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  • Property-a-holics

    Taking advantage as a cash buyer....

    Hi all

    I have 100k cash and 6 rental properties at present. How do I make most use of the 100k in the current market and make the most of my status as a cash buyer? Is it better to buy 3 more steady 3 bed BTL with 300pcm cash flow on 75% IO mortgages or look for repossession bargains to buy with cash? What is best way to get knowledge of repossessions that are available to buy with 100k?

    Thanks

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    Hi,  you are in a similar position to me.   I was thinking about sticking down lots of 25% deposits and start off with a medium sized portfolio pretty quickly.

    But after speaking to people on here I came to the conclusion that a better use of my money was buy in cash, trying to get at least a 10% discount for cash buyer status alone ,  and buy something that needs work doing/Repo etc.

    Then refinance later and try and get most of your money out.

    For Repo's:      use the subscription based site (£10)   RepoList.

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    "trying to get at least a 10% discount for cash buyer status alone"

    I feel this is sometimes over-hyped. Yes cash does put you in a strong position but in my experience (a previous purchase of mine and other owners I know that bought in cash) I have never experienced any discount for cash.


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    I’m surprised to hear that but I wonder if the reason is that you haven’t tried the ‘cheeky offer’ route often enough for it to work.
           My tactic is to get the money together in a current account first then do lots and lots of viewings over a 2 or 3 day period ( perhaps 6 viewings each day) then put in the cheeky offers ( far more than a 10% discount) on perhaps 10 different properties and emphasise to the estate agents that the money is in the Bank which I can prove and I want a quick purchase and I’ve put offers in on other properties  so it’s a sort of first come first served type of scenario . 
                 I also say that the vendor can stay in the property after completion of the sale as long as they want as my tenant (subject to referencing) so they then become very desirable buyers because they’re not in a chain anymore and can strike a good bargain themselves . This vendor becoming temporary tenant offer  has proved to be a very attractive option . If my offer is a particularly cheeky one I’ve done deals where the vendor becomes my tenant rent free for up to 6 months and only then starts paying rent if they haven’t found their next house by then .
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    Cheeky or illegal ?

    Unless you are  regulated to do that of course ?

    This type of practice known as a SARB was banned many years ago

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

    Which part is illegal ? Is Sarb  an acronym for something ?
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    Looking at those links I can see why Sale and Rent back was regulated as a lot if not most of the deals were heavily skewed to the benefit of the buyer . The last case I did was as follows .
          Advertised sale 210 but it had been on the market for 6 months and reduced from 225 so obviously the initial valuation by the local ‘expert’  valuer was inaccurate and above market value as if the market value was 225 it would have sold . It wasn’t selling at 210 so obviously that was sale price  above market value too . I liked the place and offered 200  if they could complete quickly .
               Their situation was they were having a house built but it wouldn’t be ready for 6 months and they had the dilemma of having to move out and stay with relatives putting their stuff in storage and also they were financing the build and their present mortgage while they still had all their equity  tied up in the house I was buying and an even bigger dilemma as they had no idea when their house would actually sell . My dilemma was I wanted to complete the deal and any delay can just give longer for them to give me backword which has happened several times before .
        They sold to me for 200 and got an AST for 6 months rent free with an agreement to pay 850 from 6 months onwards until they moved into their new home . Hey presto  they got their equity out of the property  ,paid off their bridging loan and builders ,could wait in comfort for their house to be completed and moved out after about 5 months before they paid me a penny . When I did that I didn’t even know it was potentially illegal as I didn’t even know what the acronym SARB stood for when mentioned in this thread but if the FSA I’d fancy my chances in court when I call those very happy vendors to the stand to act as my first witnesses. 
       
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    ``When I did that I didn’t even know it was potentially illegal as I didn’t even know what the acronym SARB stood for`` 

    As they say  - Ignorance of the law is no excuse

    You have reasonable mitigating circumstances though as it appears as you acted in good  faith

    But you would be found guilty

    On the plus side  - Your fine will  probably  be at the lower end of the scale




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

    "I feel this is sometimes over-hyped. I have never experienced any discount for cash. "

    +1

    The vast majority of people could not care less whether you buy with your cash or the bank's cash and are unlikely in the extreme to give up £10,000 or £20,000 for the sake of waiting an extra few weeks that a mortgaged offer might take.


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