Fast Profits from BMV

Introduction

Hello, and thanks for taking the trouble to read through my website.

Before you go any further, I think it is vital for you to consider a few facts that may change your view of your current accepted ‘reality’ of property investment in the UK today.

You may, and it wouldn’t surprise me if you did, by begin by asking the following question…

‘Why on earth would I want to get involved in buying residential properties in these crazy times?’

On the face of things, this is a perfectly reasonable, suspicious approach.

Why?

Because you may think that the world is ending from - a financial point of view, and that property prices are going to plummet to almost nothing.

The newspapers tell you this every day don’t they?

So it must be true…..

Mustn’t it?

You’ve possible been influenced in the extreme by the media - who love to ‘peddle’ over exaggerated stories, be they positive or negative ones.

I see things very differently however.

Why?

Because I’m blind to the truth?

Not in the slightest.

I cannot afford to be ignorant about such important matters.

You see, I’m still actively buying properties.

In fact my recent acquisition rate this year has been more prolific than any other previous period for me.

Why should that be?

Am I stupid?

Why should I be doing that when, on the surface, it appears that houses are the last thing anyone should be buying at present?

Because of a combination of a couple of things…..

Reason number one…

Firstly, I have taken the trouble to cut through all the mumbo jumbo being written by the tabloids, and reported by the down market TV programmes about the ‘world coming to an end’

To some extent, the media is leading the market – in the way it led the market when house prices rocketed.

It has so much power.

Why?

Simply because, with respect, one-dimensionally minded readers and viewers (possibly you can be included in this group?) allow it to have so much power on their lives – by taking everything at face value - as presented!

A ‘self fulfilling prophecy’ occurs

I have, and have always done, my own research on these extremely critical matters.

I don’t permit Trevor MacDonald, a hyped up media ‘face’, or other TV pundits, to be my personal mentor on these matters…….

Also, there is no way that some glory seeking, salary chasing, newspaper ‘hack’ living in a rented studio in some seedy part of London is going to exert influence over my thinking and actions.

I prefer to check things out myself - then act accordingly

Hence me buying lots of property recently!!

The second reason why I am buying lots of property currently is much, much simpler….

I am only agreeing to buy when sellers agree to accept my ludicrously low offers

I am taking MASSIVE advantage of current circumstances…..
I am not paying a single penny more than 65% of TODAYS (not last years) market values for properties that I buy.

If you can’t believe that is possible – then I have to tell you that you must change the context of your mind immediately if you want to enjoy the same success yourself.

There are sufficient people out there at any one time who will sell at ridiculous prices…if they are desperate enough!

You just have to find them!

Here’s the rub….

I only ever do deals with extremely desperate sellers of houses.

An important reason why they are desperate is that they have been influenced by the media, and firmly believe that the world is almost at an end…and its best to sell now…before the market comes to nothing.

They don’t know the real facts

But I do!

‘So, what do you know that makes you so confident to buy property – even at no more than 65% of the houses’ value?’

Let me tell you….its so simple

I bother to look at the cold hard facts and this gives me the confidence to keep on buying – albeit it at massive discounts.

The vast, vast majority of people haven’t got a clue about ‘reality’

Is that my problem – or theirs?

Please remember that there is no way whatsoever that I would buy property at full market value now – or anywhere near that.

I can see for myself that the market is falling now.

I am waiting for it to ‘bottom out’ – as it will do soon.

Here’s a recent working example of my logic.

I viewed a property that my research told me would have sold for around 120k 12 months previously.

I factored in, by virtue of my proven research model that the house would today be worth 105k

After negotiations, I bought the house for 68k.

The seller has stayed on in the house as my tenant, and is paying me £525 per month in rent –which is the local market rent for that type of property

In summary, I bought a house that would have sold 12 months ago for 120k – for 68k today!!

68k represents around 65% of today’s market value

To ‘land’ this deal I needed to have

• A desperate seller
   
• A desperate seller - who could afford to accept my low offer
   
• The personal ability and skills to persuade the seller that my option was the best option for them at the time
   
• A financial strategy to make the deal work for me

In this case, all of the necessary requirements fell into place – and a great deal was structured

I have to tell you that most enquiries do not end like this

Most, the vast majority, come to nothing

I spend a lot of time wasting my time…..

I also spend a long time calculating my massive profits…..

Work it out!

But this is a numbers game – like most forms of business

Hopefully, you can see my logic here?

• I have a property worth 105k today
   
• I bought it for 68k
   
• I have a rent-paying tenant from day one
   
• The rent is £525 per month
   
• I managed to structure the deal using none of my money
   
• The monthly mortgage is £340
   
• The monthly gross profit (rent v mortgage) is £185

Now, when the market bottoms out, and that property is worth say 90k (representing a 25% drop in its peak price)

Then I have an asset worth 90k – that I paid 68k for!!!

It hardly requires the brains of a genius to see that this is a good deal!

If you don’t think that this example is a good deal, then can I politely suggest that you continue doing exactly what you are doing to pay the monthly bills now….and forget this!

If not….read on please……

Finally, because my research and insight into reality (which I mentioned earlier), as opposed to mass-media ‘hype’ told me months ago that the Bank of England Interest rate should be around 2% in 2009, I took out ‘tracker’ mortgages linked to this rate.

If the Interest rates do drop to 2% per annum (as widely predicted) then my monthly mortgage payment will be around around £170 per month.

Meaning my gross profit on the monthly rent would be around £355 per month (£4260 per annum)

‘So, what are these cold hard facts that you know that make you confident in the long-term market?’

Firstly, as you now know, I buy very low.

Buying very low is rule Number one

This is the main component of my strategy.

It gives me a massive safety net against the bottom of the market

It’s a big, soft cushion

After this, the following 8 important facts console me greatly……

8 crucial facts

FACT 1: Banks have to lend money

It’s what they do…..

The current slowdown in property sales is simply because buyers cannot find finance.

The banks have been sitting on their hands owing to lack of confidence in each other, as a result of their utter incompetence.

This cannot go on forever!

Banks make money by lending money - at a price.

They ‘sell’ money – rather like Tesco sell food and other products.

If Tesco stopped selling goods for any amount of time – they would not have a sustainable business!

This very basic fact, combined with Government financial intervention recently means that sooner or later a battle for the available market share in the mortgage markets will begin – and people will be able to borrow money once more.

This will get the market moving………….

FACT 2: Interest rates are going to fall massively

Don’t take my word for it – check it out.

They are widely predicted to be no more than 2% in 2009.

This will mean the lowest rate since the 1950s!

Some pundits predict they may go lower than that.

Some say 0% - as happened in Japan in the early 90s following their property problems.

Interest rates in Japan today are still only 0.5%

In the USA they are 1%

In Britain they are 4.5%...work it out!

Take your time to research reality – not hype.

Do a Google search on ‘UK Interest rate predictions 2009’

And see what I mean.

Lower interest rates can only be a good thing for borrowers.

It means the price of money has gone down - it is attractive to borrowers!

OK, we hear that many banks aren’t yet passing on Bank of England interest rate cuts to the public currently.

I see this being a short term thing – linked to the current cautious nature

Over time, as competitive forces kick in – things will change

In any event, if you are savvy enough to link your mortgages into Bank of England ‘trackers’ at the moment – then your lender has no option but to pass on the interest rate reductions to you.

It is a contractual obligation on their part, and one that they cannot ‘wriggle out’ of.

FACT 3 : Inflation is going to fall to around 2% in 2009

Once again, I don’t say this – rather the respected economic commentators whom I research do.

Check it out….check the evidence.

Google it!

Currently at around 5% - it appears to be a disaster. But read the responsible publications for the full reality.

Do a Google search and see if what I say checks out

This absolutely MASSIVE reduction will ease the financial burden on consumers and create more disposable income.

It will also build confidence in consumers.

This, combined with lower interest rates, will also increase the feel-good factor that we all hear so much about

FACT 4: Fuel prices have started to drop massively

Another, very obvious, feel-good issue to consider.

A massive decrease in a major household expense.

FACT 5 : Current wage settlements are very acceptable

Wage settlements are around 3.0% per annum.

Wages are the traditional long-term driver in the property market and have a massive effect on affordability.

Rising wages, combined with low inflation and low interest rates mean confidence and affordability for the general public

FACT 6: British obsession with property ownership

It’s widely accepted that the British have, for whatever reasons, a massive desire generally to own their own homes.

It seems to be inbred in us as a race to do so.

Currently, because it is hard to buy property, many people are renting – hence the massive surge nationally in renting (rents are rising too – great for landlords!)

Speak to any Estate Agent and they will tell you that there is a massive ‘’pent up’ demand from potential buyers to come out and buy - when things improve.

A buying frenzy will lead to price surges.

Always does!

FACT 7: Not enough homes are being built in the UK

Dear old John Prescott told us in 2005 that in order to ‘get ahead of the game’; the UK had to build 300,000 new houses per year.

However, his Department was realistic enough to realise that 200,000 would have to be an acceptable target.

Why?

Because at that time, we were only managing to complete around 160,000 houses per year (the lowest number since the end of World War 2 – whilst the current population is the highest ever!)

Therefore 200,000 represented a 20% increase – which would not be enough anyway!

However, it would be a positive move forward

The UK is the 4th most powerful economic nation on the globe today.

We are a tiny island - but we pack a massive punch!

We punch way beyond our weight!

This brings many positive things – and is why we experience a much better standard of living that the majority of people on earth enjoy….

However…it also brings responsibilities.

One of those responsibilities is to plan for the future regarding such basics as housing……

Fast forward.

In 2007, we completed 7% less houses than 2006!

Ooops….Oh dear!

Oh, and by the way, 40% of these completions were basic 2 bed apartments built by developers to cash in an naive property amateurs who were trying to move into property without any preparation – many have been stung because they didn’t take this business seriously enough.

I personally know of a respected orthopaedic surgeon who threw herself into property ‘on a whim’.

It was a ‘sexy’ thing to ‘get into’

She lost thousands upon thousands buying off-plan property in ‘overcooked ‘cities - because she was uneducated and vulnerable in property…and she was surprised by this too!

Now, if I had tried to undertake surgical procedures on people without proper training – which resulted in me crippling them for life – would I have been shocked?

Err...no….

Do you see my point?

These apartments ‘for the naïve’ are not the ‘family type homes’ that dear old Mr Prescott had in mind – meaning that in reality there are around only 100,000 houses of that type of ‘family home’ actually being built!

Wait….

It gets worse though…..

2008 has seen less building than ever.

‘The Housing Federation’ say that less than 100,000 houses (around 30 per day only!) will be completed this year as builders simply scale back production – or lock up sites completely until times improve

You see, developers don’t care a hoot for Government targets. They have themselves and their shareholders to answer to.

They aren’t public charities or servants.

They just sack bricklayers, and lock up building sites until the economic picture looks better for them

It doesn’t look good from a supply point of view does it?

Hold on….

Gets worse….

Ask yourself…how long will it take for the builders to get back on track when the economy improves?

A long time is my guess. Recruiting new staff, signing new contracts…setting up new sites……

Even then they will only be producing around 160,000 units per year!

This isn’t enough anyway!!?

What’s my point?

Property is going to become a more and more scarce commodity as demand increases.

Which leads me to…..?

FACT 8: UK population is increasing

Recent government figures show that the UK population is increasing by over a third of a million people per year.

This equates to 1000 new people coming to live on our tiny little island each and every day

Ten people every 15 minutes

Almost one full team of overseas Premier League Footballers every quarter of an hour

Sounds about right actually…most of them probably are!

But I digress…..

1,000 people

24/7

Every day…..

These people are going to start families…put down roots

Where are they going to live?

I don’t think I need to summarise…..

Indeed, I could go on about all the factors that will ensure that…..
 

• Property in the UK will become more scarcer
   
• Positive factors are going to affect demand….. and therefore prices very soon

That’s why Im still buying houses…. and making hay whilst he sun shines

Albeit at ridiculous prices!

That concludes the case for the defence!

Please read on…..

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