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I am looking for help regarding a close freind who I am trying to educate about the forthcoming downward turn in house prices.

He works for a Photocopy repair firm and after advice from his EA customers is going to buy a BTL in Hull.

this is the reply I got from him when I used figures from the DTi and hometrack to graph a history of HP's to wage ratios in the last ten or so years. He claimed I had dreamed up the figures and this is his response:

I don't dream the figures, currently I look after 600 customers as service manager of a photo copy repair firm. 598 of my customers are estate agents who say what you say is absolute sh*te.

More people now are ditching there pensions than ever and investing in property as it is the only safe return. You should think about doing this yourself as the your company need to make massive savings and job cuts as reported in last weeks press. You think your savings and pension within Centrica (company in crisis) are safe but they could all be wiped out tomorrow. That's clever putting all your eggs in 1 basket.

I am currently buying another property in hull which I am buying to let to students or people like yourself who don't like making loads of money.

I am going to end this now by saying you can have your saving program but I have sound investments endorsed by BTW accounts where I seek my financial advice.

REMEMBER, HE WHO DARES, WINS.

For info, aged 24 my savings and investents are not all in one basket. I have a centrica sharesave scheme, i bought 8823 shares for £1.07.1p, todays price of £2.80. Have £3000 in an ISA, £4500 in a savings account paying 8% and £6000 in First Direct paying 5%. I have just started another Centrica share offer, max £125 pm for every 2 shares bought they give you one free. Up to 20 free pm.

Can someone give me some advice about how I can advise him to not make the worst decision of his life. He to is 24 and I really dont want to see him on the breadline.

Yours,

Favre

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Tell him to dive in.

In fact the more the merrier, tell him he is just a two bit player, if he really wants to be a millionaire he needs at least 10 to 12 properties.

Edited by OnlyMe

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From the attitude of his response, why bother helping him?

I don't dream the figures, currently I look after 600 customers as service manager of a photo copy repair firm. 598 of my customers are estate agents who say what you say is absolute sh*te.

This bit is like a drug dealer telling an addict that cold turkey is for losers!

Edited by OzzMosiz

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I am looking for help regarding a close freind who I am trying to educate about the forthcoming downward turn in house prices.

He works for a Photocopy repair firm and after advice from his EA customers is going to buy a BTL in Hull.

this is the reply I got from him when I used figures from the DTi and hometrack to graph a history of HP's to wage ratios in the last ten or so years. He claimed I had dreamed up the figures and this is his response:

I don't dream the figures, currently I look after 600 customers as service manager of a photo copy repair firm. 598 of my customers are estate agents who say what you say is absolute sh*te.

More people now are ditching there pensions than ever and investing in property as it is the only safe return. You should think about doing this yourself as the your company need to make massive savings and job cuts as reported in last weeks press. You think your savings and pension within Centrica (company in crisis) are safe but they could all be wiped out tomorrow. That's clever putting all your eggs in 1 basket.

I am currently buying another property in hull which I am buying to let to students or people like yourself who don't like making loads of money.

I am going to end this now by saying you can have your saving program but I have sound investments endorsed by BTW accounts where I seek my financial advice.

REMEMBER, HE WHO DARES, WINS.

For info, aged 24 my savings and investents are not all in one basket. I have a centrica sharesave scheme, i bought 8823 shares for £1.07.1p, todays price of £2.80. Have £3000 in an ISA, £4500 in a savings account paying 8% and £6000 in First Direct paying 5%. I have just started another Centrica share offer, max £125 pm for every 2 shares bought they give you one free. Up to 20 free pm.

Can someone give me some advice about how I can advise him to not make the worst decision of his life. He to is 24 and I really dont want to see him on the breadline.

Yours,

Favre

If 598 EA's tell him property is a good investment, then who are we to argue? I can't think of any reason at all why they should lie.

Ask him what yield has he planned for, and how this compares with his costs of ownership.

Edited by Casual Observer

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From the attitude of his response, why bother helping him?

This bit is like a drug dealer telling an addict that cold turkey is for losers!

Yes, egg him on and tell him he was right all along and you don't know what came over you. Then sit back and watch the show. Sounds like he deserves all he'll get.

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Why bother? I gave up ages ago. All I get is "blah blah blah" - and with replies like that you know it is a bubble.

You could poke him in the eye. That might help.

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Sadly you have to let people make their own mistakes, they don't thank you for trying to point it out before hand and nor do they appreciate "I told you so after the event".

It's the old addage "you can't put an old head on young shoulders". Leave him/er to it, you've done your best so walk away knowing that that you gave them your advice and that they chose not to listen so you can do no more. To try to push the point will entrench them even further and make then ore blind to the other posible truths.

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Second thoughts, best not say anything.

I was in exactly your position in 1990, when brother-in-law bought a rental property.

2 years later he had to sell it at a 30% loss. He never made a penny profit on the rental, either.

And yet when he bought it, he told me "you can't go wrong with property"

Keep your own counsel - some people need to learn the hard way, and this mate of yours will never take your advice, from what you've posted about him

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£4500 in a savings account paying 8%

What saving account pauys 8%.

HSBC were doing a special 1 year only offer last year, max £250 per month transfered into account.

Once its done it drops to below 5% so I'll close the account and put it into first direct.

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I don't dream the figures, currently I look after 600 customers as service manager of a photo copy repair firm. 598 of my customers are estate agents who say what you say is absolute sh*te.

This bit is hilarious! Not only is he taking investment advice from estate agents, his job is also going to be clearly screwed when these estate agents go bust!

More people now are ditching there pensions than ever and investing in property as it is the only safe return.

So, he's doing it because everyone else is and because it's a "safe return"? Doesn't sound very daring to me.

You think your savings and pension within Centrica (company in crisis) are safe but they could all be wiped out tomorrow. That's clever putting all your eggs in 1 basket.

It is a common belief amongst BTL idiots that stocks and shares are simply meaningless pieces of paper whose value cannot be judged. Let's face it, that's just because they are too lazy to do any research.

I am currently buying another property in hull which I am buying to let to students or people like yourself who don't like making loads of money.

This is clearly to be read "you have no property because you are a loser and you will never have any money". What a t055er! Let him throw his money away, suits me.

REMEMBER, HE WHO DARES, WINS.

I am sure all top investors have that as their motto. Why not just get a load of cash out on your credit cards and buy 100k worth of junk bonds?

For info, aged 24 my savings and investents are not all in one basket. I have a centrica sharesave scheme, i bought 8823 shares for £1.07.1p, todays price of £2.80. Have £3000 in an ISA, £4500 in a savings account paying 8% and £6000 in First Direct paying 5%. I have just started another Centrica share offer, max £125 pm for every 2 shares bought they give you one free. Up to 20 free pm.

Good for you. Nothing wrong with holding cash at the moment. Then when an opportunity comes, you can move quickly.

Can someone give me some advice about how I can advise him to not make the worst decision of his life. He to is 24 and I really dont want to see him on the breadline.

You should give up. You have given your advice and he has ignored it.

frugalista

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He sounds like the sort of person who should go for it. Encourage him to really stretch himself.

Remember he who dares wins!!!!

But who is the more daring - the people waiting for a crash or the sheep buying houses?

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If he’s 24 there’s probably not a great deal you can do.

It takes quite a bit of time and educating to come to a position where all of the economic indicators make sense and you can recognise which ones carry weight. After all everything varies constantly.

The best you can say to him is what’s the rush to buy?

If his response is “I have to get on the ladder before I miss the boat” or words to that extent, then you can be assured he has no understanding whatsoever of economic cycles, banking, investment or anything involving money for that matter.

You should reply with “During a gold rush the only people who actually get rich are those selling shovels.”

See if he can give one historical example of a market boom when people missed the boat and everyone who could afford to buy is still reaping the rewards decades later.

When he fails to give an example of such a boom, ask him “Who is selling the shovels? Is it the estate agent?”

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The facts are if he's willing to hold onto it until his mid-forties he probably will make a small profit.

Tell him that in the long term he's absolutely right - but make sure you point out that you might be able to buy 2 or 3 BTL's in Hull for the same money within a couple of years, that these will earn more rental income and pay of the mortgages faster (oh... but he's probably doing IO like a muppet).

Facts are everywhere - ODPM, OECD, etc. if he's taken the time to borrow as much as possible he should be able to verify any figures you've provided him with in a couple of minutes.

Some sheeple just prefer ignorant bliss...

He who dares (without thinking) LOSES!!!

- Pye

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Guest Winners and Losers

Live by the sword, die by the sword. Tell him he is right, yeah the market is picking up again, make sure you offer the asking price (or even more!), so you don't miss the boat.

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Guest boredwaiting

You could poke him in the eye. That might help.

This made me laugh a lot.

But lets face it, i have been waiting 4 years for a crash and will probably wait 4 more. But we don't actually know that there will be a crash. We just think that there should be. I have given up advising people about the housing market. I have all the graphs and follow my area closely and there should be a crash. But lets face it, it's not crashing..... (yet, *fingers crossed* please please crash :) )

If he wants to make an investment you can give him your opinion. But he might do well if he buys and then comes around in one or two years and the market is going up, and sells then. It's not up to any of us to tell people what the should do.

But just in case I get flamed..... I do think the market will crash, but i know friends who bought 3 years ago and have an extremely nice house that I couldn't afford now and who knows when...

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Is this about you or your friend? If the latter, a bit of strain in the relationship and the probability of being ignored are worth it. As long as you are not offended when that happens, and recognise it could be your fault too in the way you approached it. I have tried giving financial advice three times and only succeeded in changing the decision once.

First time: buying a hole in the ground in Toronto at the height of the property boom there in the late 80s - advised against, friend listened, grateful afterwards - we all feel great and all that.

Second time: same friend, invested in eCommerce etc: I advised him not to buy, then to sell while still doing OK - this time he ignored me. But while he lost money, at least he had done nothing catastrophic, so I think on balance perhaps it would have been better for me to be less insistent about it. At least I never said I told you so.

Third time: our ex-nanny, a very sensible girl, buys in West London unwisely late last year - we send a long, reasoned, even impassioned mail asking her to consider all the issues, she ignores us as she is not clued in financially and naturally listened to her her family who think this is fine. We hope she'll be ok: I think it was right to try and save her but perhaps we should have talked to her parents first. No stain on the relationship but some regret.

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HSBC were doing a special 1 year only offer last year, max £250 per month transfered into account.

Once its done it drops to below 5% so I'll close the account and put it into first direct.

10% if you invest in Asian economies.

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windows of EA specializing in student lettings in Hull (newland av) have never been empty. several years ago U of lincolnshire was closed -- as a result many properties became permanently vacant. hull uni is closing maths department now. is it the best time now to start BTL for students? i'm not sure. advice him to specialize in lettings for eastern europeans. studios, not students! :)

EDIT: probably i was too hasty. checked local paper: a lot of 1-beds and studios and they are cheaper than 5 years ago.

Edited by Julka

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This made me laugh a lot.

But lets face it, i have been waiting 4 years for a crash and will probably wait 4 more. But we don't actually know that there will be a crash. We just think that there should be. I have given up advising people about the housing market. I have all the graphs and follow my area closely and there should be a crash. But lets face it, it's not crashing..... (yet, *fingers crossed* please please crash :) )

If he wants to make an investment you can give him your opinion. But he might do well if he buys and then comes around in one or two years and the market is going up, and sells then. It's not up to any of us to tell people what the should do.

But just in case I get flamed..... I do think the market will crash, but i know friends who bought 3 years ago and have an extremely nice house that I couldn't afford now and who knows when...

Ok, I'll write a more subjective reply:

House prices are clearly a bubble, and it has gone on longer than I ever imagined. Bubbles will stay irrational longer than any rational person thinks they will. I am convinced I am doing the right thing by not buying. No one has come up with any argument to change my mind to date.

I have decided not to mention it at all to anyone, ok I'll make passing comments like "You're brave" if they are talking about a BTL. But you will you will probably be worst off for mentioning it. If they don't crash, you will get an ear full every time the BBC writes a bullish report. Or they do crash and nothing will be said; unless you say "I told you so" then you will get the cold shoulder.

I mentioned it at work over a year ago, when they were telling me to buy buy buy. At the time I said I can't afford it, and was told I should buy anywhere, use shared ownership, buy with a friend as prices were set to rocket. I replied I doubt it, they will probably fall over the medium term if anything (and cited the arguments).

The problem was they did not like me attacking their perceived wealth, infact they went to every length to argue against it. It was every bloody lunch time they mentioned how prices were still going up. It was a joke.

In the end I said I can't wait for council tax to rise, food to rise, petrol to rise (you get the picture) then I could jump around pointing and laughing at them citing what a good thing rising prices is. After that, nothing much more was said.

Infact, with recent data (Haliwide Regional breakdown + lots of houseprices.co.uk examples) I could probably make a few people cry (as some have MEWed to the MAX). But I don't want to do that, I have to work with these people. I don't blame them for arguing against me, it was just a defensive reaction.

All it achieved was arguments during my lunch break. It annoyed me, and achieved nothing. So I wish I never mentioned it in the first place!

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Of course all those EA's he's asked for advice would have no agenda in ramping the market to him would they?

It's their job TO SELL HIM PROPERTY.

It's like going to a Chinese Doctor and asking them their opinion on the NHS prescribed medicine.

I've come round to believing that you cannot be an EA and be bearish on the market. Noone could live with that amount of conscious denial.

PS.

This friend sounds like he is jealous of the fact that you have almost trebled your money with your sharescheme. I'd like to see him do the same with his BTL empire!

Edited by DonnieDarker

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Homeowners should be required to MEW to the MAX in the event of a recession to help this country out. They must do their duty!

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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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