When it comes to purchasing a property the best advice for investors is to do as much in advance of putting in your offer as possible. This means you want your team together, have your finance in-place, your legal side covered. If you are fully prepared it is possible to complete on a property in only fourteen days.
Property Expert Series: Pamela O'Brien from Redbird Conveyancing
- Part 1: Introducing Pam O'Brien from Redbird Conveyancing
- Part 2: What is Conveyancing?
- Part 3: The Difference Between a First and Second Charge
- Part 4: Where will Property Investors be Putting their Money in 2018?
- Part 5: How is Conveyancing Changing?
- Part 6: The Impact of Proptech on Conveyancing Solicitors
- Part 7: Property Investment Advice from a Licensed Conveyancer
- Part 8: What Should an Investor Expect from their Conveyancing Solicitor
Amy: Can you tell us, from your perspective, from a conveyancer's perspective, what are some common investor mistakes and how can our viewers make your life a little easier when they are coming to work with you?
Pam: My next prop! So, when I sit down with investors, which I love to do, by the way... If you are an investor and you are watching this and you want to sit down with me for an hour, invite me to coffee and as long as you pay I will talk to you for an hour, no problem.
So, here's my cheat-sheet for investors. This is what investors should do.
The first thing that investors need to be doing is having a strategy. Don't go into property investing blind. And the two reasons that you don't go in blind: One, you can lose a lot of money and two, it's a red water pool.
You're Swimming in Redwater
Pam: They talk about red water and blue water. Redwater is where all the sharks are. Bluewater is the clear water with no sharks.
There are a lot of sharks swimming around in property. They are your competitors. They are people who are taking advantage of you, they are looking to get a fee.
So, be aware, before you plunge into the red water pool. Do your homework. Make sure that you know what you are getting into.
Research the Local Market
Pam: Is the market already tapped out? For example, here in Manchester and Salford, I think it's probably fair to say that Salford is not going to allow anymore HMOs for a while.
The market is tapped out.
So, if your investment strategy is to go into Salford, buy up a bunch of houses and turn them into HMOs, you're too far behind the curve already. You need to be looking elsewhere.
Do your research about the market. Do your research about the financing, right? You need to know how you are doing financing on this property.
Pam: If you're looking to buy an old pub and convert it into a multiple-let, are you going to go to the banks? I wouldn't because they are not going to give you development money.
Are you going to go to a bridging lender? That's a pretty good place to start. But what do you have to show the bridger? What have you done previously that you can show them, 'I can do this and I'm not going to drop the ball and I'm not going to lose your money'.
So, before you go and get your financing lined up, make sure that you have your pitch ready. What do you have to offer a financier, a seller, a mortgage broker, a letting agent, an estate agent? What's your pitch? What's your selling point, your unique selling point?
Get Your Team Together
Pam: And the last thing is you have to pull your team together. Get everybody on your side. Get your builders ready. If you are going to do a renovation make sure that you've got your builders ready, your electrician, your roofer, the guy who is going to do your floors.
Make sure you get your legal team is ready. I have lots of people who call me and say, 'Can I register with you?' And that's an alien concept for me, as an American lawyer. We don't do registrations in American law firms.
But I actually think it's a really good idea because what it means is that you are getting your identification documents, you are doing all the money laundering due diligence. You are doing it upfront.
So that when you call me three months from now and say, 'I've found a property', I say, 'Great, let's go'.
Completing in 14 Days
Pam: And that's how, when you want to make the pitch, that you can do a 14-day completion, which is really aggressive. You can actually do it with some confidence because you have already talked to me. You have already got the file set up, you have already given me the property details, maybe we have everybody done some searching on the property and we know what we're getting already.
So, you've really got your ducks in a row and you go to the agent and say, 'I can complete in 14 days'.
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