Buddy, this strategy of adding a second bedroom and hoping that it would increase the value of the property probably worked well before 2023 when property prices were constantly increasing and interest rates were low. Now, we are in a FALLING market. I don't want to go into details, but advising people to do that now, can put many in a very precarious situation, especially someone who doesn't have a lot of cash in case the market crashes.
@@JakeBM4 Exactly that's what I'm doing! I'm not touching this market if I can get a 6% risk-free return on my money in 1-year fixed bonds. It's just that some of these RU-vidrs became leveraged to the max. Anyway, it's their choice and problem, but continuing to advise people to do that is simply irresponsible. That guy seems like a nice chap and he probably means well, but all his "strategies" are based on high leverage and debt, which at the moment is insane and highly risky to do in this property market.
@@SycAamore The banks raising interest rates won't stop inflation as the inflation is caused by the disruption to supply from Ukraine conflict. The banks need to be 2% above inflation rate to be making a profit on the money it's borrowed out.
Most of his videos showcase past experiences, and he's not urging anyone to replicate them. He's merely sharing what has worked well for him and what's entirely feasible. Individual financial decisions are personal choices, and he emphasizes the importance of learning from his experiences for those interested in a similar path. Acknowledging his accomplishments is only fair, as he likely has achieved notable success compared to those offering negative remarks. His strategy is commendable, and I hold the belief that it remains viable, especially when choosing the right location. It's crucial to recognize that housing prices are in a state of adjustment and won't continue to decline indefinitely. While some may continue to wait, those who take proactive steps often see results. Well done & wish you much success 👏👏👏👏👏
You have really milked these 3-4 property deals you have done. 80% LTV is more like 7% now, I wonder how much cash flow that would generate. Additionally, down valuations are par for the course at the moment
High rates are temporary, eventually they will come down. All my mortgages are on 5 year fixes so largely not impacted as of yet. Regardless, in the long run it will still be profitable
@@ThatAhmedKhanBuddy, you don't seem to really know how investments work. Eventually everything will go up. But do you want to have your money buried in something that keeps losing it value? When will prices go back up to the current level, if ever? Don't also forget that we'll have a Labour government next year...
@@ThatAhmedKhan Nationwide and Halifax indices are showing a yearly negative on prices. When you remortgage, what will your LTV be if, as predicted, that trend continues?
The numbers are wrong surely? When you went to the second bank and got the 80% LTV the mortgage payments would have increased due to the higher loan amount from the original calculations and so would the interest rate attached to an 80% LTV. So the annual cash flow wouldn't have stayed at £4128. What were the mortgage payments on the new 80% LTV and the rate??
Dude, good effort, pity about the errors. In second calcs, SDLT should be £7115 not £9357 ? and ROI (is actually ROCE, but) is a LOSS of 11% not a return... I understand the pressure dude, when I teach my students I have to double check everything...
Investment is pointless in the now. We are an RoI business, long-term businesses only work if the short term adds up, which right now it doesnt. The short term risks dont justify the short term rewards, if i wait 2 years to buy, ill still be in a better position without even considering investing my money elsewhere in the mean time.
@@ThatAhmedKhan the short term risks being the interest rates for one, political red tape is another, and same with the current market being more unstable. But let's stick with rates, the mortages and stress testing stop us from getting a justifiable ROI as it stands currently without even considering the market being more unstable and less predictable. And then we haven't got onto the situation of the quality of tenant that has a higher probability of problematic situations if you are buying cheap properties that attract less savory tenants The numbers don't add up to being worth it right now, I'd much rather be inclined to invest in a side hustle or gold reserves in the meantime. And I certainly wouldn't want to own cheaper properties if labor win and potentially do implement right to buy
I love your explanations. I think your assumption is that interest rates will come down and property will go up in price through demand and whilst Inflation is high - errode debt. Very tax efficient too. Think the government is backing this approach otherwise they will go bankrupt too. Sourcing these properties in my area remains highly competitive and costs a lot of time and effort. I use my phone to tether instead of wifi with Cloudflare Warp that acts as a VPN tunnel.
Yeah, of course, a BTL mortgage will be much higher than 5%...I found this guy some time ago and used to like his enthusiasm and a little bit of the innocence and inexperience that's natural for his age. I find him now just another RU-vidr who tried the quick way to riches by taking massive debt. And it's all now slowly falling apart...I just hope not many people fall for this crap, going into massive debt right now is just insane and will be ruinous for many, especially those that don't have a lot of cash to use as a buffer.
The new mortgage of 255k with a 7% (which is what you will pay today minimum) works out at £1487 per month on the mortgage. Add the service charge and there’s a potential for negative cash flow or a LOSS each month, considering the tax liability.
@@NoNonsenseJohnson True indeed, and the advice he is giving now seems to me just like another scam to buy his courses or whatever he is trying to sell. There are plenty like him on RU-vid...
Sorry if this is a stupid question, but it seems like the model is only not working because you're borrowing so much. And you're only ever doing interest only. So this was going to happen at some point because the rates couldn't stay this low forever. Or have I missed something please? It only doesn't work if your plan is to borrow and never pay it back or not buy it outright. Would love to know where I am confused here. Thanks.
what if you make it profitable at the current rates?? If you're new to it now the rates will continue to decrease in the future and your profit will increase@@SycAamore
@@SycAamore exactly! I'm so confused how borrowing 80% of a flat that you're not going to live in was ever going to work. As I said, maybe I'm missing something.
Eventually the rates will come back down, as per all the forecasts. Also, since its interest only, the debt remains the same but as property prices increase over the years, you're still creating equity. Hope that makes sense!
@@simoncaine9515 It's sad that many guys like him will go bust or sell at a loss. I think he is a good guy and I honestly don't want him to fail. But others, like this chav Samuel Leeds who thinks is the UK Tony Robbins, I don't have any problem seeing them go broke...
Where are you getting planning permission on a leasehold flat to convert into 2 bedrooms? Havent heard of this before, very rare. Mortgage companies will check the title.
I admire your work however this is in part the reason housing in unaffordable for the young, not only this rents are rising as the market is mostly bank properties. I wish the day legislation hinders your ability through taxation or a limit. I hope you support this idea.
I’ve saved up and ready to buy my first property. What’s your opinion / video idea on what’s the best route to go. Do I get a property on discount and hold, do I buy a residential and live in it, do I buy a one bed flat and convert to two and sell, do I get a house and flip? No idea where to start or to wait out the storm and get in before investments when rates drop again
Sorry if this is a stupid question, but it seems like the model is only not working because you're borrowing so much. And you're only ever doing interest only. So this was going to happen at some point because the rates couldn't stay this low forever. Or have I missed something please? It only doesn't work if your plan is to borrow and never pay it back or not buy it outright. Would love to know where I am confused here. Thanks.
@@FreedomFighterz215 Yeah right..."adding value" only makes sense if prices continue to rise or at least don't fall. They are falling now! And what about financing all this? If you are a cash buyer, then I think you could break even. But who would do that if they could park their money in the bank and get 6% risk-free?
@@SycAamore The strategy is valid if the value add appreciation exceeds any near-term depreciation in capital value and in the LT one may expect prices to rise. The cash on cash return in his example is 11% which is still double the 5.25% risk-free rate.
@@FreedomFighterz215 The key here is that he is hoping the property will be revalued from 293K to 320K. And what if the bank says that in 6 months' time, a two-bedroom flat will NOT be valued at 320K but at 293K or even less? And this is very possible to happen. So now he has a total cost of 293K, and the apartment is valued less than that? Plus the interest on the BTL mortgage will be much higher than 5%. Do you know how this is called? Negative equity and financial ruin, my friend...
@@SycAamore He's taking a calculated bet that a ) the London market does not fall by 10% during the 6-month window in which the refurb / re-finance is being carried out and b) rates are close to peaking and may actually fall over the next 2-3 years. I would ascribe those assumptions as plausible whereas you view them as reckless. It's subjective and and you're certainly entitled to a different view. I agree the major risk of BRR is also a below-expectation bank valuation. Leverage magnifies gains and losses.
Or how would you look to make profit / capital appreciation on a first time property rather than a BTL. Is there a way to use the 95% LTV work for me somehow on my first property. Want it as an investment not to just sit in there bored and paying money
Bro., Thanks for your video I paid £1995 fir this course Samuelleeds but i willnot attend the course which will be start 7th November 2023 How can i get refund legally? I paid last week not even 14days yet
