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Would This Make Me A Bad Person?

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The market goes ping and i buy a property at a discount price from a repo or someone desperate, chipping the price at the last minute in the process.

Yields are good as demand has fallen through the floor and i then set up a company, privately backed by an equity partner and buy a few more properties whilst capital values are still depressed, as the market scrapes along the bottom for a few years.

The existing cycle repeats itself with the greed and stupidity of the general public sweeping the market into an unsustainable frenzy. I monitor the economic climate and sell at a target figure, probably less than the current wage to house price ratio and then probably below the peak but i'll have made a lot of money anyhows.

Would this make me a bad person?

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Wow sounds uncannily like my own plan.

I am grappling with the same dilemma myself, I guess the core issue is one of selling the overpriced property for more than you know it is worth on the next up cycle.

I think no. After all, people try and sell you overpriced stuff everyday, it is up to you to discern wether it is worth it or not.

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That bit would make you bad person in my eyes, but otherwise everyone else is fine with me.

Sounds like a perfectly legit tactic in my book...nice work..whatever it takes. Remember its only another human being who you do not have any attachmnet to other than you are giving him your money.. its business.

Also try this tactic. Get a mate to put in a silly offers (-20%) about month before you offer. This will condition the vendor and make him more suscepatble to your low (but relatively high) offer. believe me - It works

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Always looks like a good plan on paper, and people who spot bubbles for what they are early always seem to talk time this.

But let me ask you this, how many of you went on a large scale purchase of low valued tech stocks in 2001-2002? Not many I guess.

Just in the same way that as the top of the boom people think prices will go up forever, in the bottom of the cycle most people think that prices may never actually recover. It takes more nerve than most peole have to buck this trend, however easy it is to think like this now.

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The market goes ping and i buy a property at a discount price from a repo or someone desperate, chipping the price at the last minute in the process.

Yields are good as demand has fallen through the floor and i then set up a company, privately backed by an equity partner and buy a few more properties whilst capital values are still depressed, as the market scrapes along the bottom for a few years.

The existing cycle repeats itself with the greed and stupidity of the general public sweeping the market into an unsustainable frenzy. I monitor the economic climate and sell at a target figure, probably less than the current wage to house price ratio and then probably below the peak but i'll have made a lot of money anyhows.

Would this make me a bad person?

You can never be a bad person merely for being an economic actor. If you have not broken any laws, you are not a bad person. Not necessarily likeable, though.

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Surely if i'm sitting on a good yield then its in all likelyhood a long term steady investment anyhow. It's all about discounting sentiment with the knowledge and experience of already being through a cycle whilst tracking economic fundamentals. I will be working on the greed and stupidity of the British general public to do the rest for me.

As for "Gazundering" I would have absolutely no moral problem with doing this, its business and markets move, if they don't like it they can pull the papers on me and try and sell to someone else, otherwise accept the market price.

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The market goes ping and i buy a property at a discount price from a repo or someone desperate, chipping the price at the last minute in the process.

Yields are good as demand has fallen through the floor and i then set up a company, privately backed by an equity partner and buy a few more properties whilst capital values are still depressed, as the market scrapes along the bottom for a few years.

The existing cycle repeats itself with the greed and stupidity of the general public sweeping the market into an unsustainable frenzy. I monitor the economic climate and sell at a target figure, probably less than the current wage to house price ratio and then probably below the peak but i'll have made a lot of money anyhows.

Would this make me a bad person?

And then you woke up. :lol:

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You can never be a bad person merely for being an economic actor. If you have not broken any laws, you are not a bad person. Not necessarily likeable, though.

Quite.

Plenty of people did it in 1996 and you know what most people here think of them, but I bet they're not too bothered!

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you'd be another TTRTR..........and whether what he and his ilk have done is immoral is open to debate......even though it's plainly obvious regulation of the housing market should have been in place to stop speculation..and BTL legalised banditry.........in the first place.....

We all know that because of planning regs etc etc etc ....the housing market doesn't function efficiently like the markets for most ordinary goods we see in the shops eg vacuum cleaners......so even in a capitalist country government involvement in one way or another is essential..................

Not only is provision of housing unsuited to unbridled market forces but housing by its very nature is a necessity of life.....like water ...None of us can choose NOT to consume it (as owners or renters) like we can other goods and services....

Edited by Michael

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:D I did it on the last cycle . Sold to btl idiots. We have banked the profit and are waiting to repeat on a larger scale . Hopefully buy off the idiots i sold to. :D

Hi Property Flipper,

I've just read your posts, you seem to have a wealth of experience in buying distressed properties, etc. I'm not particularly interested in investing in rental property after the downturn but am rather interested in buying a cheap house, so it would be really interesting for a lot of us if you could post some thoughts on how to find distressed sellers, auctions, negotiating tactics and obtaining finance when banks stop giving away money. I'm sure that lots of other posters here would be really interested.

IPN

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The market goes ping and i buy a property at a discount price from a repo or someone desperate, chipping the price at the last minute in the process.

Yields are good as demand has fallen through the floor and i then set up a company, privately backed by an equity partner and buy a few more properties whilst capital values are still depressed, as the market scrapes along the bottom for a few years.

The existing cycle repeats itself with the greed and stupidity of the general public sweeping the market into an unsustainable frenzy. I monitor the economic climate and sell at a target figure, probably less than the current wage to house price ratio and then probably below the peak but i'll have made a lot of money anyhows.

Would this make me a bad person?

Only if it was a friend or relative that you did it to. Otherwise, every man for himself IMO.

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The market goes ping and i buy a property at a discount price from a repo or someone desperate, chipping the price at the last minute in the process.

Yields are good as demand has fallen through the floor and i then set up a company, privately backed by an equity partner and buy a few more properties whilst capital values are still depressed, as the market scrapes along the bottom for a few years.

The existing cycle repeats itself with the greed and stupidity of the general public sweeping the market into an unsustainable frenzy. I monitor the economic climate and sell at a target figure, probably less than the current wage to house price ratio and then probably below the peak but i'll have made a lot of money anyhows.

Would this make me a bad person?

Your plaintive and child-like cry of 'Would I be a bad boy?' immediately made me think that you were certainly not suitable material to join the property trading community. Unless, of course, (and I'm no psychiatrist) you suffer from having dreams of quickly becoming a multi-millionaire and, on the way up, plan to kick a few people in the teeth, just for the hell of it.

On reading right through your post, however, it soon became clear that yours is not a problem of morals but of business inexperience and naivity.

You speak of buying property 'at a discount' suggesting that you'll be getting a bargain. In fact, the price you pay for it will be the _exact_ market price at the time - if anyone else is willing and able to proceed at a higher figure, they will get the property and not you. You will _not_ get a 'bargain'.

You imagine yields being 'good' but don't seem to have realised that, of necessity, they are based on historical figures and you won't have a clue whether they will turn out better or worse by the following month, let alone the succeeding years. High rewards almost always mean the taking of high risks and that's what buying property to let involves.

Being 'privately backed by an equity partner' sounds good but, in reality, could become a nightmare. The last thing you appear to need is some soft touch who will throw money at your half baked propositions. My advice to you - I know you haven't asked for it but I'm feeling generous - is to find the most tight-fisted lender in the vicinity. If you can get your plans grudgingly accepted by a miserable and hard-nosed lender, you'll know that there's a possibility that you could succeed. But the risk will still stay at your door, not the lenders.

How will you know which way the market is likely to go? If you pick the right moment to buy and sell it will just be fortuitous because we never find out what's really happening until months after the event. Relying on the stupidity of the rest of mankind and your personal brilliance are not things I would bank on. So far, I've seen no sufficiently firm evidence that either exists in the volume needed to bring your plans to fruition.

So, in answer to your question - No, I don't think you'll be a bad person. What I do think, however, is that you're probably an arrogant, naive dreamer who thinks he's found a sure-fire scheme that will make your fortune.

Just my humble opinion, of course. I could be wrong.

p

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i think the coming financial shock will put people out of housing for a very long time. what happens when your house which cost you £300k in 2005 cant even sell for £50k in 2015 as the populations shrunk and there are simply swarms of empty homes abound.

i dont see it any other way./

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I know im a pretty smart person but i also know there are people who are smarter than me with more money and more infleunce.

Every great economic idea i can come up with will more than likely already of been thought of a million times before.

Yours is not a master plan and if its thats simple then everyone will be doing it. To answer your question though no it dosnt make you a bad person.

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Not a bad person - but a bad society. In a good society people would help each other out - even help each other to knock up a house.

In our society people plan how they can take advantage of the misfortune (or ignorance or stupidity or whatever) of other people so they can protect themselves and get themselves into a more secure (and safe) position.

Did someone say 'every man for himself'. What a truly awful world this would be if that were universally true. Fortunately there are lots of decent people around who are happy to help their neighbours and so on - and just live their lives without planning how they can get ahead of the game by stamping on someone else.

Maybe a bad person .... after all if no-one played this game life would be much nicer for everyone.

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Two things to consider.

1/ If you had been the one selling (i.e losing money and desparate) would that then make you a good person? Not in my book. In fact these people, as a group, have harmed themselves and others with their stupid and irresponsible behaviour. Ignorance may be an excuse in some people's eyes but does not knowing what you are doing mean you are exempt from blame?

2/ If they are desparate as you imagine in some future point - then are you, if you offer fair WORTH at the time, doing them a favour? If you do not buy who will? People in this position may not see it but it WILL BE TIME to cut their losses, learn and move on. Because you are not ignorant do you feel guilt? You did not bring about this situation, you are not to blame.

NB:People who engineer a market, mis sell financial products, ramp shares, commit fraud,run boiler rooms etc should be strung up. Those who take advantage of a market, BUT NOT PEOPLE, should be rewarded without feeling guilt.

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As for "Gazundering" I would have absolutely no moral problem with doing this, its business and markets move, if they don't like it they can pull the papers on me and try and sell to someone else, otherwise accept the market price.

On Gazundering:

There were a few threads on this subject a few months back - do a search if you are interested in the consensus views. There is a difference between finding something that affects the property value (in the survey for instance) and the market moving generally in the period between sale agreed and exchange. Gazundering is an under-hand tactic, employed at the very last minute (after sale agreed, just prior to exchange). By that stage you have moved on from "its just the market" to a specific agreed deal between a willing buyer and a willing seller.

My advice would be to be straight dealing - your long term reputation is worth more than a few K screwed out of someone (I would hope).

Take away point: gazundering and gazumping are morally equivalent and are equally bad. After exchange you should (both) honour the contract.

I suggest you think this through a bit more.

JY

[Edited: correction of timings in sale process.]

Edited by JustYield

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There is a difference between finding something that affects the property value (in the survey for instance) and the market moving generally in the period between exchange and completion

How so? In both cases the target property is worth less.

Gazundering is an under-hand tactic, employed at the very last minute (after exchange, just prior to completion).

AIUI gazundering as the term is normally understood refers to a last-minute dropping of the offered price immediately prior to exchange (especially when someone is in a chain).

By that stage you have moved on from "its just the market" to a specific agreed deal between a willing buyer and a willing seller.

Well obviously if the buyer wants to gazunder you no longer have a willing buyer at that price.

Take away point: gazundering and gazumping are morally equivalent and are equally bad.

Take away point: gazundering and gazumping are both morally equivalent (but since when did morals have anything to do with it?) and completely legal in England and Wales.

I suggest you think this through a bit more.

I suggest you find out what it is you are actually purporting to criticise before getting on your moral high horse about it.

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How so? In both cases the target property is worth less.

No. In the case of a material flaw in the property that you could not have reasonably known about prior to the survey then this is tantamount to a "material adverse change" and you should be able to NEGOTIATE a lower price. In the case of the general market falling: this should have been factored in to your offer on the basis that it takes at least a month to go from agreement to exchange. In chains that can last up to 12 months, everyone might have to renegotiate prior to exchange.

AIUI gazundering as the term is normally understood refers to a last-minute dropping of the offered price immediately prior to exchange (especially when someone is in a chain).

I have amended my post above, this is correct.

Well obviously if the buyer wants to gazunder you no longer have a willing buyer at that price.

You can walk away prior to exchange as well. What is worse, backing out of an agreement entirely or trying to use your position in the legal system to take advantage?

Take away point: gazundering and gazumping are both morally equivalent (but since when did morals have anything to do with it?) and completely legal in England and Wales.

Since the OP asked if it was "Bad". That's when.

I suggest you find out what it is you are actually purporting to criticise before getting on your moral high horse about it.

Thanks zzg, I'll take that on board and try to improve.

JY

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The market goes ping and i buy a property at a discount price from a repo or someone desperate, chipping the price at the last minute in the process.

Yields are good as demand has fallen through the floor and i then set up a company, privately backed by an equity partner and buy a few more properties whilst capital values are still depressed, as the market scrapes along the bottom for a few years.

The existing cycle repeats itself with the greed and stupidity of the general public sweeping the market into an unsustainable frenzy. I monitor the economic climate and sell at a target figure, probably less than the current wage to house price ratio and then probably below the peak but i'll have made a lot of money anyhows.

Would this make me a bad person?

To answer the direct question - no, I don't see how it does, although of course gazundering is "morally wrong", though legal.

However if you're intending to hold the properties until the market booms again then I guess how successful the venture is depends upon what you pay for those properties, how far it falls, how near the bottom of the market you're buying, and so forth.

It sounds too risky to me. Risk vs reward I guess :)

Would you not be better off trying to secure cheap property using local knowledge and then flip it ASAP to the 'greater fool' where possible?

As the next "peak" could be 2010, 2020, 2030....

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  • 301 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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