Idea to find distressed property ...

[Jamiecool]

What are the legal implications/requirements for me to set up a small "We buy your home" type business?

Its only purpose would be to find a seller, and refer that seller to another private buyer (me or my partner)

Draw for sellers would be quick sale, no agent or solicitors fees.

I have a few useful marketing resources with good reach, and this might help us find BMV Property.

Any reason why I cant do this?

[surveyor]

If your thinking of sale and leaseback, there a few rules.

Read here - https://www.citizensadvice.org.uk/debt-and-money/m...

If you are thinking of just picking up vacant property cheap, it's not particularly regulated as far as I know... but you won't be the only one...

[So]

Jamiecool said:

What are the legal implications/requirements for me to set up a small "We buy your home" type business?

Its only purpose would be to find a seller, and refer that seller to another private buyer (me or my partner)

Draw for sellers would be quick sale, no agent or solicitors fees.

I have a few useful marketing resources with good reach, and this might help us find BMV Property.

Any reason why I cant do this?

No reason at all. But it's high risk, hard work and you will take a long time to become sufficiently experienced and established to make good money.

Let me expand upon that.

If you're going to buy properties to sell, you're going to be keeping them for 6 months in all probability before you can re-sell them. Lenders tend not to like lending on properties that have been owned for less than six months. During that period you've got an expensive and illquid asset on your hands. There are ways round it to a limited degree only.

You will be chasing deals that other people are chasing. You're also competing with estate agents, who are telling the seller they can sell the property in ten minutes You've got to be quick, lucky and ruthless to secure deals. Everyone knows that houses are worth a lot of money and almost no one sells one for less than it is worth willingly.

If you stick around for a long time, build a network, grease some palms, write books (cheque books) on marketing you will eventually make a living at it. But a vanishingly small number of people are making serious money doing it.

[The Moose]

How are you planning on sourcing the property and how is that different to what everyone else is doing?

I know plenty of people who'd buy BMV property in the UK (myself included), however I don't know that there are many BMV properties out there - with the advent of the internet, everyone knows what everything is worth.

Everything I have been offered in the past that is supposedly BMV, really isn't when you do some due diligence.

[jonamv8]

We work for a few different BMV property buyers. Feel free to PM me. There is no reason why you cannot set something up.

[22s]

Can you compete with this? Nested.com

Heavily funded by some of the biggest VCs in Europe, guaranteed sales price of around 95% of market value within 90 days (or cash advance if seller needs the money more quickly), they don't actually purchase the properties so no stamp duty implications...

[Jamiecool]

I guess Im just trying any way possible to source a good deal, I run a construction business which Im desperate to get way from and get into property full time. Im struggling to find anything other than trawling Rightmove and as mentioned above there doesnt seem to be any "good deals" out there.

[So]

Jamiecool said:

I guess Im just trying any way possible to source a good deal, I run a construction business which Im desperate to get way from and get into property full time. Im struggling to find anything other than trawling Rightmove and as mentioned above there doesnt seem to be any "good deals" out there.

We used to do full-time what you are planning to do and still have a company whose sole purpose is property dealing. We have done very little of it over the past few years, however, and that's not because we have been struggling to spend all the profits.

There are deals to be had on Rightmove, but they aren't obvious and the ones that appear like opportunities mostly aren't. Those requiring work will have immense levels of interest and the profit, if there is any, is tiny.

We used to spend a lot of money on direct marketing, with a very small level of response. We had finders, some of whom were okay. The majority lost interest when we declined deals with insufficient profit. There were quite enough mugs for them to position their deals to, who either didn't know or didn't care that the profit would be tiny. Properties are expensive, illiquid assets and there is absolutely no point in dealing with them for miniscule returns. It's just too risky.

The biggest reason we wound down the dealing / tart and turn work was the difficulty our customers were having raising finance. Pre-2008 we could sell just about anything, but within 6 months of Northern Rock's problems that had all changed. When the market is rising and optimistic you can make a lotn of money and you can sell eventually cock-ups and break even. Not so much today.

To give you a point of reference, we sold two weeks ago a property we bought and redeveloped in 2007.

Edited by So on Tuesday 13th June 14:08

[So]

22s said:

Can you compete with this? Nested.com

Heavily funded by some of the biggest VCs in Europe, guaranteed sales price of around 95% of market value within 90 days (or cash advance if seller needs the money more quickly), they don't actually purchase the properties so no stamp duty implications...

I couldn't and wouldn't want to.

The offer at face value is too good to be true. There is either a devil in the detail, or they are trying to penetrate the market and don't mind making a loss for a while.

I note, though, that the properties they are selling are London centric, where the market it a bit more reliable. I wonder whether they would be offering 97% guarantess on a 4-bed ex council house in Grimsby.

[22s]

Jamiecool said:

I guess Im just trying any way possible to source a good deal, I run a construction business which Im desperate to get way from and get into property full time. Im struggling to find anything other than trawling Rightmove and as mentioned above there doesnt seem to be any "good deals" out there.

You need to get to know agents in the area you want to specialise in and treat them well (interpret that as you will). A lot of good deals will go to the agent's faves and be sold before they even hit RightMove. Sucks (for you), but it's the nature of the game.

As So just mentioned there are loads of people out there who will overpay for a property. Either developers or, more likely, normal Joe Bloggs buyers who don't care so much about profit as they're going to renovate the property and live there (or so they think!).

Also, on the subject of bad deals, remember this: there's a mug in every deal - and if you can't see who it is, it's probably you!

[22s]

So said:

22s said:

Can you compete with this? Nested.com

Heavily funded by some of the biggest VCs in Europe, guaranteed sales price of around 95% of market value within 90 days (or cash advance if seller needs the money more quickly), they don't actually purchase the properties so no stamp duty implications...

I couldn't and wouldn't want to.

The offer at face value is too good to be true. There is either a devil in the detail, or they are trying to penetrate the market and don't mind making a loss for a while.

I note, though, that the properties they are selling are London centric, where the market it a bit more reliable. I wonder whether they would be offering 97% guarantess on a 4-bed ex council house in Grimsby.

They're already profitable and it really is what you see at face-value. I have knowledge of the inner workings of this business.

The key challenge, like you say, is illiquidity of markets as you move away from the big cities. I'll be following closely to see how they deal with this.

[So]

22s said:

The key challenge, like you say, is illiquidity of markets as you move away from the big cities. I'll be following closely to see how they deal with this.

Me too.

There was quite a large outfit called "A Quick Sale" a while ago, who seemed more organised than a lot of other players. They had favourable credit terms with RBS. They went out of business during the financial crisis.

[The Moose]

So said:

22s said:

The key challenge, like you say, is illiquidity of markets as you move away from the big cities. I'll be following closely to see how they deal with this.

Me too.

There was quite a large outfit called "A Quick Sale" a while ago, who seemed more organised than a lot of other players. They had favourable credit terms with RBS. They went out of business during the financial crisis.

RBS fk you over eventually!!

They seem to only concentrate on London which I guess they figure if they can't flip for a quick buck then they hold and in the medium term are likely to see the market meet their required price.

I'd also be interested to know how they arrive at the 'valuation' amount. They obviously provide the overages clause to help appear genuine.

[Jamiecool]

22s said:

You need to get to know agents in the area you want to specialise in and treat them well (interpret that as you will). A lot of good deals will go to the agent's faves and be sold before they even hit RightMove. Sucks (for you), but it's the nature of the game.

As So just mentioned there are loads of people out there who will overpay for a property. Either developers or, more likely, normal Joe Bloggs buyers who don't care so much about profit as they're going to renovate the property and live there (or so they think!).

Also, on the subject of bad deals, remember this: there's a mug in every deal - and if you can't see who it is, it's probably you!

Re the agents, does this actually happen ? or are they required to at least list them these days?

Do they have favourites who get deals before the they hit the market? How would one approach that other than becoming friendly,

Should I visit the local agents and tell them we are a cash buyer, ready to rock and offer some sort of "incentive" or would I be laughed out of the shop!

[So]

Jamiecool said:

Re the agents, does this actually happen ? or are they required to at least list them these days?

Do they have favourites who get deals before the they hit the market? How would one approach that other than becoming friendly,

Should I visit the local agents and tell them we are a cash buyer, ready to rock and offer some sort of "incentive" or would I be laughed out of the shop!

There are two options:

1. You can rock up at the agent's with a grand in crisp twenties, demand to see the manager and in front of the staff slap the wad in his hand and say, "listen my friend, there's plenty more where that came from, if I get what I want".

2. Buy a property and demonstrate that you do what you say you will and quickly. Then ask for another.

In all seriousness, though, bribing agents is a tricky one. You'll find the odd one that will ring fence a deal for a fee (or so I am given to understand) but more often than not agents are broadly (I say broadly) straight. The best you can hope for, most of the time, is that an agent will call you first and sell your more vigorously to the seller than other bidders.

Just like with finders, agents become bored if you persistently won't pay what is needed to get a deal away.

[JQ]

So said:

2. Buy a property and demonstrate that you do what you say you will and quickly. Then ask for another.

And make sure you instruct the agent who sold the property to you to re-sell it. Don't and you'll go to the back of the queue for any further purchases. You can always agree a higher than norm agents fee on the resale to keep the agent sweet. Not a bribe but certainly an incentive to give you more opportunities.

[jonamv8]

some of my clients achieve this successfully. They spend a lot on advertising and deal with many time wasters but can pull £30k out of a property quite regularly. Sometimes they buy themselves and flip, other times they put it out to an investor who is on their books for a fee

[Ello]

Jamiecool said:

What are the legal implications/requirements for me to set up a small "We buy your home" type business?

Its only purpose would be to find a seller, and refer that seller to another private buyer (me or my partner)

Draw for sellers would be quick sale, no agent or solicitors fees.

I have a few useful marketing resources with good reach, and this might help us find BMV Property.

Any reason why I cant do this?

To set yourself up you need to be registered with the Property Ombudsman as an agent as technically that is what you will be.
You cannot advertise We Buy Your House For Cash if you actually haven't got the funds for multiple purchases. You can say is We buy houses Fast, that is, as long as you have a good solicitor who can work fast. The quickest I've completed a sale in, is 5 days. I've exchanged contracts in 2days on some deals.

I've not got an endless pot of cash so when my funds are tied up, I've joined up with investors (a few from off here) and completed on over 30 JVs successfully, offering a rate of interest that the banks cannot match.

There a many ways to skin a cat and in this game, you 'can' sell the properties within 6mths, you just have to know how, a lot of people just don't know how.

If you want deals, I wouldn't bother going round estate agents looking for deals, as Cash Buyers are 10 a penny on the open market and you will be doing a load of leg work for nothing...or only a small profit as you are competing against other buyers.
The best way to source deals are off market were you deal with the owner direct and offer them a deal that works for both of you. Someone mentioned you will compete with estate agents saying they can sell the house in 10 mins. Sure they can, but you are offering the seller a solution, they either will be happy to use you or not. You will just have to sift through all the enquiries before you find that deal, but make sure you are good on your word and don't let people down, as there'll be one or two distressed sales, but most of the time sellers just want a fast sale, for various reasons.

I could go on all night but it's late.
What area are you looking at working? Happy to have a chat if you want a bit of guidance.

[So]

Ello said:

To set yourself up you need to be registered with the Property Ombudsman as an agent as technically that is what you will be.

If all you're doing is findng deals for other people possibly. But if you are actually have an interest in the property, I don't see why you would be an agent.

Ello said:

You cannot advertise We Buy Your House For Cash if you actually haven't got the funds for multiple purchases. You can say is We buy houses Fast, that is, as long as you have a good solicitor who can work fast.

Have you got a reference for that? I'm interested.

Ello said:

There a many ways to skin a cat and in this game, you 'can' sell the properties within 6mths, you just have to know how, a lot of people just don't know how.

I think most people who do the job professionally know how to do it. But the fact remains that if you're doing volume transaction and have title to any properties you will run up against the 6 months problem.

Ello said:

If you want deals, I wouldn't bother going round estate agents looking for deals, as Cash Buyers are 10 a penny on the open market and you will be doing a load of leg work for nothing...or only a small profit as you are competing against other buyers.
The best way to source deals are off market were you deal with the owner direct and offer them a deal that works for both of you. Someone mentioned you will compete with estate agents saying they can sell the house in 10 mins. Sure they can, but you are offering the seller a solution, they either will be happy to use you or not. You will just have to sift through all the enquiries before you find that deal, but make sure you are good on your word and don't let people down, as there'll be one or two distressed sales, but most of the time sellers just want a fast sale, for various reasons.

Wouldn't disagree with that. We used to get a lot of deals from estate agents, but going asking estate agents for deals was futile.

Whilst we aren't actively dealing we do have budget for it. If you come across anything in the East Midlands drop me an email.

[POORCARDEALER]

A couple of people I know do this, they dont borrow as they are cash liquid......they have moved away from residential as the margins are small, the competition to buy is intense.

They pick and choose commercial, fewer deals but much bigger margins