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spyguy

He's Back - Leed's Btl 'king'

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http://www.yorkshiretoday.co.uk/ViewArticl...ticleID=1584493

I am curious now.

Where's the fundingcoming from?

Anyone know???

Here's some of the answer to your question from an interesting Press Release

Selected quotes:

Manoj Raithatha, 33, a Pinner, Middlesex-based teacher-turned-property tycoon, bought 209 apartments from Crosby Homes for £35m at its acclaimed Clarence Dock inner-city regeneration project - at a discount to open market value which could be in excess of 15%.
Because the properties won't be ready until 2007, most buyers put down deposits up to £15,000, and are likely to have paid about 15-20% of the price when they complete.
He also buys in such bulk, he says, that he is happy to add a modest mark-up of "about £5,000 to £6,000 on each property".
:o

These are flats that retail for circa £200,000. It will only take a 2.5% drop in new flat prices to knacker his margin.

However, the investors who put down the deposits could also be in for a rude shock when presented with the final price (agreed presumably at the initial off-plan price) when they get ownership in December 2007. I can see those investors struggling to find the finance when mortgage companies come to value those properties at less than they agreed to buy for. There was a thread recently about a couple in this situation, couldn't raise the mortgage so lost their deposit.

And another source: The Telegraph

How? They were virtual flats - bought off-plan and requiring an outlay of only 10 per cent of their price to "buy" them, the rest not due until completion, which could be several months, even a year or more away. All he had to do was keep his nerve and, as prices soared - up by 21 per cent in London from 2001-2002 - so did his investments.

Having exchanged contracts, the builders were tied to selling Manoj the properties at the original prices but - and here's the first clever bit - Manoj could raise further money himself by either remortgaging at the new, higher value or selling the flats on before completing upon them.

Only clever when prices are rising. Pretty dumb if they start to fall.

Edited by redwing

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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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