Wilsons - The buy-to-let gurus' empire crumbles

fc123

chucky wrote: »

you won't/can't wind me up

i'm not a Wilsons fan but would rather look at the facts and make conclusions rather than agree what would be the worst thing that could happen to the Wilsons and say that's wha tis happening. an example is the council tax - it's a non-issue for them.

let me have a read and get back to you in the next couple of days. :beer:

This is a wind up free thread....like the 'nice people thread.

To be fair, no-one knows how The Wilsons saga will turn out. My bet is not positive. I don't see them owning 700/900 houses in 5 years time.

Not paying CT when you have admin staff is a sign of financial distress to me.

fc123

sss555s wrote: »

I'm not bothered about the Wilson's but i do like fc123's avatars :A

I put this skirt on avatar as it hasn't gone into production :sad::sad:.
I love it and it has a scoop out vent on the lower hem back (not very clear in pic) that was inspired by a girl I was walking behind who's pencil skirt had split uo the back. It was very..err...alluring? Is the right word? I am a hetero female but notice the small things that men notice and try to put elements into my work.

All t***s falling over the front don't always do it.

Anyway, the shorter (tartier) version went on sale instead and isn't selling that well.

fc123

Dam...forgot to say..I am going with DS on the this...they are deff fragile and in trouble but for a few reasons....too busy listening to Popstar to operastar catch up and gossiping about skirts.:o

sss555s

fc123 wrote: »

I put this skirt on avatar as it hasn't gone into production :sad::sad:.
I love it and it has a scoop out vent on the lower hem back (not very clear in pic) that was inspired by a girl I was walking behind who's pencil skirt had split uo the back. It was very..err...alluring? Is the right word? I am a hetero female but notice the small things that men notice and try to put elements into my work.

All t***s falling over the front don't always do it.

Anyway, the shorter (tartier) version went on sale instead and isn't selling that well.

Yes i noticed all that too fc

Do you just sell in a shop or ebay too?

fc123

sss555s wrote: »

Yes i noticed all that too fc

Do you just sell in a shop or ebay too?

I will PM you later on as I have a couple of PM's to 'do' on where to buy buy buy.

chucky

fc123 wrote: »

I don't think I explained what I meant properly.....as I was being a bit glib.
Note to self ; Don't quote 'My Fair Lady'.

the wuality of your posts makes you very easily quotable.

fc123 wrote: »

The high living was the straw that broke the camels back. I have no idea what he spent on horses, but, had that cash stayed in the business, he may still be invisible now...just ticking over .

their arrogance of being invincible as you say is what will/has broken them - they were school teachers and all of a sudden were in the Times rich list and had horses in high profile race meetings. this image they tried to lead isn't cheap. from reading the press stories on them they haven't handled that part very well.

chucky

dopester wrote: »

We know they got in big-time during the last crash, at the bottom of the then market... bargains as it were. However I doubt they got bargains all the way along during the boom. The occasional one in distress yes (“People end up in financial difficulty because they don’t pay attention. They’re busy watching the rugby rather than doing their paperwork.”) but paying towards market price for many on the upswing (Perhaps 5%-10% off on a bulk purchase from a developer).

Part of their bulk buying came in 2003/04 didn't it (from memory).

i've looked at Kent's LR values and they're currently at mid-2004 house prices.
so yes let's go with that they bought the bulk in these two years.
these guys didn't do flats and bought terrace properties and maybe some semis.

the value of a terraced was £111,914 and a semi was £144,823 in Jan 2003.
in Jan 2004 they were £126,034 and £163,096 respectively.
and by Dec 2004 they were £139,897 and £181,035.
current value is £141,224 and £182,752.

where i'm going with this is that as far as capital values go they are not losing money as far as their investment values go.

dopester wrote: »

An EA reckons professional investor/fund would require a 30% discount buying in bulk. If I were running a pension fund (ect) I'd require more than 30%, in an environment of job losses and pay cuts, and, as the Wilsons are finding out... some rents now not covering mortgage repayments.

my personal view is 25%/30% and is what i've used in the past.
this gives you 33% equity in the property straight away.

dopester wrote: »

The failure would be a direct consequence of the debt and the number of houses they've continued to keep on buying. With 100 houses, now debt fully paid off... they could still comfortably afford to run horses, have a farm, have their own main home mortgage free ect.

i could go with this - not managing the gearing and over leveraging themselves could be the main problem.

but let me put this to you (an assumption of course) - a portfolio that big would not have 700 individual BTL mortgages but spread into clusters of loans by properties or even one big loan. the bulk of their deals if not all are with Mortgage Express - they're desperate to get loans off their books so i imagine they're squeezing these guys by making margin calls and forcing them to pay down debt reducing their exposure - hence the reduction in the interest rate currently being charged.

another thought that i had was how many properties are prone to default.
according to Ashford council the unemployment rate in the are is 2.9% as of Nov 2009 - that's way below the UK average of 7.8%. so we can't way that unemployment will affect their rental income or cash flow.

there are links for any of these if you want to see them

Graham_Devon

The value of these properties however are not likley going to be average, as they have so many to offload.

Even offloading 50 a year to the open market, it would take them 14 years to offload them to succesfully wrap up the business.

Put simply, they haven't got 14 years if they are to achieve what they set out to achieve.

chucky

Graham_Devon wrote: »

The value of these properties however are not likley going to be average, as they have so many to offload.

Even offloading 50 a year to the open market, it would take them 14 years to offload them to succesfully wrap up the business.

Put simply, they haven't got 14 years if they are to achieve what they set out to achieve.

we weren't discussing offloading them - we were looking at their value as far the lender sees them and how leveraged they may be.

you should read the posts before you dive in

Charterhouse

I think their big failing was that they were buying at maybe 20-25% off offer prices and off new build prices and thinking they got a good deal. But if they were buying at 80k vs 100k offer price when the real offer price if the Wilsons never existed was 75k then really they were paying up!! The reality was that some of these new developments would simply not have ever been built had the Wilson not bought them themselves. They don't seem to realise that you don't always know til later that actually it was you ramping the market yourself! Their very presence probaly gave the local market a 25% boost over the period. Which means that when you try to liquidate the portfiolio you drive that effect out of the market and end up back where you started. 700 houses in a relatively small area is just too much to not dominate prices.

They also used old equity to continue leveraging up so I would think assuming that selling the first 200 would knock prices by 10% in the area it is safe to say the remaining 500 would all be in negative equity after that. Quite apart from the fact that many of the houses are likely pretty run down.