All Forum Posts by: Eamon Heggarty

"Off Plan" i am referring to a building that hasnt be built but is in the construction phase.

1 Bed apartment - 550sf

Fully furnished to a high spec

Build period - 24months

Rental Package - I am guaranteed 5 years of rental income

Cost - $120,000 (due to it being off plan this price is already 20% under current market value and not 24months from now market value)

Rent per month - $650

Management fee - 8%

Mortgage (after build is complete) 70% - $350/month

Payment scheme - 30% deposit is covered over the 24 months by my own personal payments, therefore 30% of 120,000 = $36,000. Then $36,000/24=$1500/month payment.

I know this is a unique way of purchasing property but i a 99% sure i am going to make this deal/ Does anyone have any thought on it and if its good or bad please :D 

Thanks 

Hi all.

I'm 22 and from the UK and currently just bought my first property. I would just like to share my recent investment and how ive been able to pay for it with a new technique ive never heard off or seen.

It is a 1 bedroom apartment in a new off plan small 4 story block building in the city center of Birmingham UK.

The property is an off plan investment and its purchase price is 15% under market value at $117,000. The developer has set up a payment scheme whereby i (the RE) pays a deposit and legal fee to secure the property (3% off the property value). Then after this i make payments once a month for 24 months to cover the 30%. Therefore 30% off $117000 = $35,100. This is this divided by the 24 monthly to calculate my monthly payments ($35,100/24= $1462.50/month).

After the 24 month period i will secure a mortgage for the reminder of the property value ($81900).

ADDITIONALLY to this (this is the bonus ball) the developer has guaranteed 5 years rental income, weather they find tenants or not, i still get my $650/month rent cheque (-8% for management fees). Thus $598/month for 5 years guaranteed.

I am currently 6 months into paying the monthly installments and the property has appreciated to $155,000. (STILL OFF PLAN). "off plan" refers to a house/unit that has not yet been constructed, only planned.

All in all i think i've made a good invest and would like to hear what any of yous think, good/bad/ugly. 

Thanks :D

@Theresa White

Perfectly explained :D

And yes Appreciation is a mayor factor in me investing as the area is expected to BOOM in the next 10 years due to train links to London and student population & jobs increasing significantly. 

@Mary B.

I wouldn't predict any repairs within the first couple years as its a new build. 

As part of the deal with the developer they secure me 5 years of income through tenants at a monthly rate and charge 8% for all management fees. 

Expecting mortgage to be $600/month and rental income to be around $1000 - (8%management) = $920. So cash flowing $320 per month. Save up money for repairs when they come years down the line. But pleased at my first investment. 

ALSO to point out i live in a different continent than the UK/europe (but im originally from there) so its a totally hand off investment and plan to relocate back in 5 years and start Flipping/buying&renting. 

@Theresa White

Yes theresa exactly right. 

Planning on remortgaging when its complete and value should be up around the 160-170 area.

And the monthly payments will be fine hopefully!

Thanks

@Mary B.

Thanks

Essentially its 15% under market value as of November 2015 the property had been valued at that time (not taking into account inflation). 

However a new development which is very similar in all aspects incl finishes and is literally across the road has just went on the market for an off plan investment at $155,000 for a 1 bed in May 2016. Where i secured mine at $117,000 6 months prior. Its in Birmingham UK, recently the most appreciating.

Good luck to you too

@Dave Williamson 

This is an off plan investment. So techincally it is -$1426.50 (negative cash flow) for 24 months! Which covers 30% of the property value (essentially the downpayment). 

Then afterwards i will then have ($650) positive cash flow for there afterwards and guarenteed for 5 years. 

*spelling

Hi all. 

I'm 22 and from the UK and currently just bought my first property. I would just like to share my recent investment and how ive been able to pay for it with a new technique ive never heard off or seen. 

It is a 1 bedroom apartment in a new off plan small 4 story block building in the city center of Birmingham UK. 

The property is an off plan investment and its purchase price is 15% under market value at $117,000. The developer has set up a payment scheme whereby i (the RE) pays a deposit and legal fee to secure the property (3% off the property value). Then after this i make payments once a month for 24 months to cover the 30%. Therefore 30% off $117000 = $35,100. This is this divided by the 24 monthly to calculate my monthly payments ($35,100/24= $1462.50/month). 

After the 24 month period i will secure a mortgage for the reminder of the property value ($81900). 

ADDITIONALLY to this (this is the bonus ball) the developer has guaranteed 5 years rental income, weather they find tenants or not, i still get my $650/month rent cheque (-8% for management fees).  Thus $598/month for 5 years guaranteed. 

I am currently 6 months into paying the monthly installments and the property has appreciated to $155,000. (STILL OFF PLAN). 

All in all i think i've made a good invest and would like to hear what any of yous think, good/bad/ugly.

Thanks :D

@Brett Snodgrass Set up and all. Thanks 

Hi,

I have recently found this website and bought the book on rental property investing. Obviously it is geared towards the USA market, however i am wondering are they any forums for UK investing or investing abroad? 

Thanks 

@Brandon Turner Are they any forums for UK investing? or is this strictly USA market place? 

Got your book and been listening to the podcast like mad! just dont hear much about the UK.

Thanks