Zhang Zhilin is Miss World 2007

Miss China Zhang Zhi Li has won the title of Miss World 2007 on 1st December 2007. It’s the first time that an east asian has won the contest, but the secretary from Beijing was a firm favourite to win. This year the contest was hosted in Hainan Island, China.

Miss Angola, Micaela Reis, came second, while Miss Mexico, Carolina Moran Gordillo, came third place. Check out the video of the final from youtube.

I’m not sure what you guys think, but i think Miss Zhang standing tall at 6feet looks kinda alien like with long arms and fingers. Still I’m so happy for my fellow yellow lady to have won the beauty contest.

Another reason to look to China for the future, they have lovely women. Well done China!!

A Property buying company trading as Repossession Stopped and Retail and Domestic Properties have this April gone into liquidation. They owed £19million to mortgage lenders on 230 properties.

They had been operating the sell and rent back system long before other property investors got in to the game. I remember seeing their advertisments in the local papers going back a good few years. You may have seen the red postage stamp sized ad with the hand to stop repossessions.

I always thought that they would have been really sucessfull in what they do as they seem to appear in most local papers around the midlands. On occasions we did go head to head with some of my clients telling me they had also called repossession stopped. Sometimes we beat them and did deals with clients, othertimes they beat us but I guess that is just business. I think they must have bought some properties for very low prices whilst they were the only company doing the sell to rent back scheme.

They must have run in to some pretty serious cash flow problems to go into liquidation. Some of their tenants were evicted from their homes even though they had always paid rent on time. Richard Dewsbury states on the BBC website:

he’s devastated this situation has arisen and it was never the company’s intention to cause distress to tenants. He says although the Wilkinsons paid their rent on time, lots of other tenants didn’t, causing the business to struggle. He says there are still investors who may purchase their properties, reducing the likelihood of evictions.

link to article

He stated that lots of tenants were not paying their rent, which is no surprise to me. They were facing repossession for whatever reason, usually because they were very bad at handling their own finances. So now they’ve been helped out one last time by an investor buying their property and renting it back to them. More often then not they get back into old habits, falling behind with their payments on rent rather than mortgage.

£19 million Debt

What are the monthly payments on 230 properties and 19 million worth of debt?
If average interest rate is 5% assuming they bought the bulk of the properties when the rates were lower and fixed the rates.
That would make the annual payments a mere £950′000.
The monthly payments would only be a whopping £79′167.
The monthly rental income should be around £102′000 assuming £100 average coverage on each property.
If a third of the tennants didn’t pay properly the rent recieved per month would be £68′000.
Leaving a monthly deficit of £11′000. or annually £132′000.
It’s no wonder they went into liquidation..

70% Below Market Value

If like most investors of this type I’m guessing they would have bought most of their properties at 70% of the true market value. Homes they bought a few years ago would have been purchased for even less. They then remortgage them to 85% of the market value pulling out the equity to reinvest (or spend).

If the £19 million owed was only 85% of the value of their potfolio.
They must have owned over £22.3 million worth of property.
Purchasing them all for around £15.6 million.
Releasing around £3.4 million of equity in the process.

Part of the released funds will have been used to pay the monthly deficit and part will have been spent on a lavish lifestyle?

Thats must have been some lifestyle!

Buy and Rent Back system

If Repossession Stopped were using the buy and rent back system and they failed, should I be more careful? I think so, I think it may be wiser to do more traditional buy to lets. Buy to lets with more ordinary tenants are sought rather than those with financial problems.

I’ll also I’ll be buying more properties to do up and sell on. Which means I’ll need to find those cheap builders again.

I wrote about this documentary ages ago about 3 brits that risk it all to go and invest their money in China. Well today I found it on youtube so i thought i would post the 1st part up.

This documentary introduces you to 36 Year old Tony Caldera and his failed Mersyside cushion business. He is taking his operation to China in a true if you can’t beat em, join em. He has borrowed £2 Million to build his factory in a paddy field.

You also get to meet 70 year old Peter Williams who has spent all his savings on an energy saving switch for aircon units. He risks everything to sell the device to the Chinese with hundreds of millions of aircon units.

My Favourite though is Vance Miller aged 42, the kitchen gangster from Rochdale. He has been all over China to get his kitchen parts at rock bottom prices. He is a character, really funny, but also has nerves of steel (watch part 2 and the quarry)

Brits get rich in China - Part 1

Brits get rich in China - Part 2

Brits get rich in China - Part 3

Brits get rich in China - Part 4

Brits get rich in China - Part 5

Brits get rich in China - Part 6

Brits get rich in China - Part 7

I’ve uploaded a new theme today and somechanges to my blog.
Don’t worry I don’t think that ugly picture of me will be staying for too long.

One major change, that will hopefully temp more people to comment on this site is that I’ve removed the “nofollow” from the comments. By doing this I’m making the links that my visitors leave when they comment count towards backlinks for their site. The more “real” links that you have to a website, the better for the site as search engines count these links towards the sites popularity and it may help boost the sites page rank too.

So if you’ve been shying away and not posting comments on here, now is your chance. Post a comment, leave a link to your site and it will count towards your sites popularity.

I’ve tried to do this before by using a plugin for WordPress, but couldn’t get it working. Instead this time I’ve directly hacked the code for Wordpress. Only 1 line, but hacked it nonetheless.

Here is the hack from Douglas Karrs site.

Removing WordPress rel=nofollow on Comment Text

Links in the actual comments are a little tougher to find. However, I was able to track down where the filter was applied in wp-includes/default-filters.php on line 125. To disable the filter, you need only to remark the link out by putting two forward slashes in front of it. Edit

add_filter(’pre_comment_content’, ‘wp_rel_nofollow’, 15);

like this:

//add_filter(’pre_comment_content’, ‘wp_rel_nofollow’, 15);

Voila! No more punishing your users for generating great content on your blog! The advantage of doing it this way is that you’re not applying more code later in a plugin to remove the code that was there in the first place. The disadvantage of doing it this way is that you’ll have to update it each time you upgrade WordPress on your site.

I take no credit for this i only found his site via a google search.

I think this is thoroughly worth doing to encourage comments to your blog, I may think again if I get too much comment spam. Meaningful comments that encourage discussion will always be accepted by me.

I often get asked for long tenancy agreements of 3 to maybe 5 years to give my tenants long term security. Don’t get me wrong I would love nothing more to be able to give them a 25 year tenancy agreement and have the tenants agree to rent the property for 25 years. However the terms and conditions of the BTL mortgages we use stipulate that the tenant must be given an AST (Assured Shorthold Tenancy) of usually no more than 12 months.

12 Month AST

But why only 12 months?
This is to protect the lenders interests as well as yours. If in the worse senario you couldn’t meet the mortgage payments either because you were not getting the rent or maybe you’ve spent it all on holidays. The bank to protect its loan would seek to evict the tenants, take the property back and sell it on to payback the loan.

Evicting tenants

Tenants can only be evicted if the contract has elapsed or the tenants are in breach of contract (usually for non payment of rent). I’ve learn’t the hard way that even when you want to evict tenants the process is long and messy.

The Banks unwanted Situation

With a longer tenancy a situation could arise where you are not paying the mortgage, but the tenants cannot be evicted as they are not in breach of the tenancy. You would still be collecting rent, but not paying the mortgage. I suppose the bank may be able to take over ownership of the property, and keep the tenants on as their own? This would be a bit of a legal minefield therefore its understandable most banks insist on 12 month AST’s

Long Term Tenants

I always prefer long term tenants, but with conventional BTL mortgages it is difficult to offer longer tenancy agreements. How do you get around this? On one hand we want long term tenants, they want to be long term tenants, but we are not able to offer them longer tenancies.

I always make a point of telling my future tenants about my portfolio and my plans for it. I put it to them that I am a landlord, this is what I do, I buy property to rent out. If they pay the rent and behave why would I not rent the house to them?
I also make a point to tell them that if they pay on time in full they will almost never see me again, I will leave them alone. BUT if they do not pay me then I will be on to them.

Do you use a letting agent to manage your properties or do you self manage?

I currently only use an agent to manage 2 of my properties as they are not long term tenancies and they are also over 1 hours drive away. I would hate to be driving over an hour each time the tenant has a problem or i have to show tenants around.

I think that using an agent for my whole portfolio is not required. They tend to charge about £50 per property per month (10 percent of the monthly rent) that would cost me over £2000 per month. A cost i cannot justify when most of my tenants never contact me or never needed anything from me.

What does a letting agent do?

I guess agents would help with the following:
Chasing the bad payers
Handle most of the mundane paperwork (tannancies, inventories etc)
Liase with workmen
Handle marketing and viewings of property.

I would appreciate someone else chasing bad payers, its not a nice thing to do, but luckly i dont have too many of these.

Doing most of the mundane paperwork would be nice although for £2000. I think i’ll do it myself for now.

I do not really use many workmen except for my trusted plumber, he really is a godsend. all I do is send him a list of all the jobs with the address and phone numbers. He completes them all and sends me the bill with no real interation or effort required by me.

As I mentioned most of my portfolio are on long term tenancies therefore I would not really need help with viewings / marketing.

I guess for the cost I don’t mind doing it myself at the moment. But as I buy more property i guess it will be harder for me to self manage. Even when I have 100 properties though, I don’t think i will use an agent. for the amount of money an agent would cost I could employ somebody to manage my portfolio for me. Next year after my wedding my wife will be working with me full time. I hope she likes paperwork!

I think anybody investing in property should try to self manage their properties if they have the time. Then they will understand and maybe appreciate the work that a letting agent does.

i’ve been back from my group holiday to Thailand and Hong Kong for a week or so.
i feel like i’m just managing to catch up with everything whilst i’ve been away. it’s definitely very busy now. whilst i was away my solicitor completed on 2 property purchases and another 2 the week i got back. there’s still 2 deals on boil and another 3 in the pipeline. i feel like i need another holiday!

i’ve also had many people contact me via this site and i will be getting back to you very soon..
in the meantime here are a few pics from my holiday.

the rooftop bar Siccorro in the stateside tower building in Bankok. This bar sits on the 64th floor of the hotel.

the grand palace in Bankok is really grand.

spot the ladyboys, one of thailands other well known attractions.

Kata beach in Phuket

the famous Halloween party in Ocean Park was really fun.

Birmingham Midshire Solutions, one of the mortgage lending arms of Halifax Bank of Scotland group do it again. they have from start to finish offered a mortgage in just under 14 days. thats the quickest time to offer i have had even beating their previous record.

from the word GO!

BMS use an online application from my mortgage broker which makes it fast. i pay for the valuation by visa card and the valuer calls the next day to arrange the viewing. within 2 days after the valuation the report is in my letter box. a few days after that the offer letter is in mine and my solicitors mail.

my solicitors are not actually in a position to proceed yet. but at least the funding is available now.

i’m always impressed by the speed of BMS and my only gripe with them is that the valuation is a tad expensive at £405 for a property sub £120k. this may go up for a more expensive property.

in October i’ll be visiting the beautiful land that is Thailand. i’ll be going with 8 other friends of mine and we’ll be going via Hong Kong. it should be a great holiday and i’m really looking forward to this as i’ve never been to Thailand before.

going to Thailand us brits or people born in britain and not native to these climates need vacinations against certain diseases. i don’t want to take my chances out there so i was a good boy and got all my jabs done today. i had to jabs one in each arm they were for the following:
Typhoid
Hepatitis A
Diptheria
Tetnus
Polio

apparantly i need to get the Hepatitis A booster after 6 months, then i’ll be protected for 10 years.
malaria is a concern, but the nurse says that its only a real risk if i travel over the borders into Burma or go on mad trecks. if i stick to the citys and use lots of mosquito spray with “DEET” then i’ll be fine.

This is an update to this post about Eviction using a Section 8 Notice

well its been 14 days now since i issued the Section 8 Notice and the tenant has made an effort to contact me. about a week ago i got a text message from them asking me to call them. she tried to explain that apon visiting her back it has become apparent that loans.co.uk has been taking money from her account. they do not have a loan and the police have been informed as it could be identity fraud.

identity fraud
so for all the weeks that the standing order has been refused its because loans.co.uk was taking money on a direct debit from their account, which meant no money left for me. she assured me that she would now keep the rent in a jar at home and i’m welcome to come and collect it. its ok i told her, but she must deposit it in to my bank as she has my bank details.

missing money
i check my account everyday, but no deposits. i contact the tenant and she informs me that she has just paid the last weeks rent in and will pay this weeks in tomorrow. that was at least 3 days ago so the money should be in my account right? lies, lies and more lies? i’m really doubtful that this tenant will ever pay properly or tell the truth.

apply to court
the next step for me will be to apply to court for posession of the property. i can only do this 14 days after the Section 8 Notice. this will be a 1st for me too. i’ll keep you informed.