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Property Development
Comments
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Thx found itNo reliance should be placed on the above! Absolutely none, do you hear?0
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Hi Googler
You are right, the instant profit is when a sale is realised. But to be honest although there are still houses selling in the states (be it at a much slower rate) my thinking is to why not hold, enjoy the income from the rental and sell when the market recovers (whenever that happens). The reason why i said "instant" was just to i guess say that you get a head start with a property that has instant equity. So i guess "instant equity" may be more appropriate to use, but either way, its still pretty good considering you end up investing in a developed economy as opposed to a speculative investment in the middle of nowhere on a remote corner of the world
GDB here is the link: http://www.investmentpropertysales.co.uk/properties.php?cat_id=23
cheers
S0 -
Thanks Princess. I don't know much about the USA market, but looking at the UK properties on that website, I am not convinced that these claimed discounts are at all genuine. I'd have to do more research to be sure, but I am highly suspicious they've just marked up the valuation figures.No reliance should be placed on the above! Absolutely none, do you hear?0
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Just to give an example of that, there's one on their list in Malcolm Court Corby, Northants. They claim this has a market value of £145,000, and they are asking £116,000, but Zoopla suggest £97,988 for that block. The one they are selling has an extension and it's EOT, so it's difficult to be sure, but it doesn't look like instant equity to me. Indeed, why would they sell it below value?No reliance should be placed on the above! Absolutely none, do you hear?0
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Just to give an example of that, there's one on their list in Malcolm Court Corby, Northants. They claim this has a market value of £145,000, and they are asking £116,000, but Zoopla suggest £97,988 for that block. The one they are selling has an extension and it's EOT, so it's difficult to be sure, but it doesn't look like instant equity to me. Indeed, why would they sell it below value?
Hey again GDB
I see what you are saying about the valuation. i had a quick look at this property again and concur with the type of valuation you have said. But my experience of their valuations is positive and i looked into an explanation and figured that this property was listed a while ago and perhaps it explains why the market price is listed as high to what it is as today.
However, i wouldn't worry about the valuation too much because the final market value is determined by a RICS surveyor. So for example, if you wanted to buy a property from them and applied for a mortgage the valuation will be confirmed by a RICS surveyor. If the valuation does not come good, then you walk away. Its not like buying from a developer a couple of years ago where there were massively inflated prices and you reserved and exchanged, and got lumbered with an apartment you never wanted. These guys are normally OK at doing there due diligence and will normally have to put an accurate price on a property, otherwise they simply don't get a sale if the valuation is not confirmed by a surveyor. From my experience there is no commitment to buy until a "proper" valuation is done.
As to why they would sell at these prices, i had the exact same suspicion at the beginning too until i looked into the reason how they can sell property at reduced prices. What they essentially do is that they find buyers who want to sell a property quick an are willing to sel at a discount. These are buyers who may be in a hurry to sell because of repossession, illness, family inheritance etc. and these guys negotiate a discounted price from the seller for the luxury of the seller getting a fast sale without paying estate agent's fee etc. They then take the property, sell it to investors and make a living out of a fee that is charged to the buyer for getting a discounted deal. Its hard to believe and this is not normally common knowledge, but the people who know of them tend to keep this sort of buying a secret and are regularly buying from them.
i hope that helps
sonia0 -
This is very true, I have a friend who's parents owned 5 houses including their PPR, they thought they could get round CGT by renovating and selling them up serialy, moving into each one for between 6 months and a year each time.
Not long after the sale of house number 4 they get a letter from her maj saying that they believe they are trading and that their accounts are about to be investigated.
They were given allowance for house number 1 and number 5 but were clobbered for tax on houses 2,3 and 4.
Tax point. If you are "buying - renovating - selling" houses you will taxed under income tax rules not CGT. For a higher rate tax payer, the tax rate is more than double. Say bye bye to 40%+ of the profits to tax.I can take no responsibility for the use of any free comments given, any actions taken are the sole decision of the individual in question after consideration of my free comments.
That also means I cannot share in any profits from any decisions made!;)0
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