Welcome To SingingPig.co.uk

hi,

im new to this type of investment and have been doing some extensive research into buying bmv property. i just wondered if you nice people would answer a few questions i have?

firstly, how accurate and close to what a valuer would say are property value estimates on sites such as zoopla and mouseprice? would it be useful or foolish to use these figures to work out potential deals?

secondly, what recommendations do you have for places to buy leads from for someone starting out? i wish to buy on a no money down basis, so im guessing that a good lead would only be payable upon completion?

can i assume that if a property is bought and mortgaged for a price which allows for 125% of the interest payment then it is a good bmv deal?

sorry if these questions seem foolish but i just need to get my head around it!

thanks in advance

Hi there - it’s Hannah from Mouseprice.com here.

The accuracy of our free valuation estimates differ between properties depending on the amount of data we have on them. We are adding new data to the system all the time, which improves the accuracy of our valuations.

We estimate that around 85% of the values we give are within +/- 20% of the sales value. As I’m sure you’re aware, valuations aren't an exact science and the actual selling price can end up being rather different to the surveyor and estate agents' valuations.

We do not recommend putting any reliance on a valuation estimate - the site is intended as a resource for users to come to their own conclusions based on comparable evidence.

I hope that helps! Please let me know if you have any other comments or questions about Mouseprice.

Best wishes and good luck with your research!

Hannah

To answer your points

firstly, how accurate and close to what a valuer would say are property value estimates on sites such as zoopla and mouseprice? would it be useful or foolish to use these figures to work out potential deals?

As Hannah more or less says - ignore these sites for true vals. - they can be dangerous for your wealth - a tolerance of +/- 20% is suicidal to follow.

Hannah states..

We estimate that around 85% of the values we give are within +/- 20% of the sales value. That reads to me that 85% of valuations could be 20% wrong! I think that we have to applaud her honesty though.

Maybe that's a typo? - if not then they really shouldn't be giving any valuations. It certainly isn't a 'valuation service' more likely a 'valuation dis-service!'  Anyone taking a valuation with an admitted possible +/-20% tolerance built in is asking for major problems.

You have to have a local experts valuation...that can either be yours - by becoming and expert - or a respected switched on Estate Agent. You need to know a selling price and not an asking price. currently in the UK the % achieved of asking price is an average of around 93%. However as with all averages - you should not rely too heavily on therm. ALL houses are unique.There are 000s of micro markets in the UK property sector and you should make it your business to become an expert in just one of those - your own.

secondly, what recommendations do you have for places to buy leads from for someone starting out? i wish to buy on a no money down basis, so im guessing that a good lead would only be payable upon completion?

You pay, quite rightly, in my opinion, for a lead upfront on a no refund basis. You are literally buying a lottery ticket for say £50 - £100. the thinking behind it is that if you do a deal every 10 leads then you will have forked out around £750 for the pleasure. I do not advocate buying ready made deals (read up on here about them - and potential pitfalls) but am less against buying leads - because at least with leads you have more of an involvement in negotiations and 'should i buy the house or not?' decisions. However having said that I'm not keen really on buying leads either. Buying leads - unless you are disciplined can lead you away from your geographical area of strength- and that can make you weak.Most leads (not all) are 'polished up' for the consumption of gullible people - it would appear.

'One born every minute etc....'

can I assume that if a property is bought and mortgaged for a price which allows for 125% of the interest payment then it is a good bmv deal?

I don't think so because I always say you should look for properties that stack up (your example) AND have massive discounts too. You can do deals at OMV that meet the criteria you mention - so that wouldn't, by definition, be bmv!

House worth 100k - market rent 495 pcm omv bought for 100k - 75k borrowed £340 mortgage / £425 rent - this stacks - but is it a good deal?And your tied up deposit is to be taken into account...no equity from day one.

Get the same  house at 65k by using a nmd technique - then mort is £270 rent 495 plus no deposit tied up! 35k equity day one. Dont use nmd technique - buy at 65k - borrow 75% and you still have a good deal! Always make sure there's big value at the front end.

Hope this helps?

Hannah,

Thanks for taking the time to reply and to explain the range of values your site is likely to produce. Few of the sites provide any details so it is great to see you have stepped up.

John Corey

www.ChelseaPrivateEquity.com/blog

Follow me on Twitter-> www.twitter.com/john_corey