Singing Pig

""  As for LTV's, Yes you will still be able to remortgage, this is a long term strategy and property doubles in value roughly every 7 years, rents go up, money itself devalues due to inflation.

This whole strategy takes a while to get your head around, most people will never "get it"  -  

 

how DARE you be so patronising !!!!

 
and how long have you been doing this  ?  and how many 7 year cycles have you been thru ?

 

you sound like a newbie who has just been on a course in Applied maths and and has no basic  knowledge of multiplication tables.

 

this whole strategy takes 2 minutes to get my head round -

it is a very simple strategy - BUT it only works in certain types of property market scenarios  -

it does not work in a falling market,

it does not work in negative equity,

it does not work when rents have not increased at the same % as mortgage payments,

it does not work when Lenders increase their arangement fees sooo much that any reduction in the monthly payments due to a cheaper interest rate, is instantly wiped out and an additional amount added onto the original loan with no rental funds to pay for it ........  and on i could go ...

 

if there is equity left in a property, and the rent pays the mortgage, a Lender will allow a remortgage - if the figures to not work  - he wont - it really is THIS simple .....

 

AS's stratgey HAS  to have a large war-chest of cash behind it for the lean times when interest rates go up and rents dont move  - or did he not tell you that ?  

ThinkBig:

clottie:

i know i posted this elsewhere this week   -   why do folks always ignore the difficult questions ???

 

"" there will come a point  when lenders will simply not allow a further remortgage as the rent/mortgage ratio will no longer stack up as lenders need higher LTVs as we are seeing right now

then what ?  

 if you never ever sell and your kids inherit an estate they cannot manage financially   - how do they  deal with the Inheritance/CGT issue ?

 

 

 

LOL,LOL,LOL

 

This is not a difficult question,

As I said, CGT does not enter the equation,it is only payable IF you sell. When you die, CGT dies with you, check this out with your accountant.

As for inheritance tax, there are a number of strategies for mitigating this, but generally, your children will only pay tax on the equity left in the props when you transfer them over, so the trick is not to leave any equity in the prop.

 

As for LTV's, Yes you will still be able to remortgage, this is a long term strategy and property doubles in value roughly every 7 years, rents go up, money itself devalues due to inflation.

This whole strategy takes a while to get your head around, most people will never "get it".

I'm not going to go into any more detail on this, if you think it's rubbish then fine!, carry on as you are.

I'm not being nasty or anything, just trying to present an alternative way of investing,Which works!!! despite what you think. Ask the Duke of Westminster! His family have used this strategy for generations.

You have to think outside the box 

Less than 1% of investors fully understand the buy and hold strategy.

Wish you every success whatever you do,

Kind Regards,

 

Bruce. 

 

Bless

 Bruce the 7 year double is what he found over a 20 year period.  Ok let's look at this, any area, any property for example.

The price of this example property in 2006 was £100,000

Are you telling me that in 2013 this house will be worth £200,000  ?

That's taken into account the 7 year rule and where we are currently at in the cycle !

That would give us the next 5 years to see this house double in price ????

show us the evidence that rents go up by 100% every 7 years to allow remortgaging ???

 

I'm not sure what sort of relationship you have with your family  but i certainly dont want to leave fully leveraged property to my estate  ...   what a crazy notion

 

the HUGE flaw in this "simple" argument is that AS has not taken into account dramatically changing market conditions  - as we have now  - not only in house prices, but, also in the availability of funding at sensible interest rates with sensible deposit levels....... 

 

the sheer arrogance of the assertion that only 1% of folks understand buy to hold leaves me aaaaaalmost speechless !!!  

 

 

ThinkBig:

clottie:

i know i posted this elsewhere this week   -   why do folks always ignore the difficult questions ???

 

"" there will come a point  when lenders will simply not allow a further remortgage as the rent/mortgage ratio will no longer stack up as lenders need higher LTVs as we are seeing right now

then what ?  

 if you never ever sell and your kids inherit an estate they cannot manage financially   - how do they  deal with the Inheritance/CGT issue ?

 

 

 

LOL,LOL,LOL

 

This is not a difficult question,

As I said, CGT does not enter the equation,it is only payable IF you sell. When you die, CGT dies with you, check this out with your accountant.

As for inheritance tax, there are a number of strategies for mitigating this, but generally, your children will only pay tax on the equity left in the props when you transfer them over, so the trick is not to leave any equity in the prop.

 

As for LTV's, Yes you will still be able to remortgage, this is a long term strategy and property doubles in value roughly every 7 years, rents go up, money itself devalues due to inflation.

This whole strategy takes a while to get your head around, most people will never "get it".

I'm not going to go into any more detail on this, if you think it's rubbish then fine!, carry on as you are.

I'm not being nasty or anything, just trying to present an alternative way of investing,Which works!!! despite what you think. Ask the Duke of Westminster! His family have used this strategy for generations.

You have to think outside the box 

Less than 1% of investors fully understand the buy and hold strategy.

Wish you every success whatever you do,

Kind Regards,

 

Bruce. 

Bruce, whereas i admire your optimism i fear that you have been sucked into a strategy which is high risk an has some fundamental flaws in it.

most people do understand the strategy of buy and hold, it is not difficult, however most will never do it, thats the difference.

i thing the 'which worlks should be changed to 'might work', as has been pointed out we need the corect market conditions, which i am afriad to say we don't have right now

this 7 year doubling thing, just sit down and think about it, look back at the 70's and 80's (the only periods i know about) in the 70's we had runaway inflation and interest rates as well, could your property strategy cope with a 'doubling' of interest rates to be able to benefit from the time lagged property price increases that the inflation will cause, given that rents barely cover the mortgage as it is even BMV

again in the 80's we had a peiod of rampant inflation and high interest rates.

we are in a different phase, we have had low inflation and low interest rates for years and prices have shot up, the government meddle in wage inflation with tax crdeits and the minimum wage, and employing millions an taxing and spending so much and frankly fudge the figures

we have already had the 2000's price boom that a bought of high inflation would bring but without the inflation and the painful interest rates, we have had 'tomorrows' increases today in my mind

i cannot see prices doubling until 2020-2022 thats 12 years minimum 

as has been pointed out, rents also have to rise in tandem to be able to remortgage, this i do not see.

AS's book is an awkward read and the strategy simple if you time it right, perhaps by jumping back in in 5 or 6 years, when the pain has eased

good luck with your mentoring fees, its your cash to spend how you please.....

 

Rik

rents will always be in mathematical relationship with wages - and in any depression  (IF we are in one/are going to have one/will have one)  wages go down - so will rents  - how will AS's remortgaging strategy work then ?

clottie:

rents will always be in mathematical relationship with wages - and in any depression  (IF we are in one/are going to have one/will have one)  wages go down - so will rents  - how will AS's remortgaging strategy work then ?

 

This is one of the problems I have with AS's strategy. Perhaps I am overly risk averse but it worries me when properties are bought without any real thought as to the affordability.  You can't guarantee that you will be able to keep remortagaging every so many years, because you can't guarantee the market, you don't know if the rents are going to have gone up enough to take care of this.  While I am more of a hold long term sort of person, I really believe in building in some leg room so this includes not eating into your equity every chance you get. You need to give yourself some leg room so that if the market turns bad you can still run your property at a positive cash flow.  that's saying something because already many investors are running at a negative and as was mentioned earlier yes there is a 7-10 year doubling but that average was taken over a number of years i.e. around 20 I believe.  How many people can afford to hold say 10 properties making a negative cash flow and not being able to draw down on the mortgages for the next say 6 years?  Hmm, with this sort of strategy, in a difficult market you really have no hope of giving up the day job. 

I have never actually got a bad vibe from Andy and have personally communicated with some of his team.  That said I do think they are money hungry, but whether they are amoral - I am not sure.  Anyway, the truth is Andy has done the sums, but his portfolio hasn't lived through a recession (or price correction if you want to call it that).  Luckily for him his portfolio can probably withstand anything now, because he is making all this extra money from passive investments and off other investors, but the investors he is teaching probably won't be so lucky and they might really begin to struggle in the coming months.  

I really fear the high risks that people are taking.  Thankfully what is currently happening in the market might hit them early before they have made to many mistakes.     Therefore teaching them a valuable lesson before it is to late.

Good answer to Clottie's difficult questions. Great to know Bruce is THINKING BIG. Way to go??? You see Clottie if you want your children to inherit your props after you are gone, yes they will have to pay the 40% inheritance tax, but if you teach them how to get around that, then they carry on where you left off. As long as you can remortgaging your props during your life time and getting your deposit you put out on your first prop, don't you think then over time that Money For Nothing & Your Property For Free comes into the equation?? over time??, hence the answers are in the BOOK. I agree with Bruce some people get it and sad others don't.  

CB

BUZZME:

Good answer to Clottie's difficult questions. Great to know Bruce is THINKING BIG. Way to go??? You see Clottie if you want your children to inherit your props after you are gone, yes they will have to pay the 40% inheritance tax, but if you teach them how to get around that, then they carry on where you left off. As long as you can remortgaging your props during your life time and getting your deposit you put out on your first prop, don't you think then over time that Money For Nothing & Your Property For Free comes into the equation?? over time??, hence the answers are in the BOOK. I agree with Bruce some people get it and sad others don't.  

CB

This is nothing new that AS is selling , please stop kidding yourselves that he has found a new method and anyone who questions it "just does not get it"

Buy, hold,re-mortgage,hold re-mortgage, re-mortgage,etc, never sell, never sell,  die ,  CGT dies with you, IHT tax for your kids, they take over, repeat

 

This is NOT rocket science ! People have been doing it for years !  What experienced investors are saying is "BE CAREFUL" but AS would then say , ignore him he does not get it and they only have your interests at heart. These remarks to anyone questioning "the system" is brain washing tactics and very transparent.

 

Let me explain.

You find AS HAW as a new investor and are wowed by his system.  In 2006 you purchase 40 houses and max them out ready to hold to re-mortgage as soon as prices go up.  You are on a 3 year fixed at 4.89% mortgage.  2009 comes and you are due to re-mortgage 40 houses because Andy's system Say's you can but unfortunately the mortgage market has changed and house prices have not risen enough for you to access another 85% mortgage.  You then jump from 4.89% mortgages on 40 houses to 7.5% SVR .

How does the book explain you pay such a huge increase in your monthly outgoings ?  The system works over the long term yes, but unfortunately to reach the long term you have to survive through the short and medium term.

Now rather than come back and tell me "i don't get it " please explain to me what you are advised to do in the example i have given please ?????