Buying below market value properties solves, at a stroke,
the biggest issue all property investors have, which is
finding a deposit.
The mortgage companies want you to find 15% of the purchase
price every time you buy! Where on Earth do they think you
have all these 15%'s stashed - under the floorboards?
This article will take you into the world of the below
market value (BMV) investor, and show you how you can free
yourself forever from the shackles of the 15% deposit.
You must first understand that it is perfectly possible to
buy BMV properties, regardless of which area of the UK you
live in, and almost regardless of your own financial
circumstances. There are below market value properties for
sale all over the country, every day of the week. The
challenge is tracking them down and adding them to your
portfolio.
There are two main ways to find BMV properties for sale in
the UK. One is through auctions, and the other is to track
down motivated sellers yourself. In this article, I'll be
concentrating on auctions - we'll leave the tracking down
to another time!
People and organisations, such as banks, building
societies, even the government, choose to sell through a
property auction for two main reasons - speed and
certainty. It generally takes no more than eight weeks at
the most, and sometimes considerably less, to go from the
decision to sell a property to the auctioneer taking bids
for it in the auction room.
If the vendor sets a reserve - the minimum price they're
happy to accept - and the reserve is met or exceeded on the
day, then the property is sold the moment the auctioneers
gavel falls, and the deal will be completed within 28 days.
No pulling out. No quibbling. No question.
As a BMV investor, you can get the auction catalogues from
auction houses in your area, research potential properties,
do your due diligence, turn up at the auctions, bid on your
target properties, and then go ahead and complete on the
deal within 28 days (or risk severe financial penalties).
All of this takes time, money, resources, a certain amount
of skill and, if you're out-bid on the day, it's all for
nothing and you have to start again. And let's be clear -
not every property that goes through auction sells below
market value - far from it!
The other way to do it is to use what might be called
"vulture tactics".
Rather than spend all that time and energy scoping out
possible BMV properties only to be out-bid by 'amateurs'
who don't understand the true worth of a property, or who
want it at more or less any cost, you just sit back and
relax. Then, when the auction is over and the bidders have
all gone home, you take a leisurely look at whatever lots
are left unsold.
The advantages of doing it this way are...
* You only spend time and money researching the properties
that are definitely still available
* You know the asking price without having to bid
* The competition for properties is significantly less
* The 28-days-to-complete rule usually disappears
There are three ways you can get hold of unsold auction lot
details.
1. Direct From the Auction Houses
You may have a couple of auction houses in your area, and
you could always ask them to send you details of unsold
lots as soon as a sale is over. The larger firms now
publish them on their website, too.
2. From the EI Group
David Sandeman does a great job at the EI Group. They
collate all the property auction data from around the
country, and their records go back to 1991. However, a
subscription costs around £500 a year, so you need to
be pretty committed to make that sort of investment
worthwhile.
3. Subscribe to the Property Bargains Bulletin
Leo Summers has produced the Property Bargains Bulletin
since 2005, and what he does is unique. The Bulletin is
emailed out to subscribers twice a month, and each issue
covers 8-12 bargain property opportunities. You get a photo
of the property, the full address, contact details for the
selling agent, the price of the property against it's true
market value, details of any income it's bringing in, and a
full page of analysis as to why the property is a bargain,
some ideas as to what to do with it, and any potential
pitfalls identified.
All this for less than a pub meal a month!
Now you know exactly how to find BMV properties at auction,
and particularly amongst unsold auction lots. In a
subsequent article, we'll look at how to track down
motivated individuals who will happily sell you their
property at below market value prices.
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The Property Bargains Bulletin brings you 8 - 12 BMV
property deals every two weeks throughout the year. You get
all the information and analysis you need to pick up the
phone and buy direct from the agent. No finders' fees. Just
fantastic below market value properties! Subscribe today at
http://www.thepropertyman.co.uk/pbb_subscribe.html
