Tag Archives: Case Studies

Buy to let, no minimum income Advice, Buy to Let News, Financial Advice, Guest Articles, Guest Columns, Landlord News, Landlords Stories, Latest Articles, Property Investment News, Property Investment Strategies

You may well be forgiven for thinking that the current climate has been quite tough for obtaining finance. Mark Edwards - Residential Property Landlord and Finance Broker

The Financial Conduct Authority’s (FCA) recent implementation of the Mortgage Market Review, which put new restrictions on lending, has now been quickly followed by talk of the Bank of England looking to raise interest rates sooner rather than later as the economic recovery gathers pace.

Well I thought I would just remind readers that it is still possible for us to obtain buy to let finance, even in what might appear to be difficult circumstances.

I was recently able to secure funding for clients who wanted to purchase and refinance a number of properties.

The clients were experienced investors, however their provable income was less than £10,000 per annum. Additionally three years ago, through no fault of their own, they had also experienced some credit issues. Thankfully these problems have since been resolved and over the past two years they have had an unblemished record.

I managed to find a lender that had no minimum income requirement as long as there is evidence of an income and the applicant is an existing property owner.

The lender would also lend at up to 85% LTV with no restrictions on the number of properties owned.

It just goes to show that there are still positive, forward thinking lenders in the market.

I have access to a wide range of lenders and products to suit most circumstances so if you would like a free no obligation chat about your particular situation, why not contact me?

Contact Mark Edwards

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London Buy to Let still makes sense Advice, Buy to Let News, Buy to Let Property Hotspots, Guest Articles, Guest Columns, Latest Articles

One of my clients, Philip an IT consultant, recently completed on a purchase of a three bedroom house in Edmonton North London. It was his first venture into property investment and so I was impressed at how wisely he had bought. Furthermore it’s encouraging to see that it is still possible to acquire property in areas of London that provide good prospects of capital growth yet offer sensible positive cash flow from day one. Mark Edwards - "London Buy to Let still makes sense"

Using an 85% buy to let mortgage, I was able to arrange funding for him as follows:-

Purchase price £240,000

Deposit £36,000

Mortgage £209,100 (includes lenders fee being added)

Interest Rate 4.89% (2 Year Discounted Variable rate)

Rent £1300 pcm

Gross Yield 6.5%

Monthly Interest £852.08

Gross monthly cash flow £447.92

Gross return on capital invested 14.93%

The 85% product has no early repayment charges at any time, so as the property increases in value he will be able to release equity or refinance to recover his initial investment.

He was also able to arrange a corporate let with a local agent who provided him with a guaranteed rental for the next two years. Although just below market rent this was offset by no management fees being charged.

Edmonton offers excellent transport links with the journey from Edmonton Green BR station to Liverpool St taking only 25 minutes. The Tottenham Hotspur FC £400m new stadium and regeneration project, which includes shops, parks, 1650 new homes and 5000 new jobs is only a mile away.

You can find similar properties for sale to this example in the N18 and N9 postcodes.

If you would like to learn more about this case study or require mortgage advice please contact me.

Contact Mark Edwards



CASE STUDY – First time buyer, First time landlord Commercial Finance, Commercial Finance Broker Blog, Financial Advice, Guest Articles, Guest Columns, Landlord News, Landlords Stories, Latest Articles, Mortgage News, Property Investment News, Property Investment Strategies

CASE STUDY - First time buyer, First time landlord

I thought I would share a short case study of how I helped Max, a first time buyer, first time landlord, to get on the property ladder recently.

Max is aged 21, and although he has managed to establish his own hairdressing business it’s still early years with his net profits currently below £15,000 pa. He happily lives at home with Mum and Dad and despite having limited savings, still dreams of following in his grandmothers footsteps and owning an investment portfolio of several properties before eventually progressing to purchase a home of his own.

Great intentions, however, a number of factors were standing between Max and his dream. Although there are many buy to let lenders who stipulate no minimum income, they usually require applicants to own an existing property and have a deposit of at least 15% of the purchase price. Max was unable to meet either of these conditions.

So what was the answer? Max’s grandmother, whom I mentioned earlier, is in her seventies and has substantial equity in the four properties she has owned and managed over the past 30 years. Fortunately she quite liked the idea of using one of her properties to help her grandson.

The solution was to refinance an existing property, raising enough capital to fund the deposits for several new purchases. Age was not a problem as I have access to several lenders that will lend to age 85 and beyond.

Once we had raised the deposits, we were then able to complete on the first new buy to let purchase which was done in joint names between Max and his grandmother. Six months following completion Max is now classed as an experienced landlord by a number of lenders. This enables further buy to let purchases to be arranged in his sole name with the required deposit being gifted each time to him from his grandmother. This structure is also very useful for Max’s grandmothers estate planning.

Some brokers are overly reliant upon sourcing systems, all of which would have left Max frustrated. Other brokers turn deals down without exploring opportunities and applying creative thinking, I’m not one of them. Creativity doesn’t just mean the difference between a deal being accepted or rejected, it can also make a huge difference to the profitability of a transaction.

If you are looking to raise finance it would be great to hear from you.

Contact Mark Edwards

Double digit returns on London Buy to Let? Latest Articles

Yes folks, I can confirm that double digit returns on London Buy to Let properties are still feasible! What’s more, the types of properties which produce such returns are not affected by the bubble at the high end of the London property market caused by overseas investors.

With the benefit of investigative work on what to buy, where and how to structure the financing I have concluded that is is indeed still possible to obtain a 20%+ cashflow return on capital invested. My research lead me to a two bed flat in an established area of London, walking distance from Greenwich University. Furthermore, the break-even interest rate on borrowings worked out at 9.5% having factored into my assumption that 25% of rental income would be need to be written off to fund costs over and above the mortgage interest. Double digit returns on London Buy to Let

I have provided a full breakdown of how this was achieved below and as you will see I haven’t factored in any capital growth whatsoever!

London properties need not cost a fortune. My stepson is living in Charlton whilst he is at Uni; he walks to the University of Grenwich daily. He shares a two bed flat with his girlfriend and a house mate and they pay £950 pcm. The capital values are circa £150,000 at market value, thus giving a gross yield of 7.6%.

I have run these figures through our Landlords Calculator and based on 60% mortgage finance with the Principality Building Society at 1.99% the figures come out as follows.

Purchase price £150,000

Deposit £60,000

Mortgage £90,000

Interest rate 1.99% (BoE tracker rate with a margin of 1.49% for two years)

Rent £950 pcm

Gross yield 7.6%

Monthly interest £149.25

Allowance for other costs £237.50 pcm. This is 25% of rent to be used as a budget for costs of advertising/letting, management, Gas checks, maintenance, ground rents, service charges and void periods (lost rent due to arrears or when the property isn’t let.

Net monthly cashflow £563.25

Return on capital invested = 11.27%. This is your net cashflow (i.e. £563.25) expressed as a percentage of your capital invested (i.e. £60,000 deposit). I have not allowed for purchase costs but I have also not allowed for negotiating discounts on available properties in the area either.

Breakeven interest rate 9.5%

After an initial 6 months you could look to withdraw £30,000 of your capital through an Equity Loan. This would not affect your monthly payments and would increase your return on capital invested to 22.54%.

You can find properties like this in SE7 6PX. See our Property Research Tool for more details and also to use the landlords calculator I used to provide the above figures.

Case Study – 100% funding – Full transparency Advice, Buy to Let News, Commercial Finance Broker Blog, Financial Advice, Guest Articles, Guest Columns, Landlord News, Latest Articles, Mortgage News, Property Investment News, Property Investment Strategies, Property News

Case Study - No Money Down - Full transparency

We’ve all heard of those ‘no money down’ schemes (mortgage fraud scams) where a ‘property sourcer’ has negotiated a discount and the buyer and his friendly mortgage salesman gets a mortgage based on the normal market value.  Many were very active in this market, some still are, however ……

….. what is not so widely reported – mainly because the shrewd investors who use the following strategy don’t normally shout about it – is the ‘cross charging’ 100% capital raising process which allows for the full purchase price, refurbishment costs and subsequent buy to let remortgage (if keeping the property) all to be arranged in a transparent and legal process, often all with the same lender.

How do I know about this?

Because we’re doing it, and I have a case study to share with you …

Case Study for a 1st and 2nd Charge combined arrangement

Our client required a deal they couldn’t get via their usual high street lender. He was looking to buy a property, renovate and then take out a BTL based on its new and improved value.

Crucially, and the main issue that nearly caused him to lose this opportunity, is that he was also limited in the cash required to secure this deal, although he had a good level of equity in his main residence.

Our client ideally needed to borrow 100% of the purchase price and 100% of the renovation costs using the equity in his home as additional security. Once renovated he wanted a quick solution in changing the bridging loan into a BTL.

  • Our client owned his residential property with a value of £600k
  • Mortgage outstanding £300k with Halifax
  • Purchase price of the property currently worth £150k
  • Refurbish costs £40,000 – Renovation including new kitchen and bathroom
  • Total borrowing required £190k

The solution?

First, to borrow 75% of the new purchase which gave him £112.5k

Second, the shortfall of £37.5k towards the purchase and the additional £40k needed for the renovation works (£77,500 in total) was raised by adding in the additional security via a 2nd charge on the main residence.

He was actually offered a 2nd charge bridge on his residential property up to 70% LTV, which meant he could, if he wanted to, raise up to £120k from this property (70% = £420k, his existing mortgage is £300k), far more than enough to make up the required difference (£77,500) to cover the full 100% of the purchase and 100% of the renovation costs.

The valuer was booked to attend the property within 72 hours.  In the meantime our client was quick in supplying the shopping list of requirements required and forunately instructed a solicitor who understood the speed required for a bridging loan. The deal was completed within a few weeks enabling our client to ‘do up’ his new property, increasing the value to £300k.

Three months later our client was able to change the bridging loan product to the lenders BTL product, releasing 75% of its new improved value. This released £225,000, enough to pay off the bridging loan and put some money back into his cash flow.

This is the intelligent, new improved, ‘no money down’ style of investing and refurbishing which is helping many savvy investors to add property to their portfolio without laying out any of their own liquid cash.  Instead, they are letting their own existing bricks and mortar do that for them.

We are now very closely associated with a leading and award winning bridging loan / short term lending packager who specialise in these cases.

We have a very simple enquiry / AIP process and as highlighted above, cases can be processed very quickly indeed.  In this case, after 12 weeks of work, our client ended up with another property in his portfolio and also approximately £20k in cash (after fees etc) as well.

Could this be of interest to you?

Contact Howard Reuben

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Student Buy to Let – 100% mortgages available to students! Buy to Let News, HMO's & Student Lets, Landlord News, Latest Articles, Mortgage News, Property Investment News, Property Market News, Property News

Seriously, this is NOT a wind up! Our regulated mortgage broker of choice has informed us of a deal that he’s done with a lender which allows students to invest into a buy to let property worth up to £250,000 with NO DEPOSIT. What’s more, the lender is offering a 0.25% discount off their standard variable rate for the first two years. Student Buy to Let - 100 percent mortgages available to students

I can assure you this is absolutely genuine, both myself and my business Partner Neil Patterson have double checked this with the mortgage lender directly. They are a very credible and established mortgage lender too.

Obviously there is criteria involved, the key principles of which I have outlined below.

Continue reading Student Buy to Let – 100% mortgages available to students!

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