Singing Pig

Hi John,

Just to quickly jump in here.

From the info you just gave you would get 10%+ return on cap invested.

Lets say 100k pp. 8% yeild so rent 8k pa.

30% deposit (30k).

Mortgage payments on 70k at 7%(you would get better) = 4.9k pa

8k-4.9k =3.1k pa.

3.1k / 30k =10.33% return on capital invested.

Obviously not considering ex's and voids etc.

Cheers

Andy

John, which bank gives you 8% on cash lump sums? Im not aware of any, the highest I can achieve for my STR (sell to rent) fund is 6.31% through Kaupthing edge.

Abbey, Halifax and the like who claim to give you 8%, also fail to mention you can only put in a maximum each month (i.e. £250) which somewhat limits your interest earning potential.

I too am a newbie so to speak in trying to source BMV properties so I share your sceptisism and sentement in regards to these companies who offer packaged deals - too good to be true?! - possibly...........

They no doubt cherry pick the best deals for themselves and pass on the smaller cashback deals to other investors whilst still earning themselves £4-5k finders fee a time, they are in a win-win situation so to speak.

They would only have to out-source (sell on) for example 10 deals before earning themselves a cool £40-50k for what is essentailly just administion,  whilst at the same time negating any risk they would encounter by buying these propeties themselves (i.e. finding tenants rental coverage, market depreciation etc etc)

This is not to say these smaller cashback deals should be scoffed at, you, like me sound as though funds are limited which thus limits us somewhat to competing with the big boys so to speak, this beign the exact reason I am looking at this investment strategy - I want to accumulate an investment warchest.

Cash will be king over the coming months as the housing market unfolds futher allowing those in a strong position to snap up the best deals, my point being maybe these small cashback deals offer a route or opportunity in being able to amass capital which could fund futher aquasistions when the time is rite.

We sound as though we are in a similar situation, two heads are better than one so lets bounce some ideas of each other, contacts, strategys etc to see how we can both move forward with this undoubtedly lucrative area.

regards

 Steve

Hi John, whilst I can not speak for anyone else, our company sells BMV leads because we get so many. Well actually we don't sell individual leads at all, we partner up with major investors in the various regions across the UK. We provide the leads, and our investor partners complete the sales. Some of our regional investors sell individual leads on, either as ready to go deals, or as complete b2l packages.

If you where to ask me why our HQ isn't just doing all the deals ourselves, it would simply tie up too much in terms of resources. By 'selling on' the majority of our leads we get a steady flow of commission, yet no money down. Our main site is www.repossession-stoppers.com

This is slightly different to your situation of which I understand is buying one off individual leads - but I don't doubt the people selling those leads are probably making more per lead, as it does require more admin.

It depends what you are after John.

At one end of the scale, buying individual leads will work out more cost effective per deal if you have/develop the skill to negotiate and finance your own deals. Using a company who provides ready made deals will obviously be more expense due to it being a turn-key solution - but you won't have to do much leg-work.

I can vouch for Rik's suggestion of using a professional negotiatior (http://www.convertmydeal.com) to convert leads for you. Many of my clients purchase our leads and use this service to negotiate their deals - with an excellent conversion rate.

I personally sell mostly unqualified leads which investors have said are "very reasonably priced" (http://www.acinvestments.co.uk/shop)

The reason why most companies don't buy all the deals they come across, as mentioned earlier is that there are very few outfits that have the resources to purchase 50+ properties on an monthly basis, plus a lot of leads will not suit the comanies/individuals purchase criteria/location. By selling leads, marketing costs can be covered and additional cashflow produced.

Hope this helps
 

Thank you everyone who has conributed and adviced on sites and information its much appreciated.

I'm certainly feeling like i have a better idea about these types of companies and the types of services offered out there following a lot of research on the web and following peoples advice here.

What appears to be the next hurdle to negotiate is the financing of the actual deal which i understand everyone is struggling with in the current climate and with MEX no longer offering their one day remortgage i understand was the popular way to do this.

The key for me is to be able to effectively spell it out to myself how i will procede at each stage of the process -assuming it is possible which is the reason for being so keen to completely understand what is required before i jump in two footed and balls it up lol!

It may be best to start another thread on the finance area but if anyone reading this would like to contribute anything regarding bridging and (mainly) remortgaging solutions for this strategy i'd be glad to hear

Hope everyones well!

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