How Do You Get The Money?

[Time to raise the rents.]

Whoops Apocalypse has been rude enough to accuse me of being a reckless property speculator and I've seen so many of you say 50% or whatever low gearing number you provide is what is sensible.

I've posted many times before, I borrow 105% of the purchase IO. The deposit against existing property and the balance against the purchased property.

Many of you will agree with Whoops Apocalypse that this is reckless. But IMO this is completely sensible, especially when the rent covers ALL of the interest and money is left over each month to reward me for my efforts.

Now I have the equity to use this strategy & the banks believe in it, so why don't you?

And more importantly, where do YOU get the money for your BTL strategy? With more than 65% of you wanting to be landlords (which I found very interesting indeed), will you save up for it?

http://www.housepricecrash.co.uk/forum/ind...showtopic=21808

Edited January 12, 2006 by Time to raise the rents.

[aclwalker]

Whoops Apocalypse has been rude enough to accuse me of being a reckless property speculator and I've seen so many of you say 50% or whatever low gearing number you provide is what is sensible.

I've posted many times before, I borrow 105% of the purchase IO. The deposit against existing property and the balance against the purchased property.

Many of you will agree with Whoops Apocalypse that this is reckless. But IMO this is completely sensible, especially when the rent covers ALL of the interest and money is left over each month to reward me for my efforts.

Now I have the equity to use this strategy & the banks believe in it, so why don't you?

And more importantly, where do YOU get the money for your BTL strategy? With more than 65% of you wanting to be landlords (which I found very interesting indeed), will you save up for it?

http://www.housepricecrash.co.uk/forum/ind...showtopic=21808

65% said they would "consider" being landlords, not "want".

[OnlyMe]

TTRTR,

Didn't vote - nothing in the poll could really match my view of the BTL market.

I'd obviously agree with WA, you are sitting on a pile of gearing at a high point of what in nearly every single metric is the biggest debt bubble ever engineered in human history, positioned in an asset that has been the primary (but not sole) recipient of lenders and borrowers' largesse. I can see your point about the banks, you'd think they'd know what they are doing, history however suggests otherwise, and this time they have have thrown everything they have (or other people have) at this market beyond all reason.

Edited January 12, 2006 by OnlyMe

[algor]

ESIT: someone had alrready commented on TTRTR's misinformation.

Edited January 12, 2006 by algor

[Time to raise the rents.]

TTRTR,

Didn't vote - nothing in the poll could really match my view of the BTL market.

I'd obviously agree with WA, you are sitting on a pile of gearing at a high point of what in nearly every single metric is the biggest debt bubble ever engineered in human history, positioned in an asset that has been the primary (but not sole) recipient of lenders and borrowers' largesse. I can see your point about the banks, you'd think they'd know what they are doing, history however suggests otherwise, and this time they have have thrown everything they have (or other people have) at this market beyond all reason.

History? Do you mean 7-8% annual compounded HPI for the last 100 years?

I see what you mean......

65% said they would "consider" being landlords, not "want".

"Wanting to be landlords" or "Consider BTL" bit of spin in your question methinks.

That poll to me says you all know it's a great strategy, but you lack the balls.

[apom]

Whoops Apocalypse has been rude enough to accuse me of being a reckless property speculator and I've seen so many of you say 50% or whatever low gearing number you provide is what is sensible.

I've posted many times before, I borrow 105% of the purchase IO. The deposit against existing property and the balance against the purchased property.

Many of you will agree with Whoops Apocalypse that this is reckless. But IMO this is completely sensible, especially when the rent covers ALL of the interest and money is left over each month to reward me for my efforts.

Now I have the equity to use this strategy & the banks believe in it, so why don't you?

And more importantly, where do YOU get the money for your BTL strategy? With more than 65% of you wanting to be landlords (which I found very interesting indeed), will you save up for it?

http://www.housepricecrash.co.uk/forum/ind...showtopic=21808

Personally your braver then me..

but would you take 1055 loans in todays markets if you didn't have equity..

hope you wouldn't have to find Capital gains tax against that equity if you have been cashing it in..

You owe CGT not againt what you owe against the property, but against what you bought it for..

History? Do you mean 7-8% annual compounded HPI for the last 100 years?

I see what you mean......

That poll to me says you all know it's a great strategy, but you lack the balls.

7-8 % annually..

True..

but look at the inflation in that time.

and take out the last boom.. stopping it when it geared back to long term average..

Easy to say 7-8% annually over 100 years..

when you are the top of the market..

what was it in 1995?

and what would it be without periods of overall inflation..?

I know..

[algor]

Never really considered it to be honest. Might come as a bit of a shock to you but not everyone wants to own a large portfolio stuffed full of stocks and derivatives, a property empire or lumps of metal. If I needed to eat and that would pay the bills then why not? If however I can do something I enjoy more than playing Monopoly for a living I think I'll choose that.

[aclwalker]

History? Do you mean 7-8% annual compounded HPI for the last 100 years?

I see what you mean......

That poll to me says you all know it's a great strategy, but you lack the balls.

TTRTR every day I consider doing lots of things, but most of them I decide not to. I would be a fool to dismiss everything without researching it. In a few years time, I may consider to consider it.

I don't know if I will be investing in shares, or buying a car, or painting the windows in 5 years, but I'm sure that I will consider some of these at some point.

As many people have said on here before, there are easier ways of making money. Sure, the gearing in property make the absolute gains much bigger in bull markets, but I don't believe in putting all my eggs in the one basket, certainly not eggs that aren't mine.

I wouldn't borrow to play the stockmarket or go to a casino, so I'm unlikely to borrow huge sums to play the property market. I would borrow money to establish a business, if I had any ideas worth pursuing but I don't at the moment.

Does that give me balls?

[OnlyMe]

History? Do you mean 7-8% annual compounded HPI for the last 100 years?

I see what you mean......

That poll to me says you all know it's a great strategy, but you lack the balls.

No, I mean that banks can go on a bender just like you or I. The results of which can wipe out a market just as quickly as it created it, think Florida land boom, think 1000's% increases think falls down to 3% of peak values. Gearing is great when you are winning and a killer when you are not, simple as that.

[Time to raise the rents.]

No, I mean that banks can go on a bender just like you or I. The results of which can wipe out a market just as quickly as it created it, think Florida land boom, think 1000's% increases think falls down to 3% of peak values. Gearing is great when you are winning and a killer when you are not, simple as that.

Land is pure speculation, like gold & shares. Well situated property has a business element as well as a speculative element.

But when is someone going to answer my question? How do you get the money?

[Smell the Fear]

Land is pure speculation, like gold & shares. Well situated property has a business element as well as a speculative element.

But when is someone going to answer my question? How do you get the money?

The only reasonable place to get it is where you got it - get lucky with your timing in the HPI lottery.

Why can't you see that your winning streak has run out?

[aclwalker]

Land is pure speculation, like gold & shares. Well situated property has a business element as well as a speculative element.

But when is someone going to answer my question? How do you get the money?

How do I get the money for my BTL strategy? I don't have one, therefore I have no need to get money for it.

[algor]

Land is pure speculation, like gold & shares. Well situated property has a business element as well as a speculative element.

But when is someone going to answer my question? How do you get the money?

Use your savings when houses are available at a more sensible price?

Pimp your daughter?

Turn existing flats into opium dens/cannabis growing operations for a better yield?

Medical experimentation?

What BTL? It was outlawed in 2007 after the great crash. Your house now belongs to your slavemaster and you don't complain without risking a beating.

[OnlyMe]

Land is pure speculation, like gold & shares. Well situated property has a business element as well as a speculative element.

But when is someone going to answer my question? How do you get the money?

It is the Land element that has largely gone up for property so that argument does hold water. If you are saying that land is speculation then so is property, business element - well that depends a lot on demand. Owners of high street commercial can take a bath too, just the same as anybody else.

How do you get the money?

Save a bit, spend a bit, invest a bit, speculate a bit, keep costs down, keep work coming in (all the better f it is something that interests you), pay the bills and never get over your head because once the bank have you by the nads they can and will rip you apar. That money is not going into BTL at the moment and probably never will.

Edited January 13, 2006 by OnlyMe

[right_freds_dead]

t-rents.

all sums aside wouldnt it be the same in a crash or a peak for you ? if your managing to buy and rent them out to cover your costs in a boom. why not do the same in a -40% environment ? so no need to hype up house prices on this site. it bears no benefit to you either way. -40% or +40% what would it matter to you ?

[crash test dummy]

Who wouldn't wish to be a BTL'er when house prices drop 30 - 40%.

Us not You if you bought recently.

Some will get burnt - fact as they always have. When did you buy your last 3 houses and when will you buy your next 3 houses?

As an investor you are right, but remember buy low sell high, and propping the market up is no-one at the moment.

So the fall will come. It's getting cheap for a 3 bed new in Norfolk yet very expensive for a 1 bedroom flat. Maybe only £20K difference at times. So New will push old down.

Unless Portman will give you a 100% loan to value.

[Michael]

The only reasonable place to get it is where you got it - get lucky with your timing in the HPI lottery.

Why can't you see that your winning streak has run out?

(quote from further up this thread.).....Smell the Fear

TTRTR, re-your success over the past 10 years ............IMHO the above statement is certainly true to a degree and your strategy should reflect this.......

Housing as an investment vehicle cannot plough on and on outperforming other investments...and you should adapt your strategy accordingly.......Granted,you can borrow money for housing secured on the asset itself unlike with most other investments and even in a severe crash housing will not fall as much as say shares..................................but in the medium term housing isn't going to increase in value .....

Your biggest move right now would be ...REST of post edited out as i don't want help a BTL magnate who's helped price us all out..............

Edited January 13, 2006 by Michael

[CrashIsUnderWay]

105% gearing???? TTRTR is completely and utterly screwed sideways with a large rake.

That explains why he's been pre-menstrual recently. he knows that the likely direction for IRs is UP, and soon he will be 'negatively rewarded' for his amazing business acumen. He is also probably (despite his ludicrous boasts) finding it harder and harder to fill his rooms.

Buying a house on borrowed money is akin to a leveraged buy out in real business. The future cashflows of the business are applied to the capital costs needed to buy the business. Even an undergraduate knows that the business plan needed to prove the model needs sensitivity analysis. In this case, the sensitivity analysis would be complicated, factoring likely IR rises, rising unemployment etc, any one of which will turn his little 'empire' cashflow negative fairly soon. A beginner's mistake, but not exactly unexpected from someone who obviously believes in 'free money'.

sucker.

[AteMoose]

105% gearing would only work if a government had got rid of boom and bust, (removed boom and bust, havent i heard that before?)

economics tells us, high gearing will multiply profits during good times and destroy companies and individuals 'when' the bust occurs, High gearing was the downfall of the worcester property tycoon neil grinnel who went bankrupt earlier this year. Economics also tells us companies (and individuals) should try and reduce there gearing as much as possible before a bust occurs.... (well done dogbox )

Edited January 13, 2006 by moosetea

[timmy_30]

TTRTR...... Iv'e thought about it and the only explanation is that...... and it hurts me to say this.

You are a financial genius.

Your insights into the future direction of global capital markets, your accurate understanding of the future direction of interest rates, your preminent understanding of the true future direction of the UK economy...... your incredible ability to predict these things 20-25 years into the future place the likes of Eddie George and Warren Buffet in the shadows.

It is obvious what you must do.... buy more flats, and more houses, keep buying, even if they try to tell you that prices are falling, you know, you know better than anyone, don't believe them keep buying. After all in house prices could fall why on earth would the banks still be lending you money.

[CrashIsUnderWay]

:-) :-) :-)

I too worship at the sweaty herring-flavoured feet of Australia's greatest living businessman!!!

[Casual Observer]

:-) :-) :-)

I too worship at the sweaty herring-flavoured feet of Australia's greatest living businessman!!!

Yes - now that Kerry's gone, he is indeed number 1

[CrashIsUnderWay]

TTRTR walks into the doctors with a frog on his head and the doctor says"What the fvck is that?!!"

The frog says "I don't know,it started as a wart on my @rse."

Edited January 13, 2006 by CrashIsUnderWay

[Mags]

Never really considered it to be honest. Might come as a bit of a shock to you but not everyone wants to own a large portfolio stuffed full of stocks and derivatives, a property empire or lumps of metal. If I needed to eat and that would pay the bills then why not? If however I can do something I enjoy more than playing Monopoly for a living I think I'll choose that.

Exactly! Some people like to do something that can either make an impact for the better on the lives of others and/or something that will use and develop their skills etc etc. Choosing not to enter the BTL market doesn't mean you'd really love to but are too scared. It means you choose not to because you can think of many more satisfying, useful and rewarding things to do with your life. Believe it or not TTRTR, being a landlord is not the be all and end all in most people's lives.

But when is someone going to answer my question? How do you get the money?

When I buy, I will have earned most of it!

[paradox]

TTRTR

You talk a lot about balls, courage etc

Many people on this site run their own businesses. I packed in a steady 9 - 5 job to go freelance.

There are all sorts of types of courage.

Becoming a landlord is one of them, but not the only one.