David uses two case studies to illustrate exactly how to work out a below market value offer the right way.

He has been working with 2 new deal packagers who are part of his community and uses his considerable experience in deal packaging to explain the process and calculation that needs to be done to make sure the numbers add up and it is really a good deal and has taken into account all costs involved.

 

KEY TAKEAWAYS

• Deal packagers sometimes want to make BMV offers.
• If you are going to do Below Market Value (BMV) you should be doing it in this way.
• Always work backwards from the final uplifted value of the property.
• Ask what can be done to add value to this property?
• It may be decorating, or refurbishment, the cost of this should be deducted from the final uplifted value.
• All costs involved in purchasing the property must be accounted for.
• When you work backwards from the final uplifted value taking into account all costs, including your deal packaging fee you will arrive at the offer price you can make.
• If an offer price is lower than the asking price then there may be other factors such as the vendor requiring a quick sell that will influence the offer price the vendor will accept.
• With BMV (below market value) you have to start with the end uplifted value of the property and work backwards to arrive at the offer price.
• Always work your offers out backwards.

 

BEST MOMENTS

‘When you are starting out BMV may be something you want to do when you are talking to investors’

‘We are really trying to buy a five-pound note for £3.77’

‘My work involves working with investors on bespoke deals’

 

VALUABLE RESOURCES 

Property Sourcing Profits Podcast

https://www.progressiveproperty.co.uk/

https://unlimited-success.co.uk/

https://www.facebook.com/groups/progressivepropertycommunity/

 

ABOUT THE HOST

David is a property expert with over 25 years’ experience and his own portfolio of 26 units. His current rent roll is in excess of £10k per month. He is also a partner in a Deal Sourcing and Packaging business in the North West of England and has sourced over 250 properties for investors since 2004.

In recent years he has, by necessity, had to develop an expertise in LHA strategies. This area is increasingly becoming a niche for him, and he enjoys empowering other landlords by sharing the knowledge he has gained.

The ultimate purpose when sourcing properties in this sector for investors is to minimise risk while maximising profit. He has had to find answers to the challenges of Tenant Find, Management, ensuring rents are paid and the transition to Universal Credit. These are strategies he uses in his own business and also on behalf of investors. His investor clients regularly achieve annual gross yields of over 20% with high occupancy rates and voids resolved, sometimes within hours.

 

CONTACT METHOD

https://www.linkedin.com/in/david-siegler-7b126316/

https://www.facebook.com/DavidSieglerInvestments/