Buying From BMV Company

ILW

Tell them not to take their cheque book or credit cards with them to the viewing, and on no account to sign ANYTHING without getting a solicitor to check it over first.

Gareth78

ILW wrote: »

Tell them not to take their cheque book or credit cards with them to the viewing, and on no account to sign ANYTHING without getting a solicitor to check it over first.

I will do that!

G_M

And warn them to watch out for the "For a quick sale, there's another £5K off if you sign xxx today / hand over a £X 'reservation fee' today." Or similar .....

silvercar

Ideally they should speak to the tenants and get their solicitor to look over the tenancy agreement.

Colincbayley

Smells fishy to me!
:money:

princeofpounds

So, what exactly are this company doing except being very, very, very expensive estate agents?

Who owns the property and who is *actually* selling to you?

Exactly what sort of tenancy are the occupants on? It makes a massive difference to the value of the property?

Even if everything you are told is true, here is a quick look at the financials of the deal:

£550pcm income.
-10% for voids (assuming its quite a lettable property)
= £495pcm income
= £5940pa income.
- £800 annual maintenance budget (just a guess, some years more, some less).
= £5140pa income.
capitalise income at a 5% rate (equivalent to a 5yr fixed mortgage which is as good a discount rate as any for such a project)
= £102800 capital value.
- 2.5% fees
- £500 solicitor/conveyancer/land registry fees (just a guess)
= £99730 capital value.

Compare to supposedly BMV price:
99730 - 97500 = £2230 'upside' and that's if everthing they have told you is true and nor a scam.

Not really worth getting out of bed for as an investment unless you think house prices are going to go up (and I don't). The 'BMV' is a mirage.

These things are never as good as they look, otherwise they would not be offering them to a third party. If your parents want to buy a house and be landlords, they should just do it in a normal way.

Gareth78

Ok, i've spoken to my parents and got a wee bit more information from them. Please bear in mind that most of this is being done by phone and email as they live 200-odd miles away.

Right, firstly my parents tell me they "are not mugs"(!) and wont sign/pay for anything until it has been looked at by a solicitor so not to worry on that front.

Secondly, according the this company, the property is being sold as part of a "portfolio break up" (their words) whereby the LL is selling a number of properties and has passed them to this company for a discount which is being passed on to possible investors. The way the company make their money is through the 2.5% fee which they have referred to as a "finders fee". (I think that was the basic gist of the conversation my father has with the person at the company).

Thirdly, the tenants are 2 months into a 1 year "rolling" contract, something which can be confirmed / denied by them tomorrow when my parents go to view.

And finally, i got the figures wrong (sorry!) in the original post which probably wont make much of a difference to the figures that priceofpounds has kindly posted but it does push the rental yield up a wee bit, though probably not enough to make huge impact in the validity of the purchase. The "market value" is £120,000, being sold for £92,500.

Trollfever

I get several emails a week offering me BMV deals.

The genuine deals do not get into the public domain.

ILW

Gareth78 wrote: »

Ok, i've spoken to my parents and got a wee bit more information from them. Please bear in mind that most of this is being done by phone and email as they live 200-odd miles away.

Right, firstly my parents tell me they "are not mugs"(!) and wont sign/pay for anything until it has been looked at by a solicitor so not to worry on that front.

Secondly, according the this company, the property is being sold as part of a "portfolio break up" (their words) whereby the LL is selling a number of properties and has passed them to this company for a discount which is being passed on to possible investors. The way the company make their money is through the 2.5% fee which they have referred to as a "finders fee". (I think that was the basic gist of the conversation my father has with the person at the compa

Thirdly, the tenants are 2 months into a 1 year "rolling" contract, something which can be confirmed / denied by them tomorrow when my parents go to view.

And finally, i got the figures wrong (sorry!) in the original post which probably wont make much of a difference to the figures that priceofpounds has kindly posted but it does push the rental yield up a wee bit, though probably not enough to make huge impact in the validity of the purchase. The "market value" is £120,000, being sold for £92,500.

How was the original contact made?

Gareth78

ILW wrote: »

How was the original contact made?

My parents signed up for updates for investment properties through Turtle Homes, an online estate agency, and this property was one of the deals in the update.