The Wilsons - 875 buy to let property empire

neverdespairgirl

Generali wrote: »

I'd be very surprised if they had 800 mortgages on 800 houses. Much more likely is that they have lines of credit (which work a little like an overdraft) each secured against groups of houses.

So, in effect, they are likely to have one huge mortgage on the whole lot?

Walletwatch

neverdespairgirl wrote: »

So, in effect, they are likely to have one huge mortgage on the whole lot?

Yes, NDG, and I think Generali is right in his assessment here that it will be a line of credit that these guys will have with their bankers (and it won't be one single bank, they will probably have it with multiple bankers, given the size of their portfolio).

However, I must add here that while in a rising market, it is easy to manage a portfolio and relegate the finance aspect of your business to a staff function, just responsible for getting the funding when required and keeping the bankers happy that covenants aren't being breached, it is market conditions like these that actually test your overall management expertise. So the credit crunch and dropping house prices must already be testing this couple in their financial management skills, as they will need to do an effective juggling act among their financiers and within their portfolio in the face of a falling market.

TDS_2

What you people are all forgetting is that it's only flats that drop in value. If you read you original article, you'd appreciate that they ONLY own houses, and houses NEVER fall in value.

Why don't some people listen...

Generali

neverdespairgirl wrote: »

So, in effect, they are likely to have one huge mortgage on the whole lot?

Probably more like say 5 or 10 mortgages on the whole lot. Maybe fewer.

They probably pay very little and maybe even nothing to keep an unused line of credit open so if they've got any sense they'll have enough spare capacity in the potential loans that the whole thing doesn't go under if one line gets pulled.

MissMoneypenny

kennyboy66 wrote: »

The horses are often 1000/1 to win and they are widely viewed as a bit (or a lot!) of a nuisance - they are 20 times as likely to fall or be pulled up than be in any sort of contention.

It is quite sad to see some of the once decent horses run way above their class, so that their owners can swank about in the owners enclosure. Most true racing folk would view them with contempt.

That's roughly what I heard.:mad:

carolt

neverdespairgirl wrote: »

I don't know why people keep saying that. I certainly wouldn't do the same, I have no desire to own 800 houses in Ashford!

So, so true!

I would never want to be a BTL landlord for 1 house, let alone 800! (Not to say Ashford - words fail me.....!) (And yes, I could easily have bought 1 or more, but chose not to.) There does seem to be this bizarre assumption among some of the landlords on here that everyone else is just jealous and would love to be a BTL landlord more than anything, but just weren't clever/brave/rich enough (delete as appropriate).

Actually, whilst the desire to own your own home is widespread and rational, the desire to own lots of other people's homes is less widespread than some would have us believe, and seems very peculiar behaviour to me. :eek:

Dithering_Dad

carolt wrote: »

Actually, whilst the desire to own your own home is widespread and rational, the desire to own lots of other people's homes is less widespread than some would have us believe, and seems very peculiar behaviour to me. :eek:

They're not 'other peoples' homes carol, they're just buildings. It's the people who live there that make a home.

As someone who has rented in the past as a student and when I started work, and as someone who is renting now while I work away (more convenient and cheaper than living in a hotel) I am pleased that there is a decent supply of rental stock around the country.

Not everyone wants to buy a house and are quite happy to have the freedom of movement that renting provides. Are you saying that these people should be forced to buy a home? Also, with the 'right to buy' legislation, there are much fewer council houses so many people who would have qualified for council housing now have to live in private accomodation with the LA paying the rent. Basically, landlords provide a useful service, they're not all like the Wilsons.

You currently rent, why not tell your landlord your views?

MissMoneypenny

Alan_M wrote: »

These people have been building this business for a number of years, I also saw the documentary on them in which they explained they were drawing an income of £10 per property per month, all rent over and above that going straight back in capital repayments, which was quite a substantial sum at the time.

Their houses are interest only payments on most (if not all now) of their properties. I watched that programme too.

It was on years ago. Mrs Wilson said that they only took about £10 a property, because of keeping the rents low to ensure the properties were rented out. The programme host had asked them how they managed to keep their properties tenanted.


They said they really started their buying empire, when the interest only mortgage payments were allowed without any proof needed to be held by the bank as to how the debt would be repaid, as it was cheaper to have interest only mortgages and the rents then covered the mortgage payments. Fergus said that they made their money from hpi and not rental yield. He also said something along the lines of how he wished he could let the tenants live in the properties for nothing as they (the Wilson's) were making so much money from house price rises, but he couldn't though, as the tenant was paying the interest on the mortgage.

They said they liked to buy new houses as they had discovered that old houses needed a lot of maintenance and also tenants preferred new houses. Although they did show the outside of an old terrace in Maidstone, that Fergus said they bought at auction for 30k in the late 90s. I remember a cat was sitting in the window.

They said that now they bought new houses in bulk from builders and got discount.

They showed their own house that they were extending and how they had taken ages to build an extension as they had paid for each stage separately, to keep the cost down. The programme host was astonished when Fergus told him how little they had got the extension done for. He asked Fergus why they lived in such a modest house, when hpi had made them so much money.

Later, a piece appeared in a paper about Mrs Wilson's 7 million pound spending spree with builders. That article too said they were interest only mortgages.

That same programme also featured a woman who made jewelry and lived with her son. She had bought houses in areas she knew (usually ex council) and rented then out to HA and also had a builder she knew and trusted. He spoke on the programme too about how she use to rush into buying houses without letting him check out the place first. The HA guy said she was one of their better LLs.

As this woman had bought her properties cheaply in the 90s, she only had 10 to 15 years repayment mortgages on them. The programme makers said that as she rented to HA as they had guarenteed her rent. She said she was trying to encourage her son (in his 20s) to do the same as she had done. They said that HPI had made her rich as she bought at the right time - at the bottom of the market.

I'm sure that a lot of people then went into BTL after watching that programme.:D

carolt

Not a great business plan - relying on HPI at the height of a giant property bubble! Sure it worked just fine when they started, but one wonders how long it will be before they crash, if they've stuck to that as a way of making money?

Alan_M_2

RabbitMad wrote: »

This to me looks like one huge house of cards. A light breeze and it will come falling down which will end in their bankruptcy.

A poster earlier said that they would have it structured as a limited company so as to be safe if it went wrong. I looked into doing a buy to let via a ltd and all lenders I looked at (inc northern rock) insisted on the directors personally being ultimately responsible.

Once the sums of money become large enough, you're treated as an independent entity away for the general "rules" for these things. They wouldn't have been walking into the local Halifax when it was time to remortgage, a credit line of this size will be dealt with by merchant banks or similar.