Investing in off-plan property in London - any experiences?

andrewm1981

Hi,

I've done extensive searching but I have found little in the way of info. I have some money to invest, and I've always loved property. I Contacted the YPC group,who is a property investment company.

I've been to their office, they seem very professional , no hard sell, and are happy to spend time with you educating you about property

Their basic strategy is that they buy in bulk off plan property in big developments, that they feel with see above average capital growth. You then buy a unit, (eg: value £400k) for £360k as they get it for s discount, and they charge you a 3% finders fee £12k. If you get in at phase 1, you'll see capital growth very quickly, and by the time the development is done you'll probabky see 10-15% capital growth


It all seems very legit, and they seem very honest and transparent . Obv this relies on capital growth but the only places they sell are in great locations next to areas of huge government investment eg wembly at the moment, or Stratford 5 years ago.

So any thoughts anyone? I want to take the plunge,but it's alot of money if be putting in, and I'll only do it after significant research.

Thanks in advance

Andrew

pathtofreedom

Is this a btl or are you planning on living there? If it is a btl what do the costs work out to? If you're just hoping the price of the flat will rise how long are you planning on keeping it as capital gains could eat away at your profit.

Can you not do your own homework and save their finders fee else how are they getting such a good deal, as it isn't in the developers interest to sell at a discount unless they are getting something out of it.

andrewm1981

Hi, thanks for your reply.

It would be a Btl. You pay 10% now, then 10% in 3 months then 10% On completion. This comprises your 30% of your 70% LTV mortgage that you now have. So cash upfront is around £125k. On completion of the build (around 1.5 years time) you then get a mortgage on the remaining 70%, and start paying around £1000/month. Income is around £1600 / month. So around £600 profit/month on An IO mortgage.

Obviously you can then sell it or let it. The general idea is is that you let it and release some more funds from the increased value to buy somewhere else. Obv a lot of exposure to price rises or falls.

The prices seem quite good. Eg I looked at a lot of other places that had three flats and they do charge more, eg for the price of a 50sq m 1bed through YPC all I could get was a studio flat at 38sq m through other vendors.

So has anyone dealt with YPC?

pathtofreedom

Your sums look wrong to me, the "profit" won't be £600 a month, you haven't factored in all the costs of being a landlord, or the taxes.

What happens if your circumstances change in the next 18 months and you can't get a mortgage to cover the outstanding amount. You'll be in breach of contract which could get very expensive very quickly including potentially losing all your deposit.

If you want to get into BTL have a read of the landord threads to really understand all the costs and responsibilties involved. Why complicate matters by using this company too, as you'll just end up paying out in capital gains anyway if you sold straight away, that is if you can even complete still when it is built.

googler

Google

Inside Track
Instant Access Properties
IAP Global

and read this page and all the links therefrom

to see/hear stories of folk who signed up for pretty much the same sales pitch, and who saw their investments disappear when there wasn't any 'capital growth' from their purchases due to the market downturn.

What happens if the development you're investing in doesn't get built?

Check out the middle paragraphs at the YPC wiki

pyueck

andrewm1981 wrote: »

Hi,

I've done extensive searching but I have found little in the way of info. I have some money to invest, and I've always loved property. I Contacted the YPC group,who is a property investment company.

I've been to their office, they seem very professional , no hard sell, and are happy to spend time with you educating you about property

Their basic strategy is that they buy in bulk off plan property in big developments, that they feel with see above average capital growth. You then buy a unit, (eg: value £400k) for £360k as they get it for s discount, and they charge you a 3% finders fee £12k. If you get in at phase 1, you'll see capital growth very quickly, and by the time the development is done you'll probabky see 10-15% capital growth


It all seems very legit, and they seem very honest and transparent . Obv this relies on capital growth but the only places they sell are in great locations next to areas of huge government investment eg wembly at the moment, or Stratford 5 years ago.

So any thoughts anyone? I want to take the plunge,but it's alot of money if be putting in, and I'll only do it after significant research.

Thanks in advance

Andrew

Bold 1: Why do they believe this?
Bold 2: How do you know what the real price is, could you not get this discount yourself? Will you actually be owning this property? What is this 'finder's' fee for, are there any other ongoing charges?
Bold 3: Based on what? Nobody knows what will happen to property prices.
Bold 4: Based on what, going into their showroom?
Bold 5: Wouldn't touch in a million years. If I did I would go through the fee structure and contract with a toothcomb.