BTL cashback mortgages

blushingbride_3

ok i am waiting for her to send me the details.

So what experience do you have in similar situations? can you explain to me how it works?

I know hubbys bro has done similar & is very happy with his portfolio

Conrad

My number one tip is do it yourself and don't make use of third parties.

For example I can go to a town like Colchester and pick up cheap repo's as there are many of them, funnily enough from 'investors' that bought new build flats at peak, and no doubt some with '15% wholesale discounts offered by those ever present investment clubs.

What you want is a property that wont be subject to too much competition.

Investment schemes and clubs invariably offer multiple units in a block, meaning over saturation and too much supply for too few tenants.

You want your deposit to be repaid to you by excess rent within 6 years. You want a gross yield of at least 6%.

Understand the fundamental key that B2L is a business.
An awful lot of people have low yielding property and still refer to it as an investment, yet they could generate a higher return without any costsa by simply leaving it in the building society (many people do not get this point).

Also when you work out whether it's a true investment, do the thing they never mention on the TV property shows;

> take into account the cost of the lost interest you would have earned had you left your cash in a building society account (assuming you had it in the best possible place).
Note that each year the interest on a savings account increases, thus generating more interest and on and on. Dont just simply work out what you would get in interest now and use that as your benchmark

> Also take into account the saving you would make were you to simply reduce your main debts / mortgage

I had 4 B2L's by 2007, but really the profits are'nt great.
Ok there may be long term capital growth, but still when nyou compare properly taking all costs into account (refurbing property every few years for example), tax, lost interest on savings etc, it is'nt as good as people might think.

Eevn when I meet investors with 10 properties and no mortgages, the returns are'nt that great if you properly look at all costs, rent voids and so on.

You say your brother in law is happy, but don't let his satisfaction cloud your own long term assesment.

blushingbride_3

thanks for that, its helpful,

this is why i have always been anti it in the past when hubby has wanted to invest in things & why i wanted some more opinions.

I'm gonna think about it some more.

Thrugelmir

Conrad wrote: »

There is no such thing as a B2L mortgage cashback.

So who is giving you thier hard earned cash in the form of a cashback?

Sounds like a desperate property developer to me.

The overvaluation of property between colluding parties is nothing new.

In reply to the OP. If you don't understand what you ae doing don't. Take a time out, and research the matter thoroughly. If its to good to be true it is. Business people are in business to make a profit.

FraudBuster

If you don't understand what you ae doing don't.

If its to good to be true it is.

brit1234

blushingbride wrote: »

maybe its that you get a mortgage of a higher value than the house? this is what i am asking or trying to get advice about.

I think that my friend negotiates a wholesale rate on houses etc for investors

Thats ok then, so you do know you are commiting mortgage fraud if you do not declare the cash back to your lender.

I would read up on this and stay well clear

Wutang_2

FraudBuster wrote: »

If you don't understand what you ae doing don't.

If its to good to be true it is.

What, exactly, is your point though?