Real Estate Made Simple

How To Look For BMV Properties

Henry Mccarthy — Fri, 03 Nov 2017 03:00:38 +0000

Investors in general want to buy low and sell high. What better way to buy low than to purchase properties that are below market value? Unfortunately, not all BMV properties are created equal. Some have the potential to make profit, others have the potential to cause headaches.

The key to success is to know which BMV property is a good buy. Here are factors you need to consider:

Make sure the area has potential for cash flow

Not every BMV property on the market is a good investment. For instance, it is extremely common to get a low price for top-notch properties in provincial towns in the far areas of the UK. They could have the most captivating nature or seaside views and most awesome architectures, yet the probability of you finding buyers or tenants is close to impossible.

Always place yourself in the point of view of a tenant. Most people want to have easy access to groceries, shops, restaurants, schools, (if you’re pertaining to a family with children) etc. Unless basic needs can be met, income potential will be low. So location still matters a lot when scouting for BMV properties.

Assess the sellers in the area

Assuming you’ve found a location with income potential, the next step is to find sellers of BMV properties. Now, finding people is usually hard work. So the best strategy is to make the sellers find you. Thanks to social media ads, it’s easy to run a campaign with tag lines like “Looking To Buy Property, Willing To Pay In Cash” or anything similar.

These ads can be sent out only to people within the area you are looking to buy. Hence, any leads that come to you will only be the sellers with properties in your desired location.

Once you have your leads, you can now assess which sellers are willing to sell below market value. Usually, those who need to move out quickly (e.g. new job in another town or country) will be willing to take a dive for a quick sale. Another reason is that they’ve had a property on the market for so long, and so are more amenable to selling at a lower price.

Don’t be afraid to haggle

Sometimes, the best way to get a property cheap is to actually to haggle the price. It is a known fact that almost all those who price their properties very low are expecting them to sell at a very low price. Use this to your advantage. They might just agree to whatever price you ask them, just to get rid of the property. But if they don’t sell it any lower, in this case you probably will still be able to acquire the property and gain some profit in it.

Of course, there is a caveat in all of this. If a property is completely rundown and will take you an arm and a leg to pretty it up to flip it or to lease it, then it might not be worth buying it, even at a below market value price. If you can bring with you a trusted contact (preferably a builder) when you inspect the property, you may be able to get a realistic estimate on how much it will cost you to refurbish, and what to refurbish to improve the value of the property when you sell it. In that way, you won’t be buying blind and leaving everything else up to chance.

3 Tips For Working With Banks When Buying Property

Henry Mccarthy — Thu, 19 Oct 2017 02:29:37 +0000

You have read all the stories and you have taken all the tips you can find on how to get financing from the banks but, unfortunately, you still cannot get a loan to buy that house that you want so much. The truth is that, when it comes to buying a house, financing is one of the most difficult huddles you will have to overcome.

It, therefore, goes to reason that you should try as much as you can to find out the most practical tips for working with banks to buy property. Here are the things you need to do:

Have a solid relationship with your bank

Of course, there are other things that matter such as your credit score and your earnings. But every savvy veteran investors will tell you that your relationship with your bank matters just as much as your credit score. How many times have you had that the new President of the United States, Donald Trump went bankrupt more than once but bounced back? The truth is, most veteran investors have secured financing even when they were down and out for the financial count mostly because they had great relationships with their banks.

It helps that they had a stellar reputation, to begin with and that they only fell on hard times. So, if you are planning to buy homes somewhere in the future, you might want to choose a bank and start building a good relationship with them. Save, make sure your credit score is up and maybe even borrow a few times just to show them that you pay back without any issues. After 6 months or so, you will be well on your way to being an excellent customer for them.

Have other accounts and assets

All lenders want is the security that they will be paid. Failing which, they want assurances that they can easily recover their money should things head South. You, therefore, need to have savings or other accounts that are liquid enough at least to cover three to six repayments should you lose your job.

Your assets should be large enough to cover a huge chunk of the debt should an impromptu expense or circumstance come into play. So feel free to hold other accounts and assets in your name.

Build on whatever equity you already have

If you already have another home then your number one priority should be to build equity on that property. Banks are always willing to give you a secured loan if you have another home that is not taking on water.

Basically, the idea is to put yourself in such a position that you are not a total risk to the bank. It is the same principle they use when they look at your credit score. The higher your score, the less scary you are as a borrower.

Closing The Property Deal: How To Get Parties Agree To Terms

Henry Mccarthy — Tue, 03 Oct 2017 04:58:12 +0000

If you are doing it right, then every property deal you make should excite you beyond measure. These things involve a lot of money and as such can be classified as ‘good things’. As we all know, all good things must come to an end.

No matter how much success you have had in the past, at some point, you will come across that one property deal that is just bent on falling through. When that happens, you need to know what to do to try and save it. Here are some tips that might help you save a failing property transaction.

Inspection jitters

The inspection report is a dreadful thing. For the most part, the report will not reveal anything that cannot be fixed right away before the buyer moves in. But, if you have a skittish buyer, then any negative line item on the report could very well send them packing.

What to do about it: Use this report as a negotiating tool. Let them know that you gave them a discount for this very contingency. Plus, you can offer to sweeten the pot by doing the repairs yourself and relaxing the terms of the deal a little bit. But do not let a skittish buyer ding your price too much. Remember, there are always people looking to buy and fix up properties.

Blowing small things out of proportion

As a veteran seller, any house deal might seem like a ‘usual’ thing for you. After all, you are used to dealing with that kind of money. What you need to remember is that for most first-time buyers, this is a huge financial commitment. The sheer magnitude of it is enough to stress people out. So when you find a buyer looking to pull out of a deal because they saw one cracked tile in the bathroom, all you can do is reassure them and replace the wretched tile.

What to do about it: Fix the tile and do your best to be patient with the buyers. They are, after all, giving you decades of hard earned cash.

Cold feet

This is by far the most common reason why property deals fall apart. A buyer will find the perfect house and have everything lined up; they’ll even get preapproved. Then they’ll start second-guessing themselves. They’ll start thinking: maybe they should wait and see if something better comes along? Maybe they are spending too much money on something they don’t need.

What to do about it: Honestly, all you can do here is give them time to calm down. It just means that the home buying honeymoon period is over and the reality is setting in. They’ll come back to their senses and buy.

For the most part, the best thing to do with these things is to be patient and to guide the buyer through whatever jitters they might have in them.

3 Tricks For Getting Mortgage Applications Approved

Henry Mccarthy — Mon, 11 Sep 2017 02:30:51 +0000

I have it on very good authority that we all want to own our own home at some point in life. In fact, for most of us, the sooner we can get ourselves out under the thumb of our landlords the better.

The problem, however, is not the lack of ambition. The problem is that, no matter how much we would like to own our own homes, sometimes, we just don’t have the money.

Thankfully, however, there are various avenues through which we can acquire that funding. Unfortunately, sometimes, we might not exactly qualify for the money we need. But there are ways to remedy that issue. Here are 3 tricks for getting mortgage applications approved.

Rebuild your credit score

Let’s be clear, this is a long-term solution. And by long term, I mean that it will take a while before it can come into effect. The best part is that this solution cuts across your entire financial health. By improving your credit score, you are essentially making yourself a better candidate for better funding by more potential financier. So, if you are thinking you want to buy a house in the next 5 years of so, then you should start rebuilding your credit score right now. Here are some things you can do:

Get your credit score rating to get a clear picture of where you stand.
Consolidate your debt by cutting down on the number of credit cards you use.
Pay off those little bits of debt.
Close down some bank accounts, but not all of them…the longer your financial history the better.
Curb your spending.
Start making more money.

There are myriad ways through which you can rebuild your credit score. Do a little bit of research and start applying some of those tips to your life in particular. This will take time, so be patient and persistent.

Find ways to increase your qualifying income

We all want to make a little bit more money. Apart from finding part time work or start a consultancy, there are other ways to make your qualifying income seem bigger to potential financiers. Here are some things you can do:

Start including child support if it applies to your case.
Include automobile allowances.
Include foreign income.
Include interest or income from dividends.
Include any royalty monies.
Include tip income.
Include disability income.

What I’m trying to say here is that there are quite a few income avenues that most people do not think to include in their qualifying income part of the application. Include everything you can think of to include; let the financier decide which sources are not relevant.

Look for alternative financiers

Although not always the best options, there are more financiers available out there than just your local bank. Have you ever thought of approaching other banks, maybe some that you have never considered using? There are some who will happily give you a mortgage, albeit with high interest rates, but this might be a viable option to many…just something to think about.

Obviously, the best option here would be to do what you can to improve your credit score. That is by far the best way to improve your chances of landing a wonderful mortgage with better rates. But if that fails, then you can try the other two options.

When To Make Concessions On Your Property Deal

Henry Mccarthy — Wed, 09 Aug 2017 01:34:12 +0000

To tell you the truth, I hate making concessions on a property deal. In most cases, it is construed as a telltale sign that you (the seller) are hurting economically and are desperate for the deal to go through even if it costs you a little extra. While this might be true for some cases, in most, concessions are just a way to help the deal move along so that everyone comes out of the entire process a little happier than they went in.

For example, a young couple looking to buy a home might not have all the money you are asking for, but just because they remind me of my daughter when she was just starting out, I will be more inclined to reconsider their offer provided I do not sell the house at a loss. In this kind of deal, I have made a concession in the form of price reduction – whereas I’ve lost some of my profit, I have gained a good night’s sleep knowing that I helped a young couple make one of the most profound investments of their young lives. It is all about the little things you do in life that make you happy, isn’t it?

Granted, I did have a friend that thought I was crazy for being sentimental like that. And perhaps, sentiment should not be a basis of when to make a concession. So when should you consider doing so?

For the most part, concessions on a property deal will be guided by one goal and one goal alone: ensuring that the deal goes through without further hitches. So, if you want to sell that house as fast as possible, you might have to make concessions. Here are some typical examples of when to make concessions:

When the market takes a sudden dip

Although not very regular, the real estate market does take a few dips every now and again. Should you find yourself in a situation where you need the house to sell at a particular time but the prevailing market atmosphere is not so friendly towards your demands, you might have to make a price concession just so the house can sell faster.

If, for some reason, you need to sell at a certain price, the other concession is granting flexible terms.

Rather than getting all the money today, you may let the buyer pay the down payment on a monthly basis instead. In that way, they don’t have to cough up 10%-20% of the value immediately, which might make it easier for them to meet your price.

These types of payment terms have been introduced by investors like Rick Otton and Reena Malra for more than a decade now, so it’s not an uncommon option. It’s something you may want to keep open if you are looking to sell quickly.

When you realise you have asked for more than you will get for that house

This happens more often than you might think, especially when dealing with rookie estate agents who are keen to make a name for themselves. Should you discover that your house has been over-priced or that, try as you may, you are just not getting the kind of offers to match your pricing, then you will have to bring that price down or risk the house becoming a permanent fixture in the market.

When the inspection results are not so flattering

Smart buyers insist on an independent inspection report before they make a down payment. Should this report come back a bit more negative than expected, you might have to make a few concessions just to cushion the blow and to ensure that the lined up buyers do not run for the hills.

The biggest reason, however, to make concessions is when your house has been on the market for far too long. This only means that it will lose value the longer it has that ‘For Sale’ sign attached to it. In this case, you can either make a concession and sell it or hold fast to your guns and risk your equity in the process.

Knowing When To Back Out Of Property Deal

Henry Mccarthy — Thu, 06 Jul 2017 05:26:58 +0000

As exciting as the process of buying a home can be, sometimes, way down the line, you start to feel as if the entire deal just isn’t right. As a buyer, this kind of gut feeling can be rather confusing and stressful. But as experience has probably already taught you, not listening to your gut might be a huge mistake. So, if and when the entire process begins to feel as if it is backing you into a corner you do not want to be in, then maybe you should think about backing out.

But, how do you know when to back out of a property deal and how do you do it without burning too many bridges? Here are a few tricks you can use to either totally back out of the deal of delay it long enough so that the seller moves on.

When can you back out of a property deal?

When it has appraisal issues

This has to be one the most convenient reasons for backing out of a property deal. Almost every real estate deal comes with the contingency that the inspection and appraisal results must be satisfactory. The beauty of it all is that ‘satisfactory’ is a very relative term. In many cases, the resulting property value often comes to something lower than the stated price. In this case, one of two things has to happen:

– Either the seller reduces their price to match the appraised value, or
– The buyer agrees to pay the asking price out of pocket.

At this point, things can get very sensitive and no one would blame you should you walk out of such a deal.

When the inspection reveals more problems than anticipated

This is a straight forward ‘get out of property deal’ card. Should the inspection reveal more problems than were initially stated or than you can comfortably accept in your new house, you can simply back out and say you are looking for something that will require fewer repairs and cost much less when doing so.

When you have financing issues

As much as it may be your dream home, if it is going to cost you both kidneys and an arm, you should really think about backing out of that deal. In many cases, real estate transactions are backed by financiers who give you a mortgage at a stated interest rate. In some of these cases, you may find that you do qualify for more money but it would mean that the belt would have to be tightened just a bit more than is comfortable.

DO NOT buy a house that will run you into the ground in terms of mortgage payments. Should you find that the seller is asking for much more than you are comfortable with, even after negotiations, then you can, and should, easily back out of that deal.

The trick is knowing when to back out and when to stick to your guns. If you have the slightest of verifiable fears about buying that house (verifiable like ‘inspection results’) then you can and should back out of that property deal.

Step-By-Step Tutorial On How To Buy A Home

Henry Mccarthy — Thu, 15 Jun 2017 03:35:29 +0000

The very first thing you want to do before you commit to buying a house is to decide whether buying is the right move for you. As wonderful and liberating as this kind of investment can be, it is often very expensive. And we are not just talking about the price of buying the house. We are talking about other factors such as:

Associated homeowner taxes.
Maintenance costs.
The risk of the market going belly-up and you losing your equity.
Homeowner’s insurance.

And then there is always the chance that your wife might end up hating the house just after you have paid for it. But, once you have considered all these factors and decided that you want to buy anyway, then here is the step-by-step guide on how to go about it all:

Get your financing in order

The way you go about this is to find out how much you can spend and then find a house that you can buy for that much. The mistake most people make is that they find their dream house first and then try to find the funding.

The problem with this approach is that you will almost always end up either spending more than you can afford on the house or have you heart shattered because you will not be buying your dream house. So, get pre-approved first and get all your financing in order.

Find the house or an estate agent

Once you know how much you have to spend on the house, you can go ahead and try to find the right house within that price range. One of the best ways to go about this is to use an estate agent that has access to more information than you do. This is the person who will be able to find a house within a preferable neighbourhood and within the price. You can also go online and start doing your own research. Try sorting by price and by neighbourhood and see what kind of options pop up.

Make an offer and have it accepted

Once you find the house you want, you do not want to go around playing games. Decide if you are buying it and make the offer. You should know that the seller might try to negotiate the price higher. Do not get irritated, this is just a tactic to get more for their house. Come back with a fair enough offer and see if it is accepted. This is where an experienced estate agent comes into play. They can be an invaluable go between the two parties.

Get a solicitor’s opinion

Once an agreement has been reached, involve a real estate solicitor. This is someone who will take a closer look into all the legalities of the deal and also ensure that you do not take a bath in the deal as well. The last thing you want to do is end up losing your hard earned money to a conman.

After this, all you have to do is ensure that the house has been inspected and that everything adds up; make the payment and move in. Give yourself a little time and then start improving the house by making minor DIY home improvements. This will end up increasing the value of your home equity.

What’s The Best UK Property Investing Strategy To Use Now?

Henry Mccarthy — Mon, 05 Jun 2017 06:07:50 +0000

Whether you are looking to invest in buy-to-let properties or are thinking that maybe foreign remote investment is the way for you to go, it all comes down to what gives you the best possible returns. Recent tax changes have made it a little difficult for buy-to-let property owners to realise as much of a profit as they used to before 2016.

But that doesn’t mean that people have stopped buying homes or investing in buy-to-let properties. It just means that people have found ways to make it work despite these changes. With that in mind, here are some property investment strategies in the UK today that could make you money.

Master your rental yield calculations

You could be buying property purely for capital growth or you might be doing so for rental income, either way, it is essential that you understand how to calculate your rental yield. This will make or break your property investment portfolio. The good thing is that you do not need a complicated landlord software to do this (although one could come in handy).

Your rental yield is basically the total cost of investment in the property divided by the gross rental income. As straight forward as this might sound, there are a lot of factors to consider. The total costs include things such as:

Mortgage payment.
Management costs.
Insurance payments.
Voids.

Ideally, you should be looking for properties that will give you about 12% annually for multi-lets and 8% for single-lets.

Tenant profiles matter

Most property owners have realised that investing in rental property is a good way to keep their cash flow going. But if you are going to use this strategy, then you need to pay close attention to tenant profiles. The different type of tenants you could target include:

Working Tenants
Student Tenants
Local Housing Allowance Tenants
Corporate Tenants

Each of these tenant types has their pros and cons but the working tenants and corporate tenants are the best types as far as high yield rental income is concerned. But you need to know that they are also the most demanding.

Go international

There are very many different markets across the globe that are up and coming in terms of property investment opportunities. All it takes is a little research and you could land some of the most lucrative property investment opportunities in Scotland, Kenya, Seychelles and even Australia. You must, however, be prepared to go outside your comfort zone because some of these places have stringent foreign investment laws and you might need a workaround strategy if you are to succeed. One of the best ways to approach it is to use locally based solicitors in conjunction with your own estate agents as well as solicitors.

There are investors like Rick Otton and Tom Wade who have had lectures on how to invest internationally. Be sure to check them out if you want an idea on how to go about remote property investing.

Understand that almost every property investment strategy has the potential to be profitable in the long run. You just need to go in prepared and to have an exit strategy in place should things start heading South.

What Does Rent-To-Buy Mean?

Henry Mccarthy — Mon, 22 May 2017 02:12:50 +0000

Back in the early 2000s, an Australian property investor named Rick Otton came to the UK and began popularising rent-to-buy agreements, and other British investors like David Lee, Reena Malra, Simon Zutshi and Sarah Barret followed suit.

In a typical rent-to-buy agreement, the landlord promises the tenant that they will sell the house to them in due time. It means that, as a tenant, you are basically buying the house in which you live with a portion of the rent paid going towards the eventual price of the home. There are many different forms of this agreement, all of which have different terms. The options involved include, but are not limited to:

The tenant paying the landlord a down payment that will go towards off-setting the final costs.
The landlord taking a share of the rent as payment towards associated closing costs.
A non-refundable deposit is made as a show of serious interest by the tenant.

The nature of the agreement will depend on the terms discussed between the tenant and the landlord. These types of agreements have some associated advantages as well as disadvantages.

Pros of rent-to-buy agreements for the tenant

As the tenant, you have first rights or exclusive rights to the purchase of the property. ‘
As a tenant, part of the rent you pay out can be considered an investment in your own property.
It gives you an opportunity to ‘test’ the home as well as area first before you become fully committed to the purchase.
The originally agreed price is locked in from the start. Should the property value skyrocket, the gains go to your advantage as the tenant.

Pros of rent-to-buy agreement for the landlord

You have an almost guaranteed buyer for your property.
Maintenance and such expenses shift from your docket to that of the tenant.
The property price is locked in from the start. Should the market bottom-out, the losses go to the tenant?

Cons associated with rent-to-buy agreements

The landlord might ask for a much higher price due to the favourable payment terms being offered.
Should you decide against buying the property two years down the line, as the tenant, you will forfeit your deposit and the portion of rent that has been going towards the property purchase?
The agreed property price might fluctuate as time goes by, this means that you might have to see some losses or gains along the way. Depending on which side of the equation you belong, this could be a good or a bad thing or both, really.

You should bear in mind the fact that this type of agreement has a lot of intricacies that go into making it work. If both parties are to be satisfied and happy, then some tough questions need to be fully answered before the agreement is signed. Examples of these questions include:

For how much will the house be sold?
Who pays for the closing costs?
Who pays for the inspection, survey and appraisal?
What kind of warranty deed is agreeable?
Payment terms should be set in stone.

These are the sort of things that ruin a perfectly good rent-to-buy agreement down the line. Whether you are a tenant or a landlord, be sure to have all of this in mind when entering this kind of accord.

Where To Find Best Foreclosed Properties In The UK

Henry Mccarthy — Wed, 10 May 2017 04:55:21 +0000

If you can find them, buying up houses that are in repossession is a wonderful way to get your hands on excellent properties that are selling for way below their market prices. If you are looking for ‘buy to let’ investments, they do not get better than this at all. The problem is that mortgage companies won’t just tell you that those houses are in repossession.

They too want to make some money from this as well as recover what they are owed. So, if they can sell them for a higher price, they will. Which is not good for your potential high returns on investment. So, how do you go about finding these properties?

Be on the lookout for telltale signs of repossession

In many cases, you will not be told that the house you are viewing is in repossession. In fact, most estate agents are strictly forbidden from telling the buyers that the house is in repossession, so they go about their business as usual. But once it comes to the viewing, a discerning buyer will identify a few telltale signs almost immediately. In many cases you will see:

The windows will be boarded up.
There will be tape around the facilities telling you not to use the bathrooms.
They may be several personal possessions strewn across the floors in the rooms.
It just seems deserted.

In a typical showing, the houses are well staged. You will never get the feeling that no one left there in a hurry or by force. Repossessed houses always tend to have that feeling. This is mostly thanks to the fact that mortgage companies, who just so happen to be financiers and not home sellers, farm out the selling process to estate agents who are experts in this field.

But then the presiding mortgage companies go right ahead and tie the estate agent’s hands behind their backs, whether it is to save on staging costs or just because financiers are a difficult lot, no one knows. The end result is a shoddily done staging job that leaves signs of repossession for those who know where to look.

Be friendly with estate agents

Most repossessed houses go through an estate agent before they get to the auction house. If you are friendly with a few well-placed estate agents, they just might be inclined to share this ‘insider information’ with you. This is a long shot though.

Look at the adverting and wording

You can also keep an eye out on the local papers. Be sure to look at wordings such as ‘public notice’. This is a clear sign that the advertising estate agent is calling for bids on the house. This is an auctioning tactic that is a dead giveaway. Because mortgage companies are obligated to let the repossessed house go for the best possible price, they will continue to invite bids even once an offer has been made. This can be infuriating for buyers, but a good indicator of repossessed properties for sale.

The trick is knowing what to look for and being in constant contact with the right people. Other than that, the other option is to go for auctions and try your luck with the bidding process.