Onboarding

Buying a property with our help.

Detailed process flow.

Complete the fact finder form

Book in a free 30 minute consultation

James Birch

One of our senior team, probably James Birch co-founder of Invesmore Real Estate will go through the factfinder with you.

Together we will go through your requirements and make sure we are in a position to help you.

We will review some properties with you

As of writing, we’ve got data set of 120,000 live properties on sale now. They are mostly in the North of England within 75 minutes drive of central Manchester. For your interest, our core criteria for a good rental investment property is:

  • Valued between £65k and £170k
  • 2 to 3 bedrooms
  • Above 5.5% gross yield
  • In areas which show promising capital growth
  • Areas which are economically robust
  • Low crime neighbourhoods
  • Low deprivation
  • Within 10 minutes walk of shops
  • Close to good schools
  • Good public transport
  • Quiet location near green spaces
  • Can be rented out within 8 weeks or less
  • If sold on, can be sold within 4 months or less
  • In reasonable condition so it can be renovated quickly

We select 25-100 properties which broadly fit your criteria

During the fact-finding session, we will probably pull together a list of between 25 and 100 properties which might be suitable for you. Each property will have calculations showing approximate:

  • Gross rental yield
  • Cost of purchase which includes deposits, and professional fees
  • Probable cost of renovations
  • Net income which factors in lettings management costs, mortgages and other expenditures.
  • Probable capital growth

Sidenote: If you’re buying as an owner occupier 80% of our data and insights are relevant.

If you’re happy with everything so far:

We ask you to sign our consultancy agreement (Copy here) and deposit 40% of our consulting fee, usually £2,400 + VAT with our company solicitor. GHW Solicitors

Important! If we don’t find a suitable property for you within 30 days from signing our consultancy agreement, our solicitor returns your deposit, including VAT you paid.

We start finding property deals for you.

We will:

  • Calculate gross rental yield, net yield, cost of purchase and potential capital growth
  • Estimated renovation costs for each property
  • Provide an area report showing demographics, crime, deprivation and other variables which affect future property prices

Together we create your property shortlist.

These are properties we have pulled out from our InvesFinder platform with fit all the main agreed criteria for a good property acquisition.

For example, you may prefer a certain type of tenant from a particular demographic, so we’ll select properties from areas where certain demographics live.

If you are an owner occupier, you may want certain amenities including the best schools, low crime, a robust local economy. Whatever your requirements are, if we’ve got data on it, then we can find the right properties in the right areas areas for you.

We do a more detailed background check

On shortlisted properties we do:

  • A land registry search to check purchase history and current ownership
  • Previous sale history on Rightmove Plus ( only available to professional estate agents )
  • One of the negotiators (An experienced real estate agent) will contact the selling estate agent and get background information on the property
  • We do a thorough area check to make sure we know of any urban regeneration, flood risk, crime risks et cetera

If the properties look like good deals, we start negotiating.

  • Our lead negotiators will contact the selling agents.
  • Based on our background knowledge of each property, we’ll make a suitable below asking price offers that make the the deal meet our requirements*
  • Importantly, we base our offer prices on solid calculations.  Selling agents and vendor’s respect us for being straightforward.

*ie for buy to let good net yield. The expected rent you’ll get from a property deal divided by the total cost of ownership i.e. deposits, stamp duty, refurbishments, professional fees.

If an offer is accepted by the seller...

We double check you are happy with the suggested price. And just to be sure, we will go through all the following with you:

  • All the calculations for the property
  • Exactly what you’d expect to pay after deposits, renovations, stamp duty, professional fees
  • What renovations need doing, how long it should take and how much it would cost
  • How quickly we expect to rent the property out from the day you take possession
  • How much actual pre-tax cash profit you should make per month
  • How much capital growth you can expect over the next five years

If you are sure this is the best deal for you...

  • We get your authorisation by email to make a formal offer to the seller
  • Our director of acquisitions: Brendan Neely, an RICS chartered surveyor will review your potential offer
  • If everything checks out properly, we then make an offer subject to survey.

If your offer has been accepted, it's time to get a survey.

At this point, you should get a condition survey. You may be investing a lot of money in this property, so it makes sense to have it professionally assessed for condition.

the condition survey is your first actual cost on top of the consulting fee. The survey will cost between £350 to £450.  That is the cost of the survey from the surveyor.  We do not take any profit from that surveying cost.

You can use any surveyor you like, but we recommend you have a condition survey undertaken at cost price by Brendan Neely, our director of property acquisitions.

Reason for using Brendan to survey the property: He is a successful property investor and RICS surveyor, he understands exactly what a good investment property should be. And as previously mentioned the survey fee will be at cost price.

If Brendan can’t do the survey personally, he will nominate a suitable local surveyor to do the survey also at cost price.

We use the RICS condition survey template. It’s well understood by the property industry and it’s condition reporting traffic light system incorporates with our property estimation workflows.   RICS PDF sample report here.

The condition survey report

In probability the condition survey report will be in line with expectations.  In your report you’ll get:

  • Comments on any issues
  • Photographs of the property
  • Photographs of issues of note

Since this report will have been undertaken by a chartered surveyor, you’ll  know where you stand in respect to the condition of the property.

And since we will have an accurate condition report, assuming you want a quote from our renovations business, we can draw up a very accurate estimation of renovation costs.

Ready for the next steps

At this stage you’ll know the accepted sale price and condition of the property.  Now it’s time to raise finance.  It’s tempting to buy property for cash, but it’s smarter to gear up and get finance.

Why? Low interest rates and moderate inflation mean that the value of money borrowed declines over time, whereas rental income is generally pegged or outpaces inflation assuming you buy in the right area.

If you need finance...

We suggest you talk with our partner finance specialist Charles Louis.  They are one of the most successful and trusted buy to let investment finance specialists in the UK.

Finance provider wants a survey of the property.

Lenders want to know how much a property is worth so they can decide whether that property is suitable for a mortgage or bridging loan.

Important! You’ll need to pay the valuation survey fee of  between £150 – £500. The amount charged depends on the finance provider and the value of the property want to buy.  

Reiterating: You pay the mortgage/financing company directly for that valuation survey.

Sidenote: You might think all lenders have similar lending policies, surveying costs and finance application costs, but it’s not the case. The diversity between different finance providers is…Surprising.

Since borrowers have all have unique circumstances, different lenders will suit different individuals.  And to compound the problem of shopping for the right loans/mortgages, most finance applications have application fees. Also too many rejections from borrowers can affect your credit score, reducing the likelihood of getting borrowings.

We are telling you this based on experience with investors. This is why making the right mortgage or loan applications to the right lenders are critical.

If you have a trustworthy mortgage broker, then of course use those people. But if you aren’t lucky enough to have a trusted provider, you should talk to Charles Louis, our financial services partner

They are extremely good at:

  • getting the right information from you
  • working out who the best loan providers are for you
  • and getting the funding application right first time

Once the survey is done

At this stage we have a valuation report for the property, so you will now know: 

  • Whether the finance/mortgage provider will offer you a loan based on value of the property, your deposit amount and your creditworthiness.
  • You also have a further confirmation that the offer price we suggested will most probably be below the market value assessment from the loan provider.

Mortgage/loan application + small fee

If you’re working with our partner Charles Louis… you’ll be processing an application for borrowings. There is often a small loan application fee which has to be paid at this stage.

Lawyers get involved: Conveyancing.

By now,  you’ve got finance in place, the seller is still selling you their property, so now it’s time to start the conveyancing process.  Lawyers do the necessary paperwork to get the house in your possession.

This process usually takes between 6 and 8 weeks and costs between £1000 and £3000.  We have partner solicitors who work closely with lenders, which means we get the legal work done quicker and cheaper. We explain the conveyancing process here.

Time to organise renovations

In our experience, nearly every property needs renovation of some kind. So whilst the conveyancing lawyers are doing their work it’s worth getting some quotes from renovation companies.

 

 

By now, you will probably have seen a free cost estimation for doing up your property from our renovations company Invesmore Renovations. We have a very efficient system for accurately pricing and project managing our renovations project. But don’t take our word for it, going get some competitive quotes and see how get on.

There are services like Checkatrade.com Who make it easier to find trustworthy tradespeople.

Saying the obvious: If you’re buying a property to rent out, the moment you own that property, you probably want it renovated ASAP. Then you can get tenants in fast.

For example, Invesmore renovations only sources materials which we can buy and have delivered next day. It means the day after you have taken possession, we can have a crew renovating your property with all the materials needed for the whole project, on site.

Get ready to find tenants

Around one month from when you expect to take possession of your property, you’ll probably want to start organising the letting of your property. Usually you would do some research and find a suitable lettings agent to work on your behalf.

The problem: Different agents have different processes, contracts and abilities.  So it can be a headache.  To get over that issue, we have a distributed lettings management service.  It costs the same as any normal lettings management service, but it makes buy to let property ownership far easier.

Finally the conveyancing process comes to an end

The conveyancing lawyers have done all their paperwork and the property is ready to exchange. This means both your lawyers and the sellers lawyers are happy to proceed with the sale of the property.  At this point you’ll need to place a deposit with the sellers lawyer.  This is usually 10% of the sale price.

Time to fully pay for the property

you’ve paid your deposit, now it’s time to pay the rest of your deposit (if you have to)

And since both lawyers agree the sale of the property should go ahead, the bank will now forward the rest of the funds to the sellers lawyer.

Stamp duty payment

In the UK the government charges a tax on property transactions.  The amount varies depending on the property price. This money has to be paid to the UK government within 14 days of completion.  Unfortunately you can’t include the stamp duty payment in your borrowings.  You have to pay this with cash. See HMRC government site

Sidenote: When we do our cost of ownership calculations, we factor in the amount of stamp duty you would have to pay when buying the property.

Renovation work

Every property will most likely need some renovation work. Since you will have been organised, you’ll have:

  • Agreed on the specification for the renovation work
  • Got an exact quote
  • Ideally be given a project plan, with timescales
  • You’ll have a contract in place, preferably with some kind of penalty clause that says ” if you overrun on the project for no reasonable reason, money can be held back”

So, it’s time for the renovation team to get on with work.

Renovations begin

If your renovations team are organised, they’ll have delivered all the materials to site.  This includes necessary big-ticket items like kitchen cabinets, bathroom fixtures and so on.

Very important: in the planning phase, you should have made sure all the items for the renovations are in stock and available at short notice.  In the building industry, you’ll often get kitchen manufacturers, bathroom suppliers or carpet manufacturers quoting a six week lead time.

A typical light renovation i.e. painting and decorating, new carpets, new bathroom fittings, some tiling and some cabinet doors, new light fittings for a typical 2 to 3 bedroom property should take 10 days work.

If the job stops because you have to wait six weeks to get a new bathroom suite, you’ve just potentially lost 1.5 to 2 months rent. Not good.

Renting out the property

Let’s assume we helped you find your property.  We track rental demand across the UK, so we know which areas will rent out quickly.

Since you will have been organised and have lined up the letting agents, by now they will have prospective tenants interested in renting your property.  In high demand rental areas, properties will rent out before they are publicly marketed.

If all goes well, you will rent out your property within one or two weeks of renovations being completed.  That means once you’ve taken possession of your property, within a month it should be rented out.

Selecting the right tenant

It seems unrelated, but different areas attract different kinds of people.  So there’s a clear relationship between the area you buy in and the kind of tenant you’ll probably attract.

If you buy a one bedroomed apartment in a city centre location for £250,000. At that price point the only people who will afford a profitable rent for you i.e. £1200 or £1300 per month, will be high earning professional single people, or young childless couples.

The problem: young well off people are in transition.  They haven’t settled down and they’ll go wherever work takes them.  For you it means repeatedly having to find new tenants as previous ones move on.

So, by choosing the right area, your effectively choosing the right tenant.

Tenant profiling and creditworthiness

With distributed lettings management, we work with a local agent  and give them requirements on the tenant profile we want.  Typically:

  • People over 30 years of age
  • In a stable working situation
  • Possibly with a family
  • Not wealthy enough to buy their own property
  • Wealthy enough to have reasonable disposable income whilst renting

In other words, we want people who pay their rent on time and will stay in that house for years.  Why? Every time you have new tenants you have to renovate the property, re-market it and probably have at least one month void period.  Effectively its £4000 for a new set of tenants.

Ongoing legal obligations and administration

As a landlord, you’ve got to make sure the property is safe. For example, if you have a gas boiler system, you have to get the boiler certified each year.

If you are a typical buy to let landlord, you’ll probably have more than one property.  And likelihood is they are not in the same area.

In that case, with distributed lettings management, we would handle all of the ongoing property administration and make sure payments are being received from the tenant.

If you’re using different lettings agents, they’ll all have their own systems, so you’ll just have to do a lot more personal administration.

Time passes... and capital growth.

Let’s assume you’ve bought in the right area…what is the right area? Our definition: “an area where there is more demand than supply from individuals who can afford to pay above the rate of inflation prices for property.”

one of the benefits of having a mortgage is the effect of inflation

Looking for new investment property? Or a new home you might rent out? We find more investment deals than any other property consulting business in the UK.

James Birch – Invesmore Real Estate

Find out more.  Book your free 30 minute consultation.

  • If you want priority service and you’re looking for a property, complete the factfinder.
  • Contact Us Page
  • For property consulting services email james.birch@invesmore.com
  • Whatsapp or text Jamie: 07821 119583
  • Or phone Jamie. But remember, he is very busy: 07821 119583