The Downfall of Exchange Bond
Today one of our investors sent us a very interesting bit of news about theexchangebond.com.
It appears they are going into administration.
This raises some important points for both developers and investors alike.
From an investors point of view, does this now mean that any investor whose off-plan purchase is looking a bit wobbly can now walk away from this purchase?
They have already exchanged contracts but any money paid was to the exchange bond.
The whole point of the exchange bond is that it promised that if on completion the investor was unable to complete, the exchange bond company would pay the deposit for the investor.
The exchange bond company would then persue the investor for the lost monies.
So…if the exchange bond company is no more, who chases the investor?
Does the developer take it upon himself, he should do but does he have a legal right to?
In legal terms the investor has exchanged with the developer so risks losing his deposit if he does not complete….but they didn’t pay a deposit did they!
If i’am correct, then we are likely to see a multitude of developers reducing previously sold units for a quick sale!
What of the developers that have bank funding and have been lent money on the strength of their exchanges, surely this must impact severely on them as well.
I predict interesting times ahead…
“Flipping” property!
Have the days of the short term investor now gone?
Are their still quick profits to be had out of the property market?
I have always been a believer in investing in the property market for the long term but investigating whether a short term profit is available at the same time.
By this i mean, if you go into a purchase knowing that you do not need to sell in the short term, but investigate the option anyway, you are in the position of power.
It occurs to me that all investors with cash in the bank seeing maybe 3% tops from their savings must be looking at an alternative to their investment.
Surely the knowledge that property as an investment has historically always grown in value must lead them to consider this?
Answers on a postcard….
Has the market turned?
With the government warning first time buyers to step onto the property ladder now rather than wait Fresh Invest gives it’s views on the market as a whole and it’s thoughts of a reported market turnaround.
The property market has always been a fairly fast moving animal, where price rises and falls in other markets happen on a weekly basis, the price of a new build flat seems to change on a daily basis at the moment!
We are finding that the massive discount of the last quarter of last year and largely no longer available.
I was just last week given an opportunity by a major developer at 30% discount, 2 days later i put in an offer at 40% discount for a large number of units. I was told that this was double what they were willing to do!
Obviously this confused me somewhat, in the 4 days i had taken to get back to them they had sold a number of units and could therefore be more “bullish” with their prices!
I suppose this shows how quick you need to operate in this market. It must be fairly daunting for a newbie investor, being asked to invest in something worth a few hundred thousand pounds in just a couple of days!
Unfortunately, if you want to invest successfully this is generally the pace you need to work at!
Portfolio Management
Well, interesting news at Fresh Invest.
A while ago we realised that there is a gap in the market for a portfolio management company that not only collects the rentals and conducts rent reviews, but also takes an active interest in the property that is contained in the portfolio.
We found that many investors simply go to a large letting agent and hand their portfolio over in it’s entirety.
Through our relationships with some national letting agents we have managed to agree a significant discount off of their fees.
What we propose is that we let our letting agent take over the day to day management of an investors portfolio whilst we conduct monthly reviews of your property, recommending selling or buying specific property.
As a property investment company we believe we are ideally positioned to take advantage of potential growth areas before they are hit by the investors. We also hear when some areas are overpopulated by investors. Giving our portfolio holders this information can prove invaluable.
Let us know what you think about this idea…
