Independent Mortgage Advisor

JM92

I am hoping there is some mortgage advisors on here who maybe able to help.

Here is a bit about me, I have lived in the UK my whole life but moved to Spain in 2020. Since becoming a resident here it has made UK property investing a bit more difficult when it comes to mortgages, having tried 4-5 brokers including some who are meant to specialise in ex-pat cases I am always left underwhelmed and have done a lot of research on this my self including contacting and finding niche lenders and building societies who are able to help with my complex cases, when I go back to all these brokers they dont really have any input or idea about them and just offer to put the case through as the lender will only deal with brokers. It is frustrating as almost every time I know more about the ex-pat mortgages and lenders than the brokers. I dont blame them in anyway as I know an ex-pat case is probably not too common and my cases are even more difficult (LTC co purchase, put on a mortgage within 6 months of cash purchase, holiday let and EU resident!!), so its fair enough they dont have a lot of experience in this sector.

Fortunately for me I am financially ok, I have property income and also another e-commerce business which is managed and provides me an income so I am left with a lot of time. One thing I have always been good at is working with numbers, finances and property. I dont have any degree in this but by doing my own due diligence on over the last 8 years has put me in good stead and at 30 year old I free to do what I wish really.

I am in the process of putting another property on to a mortgage now after a cash purchase and feel like I am banging my head against a wall trying to work with brokers.

Over the last couple of weeks I have been looking in to doing a CeMAP course (1-3) and linking in with a mortgage network and giving it a go on my own. I have a great FCA specialist who works along side my other business so when the time is right I would move from network to completely independent and they can help advise and arrange FCA details.

I would only specialise in more niche cases such as ex-pat and property investing rather than FTB's etc, I feel there is a void in the market for this and being an ex-pat and investor puts me in good stead.

I have put my own 'database/list' of lenders together, from some bigger names to really small nice lenders and feel I can help people like me get connected with the right lender.

I have no problem doing the relevant qualification, creating a high spec site and paying for marketing to get me off the ground. I am also quite active in property circles which will help and would target ex-pats in the EU, UAE etc, living abroad also helps as I can advertise locally here, a lot of residents still have UK properties.

I dont need the income as such so dont mind if it takes me 6-12 months to start getting paid and build a client base. I just enjoy the financial side of things, it helps me with my properties and also links me in with like minded people while getting paid. Long term I would hope to secure some exclusive offers with lenders, I will have an active social media account where I will be up to date with new regulation, rates etc and be working with clients all over the world.

Starting off I would have lower fees to get my foot in the door, for example £99 on application, £399 on completion which seems reasonable for these cases, plus the commission from the lender. Eventually increase this once things go to plan, even offering reduced rates for regular clients.

Any feedback would be appreciated on this, thanks

Marcon

JM92 said:

I am hoping there is some mortgage advisors on here who maybe able to help.

Here is a bit about me, I have lived in the UK my whole life but moved to Spain in 2020. Since becoming a resident here it has made UK property investing a bit more difficult when it comes to mortgages, having tried 4-5 brokers including some who are meant to specialise in ex-pat cases I am always left underwhelmed and have done a lot of research on this my self including contacting and finding niche lenders and building societies who are able to help with my complex cases, when I go back to all these brokers they dont really have any input or idea about them and just offer to put the case through as the lender will only deal with brokers. It is frustrating as almost every time I know more about the ex-pat mortgages and lenders than the brokers. I dont blame them in anyway as I know an ex-pat case is probably not too common and my cases are even more difficult (LTC co purchase, put on a mortgage within 6 months of cash purchase, holiday let and EU resident!!), so its fair enough they dont have a lot of experience in this sector.

Fortunately for me I am financially ok, I have property income and also another e-commerce business which is managed and provides me an income so I am left with a lot of time. One thing I have always been good at is working with numbers, finances and property. I dont have any degree in this but by doing my own due diligence on over the last 8 years has put me in good stead and at 30 year old I free to do what I wish really.

I am in the process of putting another property on to a mortgage now after a cash purchase and feel like I am banging my head against a wall trying to work with brokers.

Over the last couple of weeks I have been looking in to doing a CeMAP course (1-3) and linking in with a mortgage network and giving it a go on my own. I have a great FCA specialist who works along side my other business so when the time is right I would move from network to completely independent and they can help advise and arrange FCA details.

I would only specialise in more niche cases such as ex-pat and property investing rather than FTB's etc, I feel there is a void in the market for this and being an ex-pat and investor puts me in good stead.

I have put my own 'database/list' of lenders together, from some bigger names to really small nice lenders and feel I can help people like me get connected with the right lender.

I have no problem doing the relevant qualification, creating a high spec site and paying for marketing to get me off the ground. I am also quite active in property circles which will help and would target ex-pats in the EU, UAE etc, living abroad also helps as I can advertise locally here, a lot of residents still have UK properties.

I dont need the income as such so dont mind if it takes me 6-12 months to start getting paid and build a client base. I just enjoy the financial side of things, it helps me with my properties and also links me in with like minded people while getting paid. Long term I would hope to secure some exclusive offers with lenders, I will have an active social media account where I will be up to date with new regulation, rates etc and be working with clients all over the world.

Starting off I would have lower fees to get my foot in the door, for example £99 on application, £399 on completion which seems reasonable for these cases, plus the commission from the lender. Eventually increase this once things go to plan, even offering reduced rates for regular clients.

Any feedback would be appreciated on this, thanks

The big question with any proposed new business is: what's your strategy for getting clients? Simply doing a qualification and offering 'lower fees' won't bring people thundering to your door, however high spec your site is. People are making a huge financial decision/commitment and will want to see evidence of an adviser who is well established, with solid references and great contacts. Being seen as 'too cheap' is likely to be a deterrent!

Talk to your current contacts and see what, realistically, you need to do to get referrals from them. You're only 30, ambitious and entrepreneurial - and at such a young age, you have time on your side to set yourself up properly for future success. That might mean working as an employee in a suitably specialised advisory business while you gain your qualification(s) and start to build those crucial contacts. Your database sounds like a great start, but you are in a highly competitive market, so anything you can do to put yourself even further ahead has to be worth considering.

Very best of luck for success.

JM92

Thanks for the reply.

My only issue is working for someone else (I haven't done that in about 12 years!) but more so I also have the property investment side of things and my other business, granted they dont take up a lot of time but I cant be taking regular breaks and phone calls to deal with my own business affairs but I do feel confident in my abilities to start from scratch and with hard work build it up.

The qualification and website etc is the least of my worries, finding clients is 100% the hardest part.
I can only do this by getting word out there, networking, reaching out to ex-pat and investment groups etc on social media and by also working under a network mortgage company who help with leads. I would also approach a marketing company and give them a monthly budget to help get leads.

Realistically I think it will be a couple of years before you start getting some of the benefits of the hard work but once the ball is rolling you are then steady away.

I fully understand the economy isn't great now but ex-pats and higher value investors looking to expand their property portfolio are not really affected to be honest, I am in a lot of property groups and have done it my self for years and we see the economy in its current affair as an advantage to increase our portfolio. I am not saying this in a braggy way but serious investors are a different game to first time buyers and normal families who are feeling the pinch and I would prefer to work in this sector as not only am I a great fit for it (living abroad and investing) but it is probably more stable long term.

Thanks again

JM92

Also, I hope that just by being in the same boat as these people I will win their business.

There is a few people out there who advertise that can offer ex-pat and buy to let mortgages, yet they are neither of these things (investor or ex-pat). I now know what lenders need and like to see.

One might look perfect on paper but they wont allow you to own the house in a LTD company, or they might make you wait 6+ months to mortgage it which is too long when investing. I can pin point a few who will take on anything (at a higher rate) but we know it will be passed, and then plan for the future such as remortgaging it again in 2-5 years on to a lower LTV or better product once we have overcome the initial hurdles.

ACG

Are you going to a broker who says they can do ex-pat or a specialist? I refer my ex-pat cases off to a lady who only does ex-pat stuff. This is good on 2 fronts:
1) If she cant place anything beyond a basic ex-pat case, she is going to be going home hungry and;
2) She can refer more conventional mortgages from those people back to me. 

If you go to someone who says they can do ex-pat along with everything else, then they are just a jack of all trades, master of none. Not really what you need as ex-pat in itself is quite niche but then with all the other bits on top you need someone who REALLY knows the market. 

On to your query though...
How many people are there who are like you? I am guessing your target market is very very small. Having a business plan of hoping to get those customers because you are in a similar boat is not a great business model in my opinion (but I am no dragon). 

In addition, saying you do not need the money is also not really going to get the networks excited. They will want you writing probably £30k a year maybe more - thats assuming they are actually happy with you doing mostly ex-pat stuff. My PI cover for example does not cover me for it, I can add it but theres no point as I do not target this business and I would not have the foggiest.

I cant see you being able to secure exclusive offers with lenders. You need volume for that. 

What you have done is not uncommon - ie researched your situation to a detailed level. I specialise in the adverse market, we occasionally get customers coming to us who have done their own research to a very good level. Sometimes we can still better their research, other times they have found what we would recommend. A lot of times though, they have done it to a level better than a jack of all trades broker. Sometimes they miss things - a good example being a couple who were both on DMPs. Most lenders only allow 1 DMP per application, but it is not actually published criteria. I cant compare it to ex-pats because you will know more about that market than I do (I know nothing about it). 

As a broker, I think my concerns would be:
You actually dont know what you dont know. Knowing a little is worse than knowing nothing - nothing wrong with that, we have all been there btw. 
You have no real desire to write the volume needed, not in the short term at least. 
Your target market is very very niche and your business plan is not exactly geared up to getting a large part of that. I suppose that could be a good thing as your conversion rate will be close to 100% and probably more reliant on being able to place it rather than competing with other brokers. 


Do you research, how many cases do you expect to get? 
How much is the average commission? (its about 0.35% on normal mortgage, I have no idea on ex-pat)
How much will the network want? 
How much will your mate want? 
What other costs will you incur? 

But if it was not for your mate I doubt you would get this off the ground so if he helps you, you owe him a very nice bottle of whatever he drinks. I just dont think there is enough in it personally - but despite all of my negativity, if you believe it go for it. My last boss told me I would fail and that was nearly 10 years ago. 

JM92

Its a problem I have faced a few times over the last couple of years, using 'general' brokers and even a couple of specialist ones. For example one specialist told me you cant get above 70% LTV on my criteria, the next one 75% at a push and then I sat down for an afternoon and spent a bit of time talking to some niche lenders and was offered 80% LTV at a lower rate than the 75%, I went back to the lender who seemed stumped and then came out with a line that he knows this lender and had an issue in the past so doesn't recommend them but will put the case through for ££. In all honesty you could tell he had no idea.
Its an issue I walk away from every time and think why is this so hard, surely there is a better way of doing it and in most cases I spend a few days and come up with a better plan!

When I say I dont need the money, thats not saying that I wont be putting in the hours and I am not intending on taking time away from my family for free. Factoring in training, website, networking, marketing etc I will be in a good few grand before I even take a call, but I am not going to come on here and say I expect to make £30k in year one, I know its going to be hard and I might only make £10k in year one, £30k in year two but I am in it for the long haul and I know getting the clients is everything and not easy. I would be happy running 1-2 applications through per month for the first 6 months, it might take me a couple of months to even get the first one but long term 8-10 per month would be ideal. My wife has previous experience of admin, PA type work at a higher level and is happy to step in and help keep things in order from day one as she does this incredibly well and between looking after our daughter she has time to help and if it takes off she will be full time as our daughter will be in full time nursery soon.

The exclusive offer is a long long term thing, not even on the radar now but a thought, of even partnering up with some of the niche lenders so we become a recognised broker. Either way I need to walk before I can run.
Another long term plan could be bridging finance, I know how to package deals and juggle bridging from my developments and can put a plan together including bridging and an exit plan (BTL mortgage), but again this is long term so dont hold me to that.

Regarding demand, there is about 250,000 properties owned by foreigners in the UK now and numbers are increasing, enough to make the government add an additional 2% SDLT to help slow them down. The pound is weak, economy is falling and some other countries (UAE, China/Asia) are on the up and snapping up properties. I have seen foreign investors spend well over £700k on properties and portfolios with out even flying to see them, as long as the numbers add up they take them.

Commission I dont know exactly, I know one ex-pat/specialist lender is 0.5%. I suspect they will all be around 0.35 - 0.5-ish.
From experience most of the expat investors will be going for higher end properties (£200k - £500k+) so not a bad amount plus the upfront fees. Plus it opens up more doors with lenders at the higher value end.

Networks, I need to check, from what I gather it can be around 15%?
I might even look at remote jobs working for larger firms to gain some experience on a part time basis (still self employed) so I can get some more experience, but again this is all stuff i need to plan.

I dont under stand the part about what my mate would want?



Thanks for the info though, anything you can share is helpful.
Forums always sound like doom and gloom, if I had listened to people on forums I wouldn't be where I am now as they always shoot your ideas down but my intention is to get some advice, tips etc. if I sink 12 months of my life in to this and £10k-£12k and have failed miserably I can say I have tried and not worse off.

ACG

The bit about your mate - I thought you mentioned working under your mates company? 
I have thought of another issue, if you are in another country that could be a problem. There is some debate over this, but in essence if you are in another country when you give advice/submit the application, there is an issue with whether the advice is regulated. I dont know enough about it, but I know there is a potential issue if we go on holiday and submit an application sat near a pool. 

I mean this in the nicest possible way (it sounds like you can take it without getting offended), I think you are going to be too much of a pain in the backside for a network - I have been in that position so please do not take it personally. 

- Low income (I have been there), it takes some time to get going but 2 years is a big investment by the network. 
- No CAS (again, I have been there). Another big investment by the network. Although your mate might be prepared to help you with this.
- Where you are based. Some networks will shy away from this. 
- The type of business you want to do. Some networks will shy away from it. 
- Your business plan... I would say it needs padding out. 

I know you do not fancy the idea of having a boss, but I think you need to find an ex-pat company, give up about 30-40% of your income for a year or 2, gain some experience and CAS and then revisit the idea. I had to do something similar, my boss also paid me short and late every month whilst telling me he made £10k that month. 

Annisele

ACG said:

I have thought of another issue, if you are in another country that could be a problem. There is some debate over this, but in essence if you are in another country when you give advice/submit the application, there is an issue with whether the advice is regulated. I dont know enough about it, but I know there is a potential issue if we go on holiday and submit an application sat near a pool.

I think this bit is likely to be a pretty big problem.

It sounds as though most (and possibly all) of what you want to do won't be a regulated activity in the UK. If you're only giving advice on non consumer buy-to-let business, and never going near a regulated mortgage contract, then there might not be UK regulation issues. But there might be Spanish ones - I've no idea what the Spanish equivalent of our financial regulation looks like, and there's a decent chance the network you work with won't know either. It's one thing for them to deal all the time with customers based in Spain, but another thing entirely for them to be operating out of an establisment in Spain. If they don't already have an EU presence, they're unlikely to want to develop one just to work with you.