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Dear Investor
We are busy preparing for the 3 day “Understanding Economics To Beat The Recession” course in Liverpool starting tomorrow. I have a very small role in the proceedings looking at the “Applied” side of the economic theory. I have revisited the "Product Life Cycle," "Boston Consulting Matrix" and "Porter's Five Forces Analysis" in order to provide a framework for analysing business opportunities in the present climate. I am looking forward to the course and more importantly interacting with the people on it, all of whom I know well. Friday evening in Liverpool will be interesting, as will Saturday morning, but for a different reason!
There is a lot of information on the internet and many spam e-mails about UK distressed property. On the surface it looks easy to pick-up these bargain properties, but the reality is very different. Yes there are a lot of opportunities around, but it takes painstaking research and analysis to dig them out. You will not be presented truly great opportunities via a “list” of properties.
My team at Jet-to-Let Investments generally start by looking at 500 properties – yes 500! By the time they have been put through our “sieve process” a “Distressed Assets Checklist” which includes desk research, site visits, rental analysis and legal checks which takes considerable time, energy and resources, we make offers on about 5 properties or only 1%.
Recent successes have been:
- London – property approximately 30% below present estimated value with strong positive cashflow yielding 8%.
- Cheshire – property approximately 38% below present market value with strong positive cashflow yielding 9.8%
These are excellent deals, but took considerable time, effort and relationship building to “pick out from the crowd.”
My view is that the best possible deals in the UK right now are obtained from bank repossessions. We only look at bank repossessed properties as they are desperate to sell in order to raise cash. We are making offers on two more properties today, but only if the price is right.
Value in today’s market is determined by one thing only – RENT. The X% below market estimate is a great safety net and locks in value, but the real value lies in the yield and net cashflow.
If investing in UK Distressed Assets at this very bespoke and highly researched level is something you may be interested in, then please fill in the form at:
www.jet-to-let-investments.com/UK
Best wishes
Dominic Farrell
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