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  • Buy-to-Let

    Do the wealthy invest in BTL?

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    Learn Change and Adapt ?????

    I think obviously not, above a certain level DL, but very few people actually get to such a level - and for most people (not all), in my view, property investing is still the best bet for getting to that point!

    My sister in law is married to a New York banker and they live in an apartment in Manhattan.  They bought a second home in a glamorous location in London.  They were talking one time about how they don't get over to it as much as they'd like, and me being 'clever' said "You could maybe rent it out on a short term let basis like serviced accommodation"  She just looked at me and said "Er, no."

    My daughter has a friend whose parents have always bought properties to do up while living there - trading up - and also earn well (he's a pilot). I asked how they're getting on the other day and she said "They live in a fuck-off big house now!"   I just love that phrase :-)

    Good ambition - to get to the stage of being Fuck Off Rich!!

    I feel a bit like that, I suppose.  Once you've got to a certain size..!!

    Some people are more ambitious though - mostly moving on to development.  I've done a bit of development but I'm more of a crowdfunding investor, let-them-do-the-work sort now - still property, of course!

    Angela

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    Author of The Complete Guide to Property Strategies

    "It is the small decisions you and I make every day that shape our destiny" Anthony Robbins


    I have similar friends who never conceder property as an investment

    This is going to sound snobby (so forgive Me ) BTL is a working class investment

    The more I ask myself this question Do I really want to buy ex Council Houses to rent the more I shy away

    Not because the House is a bad investment but because I can find similar returns with less tax and less hassle

    of course the Houses I own today allow me to have that choice and they will remain in place 

    I know I am changing my views on investment in 2018 But I can afford to change my areas of investment

    and that's where the rubber hits the road


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    Learn Change and Adapt ?????


    I know exactly what you mean DL.  It is really working class.  It's really work!!  It's grubby!  No class, lol.

    We still actually do the grubby, stinky work of it.  It's partly a case of being old dogs here... I do sometimes think I should've got me coat a long time ago!

    It is tricky trying not to offend anyone, but let's be honest - once you've got 100 'good yielding' properties (often ex-council or other cheaper) with all that entails, not least the tenants, you don't really hanker for another 100.

    As my mother-in-law stupidly asked when we started out: "Can't you just buy the property and not bother with the tenants?!"  Quite - bloody good idea!

    I suppose that's what the rich do, like my sister-in-law: Buy-to-leave!

    That's why it saddens me though that the government and the public 'go after' private landlords; fundamentally, most are just good, hard working people who are trying to get ahead in life.  They're not on the whole 'the rich' that they're made out to be.  They might get rich through BTL, but by then more likely to cash it in - like me!

    Angela

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    Author of The Complete Guide to Property Strategies

    "It is the small decisions you and I make every day that shape our destiny" Anthony Robbins


    I think the more money one has the more one might lose focus

    A billionaire maybe will not interrupt a yearly family gathering even if he loses a million by not taking a I minute call

    Business wise its a poor decision one could argue but emotionally wise its the right decision

    That 1 million lost will not affect his day to day life one jot but his 91 year old mother may pass tomorrow

    20 years ago they may think that was unthinkable and they are in 2 minds

    Part of them says I feel guilty at letting that million go.

    Part of them say - but so what I spent 20 years of my life just so I can let a million go and my mum is more important

    The waiter at the table may not be able to comprehend that mindset

    I have 3 voids at the moment but I`m still in my dressing gown .Everything is relative

    Its not a question  so much of can you afford the losses its where it comes in the priority list in the day

    Everyone`s priority list is different

    The billionaire may justify his actions in not taking the call

    But it may be on an emotional basis which is fine but not on  a business basis

    Because even a billionaire would struggle to replicate earning a million every minute of every day

    He lost focus but knows he is losing focus so that`s fine that`s his prerogative

    But yes the wealthy invest in BTL . BTL is a very very broad brush of course

    I include BTR as BTL . BTL is the end product of BTR

    The wealthy will also borrow to invest in BTL . Even if they are very wealthy

    All they do is what I do .. but they scale up . ......Dolf de Roos taught me that

    They dwarf the richest person on PT

    They look to buy a skyscraper full of apartments @ 1 billion.

    They may leverage@  50% to buy that little baby

    So BTL has no limits even to the very wealthy . Check out the Sunday Times Rich List

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    Jonathan Clarke. http://www.buytoletmk.com


    But you see If I came to you and said buy me 20 houses with cash and manage them for me I could walk away and not give much thought about the running of my

    investments as long as I saw cash in my bank every month

    It was your comments that made me think on this

    would I worry If my Property business  halved in value over night

    No I would Not ???

    Would I worry about Rent Control

    No I would not

    There comes a time where the risk goes and maybe the buzz too

    It becomes just an investment not a Business.

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    Learn Change and Adapt ?????


    Hey - so my experience  when I came into some cash in September last year...

    I was already a BTL investor with  a generally positive experience (purchased a run down property in Twyford a week before they announced Cross Rail was stopping there - instant 50% increase once we'd modernised and added a bedroom for £20k) and had assumed that I'd do much more (gently leveraged) BTL to provide an income and benefit from the property appreciation but its not worked out that way.  Property prices are very high and its really difficult to find value in the market, S24, Stamp Duty etc etc...it just feels like a very bad time to be getting into the BTL market and the modelling I've done isn't really compelling.

    As a cliche, I bank with Coutts but I'm not letting them manage my money either...all they would do is stick it in equities (ok, a broad diversified portfolio, but...) anyway....and equities are very high at the moment too and there will no doubt be a correction at some point.

    So what am I doing?

    1. I've invested a big chunk of change into an FHL...the tax breaks are great and a management company takes the hassle away.  A net yield of ±10% is fine with me.

    2. I've created another business and purchased one out of administration (not in the same industry as before as I have restrictive covenants) and found great managers to do the day to day running.

    3. I've invested as much as I can (ie up to the limit of tax relief) in EIS and SEIS businesses (see ie: https://www.ignition.financial/2017/07/03/founders-facts-why-investors-love-seis-and-eis/ )

    I'm also sitting on cash to pounce on the next opportunity (ie if there is a  house market crash, equity correction, another distressed business etc).


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    I tried for a Coutts bank and they turned me down

    Post code address I would imagine


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    Learn Change and Adapt ?????

    Hi DL, Might be not deep enough pockets, wealth managers nowadays look for 25M investable wealth Smile

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    If you are in a position that you are not worried if your business halved over night then why invest at all

    I think your buzz has gone but you are having a final fling with BTR which is fine

    Lets bring the figures down a bit

    Say I have 1000 in the bank and so do you and we know that roughly 500  will sustain both our needs for a lifetime

    You say  to me - JC  lets invest / gamble 50p in flipping a coin at double or quits . Just a bit of fun

    But is it fun. Is it a buzz. Is it even worth the effort of getting a coin out of our pocket

    Because . If you win so what . If you lose so what . If I win so what . If I lose so what

    Its a waste of our day

    There no point in flipping a coin as there is no fun or adrenaline it in it

    50 years ago maybe when one had maybe only 50 in the bank and were at school then yes .

    I enjoyed that then as a 50p could buy me a mars bar, crisps, drink and a doughnut at the tuck shop

    Time and wealth distorts the need and desire to play those games which gave us a buzz back then

    If the BTR gives you that buzz that`s cool .

    If you thought it would give you more of a buzz but in fact it hasn`t then that`s cool as well

    You have learnt something about yourself which you dint know before you did it

    I personally wouldn`t get bogged down whether its technically an investment or a business

    Just do phase 1 maybe and forget phases 2, 3 and 4 and move on to a different buzz

    That could well be outside BTR. BTL and indeed  anything bricks and mortar related

    Letting go of the need to be an entrepreneur is an art in itself and that will take some time

    Feel the Fear and Do it anyway as Susan Jeffers says. But kinda in reverse now

    Angela kindly suggested.... ` End the Struggle and Dance with life`

    https://www.amazon.co.uk/Struggle-Dance-...+with+life

    My copy  should arrive tomorrow

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    Jonathan Clarke. http://www.buytoletmk.com


    DL your posts often worry me, as I'm just starting out in BTL and you seem so down on it I wonder if I'm making a big mistake!

    Unfortunately for me, being relatively poor there's little point in me pondering whether I'd still invest in BTL if I was wealthy. What concerns me right now is whether BTLis still worth trying? But surely the answer must be yes, provided one is careful?

    I have £250K-odd to do something with, but no other assets to speak of and 2 very young children to provide for.

    For me, "being careful" means buying terraced houses in an area with good rental demand, not paying over the odds each time, then refinancing at a LTV that should ensure the rent always covers the mortgage payments for the next 5 years. Provided you stick to these (and no doubt some other basic rules), surely BTL is still be a sensible way to make the most of your money? 

    Obviously there will be better ways to invest my money but it isn't obvious to me what they are!!!

    This is tremendously important for me. Do any of you experienced investors really think BTL should now be avoided?

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