Pioneer Portfolio
How Two Property Investors in the South of England Have Found a Winning Formula with their Clients
Copyright (c) 2010 Katie Sylvester
Over the last year two enterprising property buers in the South East of England have been dramatically increasing their portfolio whilst helping those they have been buying from get the greatest price for their property.
Where other “fast house buying companies” have needed at the very least a 30-35%% discount on the value of the property, these Investors have delighted their clients because by paying full market value for their property, just split over two payments.
In a nutshell, by offering a later payment to the Seller they are able to pay much more for the property in total. This second payment is legally binding and wrapped up, so that the seller can have confidence that they will receive the outstanding balance. The amount of that second payment will vary depending upon the length of time that the seller is able to wait – For those who can wait longer for the second payment, they have been able to offer upto 100% of today’s value of the property.
In buying properties in this way, these investors have been able to overcome many of challenges others are facing from the limited availability of Buy to Let Finance in the UK. They discovered that Sellers in these types of situations were really excited to hear about a new solution:
- Where the Sellers have little or no mortgage on the property. They have helped people with inheritance properties, as well as couples who have lived in their property for a long time, paid off their mortgage and wish to downsize. – They have save down-valuations on Below Market Value deals after receiving unexpectedly lower valuations, they have been able to give the Seller the same amount, albeit in two payments. – Where the rental achievable on the property limits the finance obtainable This is usually on larger properties where rentals values don’t stack but the property is still a good investment. By making the initial payment lower then they have been able to raise as much mortgage as possible to finance the purchase
So why have the Sellers felt this was a good solution for them?
Basically those sellers who for a variety of reasons either didn’t want to or couldn’t sell their property via an Esate Agent. Instead they have evaluated this solution against other fast-house buying offers that they may have had, and found it to be very appealing for the following reasons:
- These Investors have been paying anywhere between 80&100;% of the value of the property which is extremely strong in today’s market – The Sellers have had confidence in the knowledge that there is a robust Legal process to protect both sides which means that in the unlikely even the 2nd payment is not met, the Seller has a legal route they can follow to have their outstanding payment secured against the property
How has this approach helped these Investors?
What a win:win. Essentially through helping others these investors have been able to grow their own portfolio in a relatively short space of time, doing so in a responsible and sustainable way. They have also been able to reduce the number of deals that have broken down as a result of a lower than expected valuation of the property.
This methodology has also enabled us to buy properties in locations that they may not previously have considered, which means that they have been able to help more people who otherwise would have no option but to take a very low cash offer or perhaps have their property reposed.
In summary, this pioneering approach to helping vendors has enabled them to acquire some great properties, whilst helping people in an ethical way.
About the Author
For more info on how you can use the Staged Payment Methodology today to do more property deals and to increase your property portfolio, go now to http://www.everycloud.org/wordpress/stagedpayment/. Katie Sylvester is a co-founder of EveryCloud and a full time Property Investor & Landlord.
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