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Morning I’m glad to know I’m not the only one struggling to find deals and I’ve been doing it for 40 years and sold over 3500 properties . And I’m sure it will continue to be a struggle to find the right margins that’s why you have to be so carful about which feals you to do and who you work with
I would personally consider if you haven’t done already purchasing at Auction all the deals are in a catalogue there is always one bargain per auction at least you just need to try and find which one it is!
If you’ve never been to an auction before go and get some experience of what it’s like goto view a few of the properties on the open days remember you need to know exactly why any property is in the auction .
A lot will have problems you just need to pick the problems you’re able to sort out.
Always then go on to the next door neighbour to find out the truth as to why it’s in the auction they will tell you everything you need to know
Make sure you read the legal pack thoroughly and get your solicitor to do so also . Make sure you do all you due diligence and you know exactly what it will cost to refurbish ETC
Never bid at auction without having all the funds in place to complete . I hope this is of help
Auctions are definitely something I am interested in so thanks for the advice. I did consider a barrier to entry being a good working relationship with a contractor / builder which I've recently managed to develop so perhaps now is the time to consider this route.
The Birmingham house was a cash purchase. I have written the details of the purchase in a separate thread if you are interested:
I do plan on updating the thread as the refurb progresses as I told Vanessa I will try to document it on PT.
In regards to your question on Bridging/Mortgage; I believe there are a few lenders now that offer a light refurbishment product whereby they lend against the purchase price and will also provide a BTL mortgage once the refurb is complete. I think the benefit of this is that you have a mortgage in place for when the refurb is complete upfront, so you know what the lenders surveyor has valued the refurbished house prior to beginning the refurb. If that makes sense. I think Precise Mortgages do that and maybe a couple more lenders. Not tried this myself but keen to get feedback from anybody that has and maybe an option for you to consider.
Alternatively bridging loan is an option too, I have not tried this either. Just be careful with the sums when calculating the cost of the loan and factor in the inevitable unexpected delays during the refurb process.
During my house search, I visited over 15 properties and put in offers on 4. I think it is important to visit as many as you can because it gives you a chance to build a relationship with estate agents and as I have found you will be surprised how much reduction on the asking price you can achieve as seller’s circumstances change all the time. I would also say do not give the estate agents a price on the viewing, just say you have a few to see and you will go home and do the sums and come back to them with a figure. Also always give an in-between figure, so If you are thinking of offering lets say 150K, offer 147.5K and say you have done your sums and that is the number you have calculated will work for you. Just gives the impression you have thought about this in detail and are serious. If your offer is not rejected first time around, you went in too high. I usually increase it slightly by a couple thousand and then say I will leave that offer on the table while I continue my search. If you do that on a number of properties, in today’s market, chances are you will a phone call soon from one of them.
As a seasoned property professional (both as an adviser and investor) I think references to BMV are misleading. Only in exceptional circumstances would a vendor really accept less than their house is worth, the key driver being of course time to completion. Most people buying with a mortgage cannot offer a quick purchase. There is also the danger of someone selling at BMV only to go bankrupt and have their Trustee in bankruptcy unravel the deal because full price was not achieved. Therefore seeking BMV deals specifically is both time consuming and a bit risky.
The best thing is to just do loads of legwork to make sure you get a good deal that works for you and is affordable. Many areas have static or even increasing house prices, assisted by very high employment and low interest rates, so deals will take more finding, especially with low supply. My own MO concentrates on buying on an estate that I know inside out (30 years of experience). I know the intricacies of the different house types, the different roads and the people who occupy them. I drive round it every day. This gives me a decent chance of knowing when a deal is good.
Just on the refurb and remortgage scenario, with my valuer's hat on, just be wary and make sure you are adding value. I have dealt with may cases where a house has been purchased and tidied up (nothing structural) with the owner being disappointed that they have not added any significant value. If you are relying on this then get some good local advice on the market place.