Economical Election

When you’re searching for a property you need to understand the needs of the potential buyer ortenant who will be occupying your property. There are a series of questions you need to ask yourself to ensure that you have a ready market for your investment.

What is the target market for the property?

The difficulty in obtaining this information will ultimately be based upon familiarity and understanding of the area. In modern day society it is difficult to pigeon hole long held views such as ‘Students prefer to reside in bedsits’, as students often form a partnerships nowadays to rent a 4 bedroom house. Furthermore, the property requirements for a specific market will often change throughout the country as many towns and cities will have different attributes.
The most efficient way to gain the correct information relating to your area is to request the help of local estate and letting agents with reference to location and market requirements.

There are a series of important questions you need to ask estate agents when buying a house to refurbish and sell quickly.
• What kind of people will want to purchase this property and for what reasons?
• What kind of refurbishment will need to be made to suit potential buyers?
• What changes to the property and refurbishment can be made to the property will appeal to the widest buyer market?
• What incentives (if any) would I need to offer to promote a quick sale?

There are a series of important questions you need to ask estate agents when buying a house to refurbish and let quickly.
• What kind of people will want to rent this property and for what reasons?
• What kind of refurbishment will need to be made to suit potential tenants?
• What changes to the property and refurbishment can be made so the property will appeal to the widest rental market?
• What incentives (if any) would I need to offer to promote a quick let?
Once you have obtained the answers required to the questions, you will get a much clearer view of the kind of market the property should be appealing to and the refurbishment (if any) needed to gain the best price for selling or renting.

Summary
In this section you need to have understood the following:
• 4 questions to identify a potential buyer
• 4 questions to identify a potential tenant

Taken From : How to be a Super property Investor

Making sure your potential investment is located in a good area is critical for successful buying, selling and renting. The key is to ask the right questions to get the facts about the areas you wish to invest in. Below are a list of questions you should find the answers to in establishing a sound location for your investments.
• How well is the local area serviced by transport i.e. motorways and train stations?
• Which schools are within the catchment area?
• Are there any plans for major regeneration in the near future?
• Is the local economy dependent upon a major manufacturer?
• How close are the major retail parks?
• How close is the city centre?
• How easy is it to get to local amenities like libraries, leisure facilities, parks etc?
• What is the level of crime in the area?
• Is the area predominantly rental or owner occupiers?
• Is the area vulnerable to flooding?
• Is there an over supply of a particular type of housing in the area?

Summary
In this section you need to have understood the following:
• 11 important questions to ask about the area you intend to invest in

Taken From : How to be a Super property Investor

There are many alternative ways in deciding the profitability of your property investment. Increasingly you will find investors achieve varying degrees of profitability from their investments, ranging from 10% profit levels to deals realising 30% and above. It becomes very individual to each investors requirements.

There are a number of basic questions which need to be answered to fully understand the makings of a profitable investment.

Question 1
Can I borrow money from a lender to make the purchase?

For a Buy-To-Let mortgage to be approved an assurance on approximately 130% rental coverage is needed. At this point you need to contact local letting agents to receive their assessment on rental valuations, after which your mortgage broker can calculate the sustainability of the monthly mortgage repayments required to purchase the property at the present market value.

Question 2
Do I have the required 15% deposit available?

You will be required to provide a 15% deposit to meet the 85% loan to value. This can be provided either as a cash amount or as 15% equity in the property.

Question 3
Is the property 20% or more below market value?

Majority of the profit made on an investment is through the purchase. You may need to negotiate the purchase price to at lease 20% BMV. Should you need to, this will allow you to release the equity out of the property at a later date to realise as much of your investment in cash as possible. This will increase my ROI (Return On Investment). Should you decide to sell up anytime in the future, there should be a healthy profit after tax.

Question 4
Will I be able to sell the property quickly?

You need to research the area to establish that should you wish to sell quickly, will you be able to do so? This is important as you may want to release the funds from the investment to purchase further properties.

Question 5
Will I be able to rent the property quickly?

You need to also research the rental market to establish that should you wish to let the property, will you be able to do so? This is also important as you may want to rent the property out over a period of time to benefit from a positive cashflow.

Question 6
What will be my cash-on-cash return?

When calculating the cash-on-cash return to establish your ROI, you should usually plan for at least 25% ROI – anything more is a bonus.

Question 7
When will I break even?

Taking into consideration the number of months or years, calculate the length of time it will take you to recover the cash injected into the property including deposit, purchase costs, refurbishment etc. Keep your cash flow forecast positive yet realistic.

Question 8
What is the Net Yield?

When calculating the net yield, anything less than 4% will prove cash flow to be minimal and not worth investing in for rental purposes.

The answers to the previous questions will need evaluating in detail. A positive or negative picture will form to help you decide whether the property is worth the investment.

Use your time productively, viewing properties that do not stack up can waste an awful amount of time. Request the relevant information from estate and letting agents, together with your own research. This will save you time and money. Prior to viewing potential property investments use the information to calculate the profitability, thus you’ll only be viewing properties that have potential profit. This may well prove crucial in the future as you progress as a property investor when you will be dealing with multiple investments in building your portfolio.

Summary
In this section you need to have understood the following:
• Evaluate 8 important questions to analyse a property investment

Taken From : How to be a Super property Investor

Setting up a business as a sourcing agent has many advantages for a property investor. You will obtain valuable knowledge and contacts while sourcing properties for other people who have no time and few contacts of their own, giving you the necessary experience to eventually source your own properties.

A sourcing agent usually charges a reservation fee of approx £500 followed by a success fee on completion of anything ranging between 0.5% to 2% of the final purchase price. The success fee can be quite substantial as many properties are over £100,000. However, it is imperative to collect your success fee when contacts are exchanged which can be organised through your own solicitor.

Options

An option is an agreement that gives you and only you the right to buy the property in a specific timeframe e.g. 3-6 months. Make the agreement legally binding, and then sell the Option for profit. For example: You agree to purchase a house for £75,000, when its true surveyed market value is £100,000. The seller signs an option agreement which gives you the exclusive right to buy the property for £75,000 within the next 3-6 months. You have to pay the seller for the agreement to make the contract binding but the amount can be as little as £1 if both parties agree. After the agreement is signed you register the option with the land registry. At which point you can sell the agreement for £10,000 or as much as you can get.

In this situation you need to have a lot of pegs in the right holes. The seller is happy because they’ve sold the house. Your buyer is happy because they’ve got a below market value deal and you’re happy because you’ve just made £10k or more for relatively little work without owning the property.

Mortgages

The following examples show the various types of mortgage used to purchase an investment property.

Repayment Mortgage

Provided you have repaid the loan, this traditional type of mortgage remains the only way the property is actually guaranteed to be yours at the end of the mortgage term.
Your mortgage loan is divided into capital repayments (the money you borrowed) and interest payments (interest you’re being charged for the loan).
As you pay off your mortgage every month you’re actually paying off a portion of the capital loan. It may appear you are being charged more but unlike other types of mortgages you’re paying off the capital – not just the interest.

Interest Only Mortgage

An arrangement where you’re only paying off the interest on the loan. None of your original capital loan is being directly repaid. You are expected to have made provision by setting up a separate investment fund into which simultaneous monthly payments are made to coincide with end of the mortgage term.

This type of mortgage is usually preferred by most investors as the repayments are cheaper allowing the property to stack up against the rental income and less money is tied up in the property. There are also tax benefits to be made claiming back on the tax on the interest payments made.

Buy To Let Mortgage

After the interest only mortgage this is the next cheapest option. Generally you will be required to provide 15% of the property value as a deposit. Upon submission of the deposit, the mortgage company will loan you an amount based on the rental income of the property you are purchasing, where rental income can be a minimum of 130% of the mortgage repayments. This percentage will vary from lender to lender.

There are many other types of mortgages available to suit your individual needs – the following are just a few. Tracker, Capped Rate, Current Account Mortgages, Discounted Variable Rate, Fixed Rates, Flexible Mortgages, ISA Mortgages, Pension Mortgages, 100% Mortgages, Variable Rate and many more.

Bridging Loans

This type of loan is usually taken out to solve a temporary cash shortfall that may have arisen when buying a property or alternatively when paying for a renovation.

A typical example when a bridging loan is required is the cross over between selling one property whilst purchasing another. Another reason for requiring a bridging loan could be the purchase of a property at auction. As bridging loans offer more risk for the lender than the normal housebuyer’s loans, they are more expensive and should only be used where you are certain they will be repaid within 6 months.

Credit Cards

Although I would never advise anyone to purchase a property using credit cards due to high interest charges, you may find them useful to help pay for fees and some refurbishment.

Credit Record

There will always be a time, as you progress in investing, when you will need to borrow money from a lender. The lending can come from various sources such as credit cards, mortgages, personal loans, HP agreements etc. The success of borrowing money is due in the main to having a good credit rating.

Your credit record will detail every time you may have borrowed money previously, every time you moved house, every person registered at that address and so on.

It is critical to keep your credit rating as high as possible to give you access to the best forms of lending with the best rates. The rating greatly influences your approval of any type of loan.

It would be beneficial to get a copy of your credit record to ensure that the information kept on your file is correct as mistakes can occur. Credit rating agencies like Experian (www.experian.com) and Equifax (www.equifax.com) can provide you with the details on your credit for a small fee. Check you credit records and address any problems before you attempt to apply for any borrowing.

To maintain a healthy credit record ensure that your bills and credit card payments are made regularly and on time. Ensure that anyone living with you also maintains a clean record of credit.

Summary
In this section you need to have understood the following:
• Understand 14 ways to raise finance easily
• How to access, check and maintain your credit rating

Taken From : How to be a Super property Investor

William A. Ward once said, “There are four steps to achieve success, that is, the right planning, preparation of a mature, good execution, and not easily give up.” Ward Use this philosophy for success.

Details as follows:

Follow the development of the era, Join in organizations related to your business. Many read and dig as much information as possible. Internet will help you a lot.

Create a financial plan
Record all income and expenses for each day. Create a target short-term and long-term. Never submit to the financial condition of the lot. Take into account the well.

Estimate cash flows
You have to estimate the flow of cash, at least three months. Do not make budget expenditure is greater than that.

Form of advisory council or search experts, to provide ideas, suggestions or criticisms against you and the products offered
They can be friends or a trusted family member.

Keep a balance between work, leisure, and family
Ngoyo unnecessary, because something is done with ngoyo, the result will not be maximum. Moreover, the body and brain needs a rest.

Develop a network (network), No one acquainted and socialize with people who have or can support your business. Who knows there are ideas that can be extracted.

Discipline / motivation
Terberat aspect in running your own business is the discipline or motivation to work regularly. To overcome this, make a list of what must be done today and tomorrow. Specify that the target must be achieved in this week.

Always alert and ready
Diligent diligent do-evaluation of the market, products and systems
marketing. If necessary, change the way in order to work more efficiently. Improve ways of marketing or product quality.

Love your work
How will success, if you do not have a “sense of belongin” on the job and the resulting product. Love the work and the production itself, and the money will follow you.

Do not give up easily
The successful businessman also had experienced a failure. If you want to succeed quickly, flee to rise and learn from failure. Do not grieve too long, let alone capitulate.

The leader is a person that shows direction. Someone who has the soul of leadership will always know where the direction should be taken. Its decisions based on solid and self-confidence, along with data and information that is accurate.

In the business world, leadership and pioneering spirit is absolutely necessary. Each of the run itself is a leader, because consciously or not, he has put himself in the position of leader. The position is required to always be able to take decisions according to the calculations themselves are the most wise and good. There can be no doubt and hesitation. Once hesitate and doubt, the decision taken will be too late and not effective anymore.

On the other hand, employers who do not have the soul of leadership, will suffer at the very time must take a decision. Despite the many he’s maid, he will still always be covered so that doubt inclined to follow the opinion of the dominant figures of himself. Employers usually like this kind can be difficult to bring the company towards progress means.

Employers who are likely to progress steadily, is the soul of leadership that has a very prominent. Characteristics they are usually very specific, namely the decision lunge and kick it often is not considered common and in general from other employers. They be different?.

One example, is Kim Woo Chong, a leading wiraswata of Korea, the founder of Daewoo Group. Kim was never affected by the lunge kick-the-other and participate in follow-up pursue business trend that many-many people do.

At the time of the race the other race-search market in the United States and Europe, it is surprising just shove countries such as the iron curtain Russia and allies share. More surprise again, he also embrace the countries are very far in fear Him? and forbidden? by countries precious resources adherent capitalism, such as Iran and Lybia.

However, the fact that Kim prove correct. With that decision, and immediately he and a business group, Daewoo, developing into one of the chaebol (conglomerate) in Asia and is everywhere in the world including the United States and Europe.

The most difficult part of getting into property developing is usually based round never having enough money to put down as a deposit or realising cash for refurbishment costs. Simply working longer hours or doing overtime only seems to take away more of your time from property developing.

There are a number of positive ways you can raise the monies required to get you on the property ladder enabling you to build a property portfolio.

Ways to raise money

Personal Savings

You can use your own savings to fund the purchase of an investment property. The advantage of this approach is that although you’re risking your own savings, you will save on loan interests and you can avoid any restrictions that may be imposed by borrowing monies from other establishments.

Borrowing from friends and family
Borrowing the funds from family or friends is an efficient way to raise money for property investment. Unfortunately the funds can be limited and often come with time constraints, putting unwanted pressure on you to sell or refinance the investment quickly to return the funds.

Remortgage
Being a homeowner, you may have sufficient equity in your property to be able to remortgage. Although this will probably increase your monthly repayments, it is one of the quickest and easiest ways to raise a deposit.

Joint Venture (JV)

Using other people’s money is definitely an effective way to raise finance. There are many people who are ‘sitting pretty’ with plenty of money in their bank account who do not have the time or inclination to use the funds for property investment. Begin by looking to a joint venture with close family, friends, work colleagues eventually networking with people too busy to invest themselves but who would be interested in a joint venture.

Here are two examples of ways in which a JV can work for you.
1. Equal partners can both contribute 50% each towards the deposit and refurbishment costs.
2. A silent partner finances 100% of the costs, you in turn source, purchase, refurbish and sell the property splitting the profits equally.

Never undertake a JV without seeking advice from your accountant and solicitor who will be required to draw up a JV partnership agreement. This will legally protect both parties should there be a dispute.

Property Club
Taking the JV theme further and introducing additional partners to raise the finance means you are potentially creating a Property Club. Similar principles apply as with the JV partnership. However, with 3 or more partners involved be sure to establish the goals clearly, outlining each partner’s role and their responsibilities.

Lead Generator/Introducer
When you begin to network within the property circles, you will establish business relationships with other professionals involved with every aspect of the property sector. This will enable you to make easier connections with accountants, mortgage brokers, solicitors, insurance companies, letting agents and estate agents etc. If you capitalise on these professional connections establishing a business arrangement with each category of service provider, you can command payment for every lead you pass on to them.

For example you can easily request £200 - £300 for every person you refer to your mortgage broker. Setting up this kind of referral rate with each professional will soon accumulate a sizeable deposit over 6-12 months.

Taken From : How to be a Super property Investor

Using delaying tactics can help apply pressure on the vendor. Here are a few examples. Remember to recognise these tactics when a buyer applies them to you.
• I need to confirm a few details with my partner i.e. wife/husband, girlfriend/ boyfriend or business partner.
• I just need to go over the figures again and I’ll get straight back to you.
• I need to organise a damp and timber report to establish the extent of the damp proofing costs. This is usually undertaken by the estate agent and should not cost you anything.
• I need to organise a survey on the property, this being a cost you will need to pay.
• I need to arrange an estimate from the builder for repair work.
• I will need to speak to my mortgage advisor – to go over the figures again.
• There are a number of other better priced properties I still need to view.

A major mistake made by investors in negotiations is to believe they need to offer the asking price on a property. Their desperation in securing the investment will encourage the vendor to feel they should have asked for more money and can instruct the advertising of the property to continue until the exchange of contracts.

At this point the investor can be at risk from ‘Gazumping’.

Practice negotiating whenever possible, ridding yourself of any fears until you become confident of anticipating any queries or awkward questions. Let it become a natural instinct to negotiate.
Always make a low offer, bringing down the vendors expectation of their own property, following the low offer with a low counter offer.

Ignore the number of potential buyers who view the property or those who make an offer, they may not complete the negotiations or fully intend to purchase the property. Ignore the usual estate agents spiel that there’s great interest being shown and a number of high offers have been tendered. How will you know if this is true? You will soon be made aware if there is considerable competition to buy the property because your offer will not be considered at all and the potential investment would not have proved a bargain.

React with shock, surprise, gasp, act as though stunned when you are told the asking price by the vendor. This may help in forcing the vendor to re-think his property’s value.

Importantly – if after the negotiations have taken place and your offer has not been accepted, let the vendor know that was your final offer. Never go back and increase your final offer, this will only serve to ruin your reputation and wreck any credibility you had amassed with the estate agents. Next time you tender a final offer – they will not believe you.

If it is possible – always leave the door open if negotiations fail to materialise. Interestingly, the best way to orchestrate this is by stating that although you cannot increase your final offer, should their vendor require a quick sale then please ask them to come back to you prior to re-advertising the property. This will inform them that at no stage will you increase your offer, however, you would be willing to help with a quick sale.

Summary
In this section you need to have understood the following:
• The four main points about negotiating
• Understand the effects of Emotional Time Pressure
• 7 tactics to use Emotional Time Pressure to your advantage
• End failed negotiations with the possibility of future prospective contact

Taken From : How to be a Super property Investor

Studying the techniques used by professional negotiators and how to apply them could save you thousands of pounds, specifically when these negotiating techniques are being used against you. There are a number of points that you will need to understand and act upon them immediately to turn a sale to your advantage.

Point 1
If you are going to employ the methods outlined in this book to acquire quality leads, then you should have more deals on the table than you can handle, from this position you can cherry pick the best deals. The critical point to understand is not to let yourself slip into a position where you become so desperate for a particular property that the investment proves too expensive or worse – you lose money on the deal.

Point 2
A common denominator remains, the vendor will always need you more than you need them. The vendor is normally under greater pressure to sell than you are to buy. If this scenario is to be borne out, then the vendor’s need to meet your evaluation will be greater than for you to meet their price. If however, the vendor is not in any rush to sell, the probability of you striking a good deal becomes limited. At this point it may be wise to walk away from negotiations altogether.

Point 3
Estate agents are and must be paid by the vendor who has employed their services. It’s in their interest to sell the property for as much money as possible to realise a greater commission. The vendor still pays the agents even if the vendor is prepared to sell at a much lower price.

Point 4
There are three possible consequences resulting from a negotiation.

Vendor Wins, You Lose
The vendor insists on holding out for a better deal or your offer is just not accepted. If this eventuates – don’t worry, there are many more profitable deals to be made elsewhere.

Vendor Loses, You Win
The vendor accepts your offer by taking a considerable loss. You purchase a property with at least 20% margin of profit.

Vendor Wins, You Win
The vendor accepts an offer sale in the knowledge that you will complete quickly, with the vendor sacrificing the asking price. You obtain a property with at least a 20% margin of profit. Throughout the negotiations there is a limiting figure that controls how much you as a property investor can pay for any property – your ceiling figure. For the deal to stand up you must never negotiate past this figure. Keep this figure in your mind at every stage throughout negotiations, every offer and counter offer. Going beyond this figure could result in loosing a great deal of money.

Understanding ‘Emotional Time Pressure’
Always remember, in most cases the vendor needs to sell as quickly as possible. At this point in the negotiations, it’s in your interests to put the vendor under ‘Emotional Time Pressure’. At each stage of the negotiation, your skill will be required to ‘play for time’ or to use strategic delaying tactics, in doing so you will be putting the vendor under emotional stress. The longer the period of negotiation takes – the greater build up of emotional pressure on the vendor, resulting in the vendor growing tired of negotiating. Realising he/she will not wish to go through another set of negotiations with another buyer should these fall through, the vendor often strikes a deal that suits you. It’s nearly always the case that the vendor wants to sell quickly and move on with his or her life. Emotional pressure can prove to be an effective tool.

Taken From : How to be a Super property Investor

The ideal long term strategy is to create a steady stream of motivated sellers knocking on your door. In short, you will be well placed to assess each deal and cherry pick the most profitable ones. This would be every property developers dream but with careful and strategic planning, you can achieve this by employing simple, cost effective marketing techniques.

Estate Agents
Register your requirements with all the estate agents in your area. Let them know exactly what you’re looking for.

Letting Agents
You may not wish to or be ready to let your property simply because you have not reached that stage however, letting agents may let you have details of the landlords on their database who may be offloading properties for various reasons. With their assistance and a little relationship building you could be considered before the estate agents.

Adverts
Placing small punchy ads in local newspapers is a great idea to effectively target specific locations that meet your criteria.

Leaflets/Sales letters distribution
Leaflets or introductory letter distribution is an extremely effective way to target your specific audience in locations that meet your criterion. The accessibility of digital printing has brought the cost of printing down to the point where this marketing process becomes achievable and very cost effective.

Property Newspapers and Magazines
Nearly all cities, towns and villages operate or receive a property guide promoting buying, selling or letting sections. Subscribing to these publications will allow you to monitor the housing market. Pay particular attention to a property that may have been reduced for a quick sale or properties that are advertising for a buyer through multiple agents, both are a strong indicators of a desperate seller.

Auctions

When opportunities present themselves visit property auctions and allow yourself to become familiar with the procedure of bidding. Auction rooms are interesting and often daunting places to visit, however, you may find that out of 200 to 300 strong audience – only a handful of people will actually bid on a property.

Buying at auctions can present a whole load of restrictions which can dramatically reduce the time in making calculated decisions on investments. You have the time between the advertising of a property to the auction date to do the following; get a survey, analyse the legal paperwork, research the location, arrange the non refundable deposit, arrange the insurance, calculate the refurbishment costs, submit pre-auction bids, get comparables etc. Pretty much everything you would need to do between a viewing to exchange of contracts on a regular purchase within a 21 to 28 days restriction. Also, any costs incurred for all the preparation can be wasted if your bid becomes unsuccessful on the day. However, if your bid does become successful then you are fully committed to buying the property unconditionally. Failing to complete on time may incur severe financial penalties with a possible loss of deposit.

Friends and Relatives

Ensure all your family, friends and relatives are aware of your property developing as this close and trusted relationship can easily promote a below market value price.

Websites
Take time to create a simple website to promote your search for properties at ‘Trade Prices’. If help is required at this point in creating a professional and modern website styled for ease of use then email
me at info@publicangel.com.

PublicAngelMembership.com can help you find BMV properties
Within my own website, I have created a section where you can register your interest as a property developer and I will assist you by forwarding properties that are available below market value in your area.
Click http://www.publicangelmembership.com

Land Registry
If you should find a distressed property or a house in a poor state of repair, take note of the address and obtain the owners details via the Land Registry. Once you have received the details post them a letter showing interest in wishing to purchase the property.

Solicitors
Alternatively, once you have obtained the property information from the Land Registry you may wish to request your solicitor to write a letter on your behalf. A letter from a solicitor will bear more weight with a potential seller and may precipitate a sale.

Networking
Without doubt, one of the most effective ways to acquire a higher profile and build relationships with people who will help you cultivate your career as a property developer is networking. Network at every opportunity. Be present at every available property network club, property exhibitions, seminars etc. Make the effort to be seen at development open days, auctions and local council meetings. This course of action will raise your profile and introduce you to an important learning curve with regards to what other like–minded investors are doing. Significant connections are to be made through networking.

Summary
In this section you need to have understood the following:

• 12 common ways to seek out motivated sellers

Taken From : How to be a Super property Investor