How Big Is Your Vulture Fund?

[Sinking Feeling]

Rosie Millard's crazed rant fair and balanced view of property buyers reminded me of an article that was published in the US about a year ago, about some Americans building up what had become known as "vulture funds" i.e. money being saved to buy a house at a bargain price. I remember everyone joking about it on a thread here.

Just wondering if anyone took it seriously and started saving at that point!

Edited June 1, 2008 by Sinking Feeling

[libspero]

Rosie Millard's crazed rant fair and balanced view of property buyers reminded me of an article that was published in the US about a year ago, about some Americans building up what had become known as "vulture funds" i.e. money being saved to buy a house at a bargain price. I remember everyone joking about it on a thread here.

Just wondering if anyone took it seriously and started saving at that point!

LOL.. I thought it was going to be a poll!

I think there must be quite a few people around here with seriously large "vulture funds", particularly those who STR'd. The most striking thing for me in this is how much sentiment has changed. This time last year everyone felt sorry for poor first time buyers.. but still kept on raising the asking prices. Now first time buyers are all evil vultures waiting to swoop in on the poor homeowners with the nasty cash they were forced to save because HPI became so utterly ridiculous.

I can only presume that far more of this will follow

Edited June 1, 2008 by libspero

[IMHAL]

I strongly suspect that even having a deposit to get 80% LTV will be good enough to act as a vulture fund as the property market will be carrion by then - a stinking mess that smells so bad that no one will want to touch it.

HAL

[Fairies Wear Boots]

I was discussing buying BTL's in three years time with my mate today, in the scenario that house prices drop quite a big chunk and they become cheapish. Cheapish as in you can at least cover the expenses i.e. interest part of mortgage, voids, maintenance, and turn a bit of a profit. If you had money for multiple deposits for BTL flats would the banks lend you money to buy multiple rental properties?

I've never owned a home, nor a rental property.

[renterbob]

Rosie Millard's crazed rant fair and balanced view of property buyers reminded me of an article that was published in the US about a year ago, about some Americans building up what had become known as "vulture funds" i.e. money being saved to buy a house at a bargain price. I remember everyone joking about it on a thread here.

Just wondering if anyone took it seriously and started saving at that point!

I've £2.49 and want an ex council build (the new build flats presently going for 200K) in August next year.

My plan is to give 90p deposit, to show I'm interested, and serious.

I'll do this on a Friday, to get in before the Saturday viewings....by and large the expected audience will be the local 'pleasure lades'...most of which are ex EAs/BTL/LL making a quick buck on their back whilst the flat is empty.

[kagiso]

I was discussing buying BTL's in three years time with my mate today, in the scenario that house prices drop quite a big chunk and they become cheapish. Cheapish as in you can at least cover the expenses i.e. interest part of mortgage, voids, maintenance, and turn a bit of a profit. If you had money for multiple deposits for BTL flats would the banks lend you money to buy multiple rental properties?

I've never owned a home, nor a rental property.

Times will change. If building societies don´t lend money they don´t have a business.

In three years time, when the libor is back to normal, one bed flats are cheap as chips, and everybody else is still terrified of falling prices, building societies will bend over backwards to lend to anybody who can offer a half decent deposit.

For me the big issues for BTL purchases are, firstly, how far will rents drop before they stabilise, and secondly which areas are going to transfer permanently into ghettos and which areas will bounce back in the next boom.

In the meantime my vulture fund is doing just fine.

Arslab and proud of it.

[robski]

As a bit of a newbie here I'd have thought that that such polls have been done in the past but I've no idea how you'd find one!

IMO a poll would / could provide some anonymity and I suspect most people wouldn't want to shout about such things - a bit vulgar don't you think?

[Fairies Wear Boots]

As a bit of a newbie here I'd have thought that that such polls have been done in the past but I've no idea how you'd find one!

IMO a poll would / could provide some anonymity and I suspect most people wouldn't want to shout about such things - a bit vulgar don't you think?

As for vulgar, there are some on here that'd want to flame anybody for considering BTL, even at the bottom, when financially it might be a good investment option.

[Sinking Feeling]

As a bit of a newbie here I'd have thought that that such polls have been done in the past but I've no idea how you'd find one!

IMO a poll would / could provide some anonymity and I suspect most people wouldn't want to shout about such things - a bit vulgar don't you think?

Only as vulgar as talking about how much your house is worth - and there were plenty of those up to last year. Anyway, for those shy boys and girls I have now devised a poll!

[robski]

I'd suggest that the result is somewhat skewed by STR funds.

[Frank Hovis]

That banding is underestimating the spread on here.

I'd have done it in £200k bands.

[libspero]

That banding is underestimating the spread on here.

I'd have done it in £200k bands.

LOL... certainly dispells the myth that we are a bunch of whiny first time buyers and college students!

Makes me feel poor though

[Sinking Feeling]

That banding is underestimating the spread on here.

I'd have done it in £200k bands.

I was expecting the majority (I guess somewhat naively) to be anywhere between £20,000 and £60,000. The fact that so many have over £100,000 and so few under that figure points to a lot of STRs and very few real savers.

[impatient_mug]

I was expecting the majority (I guess somewhat naively) to be anywhere between £20,000 and £60,000. The fact that so many have over £100,000 and so few under that figure points to a lot of STRs and very few real savers.

Nail on the head. This site makes out that it's a place where FTBs and young families priced out of the market come to discuss property prices and the crash. In reality I suspect a significant minority are out to make a quick buck just like the rest of the world. They're just the smart and lucky ones who saw the signs at the right time, bought low, and sold high. Now they're waiting for the next trough to build up their portfolios.

There's nothing wrong with that - thats the way the system works today - we all play the game like it or not (unless you live self sufficiently somewhere) and I know I would have done it if I had the knowledge and was 10 years older. I guess everyone bangs on about the 'poor priced out' whilst sitting on their £250k nest eggs because it's somehow trendy :-)

[quangolicious]

I was expecting the majority (I guess somewhat naively) to be anywhere between £20,000 and £60,000. The fact that so many have over £100,000 and so few under that figure points to a lot of STRs and very few real savers.

We've saved over £100K, without STR, so don't assume too much.

Edited June 1, 2008 by spleeper

[twatmangle]

I was expecting the majority (I guess somewhat naively) to be anywhere between £20,000 and £60,000. The fact that so many have over £100,000 and so few under that figure points to a lot of STRs and very few real savers.

I'm a 'real saver', with such an amount in cash. We may be rare, but we exist.

[brumroccoco]

Rosie Millard can kiss my arslab. I've changed my avatar temporarily in her honour

[spring]

We've saved over £100K, without STR, so don't assume too much.

well done, that's really good going. just as a matter of interest, how long did it take to save such a large amount?

[CviewUK]

ARSLAB looking for 15% gross return on new/recent build BTL.

[twatmangle]

well done, that's really good going. just as a matter of interest, how long did it take to save such a large amount?

For me, about 3 years of saving and investing combined. 'saving' on it's own is not enough. you need invest.

[Namaste]

I'm a 'real saver', with such an amount in cash. We may be rare, but we exist.

Another here

[toonboy]

i have saved 60k in palladium and gold and my parents will give me 100k, bring on the crash!

[quangolicious]

well done, that's really good going. just as a matter of interest, how long did it take to save such a large amount?

Probably around 8-10 years. And maybe about half of it in the last ~3 years, but that's just inflation for you I suppose.

[Mikhail Liebenstein]

well done, that's really good going. just as a matter of interest, how long did it take to save such a large amount?

That's the thing that is so mad about HPI. I have what would be considered a very good salary, as does my wife. Now given the cost of a mortgage/renting, either way for a 3 or 4 bed house in Surrey your are talking min £1500, but probably £1800-2000 per month. After tax and other expenses, which unfortunately does include very expensive holidays (which I could manage without but my wife won't tolerate not having) I still reckon it would take a while to save £100k, probably 5 years - rather quicker if we cut travel. But the house I flogged as a STR easily went up by quite a lot more than that in a similar period, with no effort on our part. So you have to ask where did all that money come from? I suspect the people we sold to will become wage slaves for quite sometime.

[kagiso]

Nail on the head. This site makes out that it's a place where FTBs and young families priced out of the market come to discuss property prices and the crash. In reality I suspect a significant minority are out to make a quick buck just like the rest of the world. They're just the smart and lucky ones who saw the signs at the right time, bought low, and sold high. Now they're waiting for the next trough to build up their portfolios.

There's nothing wrong with that - thats the way the system works today - we all play the game like it or not (unless you live self sufficiently somewhere) and I know I would have done it if I had the knowledge and was 10 years older. I guess everyone bangs on about the 'poor priced out' whilst sitting on their £250k nest eggs because it's somehow trendy :-)

There are a few mixed assumptions in the above posts.

Being a real saver and an STR is part of the same thing, as is buying to let. And if they are done properly, none of these things are about making a fast buck.

Capitalism is capitalism, and if you are saving then you are looking to make a profit at somebody elses expense.

You invest in shares to make a profit. You invest in property to make a profit. Somebody else pays you earnings on the shares or rent on the property.

If you invest your money in a bank, then the bank buys shares or property on your behalf, and somebody else pays the bank profit, so the bank can pay you interest.

That is capitalism, pretending otherwise is naive.

I have been a property owner. I bought at the bottom because I knew property was cheap. I also bought a BTL, primarily for non profit reasons, but where and when I bought, I new property was still cheap, which was a factor.

I saved hard to pay down both mortgages. I sold both properties at the top.

Now I am STR, with a nice vulture fund, Arslab and proud of it.

All my property transactions were a form of investment, ie saving by a different name.

And in the fullness of time I will probably BTL again.

Oh and luck didn´t have much to do with it.