Property advice - Buying
Discussion
Long story short. Friends mum and dad will be evicted very soon (going to court in 2 weeks) missed a lot of mortgage repayments. Friend is about to approach one of these ‘sell your house to us and rent it back’ companies and sort out his parents problems.
Now the way I see it is that this company will say offer you 80% of what the property is worth say £80k on a £100k house and rent the property back to them. Is this correct?.
If so, is the market ready for me to take a gamble? I could get this property theoretically for 20% less than market value. Question is how much further does the property market have to fall? Another 20%?
Thanks for any suggestions.
Now the way I see it is that this company will say offer you 80% of what the property is worth say £80k on a £100k house and rent the property back to them. Is this correct?.
If so, is the market ready for me to take a gamble? I could get this property theoretically for 20% less than market value. Question is how much further does the property market have to fall? Another 20%?
Thanks for any suggestions.
Take a look here.
www.thisismoney.co.uk/sale-and-rent-back
This report was written before the bad times rolled, and they reckon you'll get 60-70% of the house value.
www.thisismoney.co.uk/sale-and-rent-back
This report was written before the bad times rolled, and they reckon you'll get 60-70% of the house value.
Edited by Baby Huey on Tuesday 19th August 14:29
Do you need a mortgage to fund the purchase? If so, do you have a 20%+ (more like 25%TBH) Deposit available at the lower purchase price? No you cant say the property is worth 100k, buy it for 80K and get an 80k mortgage on it.
Will the rental value of the house cover the mortgage?
As long as you have the right answers to these questions, you can go ahead. (The repo process will be paused if they can prove the property is under offer.)
If and when your friend's parents get back on their feet, will you have an agreement to sell it back to them?
Seeing as they haven't been paying the mortgage, will they pay the rent? Will they sign an AST on the place?
Will the rental value of the house cover the mortgage?
As long as you have the right answers to these questions, you can go ahead. (The repo process will be paused if they can prove the property is under offer.)
If and when your friend's parents get back on their feet, will you have an agreement to sell it back to them?
Seeing as they haven't been paying the mortgage, will they pay the rent? Will they sign an AST on the place?
Just been asked to fund a portfolio of buy & rent back places. The price they pay for them is considerably less than 80%.
Virtually none of the BTL lenders will touch buy & rent back properties, to the point where they are categorically stating it in the manuals, so you are more than likely looking at a fairly unattractive rate to boot. Deposit will need to be 25% minimum.
Virtually none of the BTL lenders will touch buy & rent back properties, to the point where they are categorically stating it in the manuals, so you are more than likely looking at a fairly unattractive rate to boot. Deposit will need to be 25% minimum.
Baby Huey said:
Take a look here.
www.thisismoney.co.uk/sale-and-rent-back
This report was written before the bad times rolled, and they reckon you'll get 60-70% of the house value.
How much would you get at auction? www.thisismoney.co.uk/sale-and-rent-back
This report was written before the bad times rolled, and they reckon you'll get 60-70% of the house value.
Edited by Baby Huey on Tuesday 19th August 14:29
Anyway they got to the situation they are in due to either overstretching themselves a change in circumstance or they didnt fully understand the implications of a mortgage. Any of the three is neither here or there - the next move is critical they need a much smaller house one they can afford to run and pay for - we all would love those 6 double quadruple garaged detached houses but we cannot all get to that level
I dont know the inns and outs but I imagine (considering where the house is) that its ex council and they bought it not knowing anything, probably got a rubbish mortgage deal, could have even been 100% or very clkose to it, they could probably manage rent but the mortgage was obviously too much.
So if this company will offer them 60% I could get a very cheap property and yes I could make the deposit and the lad whos mum and dad are in the stuck also works for me.
To the poster who suggested I sell back to them when they get backon their feet. Why would I want to do that? this would be business, I might be able to give them £5k more than these buy and let back guys but at the end of the day I would be looking for a big profit in a couple of years when the market recovers. Amsolutely nothing is selling at the moment in this area so they have very few options.
So if this company will offer them 60% I could get a very cheap property and yes I could make the deposit and the lad whos mum and dad are in the stuck also works for me.
To the poster who suggested I sell back to them when they get backon their feet. Why would I want to do that? this would be business, I might be able to give them £5k more than these buy and let back guys but at the end of the day I would be looking for a big profit in a couple of years when the market recovers. Amsolutely nothing is selling at the moment in this area so they have very few options.
BoRED S2upid said:
Trommel said:
Coming to the party a bit late. I think I might want a bit more than 20% off at the moment.
What would this company hes approaching be offering? I have no idea these are all guesses on my part. Bad idea.
OneOn said:
All those kind of companies are run by crooks - loan "consolidation", brighthouse etc etc (hell, if I had the capital I'd do it too)
? we aren't talking about Loan Consolidation, we're talking about landlords that buy peoples houses from them then rent them back to them. Usually people on the cusp of loosing the property one way or the other. They don't have to sell to them, but through their own stupidity or bad luck it may be the only avenue to staying in their house.ETA - can you get rid of the exclamation mark in your username, it cocks up page formatting.
Edited by Davi on Tuesday 19th August 15:46
BoRED S2upid said:
I dont know the inns and outs but I imagine (considering where the house is) that its ex council and they bought it not knowing anything, probably got a rubbish mortgage deal, could have even been 100% or very clkose to it, they could probably manage rent but the mortgage was obviously too much.
So if this company will offer them 60% I could get a very cheap property and yes I could make the deposit and the lad whos mum and dad are in the stuck also works for me.
To the poster who suggested I sell back to them when they get backon their feet. Why would I want to do that? this would be business, I might be able to give them £5k more than these buy and let back guys but at the end of the day I would be looking for a big profit in a couple of years when the market recovers. Amsolutely nothing is selling at the moment in this area so they have very few options.
If its ex council; you will narrow the lenders you can talk to.So if this company will offer them 60% I could get a very cheap property and yes I could make the deposit and the lad whos mum and dad are in the stuck also works for me.
To the poster who suggested I sell back to them when they get backon their feet. Why would I want to do that? this would be business, I might be able to give them £5k more than these buy and let back guys but at the end of the day I would be looking for a big profit in a couple of years when the market recovers. Amsolutely nothing is selling at the moment in this area so they have very few options.
If they had a 100% mortgage, maybe a 60% offer wont get them out of the s
t they are currently in, especially if they have sizable arrears, you need to know what the lender will take, bearing in mind that they can if they wish pursue these people for all outstanding monies. It wasn't a suggestion that you would sell back to them it was a question.
You mention the market recovering, how confident are you that this will happen, will it be 2 years, 5 years, 10 maybe? Does that impact on your future plans?
Davi said:
OneOn said:
All those kind of companies are run by crooks - loan "consolidation", brighthouse etc etc (hell, if I had the capital I'd do it too)
? we aren't talking about Loan Consolidation, we're talking about landlords that buy peoples houses from them then rent them back to them. Usually people on the cusp of loosing the property one way or the other. They don't have to sell to them, but through their own stupidity or bad luck it may be the only avenue to staying in their house.Just move out of the house they can't afford and start again.
OneOn! said:
Davi said:
OneOn said:
All those kind of companies are run by crooks - loan "consolidation", brighthouse etc etc (hell, if I had the capital I'd do it too)
? we aren't talking about Loan Consolidation, we're talking about landlords that buy peoples houses from them then rent them back to them. Usually people on the cusp of loosing the property one way or the other. They don't have to sell to them, but through their own stupidity or bad luck it may be the only avenue to staying in their house.Just move out of the house they can't afford and start again.
Davi said:
OneOn! said:
Davi said:
OneOn said:
All those kind of companies are run by crooks - loan "consolidation", brighthouse etc etc (hell, if I had the capital I'd do it too)
? we aren't talking about Loan Consolidation, we're talking about landlords that buy peoples houses from them then rent them back to them. Usually people on the cusp of loosing the property one way or the other. They don't have to sell to them, but through their own stupidity or bad luck it may be the only avenue to staying in their house.Just move out of the house they can't afford and start again.
Best option is to give as little money to companies like those.
Edited by OneOn on Tuesday 19th August 16:08
OneOn said:
Either way, they're going to get dry bum raped.
Best option is to give as little money to companies like those.
Even if it means leaving yourself worse off? Nose your cutting face spite to your. Rearrange.Best option is to give as little money to companies like those.
Look at the example above - is the OP an evil opportunist out to dry bum rape the troubled occupants, or is he offering a way out that is mutually beneficial and overcomes either their stupidity or bad luck?
Edited by Davi on Tuesday 19th August 16:12
jcelee said:
Just an FYI really but I'm finding that in the last few days mortgage companies have tightened things up further and even as a good credit its very hard to get a BTL mortgage at a sensible rate...
Resi rates have been coming off, Btl is all over the place. Theres a 4.85% 2 ear fix been released today (dont ask about the fees though.)Gassing Station | The Pie & Piston Archive | Top of Page | What's New | My Stuff