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  • Buy-to-Let

    Valuation of a portfolio held in a company

    Have just purchased my first property in a company. Paid 85k, value 110k, mortgage 58.5k ie £184 pcm, rent £595 com.

    Let's say over the next few years I manage to build up a portfolio of ten properties like this and then sell the whole company as a going concern. How much would the company be worth ?

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    are you on capital and repayment ??

    what growth rate per year

    when will you buy the rest ie are you buying 9 this year and if your buying how much is each property

    If your still buying for the same price say in five years you will not have any capital growth


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    Learn Change and Adapt ?????

    All comments are for casual information purposes only. If you wish to rely on any advice I have given please ensure you obtain independent specialist advice from a third party. No liability is accepted for comments made.

    On interest only at 75% LTV of purchase price.

    Assuming about 2-3% growth per year. Buying three each from now on in year one, two and three.

    I realise that there are loads of variables in this scenario, just looking for some kind of rough rule of thumb idea.

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    very rough fig at best 1.5m capital valuation

    lending 585k

    But you have not mentioned you costs of setting each property up ie Stamp Duty ect

    You have to sit down and use a spreadsheet date you purchased each property ect 

    simple says take 1.5 m away from lending Your Company would make a profit of 1m

    and then you would need to take advice on how you extract profits could be taken ie salary or dividend or both


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    Learn Change and Adapt ?????

    All comments are for casual information purposes only. If you wish to rely on any advice I have given please ensure you obtain independent specialist advice from a third party. No liability is accepted for comments made.

    Well the obvious thing to ask here is why you believe the property is worth £110k when you paid £84k? The value of anything is the price someone else is prepared to pay for it. If you bought it for £84k, that’s what it’s worth..Why would the seller sell their property for 25% less than it’s worth? This whole BMV thing reeks of Sales speak to me..

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    Private sale, got a good deal, spoke to local agents, looked at comps, know the local market. I agree though that most supposed BMV deals are a load of nonsense but now and again one pops up.

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    The real test would be if you purchased in may what would a valuer say the value was in October of the same year

    I would imagine he would say its worth similer to the price you paid in may

    This is why I say deposit generation is difficult to do now all depends on the man with the clipboard

    the only way to do this is have the deposits in your bank for the first five purchases

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    Learn Change and Adapt ?????

    All comments are for casual information purposes only. If you wish to rely on any advice I have given please ensure you obtain independent specialist advice from a third party. No liability is accepted for comments made.

    I agree they do pop up once in a while because a multiple of factors all come together at once

    25% is right on the edge though for me . But even if you are 50% out of tune you still got a 12.5% discount which I would def still  invest in at that level of true discount. And you will never know of course until you try and sell it or remortgage it . When i do that that`s when i know I was right as i have figures on a bit of paper to prove it. Up to that point people are welcome to be sceptical . I expect it .

    I once had a 86K mortgage on a tracker rate . I paid  precisely £0 pcm on it . It was free and I was getting £750 rent pcm but had a 86K mortgage costing me nothing !  People couldn't work it out . I played 20 questions with them . They didn`t believe it was possible  until I showed them the statement from the lender. Sometimes you can beat the odds and its beautiful when that happens,

    When you ask  what your portfolio will it be worth in 10 years as a going concern,  is that selling the whole portfolio lock stock and barrel or just selling the management side of it ?

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


    I was once in the same position in that I had four apartments on mortgages of .51% under base when the base rate fell to .5%. For a few glorious months I was paying nothing, until the two year fixes ran out.

    As far as the portfolio goes, I would look to sell the whole thing as a going concern. I realise that this is one of those "how long is a piece of string" questions. Was just hoping to get a vague idea.

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    The company will be worth:

    (value of properties as valued by a surveyor) - (amount of mortgages outstanding) + (cash in the bank)

    The new MV for similar properties near yours is now £84K. I wouldn't expect this to recover in 3 years.

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    So you are saying that the value of someone buying a going concern that is producing rental income from day one is zero ?

    Also that if one property is sold in an area for below market value this will crash the entire local market for three years. I really don't see this. I know this market well and have been purchasing properties in it since 2006.

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