of companies offering deals with very high BMV figures. Often these figures are completely inflated in much the same way as newbuild developers did, to suck you in. If the deals is 30% BMV - why would someone sell it to you for £1,000 or so, when any fool could sell it for a larger discount? Your valuation is instructed by you alone, we have no way of determining or influencing the surveyors - so if they say its worth 'x' - you know it to be a reasonable, certainly not inflated, figure.
What makes us different is: We concentrate on one geographic area - giving us many strengths and allowing us to provide comprehensive support We provide the most comprehensive information possible, so you can make a confident investment decision We provide numerous add-on services to give the complete 'armchair investing' service We want a longterm relationship with you - helping you build your portfolio Because of our business model and services - it is in our interests to do a bvery good job for you, so you keep coming back for more!
A few points to consider
You also have to think about your longterm goals. If you pick various deals scattered throughout the country due to the attractiveness of the 'BMV discount', expected cashflow... you could run into trouble.
Firstly, you will quickly become bogged down by the sheer logistics of it - every property with a different letting agent, different contractors to get to know, different markets to understand - the chances of someone ripping you off, misleading you, or you overlooking something due to lack of local knowledge, will grow exponentially. You would be much better to choose one or two small geographic zones, or cities, and get to know them and build contacts and a team within those target areas.
Secondly, there is much more to a 'good deal' than numbers and percentages. It has to fit your longterm plans. It has to look after itself. What support will you be able to call upon, should you encounter the inevitable problems? if you have no support (or bad support), it could quickly turn into a disaster. With the right support, the damage could be reduced or eliminated.
Thirdly, the process has to be simple and straightforward with minimal chance of things going wrong. Without a closely-knit team, who are experienced and indeed specialised, there is a much greater chance things can go wrong before completion - wasting your time and costing you money.