Property Developing Question

Scabs

princess275 wrote: »

A property is being marketed for £100,000 on right move.

1. The owner however wants a sale say within a few weeks and wouldn’t mind selling at a discount.
2. He gets in touch with a buyer and says: “mr buyer, I really have to sell my property, at all costs and I am willing to accept a discounted price from the advertised price. Would you like to buy it? The price was the market value placed by an established estate agent”
3. The buyer says, yes, give it to me for 20% from the market value that must be confirmed by an independent surveyor and we have a deal. The buyer, however, makes it a condition that the value must be verified by an independent RICS surveyor to double check the price.
4. The parties agree, a surveyor verifies the property value at £100,000 and the buyers happily completes at £80,000.That means a 20% discount from the market value.

Now I don’t know how much simpler I can explain this without ending up treating you like a 6 year old. What part of this is “rubbish”?

I am sorry but this sounds like a 6 year old wrote it.
You are talking about distressed sellers who are most likely being repossesed etc so you must be talking about yourself being a company that buys property below market value?.
I will ask again "what is an investment supplier" because if somebody told me about properties 20% below market value I would be very suprised.

I don't mean to be rude by saying you sound like a 6 year old but you are making successful property investment sound far too easy.
Oh p.s. you think the market is going to rise/stabalise next year?. Your answer to this will tell me whether you know anything about property.;)

princess275

You get from bad to worse and continue to make me laugh

Where am i saying i supply these properties and i sell them? Yet again you jump on the negatives because you cant respond with any substance. And when you cant reply with any substance, you start using excuses like spam, assume that i sell properties and rant on with poorly researched comments.

To be honest if i had property to sell you would be the last to hear about it because you don't deserve the luxury of enjoying a decent gain. In a way, i am glad you don't have a good grasp of property because it just makes me think that you are wasting money else where on some crazy strategy lol

The reason why you are not happy about me being here and spitting out your dummy and running to Mods like a baby is because i have successfully exposed your lack of knowledge of:

1. How surveyors and valuations work
2. Your irresponsible advice about trying to flip in a bad market

All you have done is complain and moan from the word go because you don't know about property investing. And when it gets too much, you want your posts deleted. I would want them deleted too because there is still nothing useful you have mentioned from investing perspective and your credibility of 11,000+ posts has been severely damaged

Its easy to pick holes in people's points, but it is easier to look silly when the argument is not backed by substance.

Despite open public challenges to you to prove my points you trip up and come back with nothing that counters my arguments properly. I talk with facts and figures with me. I am not hear to quote fancy theories of "flipping" and how property values work. I work straight from practical experiences.

be grateful for my first hand advice, not spiteful



Enough said for now

Doozergirl wrote: »

Genuine newbies with help to offer are welcome here and embraced. The 11,786 posts that you ridicule were not made purely on the knowledge I had when I arrived here, they have been rounded by the advice given by others who also come here to offer advice and also those who came looking, shared their experiences and the results of those experiences. I've absorbed a lot and I wear it and share it all quite proudly actually because I've gained a huge amount of knowledge that helps me run my own business. Much of it relays the experiences of others that are here or have been and gone - I'm like the little old lady of the board that's watched it all play out as well as bringing my own experiences to try and make it real for people. I don't always explain things very well when I've said something a hundred times before and might appear a bit snotty - I try not to but I do know the post count will make me stand out as someone who has an opinion! There is always someone able to take better time to explain things; I don't profess to get everything right, I listen to those who know better than me and I will let posters know if I'm not sure about something and am just offering personal opinion.

Our conversation will probably be deleted (and hopefully your user ID as well) because you've basically admitted to touting your own business but whilst it is still here I'm happy to carry on...

If you can't sell 20% BMV property at it's apparant value then it isn't a 20% deal of any kind, regardless of you explaining how buying at BMV works. I know how it works but aside from being really rather unethical, I know you're not selling genuine deals because you're telling us you can't actually sell it at the price you're saying it's worth. Regardless of market, every house has a price tag that it would sell for. Even if it's £10 for a mansion, you've got to sell it to me for £8 for what you say you are selling to be true. You can't say the market isn't geared for it.

You're a spammer, you've admitted as such which is all I wanted to expose you as. No ulterior motive, I don't want people sucked in by you.

princess275

Hi

I had to write like a 6 yo to explain to explain to someone who was asking questions on that level. If you say i have written like that then i have done a good job.

I am sorry that you feel i am a company. Why would you assume that? If i sound like that then i cant change that but please don't jump to the conclusion, i'd appreciate it.

As for your question about property prices, i would be a fool to pretend to know where the prices will be next year. I would much rather be a fool then put my educated guess in a public forum. The market is so turbulent and there are so many factors that can still affect it. You have some of the following to consider at least:

1. deflationary environment on the short term
2. possible long term inflation and its effects on interest rates
3. the looming commercial property crisis in US and UK
4. ongoing troubles of the banking system (remember banking practices haven't significantly changed and that's still a worry(
5. Availability of lending
6. Unemployment

cheers

S




thanks

Scabs wrote: »

I am sorry but this sounds like a 6 year old wrote it.
You are talking about distressed sellers who are most likely being repossesed etc so you must be talking about yourself being a company that buys property below market value?.
I will ask again "what is an investment supplier" because if somebody told me about properties 20% below market value I would be very suprised.

I don't mean to be rude by saying you sound like a 6 year old but you are making successful property investment sound far too easy.
Oh p.s. you think the market is going to rise/stabalise next year?. Your answer to this will tell me whether you know anything about property.;)

princess275

hi googler

in theory it may drag the price down but did you know that the surveyor considers the circumstance of an unusually priced property too? The price will be definitely dragged down if the percentage of sales at prices lower than £100K are higher, i accept that. But i was eluding to an example where a one of sale at discounted happens, maybe say someone selling a run down house, someone selling a repo and so on.

The surveyor will consider the specific example. i know this because from the many properties i have seen surveyed, these scenarios do come up and it does worry you, until you learn the way the rules are applied.

cheers

S

From the many properties

googler wrote: »

Um, yes it does drag the street down. I'd suggest it drags the MV for the that type of house and that street possibly to somewhere between £50 and £100k... once the prices are published on zoopla, ourproperty etc., or someone lets slip that one has sold at £50k and it becomes public knowledge.

It doesn't mean everyone HAS to sell at £50,000, but once the public sees one sale in the street at £50k, and similar houses on the market at £100k, their chances of getting £100k each are toast......

What would you say the MV is in my example above?

david29dpo

Have you actually bought any property to develop or resell?

phlash

BMV or not BMV.....Don't forget the tax implications(!)....the correct ones!

What you would be doing would not be taxed under CGT rules. This is only the case where you sell a property which formed part of your business. i.e. A BTL house is an asset with which you trade, where your trade is rental income, so selling the asset is subject to CGT.

If you renovate a house and sell, the renovation of the house itself is the trade, therefore the profit on the sale will be taxed under income tax rules.

So if you are a HRTP, you need to tax the profit at 52% as of next tax year. Food for thought.

googler

phlash wrote: »

.....So if you are a HRTP, you need to tax the profit at 52% as of next tax year. Food for thought.

I'm sorry, I must have missed something - what's an HRTP?

Also, are you mentioning the profit being taxed at 52% as of next year because this rate has been increased from this year? If so, what's the current rate...?

ILW

Is not "market value" what someone can and will pay for a property?
Or am I being a bit simple?

phlash

googler wrote: »

I'm sorry, I must have missed something - what's an HRTP?

Also, are you mentioning the profit being taxed at 52% as of next year because this rate has been increased from this year? If so, what's the current rate...?

Apologies for banging out a rather hastily prepared note above, the 52% will apply to ARTP from April 2011.

Personal allowance - £6,475 tax free - yay! (except for those earning more than £112,950 - they do not get any tax free!)
LRTP - Lower Rate Tax Payer - The next £37,400 of income.
HRTP - Higher Rate Tax Payer - The next £112,600 of income.
ARTP - Additional Rate Tax Payer - Everything above £150,000

Currently:
LRTP - Pay tax at 31% (i.e. 20% income tax plus 11% national insurance)
HRTP - Pay tax at 41% (i.e. 40% income tax plus 1% national insurance)
ARTP - not in existence

From April 2010:
LRTP - Pay tax at 31%
HRTP - Pay tax at 41%
ARTP - Pay tax at 51%

From April 2011:
LRTP - Pay tax at 32%
HRTP - Pay tax at 42%
ARTP - Pay tax at 52%

The point is, all of these rates are far higher than the 18% rate of CGT. Plus with CGT you get (currently) £10,100 pa of chargeable gains tax free. But this tax is for chargeable gains, i.e. you make a gain on an asset in use in your business. Making a profit by developing a house and selling is not a 'gain' but an income taxable in the period of receipt at the rates detailed above.