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Vanessa Warwick Landlord and Co-Founder of PropertyTribes.com **If you have got value from Property Tribes, find out how you can support it in remaining a free to use community resource**
It has been almost 2 years since my last posting and thought I would share a quick update:
- performance of existing assets:
* Abbey wood single BTL: continues to perform well. Given the low interest rate environment it is giving a nice net yield which equates to around 12% ROE (originally invested) and currently has c. 200k in total equity (and c. 175k net equity less original equity invested). I have resisted remortgaging until I properly analyse the implications of section 24 and my wider plans for the medium to long term. Also purchased a 2 bed flat in Feb 2015 which is yielding net 9% ROE and has around 60k in additional equity since purchase.
* Scottish single BTL: has been occupied throughout the period and continues to provide a good yield.
* central London developments with Sow & Reap: these have been severely tested. The original premise was to diversify away from South East London where I had 100% of my investments and I kept thinking it would not continue to generate such high annual price rises. Since time of my original post, the market has significantly cooled/corrected/mildly crashed. Unfortunately these were structured using expensive bridge financing and at the high end of the market and therefore one of the investments is looking like a total loss (yet to be realized) and the other one has been creatively reengineered to be converted into multiple studios though it will be several years before the original equity can be returned. I have learnt a lot through the process and have developed a feel as to what works better for me in a JV.
* Bridge financing: this is a new area I have ventured into. Given my experiences with the central London developments, and my status as an expat limiting my mortgage options, I delved into finding out as much as possible about financing. For me peer to peer seemed a bit too impersonal though the small ticket entry and ability to diversify significantly were plus points. I extensively reviewed crowd sourcing and other lending avenues and particularly liked LendSwift, SimpleEquity and Code Investing. in the end I decided the best way was with someone I trusted and somewhere close to home. I ended up investing in 3 opportunities all in the local area, looking to take first charge, conservative LTV (up to 70% max) and unique situation (auction purchase, quick funds required for a BMV purchase). 1 of the deals has already paid back on time whilst the others are on track and structured so I am getting a monthly return rather than roll up. I have enjoyed working with the solicitors on the documentation, reviewing the credit parameters etc. Though the returns are not as spectacular, it is currently a good investment for me as provides more certainty on timing and less risk than straight equity deals.
Other key points:
* I have moved jobs in the last 12 months and so my day job has become my real focus. Still working crazy hours...and still an expat! So the lower pound has really helped me since I earn in dollars,.
* Whilst I have learnt a lot on the bridging side, I now would like to contribute back more to the community including on PT and the couple of facebook groups on which I am a member.
Anyways just wanted to share the update and thanks again to everyone on this forum - wishing everyone the best for their property journey during 2017 and onwards!
Lovely reading and learning from you! Welcome back to the forum!
Wishing you all the best
Hope everyone is well.
It has been almost 2.5 years since my last posting and thought I would share a quick update:
* Abbey wood single BTL: original 2 bed terrace continues to be a stellar performer. Current tenants have been in there approaching 5 years now. They are great, always paying on time and generally taking care of the place. I have had to fund some minor maintenance, all of which was fair. Rent is currently 150-200 PCM below the market, however I am fine with this and would look to increase as and when it becomes void. Equity still in the region of 200-225k. Annual profit before tax is roughly 4.5k (after mortgage, management fees, maintenance, etc.). The additional flat is also a great performer. Same tenant has been there since the purchase. Around 75k equity and annual profit before tax is roughly 3k (after mortgage, management fees, maintenance, etc.). I did not buy these for monthly yield but rather long term assets to be held for many years.
* Scottish single BTL: has been occupied throughout the period and continues to provide a good net yield before tax of c. 8-9%
* central London developments with Sow & Reap: continue to be a disaster unfortunately. One was a total write off – only redeeming feature is I can use the capital loss against future capital gains (for example if I sell the Abbeywood house). Work is still on-going in relation to the one which was supposed to be restructured into a high-end HMO. The rent from the last one (part ownership in flat in Mayfair) is at least almost entirely covering the annual expenditures as this had a conventional private banking mortgage and not bridging finance. So hoping this can be exited at par or a small loss in the next 24-36 months.
* Bridge financing: this has been the area of most interest and joy. Of the 3 investments I previously mentioned, all were paid on time and in full. Since then I have undertaken an additional investment in the local area which will be repaid on Friday in full and on time. All 4 deals were at 12% p.a., came with a first charge and PG, and were a maximum of 12 months. Finding deals in the local area through my own network has been difficult to scale up. Therefore I have begin dipping my toes with third parties, including Godwin Development and Lendswift, thus far. Plan is to invest small amounts and diversify over many projects whilst still trying to source and fund my own opportunities within my network.
* Coming up to 3.5 years in the new job. Am enjoying the transition from banking to buy-side. Still based off-shore so the weak pound has helped me.
* Family is growing, already have a toddler with a new addition expected towards the end of the year J
* No definitive plans to head back to the UK yet, however have started to research where we may want to move to when we do return. So far it has been Sevenoaks, Pettswood and Chelsfied.
Anyways just wanted to share the update and thanks again to everyone on this forum - wishing everyone the best for their property journey!
Thank you so much for sharing your up-date. It's very interesting to follow this over a sustained period of time and see how it all works out.Look forward to the next up-date!