The Interest Only landlord is royally screwed thread

[eek 112]

Picking up a post from one of my favourite comedy sites - I give you

https://www.property118.com/ukarmortgage-express-moving-goalposts/

In summary - landlord owes bank £2.3m - he wants to sell a single property for £285k. Bank wishes to keep all the money received leaving said landlord without the means to pay his capital gains tax..

So he isn't going to sell the property as he doesn't have the spare cash to do so...

 

[Band 2,402]

1 minute ago, eek said:

Picking up a post from one of my favourite comedy sites - I give you

https://www.property118.com/ukarmortgage-express-moving-goalposts/

In summary - landlord owes bank £2.3m - he wants to sell a single property for £285k. Bank wishes to keep all the money received leaving said landlord without the means to pay his capital gains tax..

So he isn't going to sell the property as he doesn't have the spare cash to do so...

 

People complain there aren't enough good news stories about. This is most certainly one.

Bet the debt ridden prick cant sleep at night knowing whats to come when S24 fully kicks in. 

[One percent 29,515]

Talk about betting it all on the farm 

[eek 112]

1 minute ago, Banned said:

People complain there aren't enough good news stories about. This is most certainly one.

Bet the debt ridden prick cant sleep at night knowing whats to come when S24 fully kicks in. 

I doubt he knows enough about S24 to be scared by it. If he did he wouldn't be flogging a single property he would be doing up and flogging 5 of them at a time....

Edited October 4, 2018 by eek

[Lavalas 91]

I like that he wants to sell the house to pay of one of his higher interest loans, so presumably he can’t do that now and will either be stuck with it or have to pay it off with profits (which will rapidly be a pipe dream anyway).

My only frustration with these stories is that I want to read more of them with more detail. Come on landlords, it’s good to talk...

[A_P 1,051]

A portfolio of 70 properties. That really is quite sick. Why don't these chumps just put their money into some fund/IT and cream the money without the hassle? I suppose they don't really have that much capital, just leveraged thanks to the banks willingness to put digits into their accounts out of thin air.

[MrPin 5,889]

45 minutes ago, eek said:

Picking up a post from one of my favourite comedy sites - I give you

https://www.property118.com/ukarmortgage-express-moving-goalposts/

In summary - landlord owes bank £2.3m - he wants to sell a single property for £285k. Bank wishes to keep all the money received leaving said landlord without the means to pay his capital gains tax..

So he isn't going to sell the property as he doesn't have the spare cash to do so...

 

Landlord sounds "highly leveraged" as they call it. I have another word for it.

[eek 112]

And now the real comedy begins as busta offers his "advice"..

As if anyone would keep a six month old phone call transcript...

[Band 2,402]

43 minutes ago, eek said:

I doubt he knows enough about S24 to be scared by it. If he did he wouldn't be flogging a single property he would be doing up and flogging 5 of them at a time....

I just read the article seems he has made a lot of money from being a parasite,, if he has 70 properties then surely he can clear the 2.3million debt.

Love the way he only decorates to sell, not for the tenant.

[eek 112]

1 minute ago, Banned said:

I just read the article seems he has made a lot of money from being a parasite,, if he has 70 properties then surely he can clear the 2.3million debt.

Love the way he only decorates to sell, not for the tenant.

If he had money he could afford to pay the capital gains tax - he can't which is why he cannot sell the property as it needs to be paid in 30 days...

I believe the only thing he actually has is some "equity" in the properties which will quickly go up in smoke. 

[sleepwello'nights 4,647]

I think you're all trying to read too much into it. If he has 70 properties then depending on location the average rent will be between £500 to £1000 each. Gross rental income of £70k to £35k per month. Assuming from the details he gave mortgage interest at say 5% on £3.650 that's what £15k per month. So net cash flow £20k to £55k per month. He should be able to pay when he has to. 

I think he's just miffed at the lender breaking their word.

[A_P 1,051]

6 minutes ago, sleepwello'nights said:

I think you're all trying to read too much into it. If he has 70 properties then depending on location the average rent will be between £500 to £1000 each. Gross rental income of £70k to £35k per month. Assuming from the details he gave mortgage interest at say 5% on £3.650 that's what £15k per month. So net cash flow £20k to £55k per month. He should be able to pay when he has to. 

I think he's just miffed at the lender breaking their word.

But then if he has so much free/net cash flow why doesn't he just pay the CGT instead of penning a letter to the website? A quick google shows that MX quite often use their right to consoldate. I think one thing for sure is none of us know the full picture

[dgul 7,202]

It is an odd story.  He's got 70 properties, and just the 18 properties mortgaged with MX are worth £3.65m vs debt against them of £2.3m -- so there's vast amounts of equity to work with.  Yet he's moaning about the £30k.

Then we read this bit:

 I was going to use the proceeds to pay off a higher rate loan.

So:

• The guy is 'loaded',
• yet also has higher rate loans that in in the £100k levels.
• He wants to sell -- landlords never sell, that's the dream, right (it's his pension).

=> He's reached a desperation point.  I think there's a certain amount of 'screwed' going on here.

 

[kibuc 553]

11 minutes ago, sleepwello'nights said:

I think you're all trying to read too much into it. If he has 70 properties then depending on location the average rent will be between £500 to £1000 each. Gross rental income of £70k to £35k per month. Assuming from the details he gave mortgage interest at say 5% on £3.650 that's what £15k per month. So net cash flow £20k to £55k per month. He should be able to pay when he has to. 

I think he's just miffed at the lender breaking their word.

Wouldn't income tax turn that 35k/month into 21k/ month for a higher-rate taxpayer?

[eek 112]

1 minute ago, sleepwello'nights said:

I think you're all trying to read too much into it. If he has 70 properties then depending on location the average rent will be between £500 to £1000 each. Gross rental income of £70k to £35k per month. Assuming from the details he gave mortgage interest at say 5% on £3.650 that's what £15k per month. So net cash flow £20k to £55k per month. He should be able to pay when he has to. 

I think he's just miffed at the lender breaking their word.

I think you have your maths wrong - I suspect his net cashflow isn't anything like what you think it is (remember this is just £2.3m owed to UKAR, there are another 52 properties with no doubt similar loans)...

Now assuming a return of 3% on the £3.6 portfolio - that gives him an income of £108k from those properties

4% interest on £2.3m is £92k a year - so he has some leeway but its not that much (of course once you factor in S24 he is royally fluffed but that's a different day)..

[Band 2,402]

28 minutes ago, eek said:

If he had money he could afford to pay the capital gains tax - he can't which is why he cannot sell the property as it needs to be paid in 30 days...

I believe the only thing he actually has is some "equity" in the properties which will quickly go up in smoke. 

I did wonder if the other 50 or so properties are mortgaged up just not with UKAR.

[eek 112]

7 minutes ago, Banned said:

I did wonder if the other 50 or so properties are mortgaged up just not with UKAR.

They must be, he wouldn't have a problem if he had a property or 3 that wasn't mortgaged as you could use those to extract yourself from the rest of the mess...

Years ago I did a post of TOS that covered the order you needed to do things to extract yourself from a Jenga IO BTL pyramid it's not pretty and either have to be very lucky or do things in a particular order.

The inability to extract any money from a sale makes it impossible so bankruptcy is eventually inevitable, the only question is whether its a bank or HMRC that push you into it....

Edited October 4, 2018 by eek

[Band 2,402]

20 minutes ago, eek said:

They must be, he wouldn't have a problem if he had a property or 3 that wasn't mortgaged as you could use those to extract yourself from the rest of the mess...

Years ago I did a post of TOS that covered the order you needed to do things to extract yourself from a Jenga IO BTL pyramid it's not pretty and either have to be very lucky or do things in a particular order.

The inability to extract any money from a sale makes it impossible so bankruptcy is eventually inevitable, the only question is whether its a bank or HMRC that push you into it....

So his best bet would be to get the rents in and not pay the banks for several months ... until they repossess.

Then stash the money so he has a nest egg for after bankruptcy. aka bankruptcy fraud.

[eek 112]

4 minutes ago, Banned said:

So his best bet would be to get the rents in and not pay the banks for several months ... until they repossess.

Then stash the money so he has a nest egg for after bankruptcy. aka bankruptcy fraud.

Well his best bet is probably to head towards Malta with as much cash as he can  carry as he will needs enough for the rest of his days..

[wherebee 7,046]

50 minutes ago, Banned said:

So his best bet would be to get the rents in and not pay the banks for several months ... until they repossess.

Then stash the money so he has a nest egg for after bankruptcy. aka bankruptcy fraud.

Exactly.

 

Six months not paying any mortgages, get tenants cash, convert into gold in small amounts up and down the country, bury in ground somewhere safe, go bankrupt, dig up after a year.

 

reckon half a mill could be done that way with minimal risk of official investigation.

 

Now, if the state sold of debt hunting to the highest bidder, like in olden times....

[spygirl 12,847]

2 hours ago, dgul said:

It is an odd story.  He's got 70 properties, and just the 18 properties mortgaged with MX are worth £3.65m vs debt against them of £2.3m -- so there's vast amounts of equity to work with.  Yet he's moaning about the £30k.

Then we read this bit:

 I was going to use the proceeds to pay off a higher rate loan.

So:

• The guy is 'loaded',
• yet also has higher rate loans that in in the £100k levels.
• He wants to sell -- landlords never sell, that's the dream, right (it's his pension).

=> He's reached a desperation point.  I think there's a certain amount of 'screwed' going on here.

 

The only solid numer he has is the mortgage.

The value of the house is just a figure pulled out of of his arse.

The reality for these IO LL is they were the only people buying. And then only as they were allowed to gorge on debt.

Anyoen buying the proprty will probaly be an OO and will defintely be via MMR.

He's opneing ip a can work tax worms when hes selling esp. if he's withdrawn equity.

Whoever has the MXEX mortgage book wants rid. Or at lest under 30% LTV.

 

 

[Majorpain 232]

You're all being so mean to him.

I bet the poor bloke can't afford a Range Rover for his wife and she has to drive something as ghastly as a Merc.

On an unrelated note, he should probably file for bankruptcy now when he might get to keep some of his assets from the bank!

[UnconventionalWisdom 168]

3 hours ago, Banned said:

I just read the article seems he has made a lot of money from being a parasite,, if he has 70 properties then surely he can clear the 2.3million debt.

Love the way he only decorates to sell, not for the tenant.

These guys are selfish bastards that tell themselves they are providing a service to sleep at night. My last landlords were a retired couple who had a shitty new build- couldn't realise that the shit quality is why the house looked run-down... not the tenants. Sorted things out on the cheap and only replaced things when we said we were leaving so they can get new tenants in. 

 

Even though I still question their morality, I am now renting a flat from the church. Looked great when I moved in, spoke with a neighbour and he said they went around renovating the flats not long ago. They built the flats so contributed to supply and actually maintain them. This is what landlords should actually be doing. 

[wherebee 7,046]

1 hour ago, UnconventionalWisdom said:

These guys are selfish bastards that tell themselves they are providing a service to sleep at night. My last landlords were a retired couple who had a shitty new build- couldn't realise that the shit quality is why the house looked run-down... not the tenants. Sorted things out on the cheap and only replaced things when we said we were leaving so they can get new tenants in. 

 

Even though I still question their morality, I am now renting a flat from the church. Looked great when I moved in, spoke with a neighbour and he said they went around renovating the flats not long ago. They built the flats so contributed to supply and actually maintain them. This is what landlords should actually be doing. 

I've been a landlord twice, once due to moving overseas, and once (now) due to our family home in Australia being there for when we go back.  In both cases I was aware that the houses were somebodies home, and as such I felt obliged to treat them well.  In the first case, the boiler blew two days before Christmas and I paid an emergency plumber for a full replacement, immediately.  In the current one, I have replaced a lot of items as they break, and even replaced trees in the garden to keep it looking good.  It's bloody expensive - people who think they can make money out of landlording without having a big professional portfolio that can embed the costs of a full time plumber/leccy/etc are only going to do that one way - downwards towards Rachmanism.

 

[A_P 1,051]

21 minutes ago, wherebee said:

I've been a landlord twice, once due to moving overseas, and once (now) due to our family home in Australia being there for when we go back.  In both cases I was aware that the houses were somebodies home, and as such I felt obliged to treat them well.  In the first case, the boiler blew two days before Christmas and I paid an emergency plumber for a full replacement, immediately.  In the current one, I have replaced a lot of items as they break, and even replaced trees in the garden to keep it looking good.  It's bloody expensive - people who think they can make money out of landlording without having a big professional portfolio that can embed the costs of a full time plumber/leccy/etc are only going to do that one way - downwards towards Rachmanism.

I've just had the estate agents round to my rented accom as I expressed the kitchen and particulary the bathroom could do with a refresh especially as we';re heading into winter. Neither have heating so the cold really effects the cheap lino. The landlord always does everything on the cheap and will go as long as he can to wait to fix something. Wouldn't fix the kitchen tap until it actually sprung a leak, rather than when I let them know it's loose and needed fixing. I don't have a problem with that but I don't get it either. He put a new oven in 18 months ago and the thing blew an element a month back. So while the agent was round I asked how much it cost to fix, £90 inc the call out. So why not just put a decent oven in and not worry about it. One would think looking after your investment would make sense. As I said above I don't get why people don't just stick their money in a fund, get a 4-5% divi and don't worry about the hassle. Tax free too

Edited October 4, 2018 by Admiral Pepe