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Castledean
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 Investor Profile
PROPERTY PEOPLE
John Paul
I started in property 5 years ago, buying 2 & 3 bedroom terraced houses near where I lived in Peterlee, Co Durham. At the time I was a Health & Safety Manager and wasn’t content with the way things were going, I watched all the property ladder shows like everyone else and thought I could do it, 5 years on although we have faced some challenges along the way on I’ve never looked back
We concentrate on purchasing properties that have high yields and are in our local areas where we now also source for other investors. The properties we buy are typically terraced properties that we can pick up at a discount and which will return rental yields typically in excess of 10%.
My own portfolio has grown to 50 properties, this includes the current development of an old working mans club that we’re turning in to a business centre for our company to move into. This will be 14 offices which we are taking 5 offices and letting the remaining to other businesses thereby covering the finance costs. We have already had 3 office moves in the last year and need space to expand when we need it.
Our principle challenge was obviously setting up in the middle of a recession and in the midst of the credit crunch. Getting finance has been a problem for our clients and our own purchases, there is the desire to buy but the banks just won’t lend, I’m glad to say it is getting a little easier.
We are extremely proactive, we’re out there looking for landlords, sourcing properties and actively expanding where a lot of people are content riding out the storm. We invest heavily in marketing locally and getting our name out there, to constantly improve our relationships in the areas that we buy so that can continue to source deals even now that we are seeing increased competition from first time buyers,
As I’ve mentioned I buy typical 2 and 3 bedroom properties, low cost but high yielding. Typically properties don’t cost more than 65k and can be as low as 35k. The rents are fantastic, due to LHA the minimum rent for a 2 bedroom is £475 pcm and for a £495 for a 3 bed giving unbeatable yields.
There are a number of ways in which our clients are buying. Some only want the typical No Money Down deals but these deals are increasingly few and far between as lenders tighten their criteria. Some are prepared to put some or little money into the deal and either get a further advance 5-6 weeks after completion, but most are putting the 25% deposit into the deal knowing that the property is already discounted by up to 30%. They then remortgage the property after 6 months and take their money out that way.
We are trying to educate our investors when it comes to no money down deals, They are hard to find and you could be waiting and missing opportunities just because the perfect “No Money Down” deal hasn’t fell into your lap. So long as your getting a true discount or only putting in 6k or less it’s a good deal and most investors have come around to this way of thinking. NMD was good while it lasted, it made a lot of people a lot of money, but as with everything, it’s had its time.
Our Local Market
In our local market things are extremely positive at the moment, houses are selling again, some investors who haven’t bought for over a year are now buying again and generally finance is a lot easier to obtain.
The management side has always done well, the area has always had a high number of people wanting to rent, and LHA has meant that investors are getting great returns
There is a real feeling that the market has now bottomed out and now is a good time to buy due to the discounts that it is possible to achieve and the high returns properties are generating.
Other Projects
In April 08 I set up Castledene Construction with my business partner, initially to carry out refurb works on the investor’s houses, but we saw opportunity to go into building extension and private new builds. As we are NICEIC and Gas Safe and NHBC, we carry out all works in house, so we offer the complete package. We still carry out all the refurb and maintenance work on all the managed properties
In July 08 Castledene Property Investments was set up, we source discounted properties that offer high yields, sometimes up to 14% but typically around 10 – 11%. The Local Housing Allowance has made the yields on properties excellent and investors see it’s a great opportunity to buy properties that produce good positive cash flow.
On the back of Property Investments I set up Castledene Property Management in Aug 08. We are members of the National Approved Letting Scheme (NALS) and the property ombudsman. We have grown to 500 houses and are looking to expand further by opening 2 new offices in the surrounding area within the next couple of months.
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