I really appreciate your clear and simple analysis of the financial trap. I lost so much money in the stock market, but now I'm making over $150,000 every week trading various stocks and cryptocurrencies.
The same goes for my current profit of $20,564 made from my investment in the Mrs Elsie Georgia trading platform. I totally believe she is the best trading broker I have ever worked with and her strategies
These figures are misleading, the actually yield works out to be 10.3% (300k ÷29100 rent) Thats still a decent figure but they make a loss if they sold the property. !! That's not great return is it .
Hey, Yield is a completely different calculation and mainly an indicator of the relationship of rent and the house price as a gross figure. 29,100 / 300,000 x100 = 9.7% gross yield. This calculation only makes sense if you were to purchase this property cash now post refurb. Just to be clear, this is a long term investment purchased for an ROI investment on an BRRR strategy. 300k was spent and 280k was the new value @75% LTV making it 210k back in the bank account via the BRRR method. That means 90k was the total investment. ROI = 15,500 / 90,000 x 100 = 17.2%
Hello! You mentioned four single people sharing however that would fall under 4 households which is essentially HMO?? unless they are relatives which means it is 1 household?
That is the most ridiculous illogical statement anyone has ever made, making a business out of property is creating homes for people, the exact opposite of what you’re saying, the government can’t afford to do it so if this couple and all other landlords and developers weren’t doing it where do you think these homes would magically appear from. Stop with the victim mentality and make your own way in the world
This return is 17% excluding capital growth in the house value. The bank won’t lend you 280k against your speculations in the stock market. Tax is paid on any stock gains unless you use an ISA which is capped at £20k contributions per year.
How much do you need to be able to have to start investing with you all. Just curious because I would love to do that but currently don’t have the ability to.
Your math aint mathing 200k pp Closing costs missing 100k refurb Duv 280 means you're at a loss New mortgage is 210k Minus dev cost of 300k (+closing) 90k money in against 70 equity Means you're in negative equity. You should tell your brother to sell and get out. Also 4.8% on a block mortgage? Id like to know which lender thats amazing. Costs like maintenance and isnurance arent factored here.
I think you’re misunderstanding the numbers. Where else can you leave 90k of capital tied up and receive 17% interest? Probably the stock market but that’s way more volatile.
A typical yield is not done on the net profit but the overall annual income it generates usually which would be £29,100 / 300,000 = 9.7% yield which is a healthy number. Although I do agree the overall money left in the project is high for the return and as stated a £20k loss.. not the best deal I’ve seen but still a fortunate position to be in and clearly explained 👍
Your calculation makes no sense. 300k has not been left in the deal. 300k was spent and 280k was the new value @75% LTV making it 210k back in the bank account via the BRRR method. That means 90k was the total investment. ROI = 15,500 / 90,000 x 100 = 17.2% Yield is a completely different calculation and mainly an indicator of the relationship of rent and the house price as a gross figure. 29,100 / 300,000 x100 = 9.7% gross yield. This calculation only makes sense if you were to purchase this property cash now post refurb.
So the property was purchase for £200,000. £100,000 was spent on renovations and valued then at £280,000 (Minus £20,000 !) It rented for £2425 before renovations ( as per your spreadsheet) and £2425 after renovations ? The numbers don’t make a lot of sense sorry or is the spreadsheet wrong ?
No the spreadsheet is correct. Think of this way they buy outright the property for 200k spend 100k doing it up so their total outlay is 300k before refinancing. When they refinance they valuation of the property is irrelevant for now as they were able to get back 210k of refinancing so that would mean they only have net 90k left as their investment in the property. With the rent they will get their 90k back gross in 5.8 years. Thereafter any net proceeds from the property will be theirs and all of their funds as in the 300k would have been all out and they would be receiving rent of circa a grand a month (subject to the interest rates)
Sorry I understand the returns but if you buy a property for £200k, spend £100k on renovation then you have total outlay of £300k. If the property is then valued at £280k (£20k less than your outlay) then I dont think you got good value for your £. I have done a number of properties over the years and for every £1 spent on renovations I expect the value to increase by £1.50 !
Oh that was a quick video 😲 looks like you did a good job on that property for your brother, I especially liked the transformation of the backyard ("garden") 🙂
Great video. I was a process control engineer (just retired 2/21/24) I would always stress test my projects just to make sure it would work under all conditions. Also depending on the government. But I found away of earning more income despite my Retirement. $57k weekly returns has been life changing, after so much struggles.
Is this an interest only mortgage? If so, wouldn’t the principal mortgage payment need to be added to the ROI calculation? It will take about 19 years to pay that off with the money invested.
I didnt understand the way you have calculated ROI. Have you considered interest only option in your working whereby 840 would be treated as interest only ? Even if that is the case the monthly interest with interest rate of 4.8% turns out to be 1120. How about stamp duty, mortgage and registration fees and other associated cost??
Great job on the refurbishment on that property. You and your brother should be pleased. I do have a question on the monthly cost, and it is probably a difference between the U.S. and U.K. Isn't there a requirement to insure the property when you have a mortgage in the U.K.? The flat contents would be up to the renters, but is there insurance on the structure? In the U.S. taxes and insurance may be included with the mortgage and held in escrow (P.I.T.I.). I do not see a cost in your spreadsheet. Also, does England have yearly Property taxes? In the states, property taxes cover government services, police, schools, etc. Yep, I got my tax bills today on both my properties...<sigh>.
Landlord building Insurance is a requirement when there is a mortgage. Council tax is the equivalent to your property taxes but the tenants are responsible and it is usually stipulated in the tenancy agreement that the rent does not include any bills including council tax.
Only downside is after 5 years they will get their money back but they'll have no capital appreciation, whereas if they bought an asset with you or used you as a service the uplift of for example £100,000 could be easily £150,000 plus a return which will be at least similar, although there's hassle associated technically it's worth it otherwise you're at a big loss
Can you imagine the kind of loser that hands over a load of money to these two for just 5% p.a. on what essentially is an unsecured investment? You can get 5% on government bonds, with zero risk, or 10% buying gold. I just don't believe there are such extraordinary mugs around.
99% of any house within 50 miles of me is going to be worth exactly what it's worth weather or not it's in bad condition the valuations are all blown out the water there's a bubble and it's going to pop
None of these are valid reasons When they Loan you money repaid at a certain agreed time period, that’s also not liquid You know and I know they would invest in property but you convince them to lend to you instead
Another pyramid scheme in the making ,but if anyone can not manage or invest their money, this experts will do it for you. 😅. It is very easy to go bankrupt nowadays , and your 50 G has gone with the wind.
Our investors literally have no interest in buying property. It is no different to most people who put money into a savings account with a bank because they have no interest in investing their money into the markets themselves. Same principle applies.
AK, you guys call it a "planning commission" too?? A group that's lower than the "city council" that approves new developments, and major changes to existing ones, especially if they involve permission to deviate from the "general plan"? I thought it would be one of those things that is called something else in UK English, but given the context in which you used the phrase, I think it is the same thing! It's been hot here lately, 37.7 yesterday and 35.5 today, gotta love the AC 🙂 btw one thing I have wondered, for a government that is higher than a city but lower than a state (I think the equivalent of a state in the UK would be England, Scotland, Wales...countries I guess), what would you guys call that? In the USA this is called a "county". For example, I live in the County of Santa Clara, which contains cities like San Jose (where I live) as well as Cupertino, Santa Clara, Palo Alto, Mountain View, etc., and that county is part of the State of California....I think you guys refer to a "county" as a "shire", is that right? Or is "county" also used in the UK in this context?
