X

Sign Up

or

By signing up I agree to Property Tribes Terms and Conditions


Already a PT member? Log In

Sign Up

Sign Up With Facebook, Twitter, or Google

or


By signing up, I agree to Property Tribes Terms and Conditions


Already a PT member? Log In

Log In

or


Don't have an account? Sign Up

Forgot Password

To reset your password just enter the email address you registered with and we'll send you a link to access a new password.


Already a PT member? Log In

Don't have an account? Sign Up

  • Mortgages & Finance

    Am I deluded but everyone seems at it - No Money Down?

    Im not and never have been a NMD investor but I read everywhere that  NMD are over , it doesnt work, the lenders have called time etc but I have a couple of observations.

    1) Many highly reputable investors who condone NMD are often seen on platforms and at network meetings with investors and dare I say it industry gurus who are doing blatant NMD every week. I saw one guru at a meeting in London recently with 12 students loyally worshipping but all the portflios had been bulit on NMD. Some of these gurus have connections to or control FSA regulates companies.Incredible.

    2) Every network meeting I go to most participants are telling me that they wont put any money into a deal, that bridgings is way too expensive even with a genuine 40% discount and that certains types of NMD involving options are too expensive and that sub sales are cheaper.

    3) The entire BMV industry appears to rely on NMD with punters picking up properties where the comparison in the same street is 2 years ago the current comparison is always a better street round the corner, the RICS survey has been managed at the punter is probably getting the property at roughly whats its worth but think he  is a genius. What he doesnt know is that he  is just acting as a mortgage host for the packager who has made 10% and got the lender to take the "equity" risk, that the only market for his investment property is back in the same market becuase nobody would ever want to buy the property to actually live in.

    Am I missing something?

    Do I need to chill out and relax a bit or is this business in denial somewhat about what it talks and what it walks?

    Kind regards

    Bengt
    0
    0

    As a sourcer of investment properties I would hate to be tarred with this brush.

    I source traditional properties at genuine discount - how do I know its genuine ? - because I look at recent sales of properties in the same street or very close, properties of the same age and layout.

    This is what the RICS surveyor looks at too.

    I absolutely agree with you that its a simple matter to 'fudge' a valuation in an area where houses are all unique, or by false comparisons with property in a better area.

    However, there are genuine bargains to be had, where an owner for individual reasons is willing to sell below the 'going' price in an area where other identical properties will have been changing hands at valuation in recent weeks or months.

    A BMV like this is a different animal from the fake BMVs that are sadly touted around the circuit.

    To know the difference an investor naturally has to do their own due diligence - that's the snag about 'armchair investing' ; to know whether someone you use is good at their job, you have to know a fair bit about it too !

    Its up to the investors how they finance their purchase - but I sometimes wonder whether there is a great deal of difference between someone buying at a genuine discount and then remortgaging 6 months later to take their deposit back out and buying with NMD - the mortgage will be exactly the same in in the end - if its a genuine BMV of course.

    0
    0

    Bengt
    Obviously Joanne is an exception and provides good deals to her clients.
    But otherwise..... yup you are spot on.
    0
    0

    Spot on and well said! Couldn't have said it better myself! Smile

    Re: these "networking" meetings with gurus ... change networking for "sales". I don't bother to go to them any more because it has nothing to do with Landlord-ism and everything to do with sucking newbies into a GRQ dream/scheme. There is nothing there for me.

    Re: NMD: I can assure you that everyone is not at it. These gurus are just coining in a few more £££ while the notion and dream still exist. They will very rarely deliver. You only have to look at Singing Pig for reams of posts of people who bought into the NMD dream but have nothing to show for it, and are now wanting their money back.

    0
    0
    I agree with the previous comments.
    I believe completely in the principles of cost and value.
    Firstly, 'cost' is the price paid, it cannot ever be anything else, it is fixed and thats it. For those who argue "well, I had to pay for this and for that so the price paid isnt cost.".wake up! yes it is but you just forgot to factor those elements in to the price paid.
    If you want to acquire a property for rental purposes or for refurb you need to list all the items that require financial input (including your time) and the total will be the cost to achieve that goal.
    Value however is entirely subjective. Yes, comparisons can and will be made against surrounding/similar properties but often, there are subtle differences. Sam Collett mentioned n a blog about a falt she looked at that had a 'secret/hidden' room that could add value to the property. Its identifying these opportunties that count.
    A real exampl in my business at the moment, I am working with an investor on purchasing a HMO, it's a repo and is being marketed by the lender as a 3 bed semi. It's so not a family home but that works for the investor (its always been an HMO!) the cost is low, the comparative value is therefore much higher in this case circa 40% BMV is I must use that term.
    By other point and this relates directly to NMD/BMV deals is this. In the case of NMD as there has been little or no financial input from the investor it is argueable that their valuation of that asset is negligable, especially when interest rates are so low. These Dream Weavers are still peddling NMD deals that the in-experienced and niaive are buying into. When the inevitable comes and interest rates do start to rise, there will be a further bout of re-possessions and motivated sales as these people reaslise that their "cash cow" no longer is.
    For me and I advise all of my clients on this, is that in order to apply value to the deal, there must be a cost. To them this is going to be a traditional deposit. Its therefore my job to ensure that I can find them the properties that they want at the lowest possible price to allow them assuming that this is their particular strategy to release the equity six months later and recycle their deposit. Now this to me is an ethical and responsible way to work smart and use your money wisely.
    You could call it NMLIAAMOSM (No Money Left In After A Minimum of Six Months) but its a mouth full and I probably wouldn't be able to get many bums on seats at £500 a pop with that snappy number so I won't bother!
    Rob
    Sourcing genuine property deals in Wakefield and The Five Towns
    Follow me on Twitter @walkerfox
    Skype: walkerfox
    Mobile 07960 753550
    Email rob@walkerfox.co.uk
    Read my blog https://walkerfox.wordpress.com/
    https://propertytribes.ning.com/events/no...erty-tribe
    0
    0

    What you say is true Nick in that there are many successful investors who don't speak at events. Equally there are many unsuccessful investors who do and equally do not speak at events!

    By the same token I'd like to think I was modestly successful and I speak at events!

    I get asked to do it far more than I can do it and am selective where I do based on a number of factors.

    I may promote my services to a certain degree but always in the context of a talk of value - I'd like to think tho leave that to others to comment!

    I like to motivate people and creative strategies are my skill but you certainly wouldn't put me in the GRQ catergory!

    So given I've been asked to speak at some upcoming events am I to decline as people will automatically assume I am actually unsuccessful?

    KR, Lisa

    0
    0

    Lisa All comments are for education and information purposes only and do not construe as advice or a financial promotion. No liability is accepted for comments made. If you wish to receive information in an advisory capacity then please contact me about becoming a client. www.keys-mortgages.com

    Joanne
    What you are doing is an entirely valid business model and the comments were not adressed at this type of activity.
    Lisa
    As far as Im aware you have avery high standing in this industry and I and my colleague Charlie follow your posts. But you touched on a good point..how do the Lisa Ormes and Joh Corey continue to spread their word and value without having to risk contamination by visual association. eg speakers at same event. If only we could have more of these good guys and less of the well I thinks its been said earlier the so called gurus.....
    Bengt
    0
    0

    It's a tough question Bengt and one I do wrestle with. There are certain events and hosts I do decline for such reasons.

    Thanks for your comments they are appreciated.

    As for the original topic of NMD; from what I'm seeing a huge number of these deals don't get anywhere near completion which is more and more evidenced by those asking for their money back!

    I've Bern on my soapbox sufficiently on here and other forums about the risks investors are taking doing such deals.

    My advice would be to just ignore the hype which much of it is! It puts bums on seats as Rob alluded to. If you value your credit file, your future and even your liberty then just steer clear and laugh at your own astuteness for recognising it for what it is and realising you'll be all the better off in the future!

    KR, Lisa
    Charlie Marston said:

    Joanne
    What you are doing is an entirely valid business model and the comments were not adressed at this type of activity.
    Lisa
    As far as Im aware you have avery high standing in this industry and I and my colleague Charlie follow your posts. But you touched on a good point..how do the Lisa Ormes and Joh Corey continue to spread their word and value without having to risk contamination by visual association. eg speakers at same event. If only we could have more of these good guys and less of the well I thinks its been said earlier the so called gurus.....
    Bengt
    0
    0

    Lisa All comments are for education and information purposes only and do not construe as advice or a financial promotion. No liability is accepted for comments made. If you wish to receive information in an advisory capacity then please contact me about becoming a client. www.keys-mortgages.com

    There are plenty of investors using NMD strategies ... of which some, but not all, are against CML guidelines. There are not huge numbers of investors doing it, but still a fair number. People rationalise it in all sorts of ways, but at the end of the day investors are adults and make their own decisions.

    There are lots of investors who have done lots of NMD deals and now have decent portfolios ... not all NMD is done by naive amateurs.

    As for networking meetings, not all events are sales pitches ... some are, but many are not. I think some investors forget that we all had to start somewhere, and network meets are useful for gathering knowledge and contacts cheaply ... forums and books are great, but I also like real conversations!

    Next Tuesday I am going to the Wigan event, where Greg Jackson is giving a talk on 'Raising Rents'. He is a decent guy, and a very experienced investor, and I know that I will learn something. I will also meet up with a couple of clients, and chew the fat with the guys there ... all for ten quid!

    Similarly, I spoke at the SWPT event recently, and, I think, gave good value ... there was nothing for sale, we just talked about property investing, had some orange juice and sarnies ... oh, and I got a parking ticket!

    I guess what I am trying to say is that investors should pick and choose what type of network meeting suits them ... because there are a lot of interesting people out there, and lots to learn. It would be a shame to dismiss all network meetings as offering poor value - that is certainly not the case.

    Just my 2p!

    Stephen Fay ACA
    Chartered Accountant specialising in property investors
    https://fyldetaxaccountants.co.uk/

    0
    0
    Stephen Fay FCA
    www.fyldetaxaccountants.co.uk
    'The Property Tax Specialists'

    Hi Steve

    completely agree about many successful investors having achieved what they have via NMD. We did a fair share of it ourselve. though once we'd secured a bridging line with Newcastle we used it less and less.

    But times have changed and lenders now specifically exclude many of the strategies being used.

    I am yet to see a single legitimate NMD scheme or strategy that doesn't involve non disclosure to the lender.

    Seriously if you or anyone else is aware of one please do let me know about it.

    We all know there are grey areas in anything; there's a fair few in accounting! But that's a different ball game to outright fraud which is what every one of the schemes I have seen amounts to.

    I agree with you about the events; as a founder of the PNC they were started with the idea that investors had a place to meet, to chew the cud, to network and to do business just like in any other industry. However most are now the domain of the GRQ and I just tire of people constantly trying to flog me something that isn't real.

    Perhaps I should reinvent the PNC and go back to what it used to be!

    KR, Lisa

    0
    0

    Lisa All comments are for education and information purposes only and do not construe as advice or a financial promotion. No liability is accepted for comments made. If you wish to receive information in an advisory capacity then please contact me about becoming a client. www.keys-mortgages.com