For those of you have read my book “beating the property clock” I have to say it is very near 12 noon.

 

12 noon means prices are at their lowest and nobody wants them.  At this point all the not so nice areas drop to near zero.  I just put in an offer for a 1,000 sqft 3 bed flat which has got smoke damage for £25,500. 

 

I am not sureof the rent but I know it will be in excess of £300 per month.  But I also know that the flat will be worth £75k in 5 years, probably less.

 

All I need to do is come up with the deposit to buy the property (all borrowed of course!), perform a £4k refurb, rent it to a DSS tenant with 2 kids on LHA for £450 and sit back and make £300+ per month.

 

I am a kid in a very big sweetie shop.  The deals are there.  With a bit of clever financing you can build a property portfolio that chucks out cash every month and will make you a true millionaire in the medium term.

 

I do not use the term millionaire lightly.  Our industry has suffered by companies similar to my own promising people they too can be millonaires.  They forget to tell you about all the unmanageable debt which also totals £1m!

 

I am talking about 30 or so rough ex-local authority flats and houses in towns you have never heard of which you can buy for £1m and you can be assured within 5 years these properties will be worth £2m.

 

You can buy properties at one times average salary in that area. Madness.  The funny thing is I think this situation could last longer than I thought.  Banks are bruised and do not want to lend to heavily because they ain’t got it!

 

This is causing only the people with:

 

1. a credit line
2. cash

 

to come out of the woodwork as prices are too good.  These are the only people who can buy or first time buyers with a bloody large deposit.  They seem to be quite small in proportion.

 

Rightmove talk about increased activity on their sites which is true but no one is buying because they can’t.  

 

If you are saving on your residential mortgage because of low rates make sure you keep hold of it and bung it in property. I reckon you can get a 300% return on cash injected if you can hold out for a few years.

 

If you want to know more about what my team can do for you let me know.

 

Ajay

 

 

Posted on: 7th Jul 2009