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Sharing some property investment/finance thoughts for discussion or sharing with others in your network.
Very relevant for investors trying to figure out what's going on...chip in your opinion.
A BIG further warning regarding UK bridging and development LTV ratios falling plus what to do if you are a developer or on a bridge loan now:
Most companies offering these categories of products get most of their finance from banks. The banks are going to dramatically cut off the flow of cash to these firms because they quite rightly believe the risk is going up at a great rate.
One of my network heads - one of the largest financial services due diligence practices in the UK, he has confirmed that they are already down valuing the assets that the loans are based on.
The banks stance to the finance companies is one of patience during the lockdown but their ability for bridging/development lenders to access money to lend will be severely curtailed.
The reduced LTV ratios offered are an early sign of this tightening. They in turn will start not only not lending new loans but will not roll-over existing lending and will be increasingly aggressive in recovering their money owed, calling in the debt.
Think very carefully about your own situation and make strong moves quickly. There is likely to be a major drop in property values that keeps falling as time goes on.
The goalposts are about to move a long way on your ability to stay in the game long enough to a) survive and b) make a profit.
Happy to talk to anyonecash flowing about their property situation discretely or generally on here. I worked as a business consultant working on a distressed loan book of 1500 mainly property development borrowers in the last recession (they were between £1M and £30M loan values but most had started smaller then got caught while expanding).
I brought my first home in the mid 1990s and have made lots of mistakes, taken big hits plus got some lucky windfalls both in business and properties.
I spent some time examining everything I knew and had seen, especially the big wins and big losses.
Property is good but you have to be able to stay in the game. Not thinking clearly, not adjusting approach while you still can and acting was the most common problem.
There are usually many alternates available that will stop you going under but you need to move fast. Time is money.
There are excellent resources to get access to the best finance deals but YOU need to make sure you've got your objective and strategy both clear plus aligned to the coming massive downturn.
My own approach is purely properties that make money from day one for my partners, our investors and myself, this downturn is a great opportunity as yields are going through the roof while interest rates are super low on completed, tenanted properties.
Happy to talk about property or business with anyone - just message me.
If you need help with financing or have assets you are looking to sell just message me.
Now is the best time not when it's too late.
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