The Road to residual income

Denzel09uk

Hi Guys

So today i have had an equity release agreed by the bank to re-invest in another property.


I thought i would start this thread to highlight all of my experiences along the way, thus helping other people who would like to do the same.

Today is the 1st day of this Journey as the equity release has been agreed.

Release date 5th Jan.
In simple terms
Plan is to buy at auction, refurbish and rent out.
I have spent the last 2 months researching every aspect of the pitfalls so hopefully i am as prepared as i can be.

Fingers crossed this is the start of something special.

UPDATE 16th December 14

Slight Disappointment but nothing to dampen the enthusiasm.
Acceptance form received from Woolwich to a value of £50,900, slightly lower than the expected £53k but apparently this is 80% LTV or 79.85% as the mortgage adviser stated. Release date confirmed as the 5th January,

UPDATE 22nd December 14
Advice: Always read the Legal Pack
I was interested in a property in the village of Burton Latimer, near kettering. A 1 bedroom ground floor flat. was just about to ring to organise a viewing and thought id read the legal pack first.
Special condition - Lot is sold with Limited Title Guarantee (Hmm alarm bells start ringing) now for me this has now put me off this property as im expecting to own the full Title. So im assuming Limited Title Guarantee means i dont own all of it. if Im wrong please let me know.

UPDATE 8th January 15
Funds have now been received and ready to go, i have 4 properties on the radar.

UPDATE 6th March 15
It's been a while since I have updated this, i have been searching for ages through rightmove, auction house, savilles and Cheffins. I had a legal pack review on a flat I was interested in costing £300, it turned out the flat wasn't remortgageable, I thought to myself how many more of these will I have to get done before I go to an auction let alone win one.
I decided to pursue the open market and try and find something that had been on the market for a while. I found a few in Nottingham. Went to view them and started negotiating with the vendors of the properties that I like. I went in with the mindset that if the offer got rejected then i hadn't lost anything.
Started negotiating with one vendor on a flat in Nottingham, market price on rightmove was £55,000 so I went in with an offer of £40,000. Knowing that the flat would cost around £7000 to refurb.
Shock it got rejected so I went in with £42,000 and said that this was the highest I would go.
Offer has been accepted and I'm waiting for the completion to happen.
Including refurb this will rent out for around £400 a month giving me a yield of 9.8%.
The perfect start on my road to residual income.

UPDATE 30th MARCH 15
Because i am effectively a cash buyer after releasing equity from our house, I had to organise a survey myself, expecting this to be around £750 i contacted a few in Nottingham to see what the deal was. I ended up paying £297 for a RICS Homebuyers Survey, 3 things came out of this survey. Electrics, Gas & Floors.
Electrics - The flat had an outdated consumer unit - £1500 inc VAT to replace and rewire flat
Gas - Boiler wouldnt switch on so they couldnt tell - Plan to get the boiler serviced £150 or replaced at £1800
Floors - The bathroom & Kitchen have thermoplastic tiles - The surveyor said these MAY contain asbestos.
Everything else is cosmetic
Not too bad i thought.
The searches have also come back clear, all systems go.

princeofpounds

Well good luck, I would be interested to hear about the auction process (what comes before it in terms of research as well as the event itself) and the renovation.

Denzel09uk

princeofpounds wrote: »

Well good luck, I would be interested to hear about the auction process (what comes before it in terms of research as well as the event itself) and the renovation.

Hi Prince


I will update this thread as i go along, and ill keep you posted.

YoungBusinessman

Good luck, il follow the thread and any progress. How soon do you plan to buy at auction?

Denzel09uk

YoungBusinessman wrote: »

Good luck, il follow the thread and any progress. How soon do you plan to buy at auction?

I plan to buy in January/February with refurb and on the rental market by the end of March,
With experience of turning my own home from £183k in 2010 to £265 today thought i have enough experience to pursue this dream ive had for years.

YoungBusinessman

Does the auctionhouse you are planning to use have a website? Keep the updates going as iv suscribed to the thread. Something iv always wanted to do, although im 3/4 years away from doing it so plenty time to plan.

AdrianC

Good luck with the auction - don't let your enthusiasm push you into over-paying or buying blindly... Be prepared to walk away if the bidding goes too rich. You'll make more money long-term by being patient and buying sensibly than by buying now but badly.

Denzel09uk

AdrianC wrote: »

Good luck with the auction - don't let your enthusiasm push you into over-paying or buying blindly... Be prepared to walk away if the bidding goes too rich. You'll make more money long-term by being patient and buying sensibly than by buying now but badly.

Thanks AdrianC


Thats what all the sites are saying, patience is key.
The websites im currently using are
Rightmove
Savills
Cheffins
AuctionhouseUK

YoungBusinessman

I know its only 5 days later but any progress?

Denzel09uk

UPDATE 16th December 14

Slight Disappointment but nothing to dampen the enthusiasm.
Acceptance form received from Woolwich to a value of £50,900, slightly lower than the expected £53k but apparently this is 80% LTV or 79.85% as the mortgage adviser stated. Release date confirmed as the 5th January,

PasturesNew

I presume you're not buying round your way with that budget. You can't get a bike rack for that much in your town.