Property purchasing
Discussion
Hi everyone.
I have bought & sold a few properties over the last 5 years and have a small portfolio which I am increasing.
Luckily a couple of my properties have done very well in the current climate and are on the market as we speak which will give me quite a large cash sum to look at buying more and recycling the money efficiently.
Like many people the prices at the moment make it hard for developers/investors to get a property at a reasonable price so rather than sitting waiting for properties to come on the market and compete we are going to try some local marketing, social media, classifieds, and possibly even hand deliver some flyers to properties which stand out to us, typically older looking houses which need visual modernising/work.
To be honest we aren't expecting much in return but its worth a shot for minimum money and effort, we are also putting together a basic website which will have a 'sell your home for cash' page/form. Its probably going to be a long haul but worth putting in some time as it only takes one deal to make good money. Once we get another property we will also make use of advertising with a small banner or for sale style board on the front with something along the line of 'Sold to XXXX ltd - sell your home today for cash' in the hope it gets out name a bit more recognised as over the years we have always been shielded by estate agents and we want to build in the business name.
Any other tips would be appreciated, our target area isn't a big town so hopefully word gets around but we are taking it steady for now and know this is not an overnight thing.
Also many people will ask why come to us/me when selling?
Well I can offer a very quick completion, I will be realistic with pricing, I know I have to make a good profit but I wont be looking to take the p*ss out of anyone, I am a local investor and hope that by being known might and a good character will stand in good stead in comparison to other property buyers who dont even live in the town and invest but have very little interest in the property/tenants/neighbours etc.
I have bought & sold a few properties over the last 5 years and have a small portfolio which I am increasing.
Luckily a couple of my properties have done very well in the current climate and are on the market as we speak which will give me quite a large cash sum to look at buying more and recycling the money efficiently.
Like many people the prices at the moment make it hard for developers/investors to get a property at a reasonable price so rather than sitting waiting for properties to come on the market and compete we are going to try some local marketing, social media, classifieds, and possibly even hand deliver some flyers to properties which stand out to us, typically older looking houses which need visual modernising/work.
To be honest we aren't expecting much in return but its worth a shot for minimum money and effort, we are also putting together a basic website which will have a 'sell your home for cash' page/form. Its probably going to be a long haul but worth putting in some time as it only takes one deal to make good money. Once we get another property we will also make use of advertising with a small banner or for sale style board on the front with something along the line of 'Sold to XXXX ltd - sell your home today for cash' in the hope it gets out name a bit more recognised as over the years we have always been shielded by estate agents and we want to build in the business name.
Any other tips would be appreciated, our target area isn't a big town so hopefully word gets around but we are taking it steady for now and know this is not an overnight thing.
Also many people will ask why come to us/me when selling?
Well I can offer a very quick completion, I will be realistic with pricing, I know I have to make a good profit but I wont be looking to take the p*ss out of anyone, I am a local investor and hope that by being known might and a good character will stand in good stead in comparison to other property buyers who dont even live in the town and invest but have very little interest in the property/tenants/neighbours etc.
Freshprince said:
How come your selling property and not remortgaging? If sold, would you not get hit for CGT plus sales cost if your only going to then buy similar BTL properties with the proceeds.
Although property prices are up lenders are still wary, so a property which could sell for 250k might only get a valuation of 230k for example and then factoring in all the other fees for doing this can cut the equity down a lot.Plus some of the higher value properties I had are not great rentals in regards to yield so the money can be used in better yielding properties and other projects, out of my savings and the couple of properties I am selling I will be either looking to flip the properties or if the deal stacks up I will then put the property on a BTL mortgage and get my initial investment back out (or the bulk of it) but either way it all comes down to the purchase price, that is key in any deal regardless of flipping or mortgaging and something I need to find a solution to.
The properties will be bought, sold or mortgaged through my LTD co so corp tax will be payable on any profit when sold.
Edited by JCKST1 on Wednesday 27th April 21:34
Thought of doing something similar last year, but the reality is almost certainly going to be that:
1) people,selling their most valuable asset will want to check the price, which they’ll do by getting an agent round (who will then try to convince them they could get more if they sold via them)
2) you may get offered properties that don’t fit what you want in terms of timing/value/condition or where the owner has unrealistic price expectations.. Say no too many times and word will get round that you don’t actually buy much. Doesn’t matter whether you were right to decline each one, that could still be the perception
3) people will expect that you’ll lowball them upfront or later on in the process (simply because that’s what people will tell them will happen). Hard to prove you won’t until you’ve done a few.
Seemed that a better approach was getting on the right side of agents, always doing what you say you will, and reaching a point where they would let you be first through the door and then “sell” your offfer ro the vendors (which coming from their adviser adds credibility).
Being a little creative or flexible can also help. We secured several when it was very hot last year by either making it clear that we could work to whatever timelines the vendors wanted, however fast (assuming that they allowed time for searches and had been totally straight with us up front if they would reveal any skeletons) or slow, and/or doing sale and rent back for people wanting to improve their positon when offering on other properties.
1) people,selling their most valuable asset will want to check the price, which they’ll do by getting an agent round (who will then try to convince them they could get more if they sold via them)
2) you may get offered properties that don’t fit what you want in terms of timing/value/condition or where the owner has unrealistic price expectations.. Say no too many times and word will get round that you don’t actually buy much. Doesn’t matter whether you were right to decline each one, that could still be the perception
3) people will expect that you’ll lowball them upfront or later on in the process (simply because that’s what people will tell them will happen). Hard to prove you won’t until you’ve done a few.
Seemed that a better approach was getting on the right side of agents, always doing what you say you will, and reaching a point where they would let you be first through the door and then “sell” your offfer ro the vendors (which coming from their adviser adds credibility).
Being a little creative or flexible can also help. We secured several when it was very hot last year by either making it clear that we could work to whatever timelines the vendors wanted, however fast (assuming that they allowed time for searches and had been totally straight with us up front if they would reveal any skeletons) or slow, and/or doing sale and rent back for people wanting to improve their positon when offering on other properties.
Thanks for the info, I will number my replies to keep it simple:
1 - Definitely, we have lost out in the past due to this. I was contacted recently by a woman wanting to sell three rental properties, we agreed a rough price on the phone and planned to view them, both parties were happy and the deal was fair, however he husband wanted them valuing by a local agent which came back at about 10% more than my offer and the deal was deal. In the end they sat on right move for a while, I think one was even reduced slightly so in hindsight they could have took a cash offer off me for not a huge amount lower and had the deal done within a month rather than 5-6.
2 - This will happen, we have done some local advertising on FB in the past and might get offered 10 properties, we are lucky if even 1 is worth considering. It might take one in every fifty properties to find the right deal but we always make it clear on the first call we are investors and cant pay market value.
3 - That is true but we do normally agree a price and then immediately start pushing the sale through, once thats in motion its hard to change the price and to be honest I have no reason too once I have viewed and agreed a price, I just want the sale over the line.
I know a couple of local agents from past sales/purchases to when a property does come on the market and we view it they know we are serious which is good. The area I would like to target more has a lot of bungalows and they are very desirable when a nice one comes on the market, without sounding too morbid about it, a lot of the owners are getting on so there is a few coming on the market which need a full refurb, from what I can gather its mostly the family looking to sell it quickly as they live out of town so that could be where we get some purchases, a hassle free sale for a seller who is not there to manage it or might not even have the time to come up and view.
I will see how longs play out of the coming weeks and months, the market is a little bit unpredictable at the moment and I have a feeling prices will level out soon and then possibly go back to what they were over the next 1-2 years but we will wait and see!
1 - Definitely, we have lost out in the past due to this. I was contacted recently by a woman wanting to sell three rental properties, we agreed a rough price on the phone and planned to view them, both parties were happy and the deal was fair, however he husband wanted them valuing by a local agent which came back at about 10% more than my offer and the deal was deal. In the end they sat on right move for a while, I think one was even reduced slightly so in hindsight they could have took a cash offer off me for not a huge amount lower and had the deal done within a month rather than 5-6.
2 - This will happen, we have done some local advertising on FB in the past and might get offered 10 properties, we are lucky if even 1 is worth considering. It might take one in every fifty properties to find the right deal but we always make it clear on the first call we are investors and cant pay market value.
3 - That is true but we do normally agree a price and then immediately start pushing the sale through, once thats in motion its hard to change the price and to be honest I have no reason too once I have viewed and agreed a price, I just want the sale over the line.
I know a couple of local agents from past sales/purchases to when a property does come on the market and we view it they know we are serious which is good. The area I would like to target more has a lot of bungalows and they are very desirable when a nice one comes on the market, without sounding too morbid about it, a lot of the owners are getting on so there is a few coming on the market which need a full refurb, from what I can gather its mostly the family looking to sell it quickly as they live out of town so that could be where we get some purchases, a hassle free sale for a seller who is not there to manage it or might not even have the time to come up and view.
I will see how longs play out of the coming weeks and months, the market is a little bit unpredictable at the moment and I have a feeling prices will level out soon and then possibly go back to what they were over the next 1-2 years but we will wait and see!
JCKST1 said:
Thanks for the info, I will number my replies to keep it simple:
1 - Definitely, we have lost out in the past due to this. I was contacted recently by a woman wanting to sell three rental properties, we agreed a rough price on the phone and planned to view them, both parties were happy and the deal was fair, however he husband wanted them valuing by a local agent which came back at about 10% more than my offer and the deal was deal. In the end they sat on right move for a while, I think one was even reduced slightly so in hindsight they could have took a cash offer off me for not a huge amount lower and had the deal done within a month rather than 5-6.
I understand that you're posing the fact the investor could have sold their property to you for not much less and completed much faster but I can't see any situation, other than really grave circumstances, where I'd let my investment go for 10% (or slightly lower) less than I could achieve for the only advantage being a faster sale. 1 - Definitely, we have lost out in the past due to this. I was contacted recently by a woman wanting to sell three rental properties, we agreed a rough price on the phone and planned to view them, both parties were happy and the deal was fair, however he husband wanted them valuing by a local agent which came back at about 10% more than my offer and the deal was deal. In the end they sat on right move for a while, I think one was even reduced slightly so in hindsight they could have took a cash offer off me for not a huge amount lower and had the deal done within a month rather than 5-6.
Particularly as it's an investment, there's no draw to complete in case I lose out on the next house I'm in love with so timescales don't matter as much. Even if it's vacant and there's no income the extra 10% would more than make up the loss of rent over 5-6 months.
sebdangerfield said:
JCKST1 said:
Thanks for the info, I will number my replies to keep it simple:
1 - Definitely, we have lost out in the past due to this. I was contacted recently by a woman wanting to sell three rental properties, we agreed a rough price on the phone and planned to view them, both parties were happy and the deal was fair, however he husband wanted them valuing by a local agent which came back at about 10% more than my offer and the deal was deal. In the end they sat on right move for a while, I think one was even reduced slightly so in hindsight they could have took a cash offer off me for not a huge amount lower and had the deal done within a month rather than 5-6.
I understand that you're posing the fact the investor could have sold their property to you for not much less and completed much faster but I can't see any situation, other than really grave circumstances, where I'd let my investment go for 10% (or slightly lower) less than I could achieve for the only advantage being a faster sale. 1 - Definitely, we have lost out in the past due to this. I was contacted recently by a woman wanting to sell three rental properties, we agreed a rough price on the phone and planned to view them, both parties were happy and the deal was fair, however he husband wanted them valuing by a local agent which came back at about 10% more than my offer and the deal was deal. In the end they sat on right move for a while, I think one was even reduced slightly so in hindsight they could have took a cash offer off me for not a huge amount lower and had the deal done within a month rather than 5-6.
Particularly as it's an investment, there's no draw to complete in case I lose out on the next house I'm in love with so timescales don't matter as much. Even if it's vacant and there's no income the extra 10% would more than make up the loss of rent over 5-6 months.
JCKST1 said:
2 - This will happen, we have done some local advertising on FB in the past and might get offered 10 properties, we are lucky if even 1 is worth considering. It might take one in every fifty properties to find the right deal but we always make it clear on the first call we are investors and cant pay market value.
That's going to be a problem in a lot of cases. Sure you don't want to overpay, but most people selling their home can't afford to take a big haircut on the price. Even a small % discount can be many months of take home for the typical owner.We seem to be going slightly off topic here as I am looking for tips on possible advertising ideas rather than our plan.
But in short I dont think buying below market value on anything is an issue, we have done it countless times before, my other company often buys in stock from repeat customers below market value for us to sell on, people sell to we buy any car, we buy any house etc, put items on eBay/Auctions with no reserve, sell to cash converters and other pawnbrokers and so on.
I wouldn't sell below market value unless I had to and you guys wouldn't but there is thousands or people every day selling anything from property, to cars, jewellery and about everything in between lower than there value as they might need the money quickly or want a hassle free sale so I am not worried about that aspect, mainly just how to reach these people before they might go to a nationwide buyer or go another route.
But in short I dont think buying below market value on anything is an issue, we have done it countless times before, my other company often buys in stock from repeat customers below market value for us to sell on, people sell to we buy any car, we buy any house etc, put items on eBay/Auctions with no reserve, sell to cash converters and other pawnbrokers and so on.
I wouldn't sell below market value unless I had to and you guys wouldn't but there is thousands or people every day selling anything from property, to cars, jewellery and about everything in between lower than there value as they might need the money quickly or want a hassle free sale so I am not worried about that aspect, mainly just how to reach these people before they might go to a nationwide buyer or go another route.
JCKST1 said:
We seem to be going slightly off topic here as I am looking for tips on possible advertising ideas rather than our plan.
But in short I dont think buying below market value on anything is an issue, we have done it countless times before, my other company often buys in stock from repeat customers below market value for us to sell on, people sell to we buy any car, we buy any house etc, put items on eBay/Auctions with no reserve, sell to cash converters and other pawnbrokers and so on.
I wouldn't sell below market value unless I had to and you guys wouldn't but there is thousands or people every day selling anything from property, to cars, jewellery and about everything in between lower than there value as they might need the money quickly or want a hassle free sale so I am not worried about that aspect, mainly just how to reach these people before they might go to a nationwide buyer or go another route.
Not easily is the simple answer. But in short I dont think buying below market value on anything is an issue, we have done it countless times before, my other company often buys in stock from repeat customers below market value for us to sell on, people sell to we buy any car, we buy any house etc, put items on eBay/Auctions with no reserve, sell to cash converters and other pawnbrokers and so on.
I wouldn't sell below market value unless I had to and you guys wouldn't but there is thousands or people every day selling anything from property, to cars, jewellery and about everything in between lower than there value as they might need the money quickly or want a hassle free sale so I am not worried about that aspect, mainly just how to reach these people before they might go to a nationwide buyer or go another route.
For someone to reach out to you then you need them to be aware of your service, at the time they are in the market, and to have addressed (in their mind) to a high enough degree the concerns they will have about house buying services. If you can’t do this then either you’ll expend resources on marketing that proves futile or simply end up filtering through a load of dross.
When you look at the likes of WBAC there are obviously some comparisons but a key difference is that they credibly offer to pay more than the customer’s option for a quick sale. It may appear to be “below market” but trade/private sale/retail are all quite different. They have also spent an absolute fortune to build brand awareness so that they are “front of mind” when a prospective customer is considering what to do.
You mentioned in another post “The area I would like to target more has a lot of bungalows and they are very desirable when a nice one comes on the market, without sounding too morbid about it, a lot of the owners are getting on so there is a few coming on the market which need a full refurb, from what I can gather its mostly the family looking to sell it quickly as they live out of town so that could be where we get some purchases, a hassle free sale for a seller who is not there to manage it or might not even have the time to come up and view.”
That bit in bold amplifies your marketing challenge if those who need to be aware of your service (or are the decision makers) are geographically remote.
There’s no harm in trying to do something but I’d still focus more on cultivating the agent relationships.
Another opportunity you might not have considered, is there is a fair few people out there with interest only mortgages.
What I'm seeing a lot of is people of a retiring age or older, that are about to hit the end of the mortgage with no means to repay. These people need a fast efficient exit.
Ive come across a few couples, divorces, and widowers who have buried their head in the sand for too long.
could be worth marketing yourself to a few Mortgage brokers and insolvency practitioners in the area.
Also could be worth tailoring google and Facebook adds to the very specific local area
What I'm seeing a lot of is people of a retiring age or older, that are about to hit the end of the mortgage with no means to repay. These people need a fast efficient exit.
Ive come across a few couples, divorces, and widowers who have buried their head in the sand for too long.
could be worth marketing yourself to a few Mortgage brokers and insolvency practitioners in the area.
Also could be worth tailoring google and Facebook adds to the very specific local area
That’s a good point Jon.
We’ve done a few sale and rent back transactions in the past year or so (where the properties fitted with our portfolio). They all worked out well. Paid a fair price for them, sometimes a bit of work needed to get EICRs/gas certs, but no redecoration costs, voids etc so everyone was happy.
Have been keeping a bit of dry powder in case there are more people wanting to do similar, but hadn’t considered the interest only angle.
We’ve done a few sale and rent back transactions in the past year or so (where the properties fitted with our portfolio). They all worked out well. Paid a fair price for them, sometimes a bit of work needed to get EICRs/gas certs, but no redecoration costs, voids etc so everyone was happy.
Have been keeping a bit of dry powder in case there are more people wanting to do similar, but hadn’t considered the interest only angle.
Perhaps I have too much faith in the typical person but I’d imagine even those with an interest only mortgage still had a plan when they took it out and they know payment of it is coming. It’s unlikely that plan ever involved selling below market value quickly. The people who have an interest only mortgage who need a quick sale and are willing to accept below market for it are probably in trouble anyway. Are there really that many like this?
sebdangerfield said:
Perhaps I have too much faith in the typical person but I’d imagine even those with an interest only mortgage still had a plan when they took it out and they know payment of it is coming. It’s unlikely that plan ever involved selling below market value quickly. The people who have an interest only mortgage who need a quick sale and are willing to accept below market for it are probably in trouble anyway. Are there really that many like this?
I think you have too much faith in people, I haven't heard about it so much recently but when I was in my early-mid 20's a number of people I knew at the time were doing interest only mortgages without a clue on how they would repay the capital, only with a view they would worry about it later, I always thought it was nuts personally, that said it was also the time of 120% mortgages. Crazy times. Jamescrs said:
I think you have too much faith in people, I haven't heard about it so much recently but when I was in my early-mid 20's a number of people I knew at the time were doing interest only mortgages without a clue on how they would repay the capital, only with a view they would worry about it later, I always thought it was nuts personally, that said it was also the time of 120% mortgages. Crazy times.
I don’t doubt for a minute that you’re completely correct about the number of people who have interest only mortgages that took them out with no vehicle to repay them. If was positively encouraged to have a 110% mortgage when I bought my first house. Surely though, those people who have no other option but to sell their house to pay back the mortgage would do it with enough time to sell at full market value to a private purchaser instead of selling at 10% below market value to an investor who’s only draw is to complete quickly. If the average house is £260k then 10% more to move on with your life is probably a decent motivator.
If they’re choosing to sell at 10% below market to an investor something has gone seriously wrong for them. So wrong in fact that it may actually still be better for them to have the home repossessed. Repossession costs, court fees and legal fees are unlikely to be more than the 10% hit they’re getting on the price of the house, particularly if they’re still paying the mortgage. Add in the fact that many councils will then treat them as homeless after a repossession but a lower priority if they’ve elected to be homeless.
JCKST1 said:
We seem to be going slightly off topic here as I am looking for tips on possible advertising ideas rather than our plan.
But in short I dont think buying below market value on anything is an issue, we have done it countless times before, my other company often buys in stock from repeat customers below market value for us to sell on, people sell to we buy any car, we buy any house etc, put items on eBay/Auctions with no reserve, sell to cash converters and other pawnbrokers and so on.
I wouldn't sell below market value unless I had to and you guys wouldn't but there is thousands or people every day selling anything from property, to cars, jewellery and about everything in between lower than there value as they might need the money quickly or want a hassle free sale so I am not worried about that aspect, mainly just how to reach these people before they might go to a nationwide buyer or go another route.
Not 100% sure if it is illegal or immoral, but can you put up a few of the 'Under Offer by JCKST1' or 'Sold' or whatever on your own properties. I have heard of a company in Edinburgh doing this to get off the ground. Although may not work in a small town that everyone knows the property hasn't been sold by you. But in short I dont think buying below market value on anything is an issue, we have done it countless times before, my other company often buys in stock from repeat customers below market value for us to sell on, people sell to we buy any car, we buy any house etc, put items on eBay/Auctions with no reserve, sell to cash converters and other pawnbrokers and so on.
I wouldn't sell below market value unless I had to and you guys wouldn't but there is thousands or people every day selling anything from property, to cars, jewellery and about everything in between lower than there value as they might need the money quickly or want a hassle free sale so I am not worried about that aspect, mainly just how to reach these people before they might go to a nationwide buyer or go another route.
Benten said:
Not 100% sure if it is illegal or immoral, but can you put up a few of the 'Under Offer by JCKST1' or 'Sold' or whatever on your own properties. I have heard of a company in Edinburgh doing this to get off the ground. Although may not work in a small town that everyone knows the property hasn't been sold by you.
Yes possibly, we did think of doing this and seen another small developer in another town doing the same.They had a stand alone banner on the front of the house which read something along the lines of 'Another property purchased by XX,contact us now to sell your home to a cash buyer'.
I think for the price of a board or banner its worth a shot and I cant see it doing any harm being there until the house goes on the market.
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