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August, 2009 Investor options
Taking advantage of the world's best residential property investment opportunity.
How else is it possible to buy a 3 bedroom detached American property, with tenant in situ, for about 5 times less than the property's value 2 years ago? The answer: government subsidy. No other country on the planet could afford to subsidise Banks and other mortgage providing institutions to the extent of the American government. Whether it's sustainable or not isn't the point. It's throwing up a unique opportunity right now.
Buying foreclosed (repossessed) houses is simply helping yourself to a slice of this enormous government hand-out. And as if that isn't enough of a bargain, when a "section 8" tenant is provided, most of the tenant's rent is paid direct to you by the same government that paid off the often big mortgage on the property!
The challenge
Whilst the opportunity is staring one in the face, it's not necessarily a simple matter to cash in. If you go it alone, there are a number of hurdles to jump before benefiting. Here's a list of some of the obstacles:
- The buying. Banks are notoriously fickle and difficult to deal with on foreclosures. They get the government money anyhow, so they don't care.
- The best property is often acquired with little or no public announcement, as part of wholesale deals with big buyers. Or, and this is an uncomfortable fact of life, there might be unethical collusion by the agents to "ring-fence" the property.
- Avoid properties with any lien, debt or claim. It would be a nasty surprise to own a property only to discover there was some large debt on it.
- It's essential to pick the right location, to avoid acquiring an unlettable liability.
- Handling building works, it's no easy matter knowing what building works needs doing and controlling it from distance. It's an unfortunate reality that builders, as a species, tend to underperform when there's nobody to manage them.
- And lastly, picking the right tenant. One that pays and won't mess up your property.
Turn-key, no hassle packages offering 15% to 20+% return net of costs
The above list is, when you think about it, quite daunting. However, it can all be short circuited in one easy step by buying from us. We've done all the hard work. We know you are too busy and just not able to deal with all these issues. You just want the property and rent straight into your hands.
There are the options to buy these bargains. Of course, if you have particular requirements, please let us know, but these 3 offers are our standard packages:
1. One unit package
Many clients just want to test the water with a single purchase. Then when they realise it's for real, they buy others. There's two ways of doing this: Either buy a single property from the property list on this site. Or, if none are available – and that can happen as they tend to sell quickly – just reserve a similar by using the Contact Us form or calling our sales manager, Dan Pennington on 00 44 (0)780 9647987.
The houses we select are pretty much of a similar style. They are 3 or 4 bed family detached houses. On streets that have few or no foreclosed homes, with house proud homeowners as neighbours. Please don't expect the very best upper class mansion areas ! That is just too expensive and the returns poorer. The best property is middle of the road. On decent streets.
And bear in mind that our sale prices of these houses are usually way under current bank valuation for mortgage purposes. Up to 75% under! Crazy, we know, but that’s what we are trying to get across here. THIS IS A ONCE IN A LIFETIME OPPORTUNITY to acquire decent houses far under anything like normal market value.
The one unit package comes as a refurbished and let property. From day one you will earn a return, usually between 15% and 22% NET. Higher gross, of course. Consider the massive capital upside there is and you can see the opportunity.
To purchase a one unit:
Purchase an already refurbished, or in process of refurbishment, property as listed on the property for sale pages of this website. Advantage is that property and income is in your hands within about a month.
However, as these properties tend to sell very quickly, it may be necessary to reserve your property by the following steps:
- Pay $2000 reservation fee. Can be paid by credit card. Just call our offices.
- After about a week, you will receive a preliminary contract stating our obligations to you, such as that the property sale will be completed after the property is refurbished and let. Sign this and return $16,000 dollars first (of two) payments. This payment includes the £500 legal fee.
- After about 8 weeks from paying the res fee, the final payment (which will have the reservation fee deducted from), payment is made of balance. This would typically be around $20,000, as total purchase price is usually around $38,000. Please note, as prices of these houses are increasing, this figure will change soon.
2. Multiple unit package (5+ houses)
    
The above properties were all sold mid 2009. Total rent for 5 is $3,800 per month
This can only be done by the reservation process just listed above. Just multiply the payment figures by the number of houses being bought. Again, they will be conveyed to you refurbished to "section 8" standards, with tenants in place, so you earn from day one of ownership.
The difference with this package is that we can arrange your holding of the properties within a company. This is advantageous for two main reasons: Firstly, it offers a level of protection against personal litigation or claims for divorce. Secondly, it can be more tax efficient.
There is an additional cost of $1000 on top of purchase price as listed above in one unit package, to cover costs. Please note, this valuable company packing service is only available for 5 properties or more, although for tax purposes, we would not recommend holding more than 10 properties in one package.
The figures
Purchase of 5 properties: $39,000 x 5 = $195,000 (plus $1,000 if company is set up)
Income gross (before costs): $45,600 per year
Monthly running costs for 5 properties (property tax plus rental management charge): $1,213
Income net (after costs): $31,044
Net return after costs = 16% pa
When you consider that net return on residential property in typical "mature" markets is rarely over 5% after costs, this is an exceptional return.
And this does not include the real benefit of owning these properties, capital growth! Considering the property of $39,000 sold for $100,000+ a couple of years ago, the potential for some sort of return to normalcy is obvious. And it's happening right now!
And, later, why not mortgage your properties and get (all) your money back!
Don't miss this once in a lifetime opportunity. Get hold of some of these houses before supply dwindles and prices rise sharply.
3. Buy to refurb
There are those who would prefer to pay less upfront, it may be better to buy a foreclosed property and either hold for capital appreciation or refurbish at your convenience. Just look at our property for sale pages (usually first page) for any available. If none are, no problem, just email us to reserve information on the next one up.
Please note, that we have teams of highly experienced builders and usually provide a quote with property details, so you know what to expect if you wish to proceed this way.
For buyers of property not yet in a rentable condition, please note that you will need to board up the property to comply with City regulations. We can have this done for you at reasonable cost. Also, property gardens will need maintaining; again, not a problem and we can arrange this for you.
Don't miss this once in a lifetime opportunity. Get hold of some of these houses before supply dwindles and prices rise sharply.
Call with confidence:
Liverpool office: Dan at 00 44 (0)9647987
Email: dan@property4peanuts.com
Or Kent office: Emma at 00 44 (0)1795 844004
Email: office@property4peanuts.com
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08/31/2010