April Property Update

April Property Update post image

It’s been a bit of frustrating month to be honest, lots of work going on but not a lot to show for it. My primary focus has been sourcing my next property, which I intend to renovate and sell on (flip) for a profit. The DSS HMO continues to be a frustration too.

1) Refinance my existing portfolio - the 2 remortgages have finally completed and I’ve got another £70k sitting in the bank now, which is nice. Well actually I have an offset mortgage on my own home, so really that money is sitting in the mortgage account and reducing my home mortgage interest significantly, but is readily available to spend.

At the moment I’ve put re-mortgaging the HMO on hold. You may recall I had a wholly unsatisfactory valuation last month, and whilst I’ve found another lender, the fees and interest rate are exorbitant. On a £100k loan, the first year outlay will be approx £6k in fees (broker, arrangement, solicitors, valuation etc) and another £6k in interest.

So if you know anyone who’s interested in funding a private mortgage, fixed for 5 years say, on this HMO then please let me know.

2) Lease Options - I’m continuing to progress the acquisition of lease option properties and am very close to picking up 3 flats, but the vendor is a nightmare to get hold off and keeps leaving the country for 6 weeks at a time without getting me the information I ask for.

I remain hopeful that this will come off.

3) LHA HMO – Last month I had 2 of my tenants sent to jail, since then one has returned so the housing benefit for him should be reinstated shortly, however I’ve had a 3rd arrested now!

The VOA (Valuation Office Agency) who are responsible for council tax have visited the property and decided to reband each room as a separate unit for council tax. Actually I’m not that bothered about this, as it means the tenants pay their own council tax and as they’re all on benefits, they get council tax benefit anyway, so that will actually save me £1000 per year.

The fact that they backdated the change to September 2014 and sent me a bill for over £2000 was rather annoying, but I’ve got an appeal in for that.

4) Property Sourcing – I continue to call estate agents, view properties and offer on them, as well as working with local sourcers. I’ve also upped my game at the property auctions, however there’s nothing new to report so far.

The tricky bit is that with houses that require refurb, the estate agents over price them, let alone leave any profit in. E.g. a £120k post refurb house, that requires a £20k refurb, will be valued at £105-110k. Whereas I need to buy a house like that around £80k, bearing in mind there’s about £5k of buying and selling costs to factor in too.

In summary, work output is good and it’s just a matter of time. As people say, property is a marathon not a sprint.

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Bought Another House – March Property Update

Bought Another House – March Property Update post image

My main property activities for March have been:

1) Refinance my existing portfolio – Of the 3 remortgages I have been doing, 2 are ready to go through after getting held up with letters between the solicitor and bank taking weeks to go back and forth. Honestly in this day and age, how sending a letter in the post is still the default communication method mystifies me, especially when one goes missing, which happened this month.

Fortunately having efficient systems in place in order to monitor and track the conveyancing process, meant that I spotted the problem and managed to get the solicitor and bank to upgrade to the more modern of technologies for communication: sending letters by fax machine!

Anyway fingers crossed, 2 remortgages should go through soon releasing another £70k in equity.

The 3rd remortgage has been a complete disaster, this is the one on my HMO.  The Mortgage Work’s valuer (actually a Country Wide Surveyor) decided that my HMO is worth £0. Utterly unbelievable. I’ve yet to speak to another investor or broker who has heard of such nonsense.

I was tempted at first to pursue this as has patently not done his job, which is to value the property, and not followed the RICS guidelines on how to do this. But life is too short to get bogged down in complaints etc, so I’m moving on.

I’ve sourced 2 other possible sources of funding which I’m progressing, and am also open to the idea of a private mortgage.  So if you know anyone with £100k ish who’d like a 5 year fixed rate of return, please ask them to get in touch.

2) Purchase another single let – The purchase of the 2 bed end of terrace in Warrington exchanged and completed yesterday. You may recall the numbers are:

  • Purchased for £85k
  • A £10k refurb to split the 2nd bedroom to make a 3rd bedroom, will make it worth £115k – £120k
  • So £20k+ equity from the start
  • It’s got a tenant already in situ, giving a yield of over 8% from day 1.

The tenant is a joiner by trade and I’ve agreed with him that he does a fair chunk of the work that needs doing in the house, so I get the renovation done nice an cheaply, probably far less than the £10k I’ve quoted above.  I will be careful to monitor the quality of the work mind.

3) Jail Time - Unbelievably TWO of my tenants were sent down within 10 days of each other! So I had to gen up quick on the rules for housing benefit tenants when they are sent to prison. Fortunately as they will likely both be out within 13 weeks, it shouldn’t affect their claim so I won’t be out of pocket.

No one ever said this landlording business was easy, did they?

4) Property Sourcing – I’ve continued this month to focus on finding good local property sourcers, and have spoken to 10 now.  Sadly it seems the sourcing sector is full of fakes and flakes, with only of couple who are approaching anything like the level of professionalism required.

Plans are afoot to bring sourcing in-house starting after Easter.  That’s not to say we won’t continue to be open to deals brought to us by the few sourcers who are actively coming up with deals, we will, but we’ve decided we can’t rely on them.

5) Lease Options - Work has progressed on 3 flats that we’re looking to take on using lease options and we’re very close to getting contracts drawn up.  I’m cautiously optimistic that in next month’s newletter I’ll be able to report we’ll have these in the bag.

Several other lease option leads have been put on the back burner due to the vendors’ situations, and that’s fine, but more leads have come in which need progressing.

I have to say I do love the flexibility that lease options bring.  If you don’t know how they work, just think about buying a car using the currently popular Personal Contract Purchase, where you pay a deposit, pay a monthly fee, then there’s a balloon payment in 3-5 years which you can pay, or you can hand the keys back. That’s basically how lease options for houses work, except houses are typically worth MORE in 3 years, not less like a car!

Rick Otton is the undisputed expert on lease options and was doing a boot camp in April which I did consider going on, but it clashed with a weekend I’d already booked with Susie Cole.  But I got an email this week that he’s had to reschedule till 19-21st June.  As that’s currently free, I am thinking about going.  If you’re interested then get yourself along to one of his monthly meetups, I think they’re a £tenner and you can bring a friend. They are like no other property meet I’ve ever been to, but I won’t spoil the surprise for you! ;)

In summary it’s been another month of ups and downs, but things are ticking along nicely.

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February Property Update

February Property Update post image

Below is my February property update / newsletter:

I’m continuing to work with Susannah Cole from The Good Property Company in Bristol, and also Trish McGirr from Come On Homes in the north of England, who are both experts in their fields with experience of nearly 500 property deals between them.

My main activities for February have been:

1) Refinance my existing portfolio – Of the 3 remortgages I have been doing, 2 have come back with firm offers at the (I thought optimistic) valuations I’d submitted, without any deductions; they will release £75k in additional cash.

I’m waiting to hear on the 3rd valuation (a HMO) hopefully this week, which I’m very optimistically am hoping will give another £80k cash, but I suspect as Meat Loaf said, it’ll be a case of: “2 out of 3 ain’t bad”.  But my target of raising another £100k cash should be easily achieved.

2) Purchase another single let – The purchase of a single let in Warrington I mentioned last month is going ahead and is in the conveyancing process at the moment. The figures roughly are: 2 bed end of terrace in Warrington for £85k + a £10k refurb to split the 2nd bedroom to make a 3rd bedroom, will make it worth £115k+ so has £20k equity from the start, plus it’s got a tenant already in situ, giving a yield of over 8% from day 1.

There’s currently a small issue with a restriction on the title from a former housing association, which is delaying things, but it should get sorted this month.

3) Raising Private Finance – I’ve launched 2 investment clubs this month: my Silver Brick Partners club (fixed interest, fixed term loans) and my Gold Brick Partners club (joint venture profit split on deals).

I’m pleased to say I have secured investments for each of my 2 clubs, with move investors in the pipeline.

It goes without saying, that if you know anyone who is either fed up with getting a terrible rate of interest on their savings, or has always wanted to invest in property but didn’t know quite how to start, then please ask them to call me, or pass on their details to me.

4) Property Sourcing – A key activity this month has been investing time in building relationships with property sourcers in order to leverage my time.  I realise that this means this month has been a bit slow on the property sourcing front, but it should pay dividends over the coming year, as I’ve now got 8 sourcers who are looking for that next great property deal for me.

5) Lease Options - I’ve actively progressing lease options as a strategy, and currently have 3 deals going through, 4 more where I’m in negotiations with the vendors, and another lead that’s just dropped in. 1 deal has fallen out of bed, but that’s the way it goes.

It’s been another busy but exciting month, time is the biggest issue at the moment as there’s so much to do, and never enough time, I wouldn’t change it for the world though.

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My Property Journey – January Update

Colin McNulty’s Property Diary

Oh my, was it really November since I last posted on here? Where does the time go?

Well 2014 can go swivel, for a whole host of reasons, not least of which having to watch my father slowly die. This is my Facebook post from the time, and I don’t think I’m going to say more than that:

Waking up and being disappointed to discover my father is still alive has to rank up there with one of the worst experiences of my life.

As my father-in-law (who also suffered horribly before his eventual death) said, before he lost the faculty of coherent thought and speech: “We wouldn’t let a dog live on like this, why do we force humans too?”

What I think right now about religion’s backing for the State’s moratorium on euthanasia, and the needless suffering that causes thousands of people on a daily basis, is probably unprintable.

Moving swiftly on to 2015, it’s all change. As you may have noticed from the change in title to this blog, I’ve refocused my life on our property portfolio. It’s modest at the moment but that’s changing A LOT in the coming year, as I’m focusing all my time and effort on increasing it.

It’s my intention to post a monthly update here, partly as a personal record for myself, but also to keep any interested parties informed (let me know if you want to get the monthly updates by email), so here’s what happening in January:

As some of you know, I’m working with Susannah Cole, who from a standing start has bought (for herself and with her investors) over 150 properties in Bristol in the last few years. She’s an expert at buying property at a discount, refurbishing them, and selling them on for a healthy profit (this is called “flipping” property); we will be working together to do the same in Cheshire this year.

I’m also working with Trish McGirr, a hugely successful northern property investor who’s acquired (through normal purchases and otherwise) some 300 properties. Already with her help, I’m actively pursuing 3 flats and a house.

As you can see, I very much believe in standing on the shoulders of giants, and when there’s tens of thousands of pounds to be made, why wouldn’t you get the best experts in your camp?

My main activities for January have been:

1) Refinance my existing portfolio – I have 3 remortgage applications underway at the moment, which should release (pending valuations) between £120,000 and £160,000 of further equity to use in the business

2) Purchase another single let – I have agreed a purchase of a 2 bed end of terrace in Warrington for £85k.  After a £10k refurb to split the 2nd bedroom to make a 3rd bedroom, it will be worth £115k so has £20k equity from the start.

However this property it comes with a tenant in situ, generating a gross yield of 8.1%, so I will be keeping this property and adding it to my portfolio.  It’s an example of the sort of properties I will be buying and flipping, and if I had flipped this, it would have returned around a 15-20% profit margin on total cost.

3) Raising Private Finance – I’ve been busy talking to old friends and colleagues throughout January, not only for great chats and the chance to catch up, but also with a view to raising additional finance.  I’m putting my own money up (about £1/4M) but my 18 months cash flow forecast already predicts that’s not going to being enough.

Towards this end I’m launching 2 partnership programmes, and will be looking this year for a few select people to become Silver Brick Partners and Gold Brick Partners to share in my property business.

Silver Brick Partners with be eligible for generous rates of return for simple fixed period loans. Because of the profit margins involved (as evidenced above), I am able to offer much better rates of return than the banks are offering.  I’m looking to take only 6 loan partners this year, and already in January have 1 partner ready to go, with another having expressed initial interest.

Gold Brick Partners are those people who wish to more fully share the risks and rewards of property investing. Typically having a six figure sum to invest, these investors will be true joint venture partners, who will fund the purchase and refurb of properties whilst I do all the hard work! Profit will then be split on a 50:50 basis.  Subject to successful 13.3 vetting, I’m looking to take only 3 JV partners this year, and I’m currently in advance talks with a potential investor.

It goes without saying, that if you know anyone who either is fed up with getting a terrible rate of interest on their savings or has always wanted to invest in property but didn’t know quite how to start, then please ask them to get in touch with me, or pass on their details to me.

As you can see, it’s been a busy but exciting month, with much more still to come. It’s going to be a great year! :-D

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Oppose Sarah Teather’s Bill on Retaliatory Evictions

Graham Evans MP

Graham Evans MP

Below is a copy of the letter I sent to my MP today, Graham Evans, which I post here for prosperity. If I get one, I’ll post a reply too:


 

Dear Mr Evans,

This Friday, 28th November, MPs will debate the second reading of Sarah Teather’s Private Members’ Bill on so-called ‘retaliatory evictions’.

I am writing to ask you to oppose this bill.

As a local landlord who has recently moved to Sandymoor in Runcorn (we moved to put our child into the excellent new Sandymoor Free School, in fact you met her when you visited) we have started investing in Runcorn to improve the very dilapidated private housing stock in the area.

We have for example already converted a derelict and empty property, providing 4 high quality all en-suite bedsits, all of which are rented to DSS tenants (bucking the general trend amongst private landlords) who were, or were at risk of being, homeless.

We have worked closely with the council, inviting them in to inspect and advise of the refurbishment and were granted a HMO license at the first time of asking, without quibble or condition.  We’ve worked closely with homeless shelters and Halton council’s homelessness officer and have tenant on the council’s Bond Guarantee Scheme.

I provide these details to hopefully demonstrate that we are the kind of quality landlords that you would want to encourage.  Which is why I’m writing to ask you to oppose Sarah Teather’s Private Members’ Bill.   Our main issues are:

  • There are no reliable figures to show that retaliatory evictions are a big problem that needs new legislation. Generally, landlords don’t evict good tenants for no reason.
  • Changes are not needed as retaliatory evictions are already illegal under consumer protection regulations.
  • The Bill will be ineffective. It is supposed to help good tenants and punish bad landlords, but instead bad tenants will use the law to avoid eviction, withhold rent and to continue with anti-social behaviour, while criminal landlords will continue to ignore the law anyway.
  • The Bill assumes a landlord is guilty of carrying out a retaliatory eviction by suspending the section 21 notice when a tenant complaint is received. In other countries, like Australia and USA it is up to the tenant to prove that an eviction is retaliatory.
  • Local authorities do not have the staff to carry out the extra inspection work the Bill requires.
  • Landlords will be more selective about who they let to, reducing availability of accommodation to groups seen as ‘high risk’.
  • The Bill will undermine confidence of landlords and drive out investment in the private rented sector.

What with the already crazy introduction of section 22 of the Immigration Act 2014, which attempts to turn landlords into border guards and passport experts by checking potential tenants “right to rent”, the amount of extra red tape that’s been laid at landlords’ feet this year is already very onerous.

Sarah Teather’s bill would take away one of the few legislative tools that landlords have to ensure the smooth operation of their portfolio, and would become a charter for abuse by rogue tenants, determined to steal rent from landlords, most of which are not experts, have only a few properties, and earn less than £20,000pa:

http://thepropertyhub.net/hub/wp-content/uploads/2014/10/big-property-investor-survey-by-the-property-hub.png

Please oppose this inequitable, unfair and obtuse bill and encourage your fellow MPs to do likewise.

Kind regards,

Colin McNulty


 

Here’s the image from that link above:

Landlord's and Property Investor's Survey

If you know anyone who’s a landlord, I suggest you ask them to send a similar letter to their MP.

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The Cure for Alzheimer’s Disease…

The Cure for Alzheimers Disease

Can Alzheimer’s be cured?

Alzheimer’s disease is undoubtedly a complicated issue, but the research is out there if you care to look. For example, I saw an article by UCLA today showing that they had reversed Alzheimer’s without any pharmaceuticals. That’s astonishing, how do you do that?

Here’s the article: http://abc7news.com/336963/ and here’s the pertinent bit:

They avoided simple carbs, gluten and processed foods. They increased their fish intake, took yoga and meditated. They were instructed to take melatonin, get adequate sleep, incorporate vitamin B-12, vitamin D-3 and fish oil. Within six months, nine [out of 10] patients saw a noticeable improvement in memory.

Oh, dropping simple carbs, gluten & processed foods, and adding fish oil and a few vitamins. So you mean an anti-inflammation diet just like the Zone Diet, which has been publishing the beneficial affects of diet on Alzheimer’s for years.

http://zonediet.com/nutritional-news/archived/alzheimer’s

What’s sad is that this is news when the treatment has been known for years: sort out that crappy western diet that your brain never evolved to work on.

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Fake Honey – Are You Serious?!?

Fake Honey


In another one of those “How have I lived this long and not known about his before?” moments, I discovered this week that there is such a thing as FAKE HONEY!

Not only has a recent study shown that 75% of US “honey” actually contains no pollen, but imported honey (most of the honey in shops) can be faked by just adding dye to corn syrup.

If you’re lucky, it’s been cut with some real honey, if “pollenless honey” can in fact be called honey that is. They filter the pollen out so you can’t trace its origin and can import it via 3rd party countries, which is an issue as Chinese honey has been banned in the UK and US for contamination due to antibiotics.

I suppose I shouldn’t be surprised, people will it seems fake anything to make a quick buck. I’ve seen or read about fake electronics chips, fake safety equipment (e.g. electrical RCDs, or plastic hard hats), and even fake eggs… yes really!

Fortunately I can get locally produced honey directly from a local farm, which is excellent.

My only decision now, is what to do with the 2 unopened shop bought jars of honey that are in the cupboard…?

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The Fat Tide Has Turned – Fat Is Good For You!

The War on Fat is OVer

Ok I’m calling it: The War on Fat is over. And guess what? Fat won!

There’s been lots of strange coincidences this week, firstly I did some research for someone who basically didn’t believe me or my bookshelf of books that fat wasn’t bad. So I provided 3 scientific studies doing real science (not Daily Mail articles trying to sell papers) that demonstrate that fat is not the big meanie poo poo head everyone thinks it is. See below for those links and quotes.

Then National Geographic publish the article Is Fat Our Friend? in which the author acknowledges that we’ve got it all wrong, but still can’t quite bring herself to call it.

The 23rd June edition of Time Magazine has an article called Ending The War on Fat, which sadly isn’t wholely online unless you subscribe.

And today I’m sent a link from South Africa about Tim Noakes, a celebrated fitness guru who turned his back on his carb-loading fuelled fitness regime and now promotes a high-fat diet, becoming South Africa’s best selling author in the process, much to the chagrin of his former peers.

The fact is, fat is not the great evil you’ve been told. To my knowledge, it’s never been proven that saturated fat on its own increases the risk of dying from heart disease. Sure it’s been shown that some people who eat a lot of saturated fat, have an increased risk of cardio issues, but these people also eat a lot of processed carbs and refined sugars in the “Do you want fries with that?” and “Do you want to super size your coke?” vein.

It’s never been shown that cholesterol causes heart disease either. Yes they’re correlated, but there’s no evidence that cholesterol in the blood is the cause. Take this study that concludes:

The concept that LDL is “bad cholesterol” is a simplistic and scientifically untenable hypothesis… Independent-thinking practitioners must look at the readily available evidence for themselves, instead of relying on the continual stream of anticholesterol propaganda emanating from “health authorities.” By doing so, they will quickly realize that the LDL hypothesis is aggressively promoted for reasons other than public health.

I contend that what causes heart disease, also causes cholesterol: inflammation resulting from excess carbs. In fact cholesterol is the sticking plaster your body uses to patch up the damaged arteries. Cholesterol is trying to save you! (And don’t get me started on calories.)

Now for those studies that back up that dietary fat is not correlated with weight gain:

From the US National Library of Medicine National Institutes of Health: Dietary fat is not a major determinant of body fat

> “fat and prevalence of obesity have not been positively correlated”
> “fat consumption within the range of 18% to 40% of energy appears to have little if any effect on body fatness”
> “Diets high in fat do not appear to be the primary cause of the high prevalence of excess body fat in our society, and reductions in fat will not be a solution.”

From the American Journal of Clinical Nutrition: Dietary fat intake and subsequent weight change in adults: results from the European Prospective Investigation into Cancer and Nutrition cohorts

> ”We analyzed data from 89,432 men and women”
> “no significant association was observed between fat intake (amount or type) and weight change”
> “These findings do not support the use of low-fat diets to prevent weight gain.”

From the New England Journal of Medicine: Weight Loss with a Low-Carbohydrate, Mediterranean, or Low-Fat Diet

> “The mean weight loss was 2.9 kg for the low-fat group, 4.4 kg for the Mediterranean-diet group, and 4.7 kg for the low-carbohydrate [Atkins] group”
> “In this 2-year dietary-intervention study, we found that the Mediterranean and low-carbohydrate diets are effective alternatives to the low-fat diet for weight loss”

But don’t take my word for it, or the word of Time Magazine, or National Geographic, or any of those pesky “scientists”. I am a huge proponent of self experimentation. Try it for yourself. After years on a high saturated fat diet, I decided to get myself bloods done to see if it was really true that a high fat diet causes cholesterol. Here’s what happened:

My Results After 4 Years on a High Fat Diet

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Hey, where did my comment go?

Hey, where did my comment go? post image

There’s a saying in the IT world: “If it ain’t broke, don’t fix it!” or perhaps that’s just the advice my Dad gave me.

Either way, I failed to follow that advice and things have gone wrong. An innocuous little tweak has ended up with over half of the posts on this site disappearing.

Oddly (or typically if you work in IT) reversing the very small change I made does not seem to solve the problem, which is a major pain.

Not to worry, I do at least take regular backups of this site, so it should just be a matter of restoring from the backup immediately prior to the change I’d made. Unfortunately, nothing in IT is ever that simple. I kept getting WordPress backup import restore errors like this:

> Duplicate entry ‘15878’ for key ‘PRIMARY’

For some reason the backups I took duplicated many of the comment records, actually in the .sql.gz backup file. I have no idea why this happened, but I had to manually remove the duplicates by deleting one of the offending duplicate INSERT sql statements. Here’s an example of an offending line (email address changed):

INSERT INTO `wp_comments` VALUES (15878, 192, ‘Eric’, ‘eric@eric.com’, ‘Eric’s comment was here’, 0, ‘1’, ‘Mozilla/5.0 (Windows NT 6.1; rv:10.0.2) Gecko/20100101 Firefox/10.0.2′, ”, 0, 0, ‘N’, ‘0’);

The really annoying thing was that there’s no way to tell which comments were duplicated without just trying to do the import. This was the process I had to follow, on the database’s Import tab in phpMyAdmin from the cPanel:

– Select the .sql.gz backup file for import
– Click GO
– Wait for it to upload and start the import
– Check the error for the primary key number it was moaning about.
– Unzip the .gz file to get the .sql
– Edit the .sql file and search for the offending primary key number
– Delete one of the duplicates
– Save the .sql file
– Find the .sql file in Windows Explorer and zip it up, ensuring it’s .gzip format
– Repeat the import process

That’s it, for each duplicate, of which there were over 10!

Anyway, the long point of this post is that if you posted a comment on this bloc between 22nd May and 23rd June, it’s probably gone. I’m very sorry about that, as I do appreciate and read every comment that’s posted. Please re-post it.

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Scottish Independence Pros and Cons and Facts

Scottish Independence Pros and Cons

Scottish Independence Poll and Referendum

I’ve just read this Sky News article on what Scotland may gain or lose by declaring independence.

In this day and age of unity and bringing cultures together in harmony and common purpose, we can’t even keep our little island united. Scottish independence would be a disaster for all involved.

Assuming that Scotland does get the lions share of North Sea oil (and that’s a bit IF if my book), what are you going to do when it runs out? Look at the Middle Eastern countries like Dubai, who have realised this and are ploughing hundreds of £Billions in to building a tourist infrastructure in the hope people will flock there when the oil money runs out and they’re just left with a hot desert.

Can you really see the entire Scottish economy, public services, police, army, NHS, benefits, education, roads etc etc being maintained purely by taxation on salmon and whisky exports and a few golf tourists?

And things this article doesn’t cover is all the debt that Scotland will gain, e.g. the public sector pensions deficit and their share of the UK national debt, and their share of liabilities for the bank bailouts, e.g. the Royal Bank of Scotland.

Scotland may do ok on oil revenues for 50 years say, but it’ll be another bankrupt Greece in your children’s lifetimes. Voting for independence is an utterly selfish move that will doom generations to poverty.

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