The Wilsons - 875 buy to let property empire

Dithering_Dad

lesley1960 wrote: »

Why does everyone on these threads revel in the fact that others might loose everything in a recession?

Not everyone

Turnbull2000

lesley1960 wrote: »

Why does everyone on these threads revel in the fact that others might loose everything in a recession? it strikes me as you all have pretty sad lives .
people have to live somewhere and if they cant buy their own property then they need to rent ? and in order to rent there needs to be someone with property to rent out.

And no I'm not a landlord , but applaud anyone eho has got off their butts and worked hard to make money .............running any business is bloody hard work .

Buy a house, sit back and ride the bubble, MEW MEW MEW, buy property with MEW on IO mortgage and shrug shoulders when tenant ask for repairs. They must be sweating blood.

But that's what bubbles do - give people grand delusions.

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fatpig wrote: »

" I'd love it if these two vultures went bankrupt.

I'D JUST LOVE IT! "

Fatpig, I tip my hat, that was:rotfl:, a picture says a 1000 words

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One thing is for sure, if they go under, all the HPC's should flock to Ashford. I reckon you could pick up a tidy 2 bed house their for say.....mmmm about £50.:D

JoJil

ruggedtoast wrote: »

Not too busy to be making quite a career out of setting people straight on here though eh.

Not to busy to send young women private emails either!

Dithering_Dad

HelpWhereIcan wrote: »

Yes - and I seem to remember that the seller was not happy that they had reduced the value of hosues in the street making it hard for him to sell.

Not saying you're wrong with this statement, but it seems to create a paradox. Lots of posters on this thread are up in arms because the Wilson's bought up all of the houses, pushed up prices and prevented FTBers from being able to buy a home (and forcing them to rent from the Wilson's). On the other hand you're saying that the Wilson's forced down prices and caused the sellers to lose money.

Surely they can't have both forced up and forced down house prices in their chosen area??

Also, if there were hundreds of FTBers who couldn't get hold of a home because they were all bought by the Wilson's, why were sellers selling their houses for 20% less than asking price when they could have just sold to one of the many FTBers lining up to buy at market value?

Generali

Sir_Humphrey wrote: »

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

Not under the strict definition of the term. You can only have a margin call where you have a liquid asset that can be sold without you permission. A good example is when you buy shares and hold them in a nominee account they are held in the name of the bank that has lent you the money to buy them. If they send you a margin call and you don't make it within a defined period (usually a day or 2) then they just sell the shares instead. Clearly you can't do that with a house.

The loans will have what are known as covenants attached to them. These are basically special terms and conditions. They are likely to have some sort of covenant regarding total LTV ratios (and also on what basis the houses should be valued). If the LTV dropped beyond a certain point then they probably could be compelled to sell or (more likely) pay a higher rate of interest. Cash flow is the key to the whole thing: if they're cash flow positive then there's no real problem. They must be cashflow positive because if each house was costing them just a tenner a week over the amount of the rent, they'd be shelling out £455k pa!

One problem with measuring the LTV of their properties is that according to what I've read, these 2 are are the market in Ashford. Really any valuation of their houses shouldn't be how much they're prepared to pay but instead what the next person would be prepared to pay. Then of course you have the added complication that the seller might not be willing to sell at that price, preferring not to move or to rent the place out instead.

The short version of that is: definitely no margin call in the contract but maybe something similar. It would probably not be exercised unless they weren't making their loan repayments.

Dithering_Dad

Generali wrote: »

One problem with measuring the LTV of their properties is that according to what I've read, these 2 are the market in Ashford.

That raises an interesting point. As these guys have such a monopoly on homes in this area, one would have thought that even in a national crash that they would be able to control prices to a certain extent.

If builders stop building new housing in that area (they certainly seem to have in other areas) and if the Wilson's decide to hold onto their properties, won't it create a supply/demand problem that will artificially keep prices higher in Ashford? Basically meaning that if you want your own home there, you either pay what the Wilson's demand (if they even want to sell) or you jump at the limited stock available from other sellers - competing against other buyers and thus pushing up prices?

ruggedtoast

I think there a limit to what people will pay to live in Ashford.

Generali

Dithering_Dad wrote: »

That raises an interesting point. As these guys have such a monopoly on homes in this area, one would have thought that even in a national crash that they would be able to control prices to a certain extent.

If builders stop building new housing in that area (they certainly seem to have in other areas) and if the Wilson's decide to hold onto their properties, won't it create a supply/demand problem that will artificially keep prices higher in Ashford? Basically meaning that if you want your own home there, you either pay what the Wilson's demand (if they even want to sell) or you jump at the limited stock available from other sellers - competing against other buyers and thus pushing up prices?

Perhaps. The thing is, very few people actually need to live in Ashford so if prices fall a very long way, would many people actually pay a premium to live there or maybe take the chance to realise a few tens of thousands in equity to live a few miles down the road. It's not like Ashford is even that nice.

Ultimately, if they decide to try to prop up the market it'll be doomed to failure. Also quite a dumb thing to do because they'll be paying more than they need to to buy!