Negative Equity / No Equity Case Studies
Case Study – Brian, A Buy to Let Landlord with New Build Flat in Negative Equity
Part time landlord Brian had bought his London flat off plan 4 years ago.
He used the developer’s incentive scheme to help fund his deposit and took out a buy to let mortgage with a sub prime lender.
In early 2008 lenders stopped lending against new build properties because it was clear that the market values had been artificially inflated by builders and developers. Brian was then unable to remortgage when his 2 year fixed period ended and his interest rate went through the roof in Autumn of 2008.
At the same time Brian found himself in serious negative equity.
30% of the flats in his block had been repossessed by lenders and this had driven down the values on the Land Registry to nearly half the price that Brian paid from new.
Brian had bought into the dream of using buy to let for his pension plan but the dream had turned into a nightmare.
He was now paying to subsidise the cost of his tenant’s lifestyle, was locked into a punitive interest rate and could not sell without paying his lender at least £90,000 from his own money!
Brian had tried all the usual routes to sell – he’d spoken to estate agents, none of whom could help him, and to many cash property buyers – all of whom laughed when he asked them to pay 130% of today’s market value so that he could walk away from his mortgage burden.
Then he called me.
Brian explained his situation and seemed to be expecting me to say the same thing as other cash property investors who buy houses for cash.
He was in a for a surprise because I work in a completely different way to other ‘quick sale’ cash property companies. Within an hour of talking to Brian and understanding exactly what his situation was, what problems he felt he was facing, I was able to make him an offer equivalent to 130% of today’s market value. Not only is this enough to cover his mortgage, but also to give him £13,000 cash on top.
Every single situation is unique and different. Brian’s was such that I could offer him this deal and still feel confident that as an investor I could make money over the long term.
If you are in negative equity, can’t sell your home or just fed up with being a landlord and can’t sell via estate agents or to other cash house buyers then give me a call to see how I can help.
(*I will be adding more low equity property sellers case studies over the coming weeks)
Gary Corben 01462 889316
or fill in the short form below
