Good Old Fergus!

chucknorris

wotsthat wrote: »

No I'm asking for detail regarding Fergus Wilson's financial affairs because everyone seems to make it up as they go along. No details, no accounts, no substance in any report.

Not that it matters of course - he's just a handy filler when there's space to fill and he's had a dispute about the colour of a bog seat.

If it makes you happy to to think he's my business hero go for it. You deserve to be happy.

If one believes (and there doesn't seem to be any reason not to) at least some of what has been reported about him, then it is hard to believe that he could be anyone's hero. But that doesn't change the facts about his financial position, the fact is that at the time of the 2008 crash, his property equity was massive, and prices are even higher now. To me, it just looks like a combination of desperate jealousy and wishful thinking from those who imply that he is in financial trouble, personally I really don't care how much wealth someone else has, it has no relevance to me.

mwpt

chucknorris wrote: »

If one believes (and there doesn't seem to be any reason not to) at least some of what has been reported about him, then it is hard to believe that he could be anyone's hero. But that doesn't change the facts about his financial position, the fact is that at the time of the 2008 crash, his property equity was massive, and prices are even higher now. To me, it just looks like a combination of desperate jealousy and wishful thinking from those who imply that he is in financial trouble, personally I really don't care how much wealth someone else has, it has no relevance to me.

Aha, a non brexit thread where I can get back to disagreeing with some of the regulars on here.

My position I've repeated often enough. In no way do I hold a personal grudge against any landlord. They are simply operating in a system which makes what they do possible.

But my problem is the system. I'm sure there are many who are only envious of Fergus's supposed wealth, but there are probably many like myself who simply see the system as flawed. The debt is the problem. I wouldn't care if some person who had become wealthy through productive means was able to buy up property to rent out.

I cannot understand how a system which allows virtually unlimited debt on IO mortgages and sucks so much potential investment out of the real productive economy is good for us. How is it that one can become "wealthy" by doing nothing more arduous or skilful than filling out mortgage forms and looking after tenants? I'm not saying it isn't tedious or work, but since it is a captive rentier market it doesn't take any particular learning, doesn't push people to be creative, inventive or competitive, doesn't really add much to our lives, and yet it seems to be the go to investment these days.

I'm not saying it is black and white and there will be some benefit from investment in the private rental market, but do any of the landlords here sense any problem with the system?

chucknorris

mwpt wrote: »

Aha, a non brexit thread where I can get back to disagreeing with some of the regulars on here.

My position I've repeated often enough. In no way do I hold a personal grudge against any landlord. They are simply operating in a system which makes what they do possible.

But my problem is the system. I'm sure there are many who are only envious of Fergus's supposed wealth, but there are probably many like myself who simply see the system as flawed. The debt is the problem. I wouldn't care if some person who had become wealthy through productive means was able to buy up property to rent out.

I cannot understand how a system which allows virtually unlimited debt on IO mortgages and sucks so much potential investment out of the real productive economy is good for us. How is it that one can become "wealthy" by doing nothing more arduous or skilful than filling out mortgage forms and looking after tenants? I'm not saying it isn't tedious or work, but since it is a captive rentier market it doesn't take any particular learning, doesn't push people to be creative, inventive or competitive, doesn't really add much to our lives, and yet it seems to be the go to investment these days.

I'm not saying it is black and white and there will be some benefit from investment in the private rental market, but do any of the landlords here sense any problem with the system?

Of course the system is flawed, but I didn't make up the rules of the system, I merely invested within those rules, and of course it is not good for 'us' (us being everyone), but I didn't invest for everyone, I invested for my myself and my family. No one said it was skilled, my profession (both being a chartered quantity surveyor and university lecturer) is skilled, so I don't lack skills or knowledge. But I knew that that alone was not going to get me where I wanted to be, so I was prepared to take on risks, the reward (as I see it) was for taking on those risks back at the start of it all, not for having skills. So in fact, I am not actually disagreeing with you.

wotsthat

mwpt wrote: »

Aha, a non brexit thread where I can get back to disagreeing with some of the regulars on here.

My position I've repeated often enough. In no way do I hold a personal grudge against any landlord. They are simply operating in a system which makes what they do possible.

But my problem is the system. I'm sure there are many who are only envious of Fergus's supposed wealth, but there are probably many like myself who simply see the system as flawed. The debt is the problem. I wouldn't care if some person who had become wealthy through productive means was able to buy up property to rent out.

I cannot understand how a system which allows virtually unlimited debt on IO mortgages and sucks so much potential investment out of the real productive economy is good for us. How is it that one can become "wealthy" by doing nothing more arduous or skilful than filling out mortgage forms and looking after tenants? I'm not saying it isn't tedious or work, but since it is a captive rentier market it doesn't take any particular learning, doesn't push people to be creative, inventive or competitive, doesn't really add much to our lives, and yet it seems to be the go to investment these days.

I'm not saying it is black and white and there will be some benefit from investment in the private rental market, but do any of the landlords here sense any problem with the system?

An inverted form of snobbery where you have to prove your wealth has been earned from hard graft, productive means and enhanced the wellbeing of the country to meet with approval?

I don't see Fergus can be used as a representative example of much at all given we know almost nothing about his finances. Certainly about the state of the system - it would seem almost impossible nowadays to build a 1000 property portfolio using what we surmise were Fergus' methods.

mwpt

wotsthat wrote: »

An inverted form of snobbery where you have to prove your wealth has been earned from hard graft, productive means and enhanced the wellbeing of the country to meet with approval?

No. Simply a feeling that such a system has gone too far now and does not result in the best outcomes for our society.

cells

mwpt wrote: »

Aha, a non brexit thread where I can get back to disagreeing with some of the regulars on here.

My position I've repeated often enough. In no way do I hold a personal grudge against any landlord. They are simply operating in a system which makes what they do possible.

But my problem is the system. I'm sure there are many who are only envious of Fergus's supposed wealth, but there are probably many like myself who simply see the system as flawed. The debt is the problem. I wouldn't care if some person who had become wealthy through productive means was able to buy up property to rent out.

I cannot understand how a system which allows virtually unlimited debt on IO mortgages and sucks so much potential investment out of the real productive economy is good for us. How is it that one can become "wealthy" by doing nothing more arduous or skilful than filling out mortgage forms and looking after tenants? I'm not saying it isn't tedious or work, but since it is a captive rentier market it doesn't take any particular learning, doesn't push people to be creative, inventive or competitive, doesn't really add much to our lives, and yet it seems to be the go to investment these days.

I'm not saying it is black and white and there will be some benefit from investment in the private rental market, but do any of the landlords here sense any problem with the system?

Whats the real difference between

1: a group of say 10 investors, 9 putting down £7.5k each and one putting down £25k to all collectively buy a house to rent out

2: one investor putting down £25k and going to a bank which funnels 9 others savings accounts of £7.5k each so the investor can buy a house to rent out

also I dont buy the cries of better productive investment elsewhere. For a start the building exists or is going to be built. Someone is going to have to buy it. £100k lent to a BTL to buy/build a house is no more or less productive than £100k lent to a FTB to buy/build a house.


you need to start looking at BTL investors as capital managers. I know a lot of them are stupid and the crash wishers wont like that idea but that is what they are. A private equity firm may well have 1000 staff and manage £5 billion in assets (some of which will be buildings commercial industrial and residential). They tend to get paid well. A small time BTL landlord is pretty much the same but scaled down. Managing maybe £5 million in assets with just themselves.

you also look too negatively onto private landlords. Why not compare them to social landlords. Social rents here tend to be in the £400-600 per month mark. The social landlord pays no tax as it makes no profit. Its debts tend to be minuscule and with interest at todays rates it will be a negligible part of the equation eg £25k debt at 2% is going to be £40 per month or <10% of costs. That means the social landlords have non interest overheads of about £450 per month per property. this is of course just a rough guess but you get the idea. So why should private landlords not make similar gains since they are effectively working for themselves while the social landlord is paying that to its staff. A landlord looking after 20 properties should have at least a non interest cost gain of £4.5k per month for themselves and maintenance which would be on similar to social landlords but a lot of the crash wishers would cry omg the landlord is milking £110k a year from his tenants even though that would be the same as the social company. The landlord should actually make a significantly higher gain as private landlords cater to a different group which moves more and has higher demands than the social group. that is to say if the social sector tried to cater to tenants that stay 1-3 years they would find that their overhead costs are higher than the tenant that stays for 30 years and then dies while in the meantime not knowing their rights or ways to protest their plight doesnt complain when the property falls into terrible disrepair.

As for the capital side again its got nowt to do with the hpc wishers. Its a trade between the landlord and his funders (the bank depositors). One group wants little to no risk, a return on their saving accounts with no chance of nominal falls, the other side the landlord acts as the insurance and takes this risk. If the bank depositors want the risk/reward of the investment then they can go and buy shares in British Land or Shaftsbury or Great Portland Estates rather than depositing it in a savings account with RBS



long rambling post I know:eek:

cells

wotsthat wrote: »

An inverted form of snobbery where you have to prove your wealth has been earned from hard graft, productive means and enhanced the wellbeing of the country to meet with approval?

I don't see Fergus can be used as a representative example of much at all given we know almost nothing about his finances. Certainly about the state of the system - it would seem almost impossible nowadays to build a 1000 property portfolio using what we surmise were Fergus' methods.

it was a tradeoff

Fergus took huge risks that paid off. The crash wishers will claim he took risk with the banks money not his but at each step he could have walked with more and more money so his was indeed risking his own capital.

Where do people think the interest on their bank savings come from? Its mostly (something like 70% of all loans iirc) from rents or imputed rents. Its not the tooth fairy!


Blaming Fergus or landlords would be as silly as blaming depositors for putting their money into a savings account with RBS rather than not investing directly into property via a UK reit or even directly themselves with full cash purchases.

cells

chucknorris wrote: »

Of course the system is flawed, but I didn't make up the rules of the system, I merely invested within those rules, and of course it is not good for 'us' (us being everyone), but I didn't invest for everyone, I invested for my myself and my family. No one said it was skilled, my profession (both being a chartered quantity surveyor and university lecturer) is skilled, so I don't lack skills or knowledge. But I knew that that alone was not going to get me where I wanted to be, so I was prepared to take on risks, the reward (as I see it) was for taking on those risks back at the start of it all, not for having skills. So in fact, I am not actually disagreeing with you.

maybe its a problem of hindsight investment

im sure if property doubles in the next 25 years the same crash wishers will cry that landlords made a bomb out of nothing but lazy stupid risk free skill-less signing of a mortgage paper.

but today, they themselves wont put a penny into property or property stocks because its too risky

mwpt

cells wrote: »

Whats the real difference between

1: a group of say 10 investors, 9 putting down £7.5k each and one putting down £25k to all collectively buy a house to rent out

2: one investor putting down £25k and going to a bank which funnels 9 others savings accounts of £7.5k each so the investor can buy a house to rent out

That isn't what happens though. In example one, perhaps one of those investors was a street sweeper, meaning your street remains nice and clean. Perhaps one invented the little truck the street sweeper drives. Perhaps another is a fisherman. Perhaps another invented zip lock freezer bags. Whatever. The point is, their money came from productive means for which consumers were happy to pay, and they use it directly to invest in something else to make a return.

In the second example, with the bank in the middle, there was probably only one person involved and one lot of £7.5k, from the street sweeper. Due to the miracle of fractional reserve banking, the bank creates more money supply and lends to the property investor.

We bring forward future consumption. This isn't a bad thing in itself, but again, in my opinion, has gone too far in the BTL sector.

Again, I am not anti-BTL, I am anti the current system which I think has gone too far and incentivises or even mandates that you use debt. There are probably areas where the yield makes no sense without using leveraged finance along with the tax breaks doing so incurs. IMO that should never be the case. It should be the case where it is better to employ productive capital from investors if you can. If we can shift the BTL sector toward something approaching that then I wouldn't have much to say about it.

Graham_Devon

chucknorris wrote: »

If one believes (and there doesn't seem to be any reason not to) at least some of what has been reported about him, then it is hard to believe that he could be anyone's hero. But that doesn't change the facts about his financial position, the fact is that at the time of the 2008 crash, his property equity was massive, and prices are even higher now. To me, it just looks like a combination of desperate jealousy and wishful thinking from those who imply that he is in financial trouble, personally I really don't care how much wealth someone else has, it has no relevance to me.

Very convenient that you have missed out the fact that he was months behind on mortgage payments before getting a speical deal with the mortgage company (as the mortgage company also had a problem if Fergus went down).

This is what I mean by people seemingly wanting to back these guys up. Only half the story is ever given in order to make them out to be far more successful than maybe they are (or might have been).