The Wilsons - 875 buy to let property empire

Edale

Dithering_Dad wrote: »

Excellent & informative post. Regardless of the morals behind buying up all the property in a single area, it's just too simplistic to say that this couple are clueless at business and how it was easy for them to build a property empire. If it is so easy then why haven't you all done it? (and don't give me any tosh about how it's morally reprehensible - would you really turn down millions of pounds because of your morals?)

As far as their empire crumpling? I don't think so. They might not be able to use their equity to purchase any more properties, but given they already have so many that isn't much of a problem. They seem to have made sure that the rent covers the interest and so unless they have an urgent need to sell up, I would suggest that a drop in the value of their properties will have little impact on them.

Usual case of the 'have-nots' sitting on their behinds moaning, watching the 'go-getters' make their millions and hoping that at some point it all goes wrong for them, allowing the 'have-nots' to justify their lack of ambition.

I don't care if the Wilsons go bust or live happily ever after. I do think it is valid to discuss their situation when they were so public about their success. I also think that the downside of any investment strategy needs to be pointed out and they seemed very keen to avoid any mention of potential risks to their business. They may have been very [strike]lucky[/strike] skillful in their investing, many others desperate not to be a 'have-not' will have got off their behinds following the 'go-getter' Wilsons and now risk losing everything including their own home. Yes people have to be responsible for their own actions but I still feel for people who get it wrong. Think of the 'go-getter' Christopher Foster who it seems couldn't face the shame of losing his lifestyle so apparently felt the need to pop off his own wife and daughter.

Ambition and success are about much more than money.

Sir_Humphrey

Generali wrote: »

Actually it's a pretty simple business model they've got and a pretty good one. The main risks are lack of diversification (everythings in Ashford) and rents falling due to economic hard times. It's rather tough if you want to buy a place in Ashford but there are plenty of other towns nearby.

If their assets did decrease in value, with their unusual funding, could they be at risk of margin calls?

lostinrates

Is there no local level competition law that would be applicable in this type of situations? Is that ust for national and international organisations?

Dithering_Dad

Edale wrote: »

I don't care if the Wilsons go bust or live happily ever after. I do think it is valid to discuss their situation when they were so public about their success. I also think that the downside of any investment strategy needs to be pointed out and they seemed very keen to avoid any mention of potential risks to their business. They may have been very [strike]lucky[/strike] skillful in their investing, many others desperate not to be a 'have-not' will have got off their behinds following the 'go-getter' Wilsons and now risk losing everything including their own home. Yes people have to be responsible for their own actions but I still feel for people who get it wrong. Think of the 'go-getter' Christopher Foster who it seems couldn't face the shame of losing his lifestyle so apparently felt the need to pop off his own wife and daughter.

Ambition and success are about much more than money.

It's fine to be ambitious or not, to be a 'go-getter' or a 'have not'. What's not fine as far I am concerned is the constant knocking of anyone who takes a chance and tries to better themselves and the almost religious fervour in hoping that they fail. I think it's just as valid to discuss this as you do to discuss the Wilsons.

Many millionaire "go-getter's" have been bankrupted, some several times, before they made their money. They have the self confidence and determination to make a success of their lives. If there wasn't a risk then there wouldn't be any money in it and it wouldn't be worth striving for.

As far as your Christopher Foster reference, I'm not sure how valid that is here. He obviously had mental issues if he puts money and status above the lives of his family.

HelpWhereIcan

Sir_Humphrey wrote: »

If their assets did decrease in value, with their unusual funding, could they be at risk of margin calls?

Yes, but the maximum loan to value is likely to have been set at around 75% anyway.

People/Companies with the number of properties these people have will be treated as a commercial proposition and loan to values would not be those available under 'normal' buy to let.

Some portfolio deals will be LIBOR based (Landsbanki/Heritable), but BBR is as common. There will not neccesarily have been any requirement to repay capital at specific points but it could exist.

The problem with speculating is that the portfolio deals on offer (the real ones for very large portfolios rather than those for people with more than 10 properties) are all individually negotiated so what they have will depend on the strength (or otherwise) of their business plan and property portfolio at the time the deal was negotiated.

In practice, their properties are likely to be split into several portfolios as it is unlikely they will have found a single lender willing to accept the whole risk alone and they may well have a number of traditional buy to let mortgages in their own names.

They may even have an element of multi currency which will keep interest costs down.

It is pointless trying to guess really, but I would just point out that it is unlikley they will suffer from payment shock to the extent that some seem to hope they will.

"If you go under owing the bank £100,000 you are in trouble. If you go under owing the bank £10,000,000 the bank is in trouble."

One of the reasons they are unlikely to suffer from any significant margin calls (repossessed stock on that scale would be worthless) and the bank is likely to keep negotiating with them.

In fact, They represent experienced investors with a successful track record in buying low. The kind of customer banks want rather than the amateur. I would not be surprised if they use the next couple of years to snap up some bargains - all with the bank's support. Sorry.

Edale

Dithering_Dad wrote: »

It's fine to be ambitious or not, to be a 'go-getter' or a 'have not'. What's not fine as far I am concerned is the constant knocking of anyone who takes a chance and tries to better themselves and the almost religious fervour in hoping that they fail. I think it's just as valid to discuss this as you do to discuss the Wilsons.

Many millionaire "go-getter's" have been bankrupted, some several times, before they made their money. They have the self confidence and determination to make a success of their lives. If there wasn't a risk then there wouldn't be any money in it and it wouldn't be worth striving for.

As far as your Christopher Foster reference, I'm not sure how valid that is here. He obviously had mental issues if he puts money and status above the lives of his family.

As I said before I don't care if the Wilsons go bust or make a billion. I do care that people who have made it then promote their success in a very one sided way perhaps encouraging less able people to take risks they shouldn't. I believe they should be happy with the fruits of their labour and not seek the publicity. I agree they had the initiative to take massive risks and leverage a business in a huge way which then paid off in times of high house price inflation. How much of this was due to skill or luck I am not sure.
The Christopher Foster reference suggests how the desire to succeed and shame of perceived failure can send you off the rails. Would he have done such a thing if his success and money were not so important to him?

HelpWhereIcan

lostinrates wrote: »

Is there no local level competition law that would be applicable in this type of situations? Is that ust for national and international organisations?

I am not sure what barriers to competition they could be accused of putting up.

They have a reputation for buying low and screwing vendors to the floor. Someone wanting to compete with them could do so very easily by offering more.

They have the advantage of being able to move quickly, but on an indicidual property that can be matched by most serious investors with a bit of planning.

HammersFan

ruggedtoast wrote: »

I can see why people hate them though, theyve artifically blown up prices in one locale, priced a whole generation of locals out of ownership and are by all accounts, awful landlords.

I saw that programme they did a while ago and in the footage they showed, the Wilsons' consistently offered 10-20% under Estate Agents' valuations of properties (in return for a quick hassle-free sale - which a lot of people agreed to - for most sellers once they factored in EA fees and the hassle factor this represented reasonable deal). So I don't think they actually priced FTB's out of the market, its more to do with their purchasing power (which they developed over many years) and people's desire to move quickly. In doing this they also kept on protecting themselves (a little) form some falls in the market. So if we accept the the worst of the falls i.e. 12% pa on EA valuations, and much less in Kent) they are unlikely to fall foul of loan covenants just yet.

I also remember them saying that they ran their first batch of houses at a loss i.e. rent less than mortgage, because their strategy was to take advantage of HPI - something that many people advise against. They also bought into falling markets because they thought that prices would eventually recover.

Personally, I ended up not liking them very much. But I did admire their willingness to take a risk and buck the trend, their eye for detail, and their imagination (and understanding of human nature when it comes to property and money).

neverdespairgirl

Dithering_Dad wrote: »

Methinks that they quite like being 'lord of the Manor' and so invested in that small area. Perhaps they even enjoy the resentment?

Very odd if they do. But chacon a son gout

neverdespairgirl

Dithering_Dad wrote: »

What's not fine as far I am concerned is the constant knocking of anyone who takes a chance and tries to better themselves and the almost religious fervour in hoping that they fail. I think it's just as valid to discuss this as you do to discuss the Wilsons.

I don't see it like that. I don't really see that they have "bettered themselves" in any real way. Just made some money.