17
Sep

Important Things To Know About Commercial Real Estate Loans

Commercial real estate loans are considerably different when compared to residential loans. They actually are much more complicated as they carry terms and conditions that are very different when compared to that of residential loans. This is one of the reasons that most of the investors fear to venture in the commercial real estate market.

Smaller investors of residential real estate are typically limited to somewhere around four to ten properties that are valued in between hundreds and thousands of dollars before the lenders conclude that it’s the sufficient risk level and no further loans will be made. The loan requirements for commercial properties can significantly vary between the private lenders and banks. Also, the loans that are held in the portfolio of a single lender may vary based on the risks perceived by the lenders.

Commercial Bank Loans

Normally, the banks want you and you and your partners to come up with a minimum of about 20 – 25% of the property value as the down payment. For instance, if the property value is about RS 4 Cr, you’ll have to contribute about RS 80 Lakh- 1 Cr as the down payment. Also, the recent researches have shown us that, most of the businesses have failed because of the lack of adequate capital to meet the needs.

For that reason, banks often require the business maintain a significant cash reserve that can be drawn on if cash flow is not adequate to make the loan payments. This financial requirement is in addition to the hefty down payment. One strategy that some commercial investors use is borrowing as much money as they can (even at a higher interest rate) to provide ample capital to build out the business and thereby increase cash flow.

Private Commercial Loans

Private lenders or the non-bank lenders typically offer less rigorous requirements for commercial loans. There are a few lenders who require lower down payment (range of 10-15%). These lenders often agree to carry to the loan amount up to 20 or 30 years until it’s paid completely (in most of the cases). However, they charge the slightly higher interest rate when compared to banks (1% or 2% higher than bank rates).

But when you do all the maths, the higher interest rate might not look very expensive as it appears the first time. Calculate the cost of higher interest over the period of loan and compare it with the cost you pay to open a new loan (2 or 3 times as the balloon payments come due).

The emergence of private or non-banking lenders is challenging the banks on their traditional terms of loans. While the banks are continuing to tighten the requirements to sanction the loan, these private lenders are moving towards a larger share as it is making it easier to qualify. So, if you are looking for a smaller commercial loan (less than 15 Cr) or a medium loan amount (less than 35 Cr), consider taking your time so that you can find the lenders who can offer you the acceptable time and term constraints.

17
Sep

What Goes Into a Feasibility Study?

A good feasibility study can make a difference when analyzing a potential development project. This helps you to see if whatever you are doing could end up being profitable. Here are a few things that will go into your feasibility study.

What Will It Cost?

The cost associated with preparing a building and subdivision should be checked. This includes a look at how much money it will cost to build a space and then maintain it properly.

How Long Will the Project Take?

The length of the project should also be put into consideration. This includes a review of how long it will take to actually build a property and then get all its units filled. The estimates will be based on points like weather conditions, the resources available for construction and the local economy in terms of who might move into your project.

What Is the Soil Like?

The soil conditions for your development aren’t always thought of as being important but they can make a difference. The soil conditions must be checked based on how easy it is to get a construction project going there. Drainage requirements may also be studied to determine if you can actually get a place prepared right without worrying about flooding.

What Are the Utilities Like?

The proximity of your space to utilities like electric and water services is important. This is to help you get the best possible connections set up in as little time as possible.

What Rules Are In An Area?

The zoning rules associated with your development should be checked. These refer to how you can utilize the space you are in. You must look to see that you can legally operate a business or residential site on a location before getting a development up and running.

What Is the Political Climate Like?

The political climate in the area that your development will be in is important as well. This refers to whether or not people are willing to support your project. You might have to make some adjustments to your project if people are not all that willing to support what you are doing.

17
Sep

Property Management Made Simple

A fast, simple and effective way for landlords to manage their property portfolio with minimum hassle.

Being a landlord or a property manager can be an arduous task. There is usually an endless list of jobs that need to be taken care of, whether you’re managing a single property or a vast portfolio. There are several landlord property care apps offered by property management groups to help property owners in managing their property and keep everything running smoothly, taking the stress out of daily tasks.

WHY DO I NEED AN APP FOR THIS?

Downloading the app provides a simple and efficient way for you to manage your properties. It’s intelligently designed, easy to use features have been developed by the experts in app development to cater for your specific requirements. With its key features you can digitally take control of all tasks with a swipe of your finger.

KEY FEATURES:

  • Managing Tenants
  • Monthly rental payments
  • Utility management
  • Rent review
  • Property inspection reports
  • Annual safety tests
  • Lease management
  • Print yearly/ monthly taxable finances.

MANAGING TENANTS AND RENT

When it comes to managing rent owed and tenants the app couldn’t make it simpler if it tried! You go to the sub section you need, click the icon and straight away you can add new tenants, storing their personal information i.e. phone number and address, as well as their moving date and contract end. As for rent you merely need to select the property in your portfolio, specify the date, rental fee and Estate agents commission and you’re sorted. This saves a lot of time and productivity in the long run, meaning you’re not chasing any overdue payments or tenant details.

TAX MADE SIMPLE

Everyone knows that trying to keep on top of yearly tax returns can be a nightmare, but this is just another reason why this app is extremely beneficial. It allows you to do your own book-keeping on the move, by logging all of your income and expenses, when and where you necessary, to keep on top of your accounts. In the long run this will be more beneficial for your accountant or even for yourself if you organise your own accounting. Moving forward, this means you can review monthly and yearly reports with the tap of one finger, as well as track your taxes making your End of Year returns report easy to access, and print off for your benefits.

The same format is used when logging Expenses, again these are all kept in one place, and you can easily input property expenses through their individual property details and log important expenses such as Interest only mortgage, Capital Mortgage, Repairs, Insurance, Cleaning, agents involved etc.

ADDITIONAL SUPPORT

An additional benefit is that you will have a dedicated support team which promises to assist you with any technical and non-technical help that you may require. This gives you reassurance and trust that your portfolio details are in the right hands, and that all information is deemed confidential, to which you will only have access to, and none of which will be shared to other Property Managers.

In conclusion the Landlord Property Care app is truly a sensational digitally advanced way to manage all your business related requirements from your phone, and is considered to be the way forward in Property Management advancement.

17
Sep

How to Find the Best Building Contractor?

You may be looking to purchase a residential property or a commercial property there are certain things you must do when looking for a building contractor. Doing those things is important as that will allow you to reach the best person easily.

Your first step should be performing a detailed research. First, make a list of contractors developing in the area of your choice. Then perform thorough research on each individual or company. Gather knowledge about the kind of track record they have; this can be done by talking to people who have already dealt with them. The majority of the modern-day contractors have websites representing their companies. Visit those sites and read testimonials written by clients; you can also read some online reviews published on reliable review websites.

If you are struggling to find a good contractor, you can ask for recommendations. Contact friends and relatives who have recently purchased properties. This will surely help you to gather names of some reliable builders.

Your next step should be viewing work samples. Here, we would like to advise you not to opt for the first project of any builder. Always opt for companies or professionals who can show your samples. Looking at the past projects of the person or company you are looking to rely on will give you the confidence required for investing a big sum.

Don’t forget to check certificates and licenses that make a construction a legal construction. You can talk to your lawyer to know what kind of licenses and certificates a real estate contractor must possess. If the contractor fails to show you necessary documents, don’t think twice before discarding him.

Whatever might be the area of the property you are looking to purchase the builder should be able to offer you a fixed price quote. You may be looking to buy a commercial property covering an area of 15000 square feet or a 2BHK apartment covering an area of 1000 square feet, you must get a fixed price quote before completing the registration procedure.

If it’s a residential property, you should know what kind of neighbors you will be having once you start living in the newly purchased apartment. Top real estate contractors always make sure that people buying apartments from them have a good background. So, it’s extremely important that the company you are purchasing the flat from is one of the most trusted builders in the area it is operating in.

17
Sep

The Changing Face of Real Estate Communications

Some of the important features of communications in the Real Estate industry are enumerated below:

Communication of Trust: Buying or renting a property is one of the more significant decisions in our life. And therefore, it also becomes a crucial one. No one makes a decision on this aspect without being able to trust the other party or the offerings available. Therefore in the real estate space, sellers & agents ought to be able to communicate trust to their consumers. Inability to communicate trust or breach of trust in the middle of a transaction can lead to serious implications for both the buyer and the seller.

Communication of Availability: All consumers would like to have an assurance that the seller is available post-sale for any contingency. Often, in case of real estate agents, they are working on multiple leads and might find it difficult to tend to each one of them at the same time. Going incommunicado only heightens consumer anxiety while the agent might be genuinely tied up. Communication technology now allows for remote handling of calls, or auto call forward options which can keep your consumer at peace.

Communication of Transparency: A real estate agent is often misconstrued to be only interested in his own commission even at the cost of endangering a consumer’s interest. However, often it is overlooked that the agent himself might be in the dark on certain issues. Documents and land records are easily fabricated in the physical realm, with the agent completely being unware. Therefore, the emergence of digital records and ownership records means that all the stakeholders involved can swear by improved transparency.

Communication of Consumer Interest: The consumers today are far more knowledgeable, informed and keen-eyed than those from yesteryears. There is a greater availability of information and improved means to cross-verify everything spelt out by agents and sellers. Thus, it is increasingly important for real estate players to embrace the virtue of consumer interest. If an agent or agency fails to communicate the fact that they remain squarely committed to the interest of the consumer, they are unlikely to build any form of viable consumer connect.

In the real estate space relationships count for much – both the real-world and virtual. The relationship forms the basis for trust consumers place in agents. And the fundamental building block of these relationships is to be able to communicate with the consumers. Communications is not limited to spelling out the property details. It is about impressing upon the consumer that the real estate business is trustworthy, available, and transparent and has consumer interests on top of their mind at all times.

17
Sep

Before Buying Size Your Residential Real Estate Needs

The largest investments we make in our lives are often the hardest to refund, that’s why it is really important to figure out what you need and then move on with your search. If we talk about the big investments, one thing that people spend their whole life’s hard-earned money is real estate. No matter whether you are extremely rich or a common man saving every penny to buy a home for his family, you can’t afford to make an impulsive decision and turn your moment of joy into remorse by settling down for something you never wanted. It is crucial to know about the options you have before taking a plunge into home buying, for they say half of your search completes when you are sure about what kind of home you are looking for. The list of the options that any average home seeker can look for in the real estate market includes:

Newly Constructed Home

What could be better that designing each and every detail of your dream home yourself? Planning your house yourself give you the leverage of choosing every little thing from layout of the structure to the color of the cabinet, which is one of the most dominant reasons why the culture of newly constructed house is increasing day by day. The major drawback that comes along buying a brand new constructed house is the list of unplanned expenses that occur meanwhile the construction.

Condominiums

Condominiums are the individual flats located in a multi-story building. The condominium building generally has its own recreation centers, parks, shopping hubs and is governed by an association that determines the monthly fee and takes care of the maintenance and improvement of the building. The major drawback of living in a condominium is the lack of privacy and increased depreciation during a housing- market downturn.

Townhouses

Vertically joined in a row with other similar looking houses, townhouses are perfect for the people who are seeking for the privacy of a single family apartment along with the exterior maintenance of a condo. Townhouses are generally located in the vicinity of schools and parks. They are bit cheaper compared to the condominiums and newly built houses but will not be the right choice if you are overly sensitive about noise coming from the adjacent shared wall.

Foreclosure Property

Foreclosure properties are known to be an inexpensive alternative for the people looking for a previously owned home that require minor repairs and modifications. A foreclosure property is also known as Real Estate Owned property and is often owned by the lender as the previous owner defaulted on paying back loan. Foreclosure properties are usually up to 65% below the market and are considered to be best deals on the market.

Second Homes

The second home is a secret hideaway people buy to get away from the standardization of life and spend a week or two into the woods away from the hustle and bustle of town. The second or vacation homes are difficult to maintain as there is no one to look after the repairs and maintenance of the house when you are away.

Now that you have a brief idea about some of the real estate options available for a home buyer, figure out what kind of house you want and plan your search accordingly. Buying real estate is not a small step but with lots of knowledge and right guidance you can make the most out of your investment.

17
Sep

How Much Should I Pay for an Investment Property?

Many people wonder if there is some formula to be able to reach reliably, the amount of money one needs to spend in order to invest in a significant gain of Investment Property. It is worth mentioning that more and more people have already started to deal with such real estate investments and also with remarkable results. This is because the housing market to hire is highly effective and can bring substantial profit and fast payback of the initial investment in less time.

Although each housing market correlations may vary, there is some items worth to know and to take into account when going to buy one Investment Property. One significant size is the CAP rate. The capitalization rate is the relationship between the amounts of net income from the rental of this house, with its total market value. The net income can be calculated approach if from the annual rental fee we subtract approximately a rate of 10% for taxes, maintenance, etc. If we divide this net amount to the real value of the house, we find the CAP rate. A remarkable CAP rate for newly built residence that do not require special maintenance should be about 8%, while for most old houses or repair this figure should be at least twice.

Another important factor that one must consider about the amount of money you spend on one Investment Property is how the local rental market is moving in this area. If, for example, invest in a house with low rental rate frequency, even if spend little money, this will harm us in the long term. Unlike the high rental rate can ensure us a risky investment. In this issue should be considered and the place of residence, as well as the direct benefits it offers, such as hospitals, banks, schools, etc.

Operating costs that this house will have should be the lowest possible. That money will be spent on maintenance repair and care of the house should be the less possible. This may help if several of these procedures you can take yourself. The less expenses the higher net profit and therefore easier to recoup the investment.

The amount of money you have to pay for one Investment Property depends on all these factors and therefore should be carefully choosing your moves. Investment as one understands with lower risk are those relating to new houses, modern, with several facilities, comfortable accommodation and easy maintenance. This means that the price of the rent of such housing will be high and our monthly income is quite important. Another good here is that if we want we can maintain the Investment Property for 10 years and then sell it at a very considerable value, something that will not be easily achieved by an old house.

17
Sep

Top 5 Reasons to Invest in Real Estate Instead of Stocks

If you are reading this article, you are probably considering investing in real estate, but you are not sure if investing in property really makes sense in the current economic situation. You may be also wondering if you should be investing your money in the stock market instead.

Well, we can tell you that in China, there is no confusion over this issue, which is why Chinese are the biggest buyers of overseas properties in the world – they buy properties across Europe, North America and Australia, and they are pretty clear headed about this. And they did, and still do, the right choice, since in 2015 there was a crash in the stock market in China which had as a result a trillions of dollars worth stock market wealth wiped out.

Really, real estate investment is much safer than investment in the stock market – history bears this out. Read on for the top 5 reasons to invest in real estate instead of stocks.

Reason #1: Real estate investment generates cash flow straight away

If you have checked stocks that pay the highest dividend, they pay 4% or less annually. This is not a bad return, especially when you consider that banks give you a return of just 1% or less, but this is only a little over inflation. So, you won’t really make much money till you actually sell the stock. With real estate, you can rent out your property and earn an excellent cash flow from it, of anything from 5% to 10% of the price of the property. Also, you can earn substantial profit over the sale of the property.

Reason #2: You can be an expert on real estate and will have access to special information

One significant drawback about stock market investment is that nothing can remain hidden. Any company listed on the stock market should make all information on its finances available to anyone who seeks it. So it is impossible to have any special knowledge on a stock which nobody else knows, and even harder to profit from it. On the contrary, with real estate, you will have access to special information about the property market in your area that nobody else does. For example, if you own a property in a cosmopolitical island, you will know specific details about this island’s property market, which will be known only to a few people, of whom only a few of them would be active investors.This allows you to set the right price and market it to the right buyers.As a result, you will have to reckon with much less competition.

Reason #3: Real estate investments are easier to value

It is very easy to value a property. If you have seen a luxury property and don’t know if the price being asked for it is fair or not, you can always ask a trusted estate agent to value it for you. As a result, you will get an accurate estimate from them, since they have special knowledge of the area. However, when it comes to stock markets, the prices change every day and every minute. There’s no way to tell if you are paying too much for a stock After all, it is not easy to evaluate a stock belonging to a company worth billions of dollars, unless you are Warren Buffett.

Reason #4: You can inspect your real estate investment closely

You can conduct a thorough inspection of the property, talk to the owner, discuss with your real estate agent, examine the neighbourhood and evaluate it before buying it. Are you surely aware of how difficult it is for an ordinary shareholder to inspect a company, talk to its representatives and evaluate the corporation?

Reason #5: You can always negotiate to buy the real estate below the market value

Typically, during negotiations, the property owner agrees to cut down the asking price of the property. Of course, this does not happen every time, and it depends on exactly how desperate the owner is to sell – he may not agree to sell it below market price if there is a lot of demand for the property. But, you can always try your luck. With investment in the stock market on the other hand, there is no room for negotiation. You have to pay whatever the market price is at the time you buy the stock.

Conclusion

Whether you invest in real estate or in the stock market is something that depends on your appetite for risk and personal knowledge. If you are an expert stock-picker, then investing in the stock market makes a lot of sense. But then not everybody can be like Warren Buffett. That’s the reason most people find it easier to make money from real estate than from the stock market.

17
Sep

How To Raise Finance For Your Property Investment

Raising Finance

There are many ways of investing in property, even if you don’t have any money. Lease options and Rent to Rent are two very popular strategies. You can create a lot of cash flow by packaging and sourcing deals for other investors for a fee. However, it doesn’t mean that if you don’t have money, you can’t invest in multi-million pound projects such as developments, commercial conversions or normal BTL properties worth a lot of money.

There are people out there who are waiting with their cash to invest in your deals instead of having their money in their bank where they’re unlikely to get much return. Money loses value every single day and after paying taxes, they may just break even or make a loss. That is why they look for new opportunities. Some of those people are cash rich and time poor, meaning they don’t have the time to find deals. These investors are looking for people like you to find and negotiate deals so they can finance it and share a profit with you. You need to start hanging around with these sorts of people; tell them what you do and build a relationship with them at the networking events, exchange business cards and after the event follow up with everyone the next day via email. You can say things like: “Hi Mr Smith, it was a pleasure to meet you at the property networking event yesterday. It would be great to meet up with you to discuss further business opportunities. Please let me know when you’d be free to meet up.” Or you can say things like “There is no free lunch, but there is when I am in town.” It all depends on who you deal with. This is just a simple example. If you are good at writing emails you can develop it, but try to keep it short and to the point. Remember: dress to impress; you can never get a second chance at a first impression. Who you hang around with is who you become and your network is your net worth. If you told us how much five of your friends made annually we could predict your salary.

We will name a few places and products where you can raise money for your property investments. Even if you have a lot of money and you start investing, you will eventually run out of money one day. That is why it’s very important to raise finances and use other people’s money instead of your own. All successful people do the same – they don’t use their own money.

Joint Venture (JV)

This is a very good way of building your property portfolio quickly with minimal risk and no capital required. JV partners could be people who you meet at networking events. Some have a lot of time and will bring you good deals, whereas others are very busy but have a lot of cash to invest. If you are working with private investors they will have business experience that can help you. This will be very beneficial when analysing deals, legal issues, profit and loss etc. It is much easier and quicker to build a property business with partners than by yourself. Before entering in any JV agreement, make sure you do your due diligence on the person you are dealing with and consult with your solicitor. JVing with other people has positives and negatives so you need to analyse it before you enter such an agreement.

For a joint venture to work, you need to choose the right partners; each partner needs to bring something different to the partnership. It’s important to have clear documents that outline how the partnership will work so you know who is responsible for what. You need to be honest and open with each other.

I (Damian) experienced bad partnerships many times and lost a lot of money in business but it wasn’t their fault – it was mine. You need to take responsibility for yourself. If I had done enough due diligence on the people I was partnering with I would never have gone ahead with the deal. But I am happy that it happened as it was a good lesson and I will never make the same mistake again. It takes time to find good partners and you might be lucky and find a good one in the first place. Remember there is a golden rule in business: trust but verify! I have done many good deals with my current business partners and it would never have happened if I didn’t go to networking events. Shane and I travelled all the way from London to Florida just to network and meet new people who we can do business with. That is called sacrifice; we do whatever it takes. Do today what others don’t, to have a tomorrow that others won’t.

You can also JV with your friends and family; you provide the deal and knowledge whilst they bring the money required. Once the work is done, you share the profit 50/50. There are many different ways of structuring JV deals. For example, there might be people who are not interested in monthly income but investing money for capital appreciation. So instead of sharing the profit 50/50, you take the cash flow every month and they take the equity. The amount the house appreciates in value will benefit your JV partner, but make sure you have an exit strategy in place so you don’t have situations where they want to sell the property but you want to keep it.

Remember that 50% of the deal financed by a JV partner is better than 100% of nothing.

Crowd Funding

Crowd funding is getting more and more popular. There are a lot people with a good business plan and models but with limited finances. Raising money from banks is difficult and bridging is expensive. Many investors look for opportunities where they invest their money for a share in a company or project in return. It is very common in this day and age to start big developing projects where there are few investors that fund the project together to build apartments, and once it is sold they share a profit equivalent to the proportion of the money invested. In some crowd funding projects, anyone can invest money and get, for example, a 10% return on their investment. Quite often there are hundreds of people investing in one project. This is an extremely powerful strategy and it’s now even used to raise money for start-up businesses and movies.

Credit Cards, Loans and Overdrafts

When we started our property journey we had no money and a lot of debt. Our favourite source of investment at the time was credit cards and overdrafts as we didn’t know many people who we could raise the money from. Most of our credit cards were maxed out, so we had to increase our credit limits. Our first property investments came from none of our own money! When you have no money you must start thinking outside the box as you have little choice. These tips came from our mentors, they showed us how to do it and what to say when talking to the banks as this is very important. If you tell your bank that you need money to invest in property then you can forget about them agreeing.

From being broke, we both achieved financial freedom in just one year of investing in property. It all came from knowledge that we acquired from our mentors, books and creativity, so we managed to crush the myth that you need money in order to make money! If you want to master the property game, you need to have the knowledge to be creative. That is how winning is done. Most of the multi-millionaires and billionaires are self-made; they started from zero or debt, so anything is possible. You just have to believe it, set up a plan on what you want to achieve and how you are going to get there; for your dreams to come true you first have to wake up! You can have anything you want in life, you just have to be hungry and believe that you can have it.

Sylvester Stallone (Rocky Balboa) is a great example of a self-made millionaire. He started from humble beginnings – he was evicted from his apartment and was homeless for a while. In March 1975 Stallone saw Muhammad Ali fighting against Chuck Wepner. After that fight, he went home and started writing a script, taking inspiration from both the fight and the autobiography of Rocky Graziano to start writing Rocky Balboa. Stallone attempted to sell his script to multiple studios with the intention of playing the main role in the movie. Although receiving enormous amounts of rejections, which went on for several months, he never gave up. He was finally offered $350,000 just for the rights to the script without him playing in the movie. He refused to sell it unless he could play the main character, so after a substantial budget cut to compromise the producers agreed to have him as a star, and the rest is history. He could have just taken the $350,000 which for him at that time was a lot of money, but if he did he wouldn’t be where he is today. That shows determination. There was a time in his life where he had to sell his dog for $50 because he didn’t have any money to feed him; after his success with the Rocky Balboa script, he bought his dog back for $15,000.

Angel Investors

There are a lot of places to go where angel investors spend their time. All you need to do is search on the internet for the closest one to your area. Millionaires and billionaires come to these places and look for people with great ideas for a new business where they can invest their money for a share in the company in return. More importantly, not only will they invest, but they will also give you all the support you need, which is priceless. They usually have their own power team that has expert knowledge in marketing, branding and selling. Of course, you must know everything about the business and have a great pitch that will attract the investors to persuade them to invest in your company or project.

You need to make sure you know your numbers; know everything about your competition, if there is any, and have a great unique selling proposition (USP). Having a mentor that has already achieved what you want to achieve is precious! I (Damian) have invested and started many companies before property investing. I invested all the money I saved from my part-time jobs and I lost it as well as getting myself into debt. The main reason I failed in both businesses was because I didn’t know what I was doing. I had no guidance or a mentor to tell me how it needs to be done, what needs to be changed and what it is I was doing wrong.

When I started property investing, I had a mentor from the beginning and that is why I succeeded and I have done it in a very short space of time. I knew exactly where I was going and I knew that I had the support if I needed it. Every successful person has a mentor; imagine a footballer in the English Premier League or an athlete without a coach. Do you think Usain Bolt, the fastest runner on the earth, would be where he is today without a coach? We have paid a lot of money for mentoring and coaching, but with angel investors you can receive investments and free mentoring for a share in your business.

Family and Friends

There are a lot of people such as friends and family that have money sitting in their bank accounts without getting much return on their savings. Believe it or not, but money goes down in value all the time; inflation kicks in and prices go up. What you could buy for £10 ten years ago you can’t buy anymore. That is why it’s very important to invest in assets that appreciate in value. If you get a good deal, you can ask your friends if they would like to get 10 % return on investment on their money. I am sure they will like the idea as in the bank it’s unlikely they’ll get more than 1%. How you give it back is flexible; once the property is refinanced or pay them interest each month. It all depends on the individual and your agreement. Once they get their money back after the first deal, this will prove you can be trusted and they are likely to lend you money again.

Sell Liabilities

What do we really mean by selling liabilities? A liability is something that takes money out of your pocket, e.g. if you have a car that is worth £10,000, it will go down in value every single year plus it will cost you money every single month. Car insurance needs to be paid, road tax, petrol, MOT test, car maintenance and repairs. If you sell the car for £10,000 and buy a property below market value, you can refinance the property after 6 months and buy a new car or you can get a new car on finance as you will have a passive income from the house you bought. Every single month the rental income will pay for your car without you physically working to pay for it, so instead of having just a car, now you have a property plus a car that is paid by the asset you have acquired. What would you prefer?

Bridging Loan

A bridging loan is a very good method if you need to borrow money for a property that you want to buy very quickly. It only takes a few days for the bridgers to accept your application and lend you the money; in some cases 24-48 hours. If you borrow for the first time and pay back successfully the next one will be much easier and quicker because they know that you are reliable.

Bridging loans are mainly used by investors buying houses at auctions where you have to complete the purchase almost immediately. You cannot do the same with a standard mortgage company. Bridging loans have very high interest, from 1-3% per month or more in some cases. You need to know your numbers and have an exit strategy in place as it’s a very risky loan. If you have never taken out a bridging loan, make sure you consult with a financial advisor beforehand or somebody that has experience in bridging so they can make you aware of the potential problems that can arise.

Social Media Groups

There are a lot of property investing groups on social media that you can join for free. You can ask questions, gain free advice and find potential business partners. You can even sell and buy property deals, subject to how active you are in the forums.

Before buying anything, make sure you do your due diligence on the person that is offering the deal and on the property they are offering. We had many deals that came our way but when we did our due diligence we found out that many of these properties were on Rightmove and Gumtree, revealing that we were not being offered a discount or, in some cases, they were trying to charge us above market value!

Seminars and Networking Events

This is our favourite way of raising finance, as most of the deals we have done and money we’ve raised came from people we met at seminars and networking events. Some people we know say that we are lucky because we manage to sell a deal or get a deal financed that made us a lot of money. But guess what? If we were sitting at home watching TV, playing PlayStation or going to the pub with friends, we would never have met the sources and our business partners. It’s all down to our hard work and the time we spent building relationships and our network. Your network is your net worth and it’s not who you know but who knows you.

You first need to invest some money into the relationship before you start to do business with anyone. We invite potential business partners for dinner, for example. Is food free? No, it isn’t! Is transport free? No, it isn’t! You need to pay for eating quality food, for petrol or a train ticket. People who say you are lucky forget about all the sacrifices, costs and hard work. Business relationships are similar to dating. You shouldn’t ask for sex on the first date; it’s the same in business. You need to meet multiple times and build a relationship with a potential business partner before you do any business together.

Private Members Club

There are many different types of private members’ clubs. If you are a fan of cars, you could look into a Ferrari or Lamborghini private members’ club. You don’t necessarily need to own one to be a member. People who can afford these kinds of cars are definitely the ones with money so it could be a huge benefit to hang around with them and build relationships that could add value to your business in the future.

There are also yacht clubs, gentleman’s clubs, luxurious concierge services where you pay a monthly fee of anything between £50-£200. You get access to the best clubs in your city for free where you don’t need to wait in a queue. Impressive restaurants and sold out VIP events from the world of music to theatre, film, sport and art. There are many different private members’ clubs to choose from – it all depends on what you are looking for and what interests you. You can find more information about private members’ clubs online.

High End Gyms

The gym is a perfect place to network with people. There are reasons for that. First of all, you will see the same people every single day or at least 3-4 times a week because if you want to keep healthy and fit you need to work out on a regular basis. When you meet someone every single day and you make eye contact with them they will remember your face, and eventually you will start talking to each other. You will share weights, benches and equipment together and if they like you, you might even come to the gym with them at the same time and work out together.

The main reason that we mentioned high end gyms and not just any gym is because this is where wealthy people go to exercise. Wealthy people won’t go to any local gym as they like luxury and great customer service – everything they need is in one place from nutritional guidance, private medical care, spa treatments to DNA testing to determine what exercise suits them best. They also want to hang around with other people who are successful because who you hang around is who you become.

High end gyms have very expensive joining fees, which could be anything from £400-600 and a monthly fee of around £185-240. The most expensive one in London is in Knightsbridge, which costs as much as £2000 to join and £500 per month. There are a lot of gyms to choose from that are also very good and attract successful people and cost much less. David Lloyds or Virgin Active gym will cost you around £70-90 per month. High End gyms cost a lot but sometimes it is money well spent. If you can find someone that could finance your project of £500,000 to £1,000,000 or JV with you, isn’t the £200 per month worth it? Some people spend £3 on a coffee every single day, £3 x 5 days= £15 per week! In one month, that’s a cost of £60. What if you could save this money instead and put it towards the gym membership that will be much more beneficial and healthier than your daily coffee?

There are many more places where rich people spend their time. A charity ball is a good place to go as people spend a lot of money there bidding and raising funds to help the less fortunate.

There are very cheap and also very expensive ways of raising money. Everyone’s situation is different. You might be able to pay the £200 for the gym membership or you might prefer to go to free seminars or networking events. If you keep working hard and you are out often meeting new people, you will build your network and you will find the people who you are looking for. It might take you slightly longer than the more costly route as it may attract wealthier people, but you will still make it as you might meet someone who knows somebody who has the money and would like to invest it or get a better return than the bank is giving. We had to choose the cheap route as we were in debt so didn’t have the money to join expensive clubs. We are a living example that you can build a big network without spending £200 per month on gym membership. We met most of our business partners and investors at networking events and seminars, but we worked really hard to build those relationships.

17
Sep

10 Tips Buyers Should Consider Before Buying a Farmhouse

For most people, specially those of us living in the cities, it is a dream to own a farmhouse which derives from the longing to escape our fast-paced, busy and crowded city-life. We dream of having a small place to enjoy leisurely weekends, sunbathing in winters and enjoying the cool evening breeze in summers. We seek solace, peace and quality time with ourselves and/or our loved ones and farmhouses match the requirement perfectly.

Points to remember before buying a farmhouse:

    1. Don’t believe every word you hear! Remember, every piece of advice cannot be right. Your uncle, a family friend or your brother’s friend maybe your well-wishers, but mostly advices are either personal opinions or rumors.
    1. Find a good real estate agent and if possible also consult a local lawyer, one who understands the local property laws thoroughly.
    1. Take time to sniff out issues related to the property. Don’t be in a haste while investing in property. Do your research and visit several locations before finalizing on anything.
    1. Decide a budget that you want to spend and also decide the upper limit that you are willing to invest.
    1. Remember to use your head not your heart in the matters of property. Relax and take your time to think over things. Agents often push the buyers to close the deal hastily often scaring that you may lose the deal if you don’t act upon it soon, but try not to make uninformed, enforced and rapid decisions.
    1. Neighbours are important. Your neighbours can be an indispensable asset, specially concerning common issues. It’s good to have support on your side.
    1. Remember owing a farmhouse means you will have to dedicate a fixed amount towards maintenance every month. You would also require a permanent caretaker to take care of your property as you wouldn’t be staying there on a permanent basis.
    1. Decide the purpose of purchasing the farmhouse – is it for investment purpose, for farming, for sports/outdoor activities or just a place to escape every once in a while. Once you are clear about the purpose, you can plan ahead accordingly.
    1. Check that the property should not be falling under the coastal regulation zone and hire an advocate to check all such legalities.
  1. Consider the sources of water on the property for irrigation as well as drinking purposes, specially if you plan on farming. The fertility of the land also plays an important role – accessing soil information is highly important.

To conclude, spend some extra time and money to reach a sensible, profitable and smart decision. Consider all the factors, don’t take advice from everyone (remember everyone has their own opinion), discuss the matter with a few close ones and involve professionals. With all the right information and people by your side not only you will be confident, but also in a better position to negotiate!