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Hello pigs!

Last post 29 Aug 2008, 10:13 AM by Vanessa Warwick. 1 replies.
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  •  28 Aug 2008, 8:39 PM 567643

    Hello pigs!

    As is obviously is the tradition on this site, I'd like to just introduce myself to all you singing pig-gers out there...I'm Henry and I'm not just new to the site but pretty new to investing in property too, so I apologise for being a bit wet behind the ears, but I've already learnt a huge amount about BLT and property investing in general in the past couple of months, and hey, everyone has to start somewhere. I'm fortunate enough to have a friend who already has a number of rental properties in my area, so have been picking his brains and experience, as well as attending a few property courses, web sites like this one, and generally just getting out there and talking to estate agents, mortgage brokers etc. I own an off-plan apartment in Romania and have renovated a couple of houses in the past, so have some experience in the game. Apart from the contacts I've made in my local area to date (I am focusing on Lambeth and Wandsworth in London, where I live), and the tips I picked up in the past months, I don't have a huge amout to offer right now, but at the rate I'm learning I'm certain that will change soon.

    My strategy is to use my limited capital (currently about 30K, but growing steadily) to buy BMV 1, 2 or 3 bed rental flats in my area over the next couple of years, pulling my deposit back out after a month or so to allow me to buy the next property. I'm limited to paying up to 200k per property on my current budget. I am looking at auctions as well as estate agents to source the properties and hope to buy maybe half a dozen or so over the next couple of years (assuming I can locate enough candidates), and I am also looking into Sandwich Options, which I feel could work well in the current market. I expect to come across a few deals in my area that will be beyond my budget during the course of my search, which I'd be wanting to pass on to other members.

     That's about me, my only question to other members right now is, can anyone recommend a good, efficient solicitor with experience of conveyancing properties bought at auction, particularly underwriting properties at auction?.

     Hope to speak to many of you soon,

     

    Henry

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  •  29 Aug 2008, 10:13 AM 567969 in reply to 567643

    Re: Hello pigs!

    Hi Henry,

    Welcome to SP and property!

    Just a word of caution though.  In theory, you are correct with regards to your strategy.  However, in reality, it may be difficult to pull back your deposits.  You can only do so if the rental income you are achieving supports the additional borrowing.  With the current mortgage products and rental stresses, it is my experience that this is unlikely.

     You can use the following quick calculation to work out what borrowing the rent will support:

    Monthly rent x 12 divided by the product interest rate, divided by the product rental stress.

    When you do the numbers, I think you will be shocked how little borrowing rents actually support with the current mortgage products and rental stresses.

    Good luck with your investing career.

    Kind regards,

    V.


    Vanessa Warwick
    Professional Landlady/collector of bricks/consultant/speaker
    www.4wallsandaceiling.com
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