how many credit cards do you have?

YorkshireBoy

monkeysnail wrote:

So, you guys, do you think it's possible to raise 50K in 1 year between me and my husband?

Well, the simple answer is yes - because we've done exactly that for stoozing purposes. In fact, we "raised" over £72K in 4 months, and others have amassed much more than this. However, it doesn't matter if I have to give it all back tomorrow* because it is available to me in a savings account.

The golden rule in stoozing is don't take risks with the money. In fact, I'd actually be happier investing in shares than buying a £400K (new-build) property at the moment.

Anyway, as you've clearly made your mind up, don't forget to factor in your minimum payments of £1,000-1,500 per month, and remember to apply in plenty of time for your round 2 cards.

Finally, I do hope you become the first millionnaire in your family, but I fear you could go bankrupt in trying.


* It does matter really but I'm just making a point.

empfun

monkeysnail, is your plan to use a credit card to pay for a desposit for a flat? I didn't realise you could do that.

seaniboy

if its really what you want approch the previous credit card companies, EGG activated my old account

Galstonian

Yes it might be possible.

Is it wise is another question altogether. It sounds like you are building up a portfolio of properties and are using extremely heavily geared financing. You don't say that you have looked at the rental yields, costs of potential voids, impact of potential changes in interest rates, tax issues, insurances or a whole raft of other things besides.

As with all bandwagons there is/was money to be made but you need to be sure of where you will land if the wheels come off. I'm not suggesting that you should not take risks, I'm suggesting that it is essential to be able to calculate them beforehand.

Best of luck.

monkeysnail

That's why I probably need SBT card to pay into my current account to fill up the deposit money..

Calculations of rental income less mortgages, etc including voids, service charges, etc are covered even after I remortgage the properties.

bob_builder_2

monkeysnail wrote:

By the way, the unit that was valued at 400K is now being rented out and the tenants rent covers the mortgage.

Somebody is paying £1700 pcm to rent a flat?! :eek:

monkeysnail

Oh yeah definitely. Our 3 bedroom flat is being rented out by girls who work in canary wharf and they pay £420 per week or £1820 per month.

Also, I am an accountant, so when it comes to figures, i am quite accurate.

Also, I am using debt to buy assets or investment properties. I am not using the money to buy consumer products.

I think this thread should be on the property thread and not on credit cards.

Rafter

OK. Understand your motivation and what you are doing now.

However, as a credit card company would you lend you £50k when you have 3+ mortgages at 85%?

That huge debt has to be declared on an application form and will show up on your credit record.

It is only possible to build a big property portfolio when property values are rising fast ( you can remortgage existing property to free up deposits for the next) or through a profitable portfolio which is generating cash each month.

I'm an accountant too. I also know that to make money out of property you need capital or other investments to weather gaps in rent or times when property values are not rising.

It is also good to have some properties that are generating a decent rental yield to fund more speculative purchases which rely on capital growth.

Good luck to you, but it seems to me you will be sitting on a £1,500 per month bill if one of your properties is void. If house prices in london do fall by 10% you will have wiped out 2/3 of your investment (15% deposits).

This is speculation big time and you may want to think long and hard about whether you are exposed enough to property and ought to look to less geared or more guaranteed investment returns.

The national lottery perhaps????

R.

monkeysnail

The thing with properties is that when you remortgage and get your cash or deposit back out, even if the market drops by 10%, as long as you do not sell or in a hurry to sell, you do not lose anything.

I do not buy and sell. I want to hold it for the long term. Around 25 years at least. I know there are capital gains implications, but I am very much aware of that.

Also, I am not investing in a third world country or dodgy areas. I am investing in London. And population in London is just getting higher. People would need a place to live. So, either they buy (which will bring up the market value of the property) or they rent ( which would increase rental yield)

The funny thing is, if properties are highly speculative, why do banks lend you money even up to 125% of the value of your property, as compared to borrowing from banks to fund stock investing.

If you do the latter, banks will just laugh at you. While if you appoach a bank to buy a property, they give you the best interest rates available. This is because they know that property prices rises historically. There may be some dips once in a while, but overall, they rise.

If interest rates go up, I am covered as most of the properties I own are on 4.75% interest for 5 years.

lush_walrus

I tend to agree with the others, although I agree that property is always a wise investment, as you have already released all of the equity in the properties you already own, you are putting yourself at a huge risk. By allowing yourself no real space between the rental yeald and property costs the inevitable gaps in tennants, wear and tear that will need repairing with each new tennant on high spec properties, etc the funding for these items may well need to come out of your personal income, and if you multiply these costs further by more properties it could tip the balance.

But besides that the level you will be able to borrow on credit cards will be dependant on whether you already have mortgages that are not BTL, your level of income etc. Possibly you will be able to borrow that amount, but a lot of the banks are starting to offer lower credit limits than a couple of years ago. The only way to really test it is to read the stoozing articles to find the best 0% cards and start applying, gradually as if you apply all in one go then the credit card co's may look into all of the recent applications and think that you are having sudden money problems and are a high risk.

How long are the developers happy to hold on for their deposit? Often they give pretty tight deadlines in order for them to be able to move the money towards their next development, which may rendor the credit card option an unrealistic one. Most applications take approx 6 weeks, say each credit card allows you a £10,000 limit then you will need 5 cards, which as I said you would be wise to leave a break between applying for each one. So it may take a minimum of 2 to 3 months to get the funding you require and as the average 0% card has a 9 month 0% period then you will effectively need to start looking into cards to transfer onto 6 weeks before the end.

Good luck if you go for it, but I think this is a very high risk option for the return you will receive.