At Finch Wealth Group we pride ourselves on our remarkable service which we tailor to meet the demands of each and every single one of our customers. Our high level of experience and creativity means that we can make the process as simple as possible for you.
Seller Financing
What Is Seller Financing?
Seller financing is a type of property agreement that allows the buyer to pay the seller in instalments rather than using a traditional mortgage from a bank, credit union or other financial institution. A seller financing agreement functions along similar lines as a mortgage loan, except that it cuts out the middleman and allows the home seller to own and oversee the debt instead of a traditional lender.
The practice of seller financing goes by many names, including vendor finance, instalment contracts and owner financing. But in its simplest terms, it describes a form of property lending transaction in which a property owner also serves as a mortgage lender, eliminating the need for a financial institution to handle financing agreements.
Seller financing is championed by some property owners and property pros as a way to help home buyers qualify for additional mortgage opportunities, reduce the amount of red tape associated with home sales and improve profit margins on lending.
PROPERTY DEVELOPMENT OPPORTUNITIES
We specialise in sourcing off market residential development opportunities for funded and active clients.
We are constantly searching for land with and without residential planning permission (or pending planning permissions) and also strategic greenfield and brownfield sites which have future development potential. We work closely with our clients to find a site which is suitable and fits their specific requirements in their chosen area.
We pride ourselves on our professionalism, our integrity and honesty and we look for the same attributes in the people with whom we form long term business relationships.
BUY TO LET
What is buy to let?
Buy to let is when a property is bought specifically for the purposes of renting it out.
How does buy to let work?
When you buy to let you purchase the property and then act as the landlord, letting it out and charging rental payments. In order to make a profit, these payments should be higher than the cost of maintenance, letting agent fees (if applicable) and the monthly mortgage repayments.
You’ll still need to pay the deposit, mortgage fees and Stamp Duty when you purchase a buy to let property. If you already own a property, you will pay a higher rate of Stamp Duty.
You may also need to pay for renovation and improvements before you rent the property out for the first time.
You’ll need to pay income tax on your rental income. Like any self-employment, allowable expenses are deducted from your taxable allowance. Expenses include maintenance, insurance, letting agent fees and any utility bills you pay for the property.
HMOs
What is an HMO property?
First, let’s look at what the initialism stands for: HMO means House in Multiple Occupation. Many types of accommodation could be deemed an HMO. These may include, but are not limited to:
Hostels
Buildings containing numerous bedsits with some shared facilities
Shared houses
Lodgings
Buildings containing flats with their own facilities, but are not self-contained
Private halls of residence
Refuges
Blocks of converted flats
Employee accommodation
As you can see, the term can be quite broad. A good rule of thumb is a property which is occupied by three or more tenants, who form more than one household and share facilities such as a bathroom, toilet, or kitchen, could be deemed an HMO.
Now, while a HMO doesn’t have all the benefits of renting your own place, by collectively sharing the property a renter can massively reduce their own monthly bills.
Living in a HMO can also guarantee a higher level of service from a landlord, such as paying for utilities, cleaning and maybe even gardening.
But, this set up doesn’t only benefit tenants.
It can also be hugely successful for investors. Although, there are added management duties, the financial rewards are clear!
While a single let on a four bedroom property in Essex can generate around £12,000 per year.
The same property, with some reconfiguration, could easily bring in between £30,000 and £35,000 per year as a HMO!
For property investors, they are clearly a highly cash flow efficient way of using a property.
SERVICED APARTMENTS
People live, work and travel differently in the modern era. A property strategy that investors are falling over their feet to be involved with is Serviced accommodation.
Serviced apartments: are a fabulous cash flowing business.
In 2018, the global total of serviced apartments hit one million. This shows a 30% increase over six years, with Europe being cited as a key player. Within this, the UK is the market leader, with a growth rate of 13% over two years; there are now a total of 22,000 serviced apartments in the UK and Ireland. London – as a hub for business and tourism – has seen a dramatic rise in the serviced apartment industry: a trend that is set to increase. This is mirrored, albeit to a lesser extent, by other UK cities that are important to tourism: for example, Edinburgh and Manchester both reported strong growth.
The interest that this business-leisure market has generated now spans both consumer awareness and investor confidence, resulting in investment volumes in the UK serviced apartment market growing almost five times over the last eight years, from £89m to £486m.
This spirit of positivity within the investor community, coupled with the consistent growth of the serviced apartment market, spells good news for the future of the industry: it’s set to outperform that of hotels. Investors are gaining from the higher profit margin pertaining to flexible, home-style accommodation, as required by an adapting population.
Serviced Accommodation looks set to stay.
Serviced accommodation continues to disrupt the hospitality industry, so it’s an exciting time to investigate making money in such an innovative way.
Below Market Value
Below Market Value (BMV) properties are residential properties that are available below their market value. This is normally because the owners are faced with some kind of financial difficulty and want to or need to dispose of their property quickly and without going through a protracted marketing and sales process. The precursor to this is quite often the threat of repossession.
The property we source is discounted due to the vendors being motivated to sell quickly. For these vendors, certainty and speed of deal completion is more important than the sale price. We offer these vendors an extremely quick solution by giving them direct access to a nationwide database of buy-to-let investor buyers that have access to funding and are willing and able to complete the transaction quickly typically in 28 days.
LEASE OPTIONS
A Lease Option is a very powerful property strategy, commonly used in the commercial property arena.
However, in recent years, its power has been harnessed in the world of residential property to great effect.
In a nutshell, it’s an agreement whereby the investor can take a lease of a property and then at the end of a predetermined term has an option to buy the property.
Throughout the term whereby the property is being leased, the investor has full control of the property and is able draw the same benefits as if they had bought the property.
The investor might choose to rent the property out, create a HMO whereby the property is let by room, provide short let holiday accommodation, refurbish or simply sell on. The possibilities here are endless.
The beauty of this strategy lies within the control aspect rather than having to buy and own the property outright.
As the property is being controlled and has not been bought, none of the traditional hurdles are in the way. For example, to buy a 3-bedroom house in the South East, you are easily looking at needing a deposit of at least £75,000 if you were to purchase it on a buy-to-let basis. Not to forget, you would need to qualify for mortgage in the first place with the required income and pristine credit file. There are hundreds of reasons why you might not be able to get a mortgage, and this is the perfect strategy if you can’t.
Even if you do have the surplus cash and the facility to get a mortgage, it would be far more efficient to have your money work harder for you through this strategy, rather than being limited by how far you can stretch your funds.
By limiting your cash involvement and not owning the property, you also minimise your risk too!
So, if you are new to property or have an existing portfolio, a Lease Option can be a great strategy to maximise your earning potential from property.
The buyer pays the seller option money for the right to later purchase the property. The lease option money may be substantial.
During the term of the lease option, the buyer agrees to lease the property from the seller for a predetermined rental amount.
A portion of the monthly rental payment typically applies toward the purchase price.
Nobody else can buy the property during the lease option period.
The buyer generally cannot assign the lease option without the seller's approval.
The buyer is not obligated to buy the property.