One effect of the credit crunch seems to be that the whole world (and his brother) are selling below market value (BMV) properties. Every day, my inbox is clogged up with incredible offers:

"Roll up, Roll up! Heavily discounted properties! No money down! no deposit required! Cash back! One 'small' fee and we'll take care of everything! RICS valuations and low-rate finance!"

I have tested a few companies out this year and all I can say is what an absolute load of rubish it all amounts to. There is NO such thing as a hassle free BMV deal. It's all hype. Every single purchase that I tried turned into a nightmare. Either the financing has hit a dead end or the deal hasn't stacked up properly. The bottom line is that companies are simply not doing their due diligence before rushing the specs to their marketing departments.

I am a serious property investor who would love to use the current climate to add a few good bargains to my UK portfolio, but I am fast giving up hope.

I would love to be proved wrong! Has anyone out there actually had a positive experience?

I know exactly what you mean. Many so-called property-find companies are not coming up with the goods, which is why many (not PS of course) are best avoided. BMVs are out there, but it takes a lot of hard leg-work to find them. I have done a fair number of articles recently on how to spot them - and an upcoming one on regional price differentials and the UKs lowest priced streets (comparing asking -v- completion prices) might also help. A BMV property relies on several elements coming together ... an atmosphere of lowering price expectations, few buyers being available and (this is the hardest to identify) a seller who is desperate to get his property off his hands. Add to this the fact that careful surveying is important (to ensure you aren't buying what could become a costly lemon) and the task becomes protracted and complex, but not without reward for those keen enough to do the research.

The current market is just about as good as it gets to find BMVs ... and they are out there. Good luck.

Tony B

Thanks Tony, that was informative.

Since I live abroad (Middle East) I have no problems paying a reasonable fee to a UK company to do the local research & legwork for me, but I just can't seem to find one that is professional and efficient and actually gets the job done!

Mind you, I haven't given PS a go yet (sorry guys!)

Hi Rehman

Well, maybe you should - but I would say that, wouldn't I!

Seriously, though, the points you make also raise an interesting question, I think - what the heck is MARKET value right now?

What is market value in a falling market? Comparables extablish market value, but comps from just weeks ago can often no longer be in any way relevant. Some sectors of the UK and US markets, for example, have simply ceased to function - so what's a BMV price there?

What the last couple of months have demonstrated, I think, is that market scenarios can change in a day, let alone a few weeks (I'm thinking of the likes of Lehman going down, AIG faced the same, Iceland facing default and so on). These and the other massive events we've seen recently were unseen and each time they happen they make a short-term investment scenario - and a decision based on BMV - ever more uncertain.

What is certain about uncertain times is that we need to take an increasingly long-term view, surely, and NOT one that measures a product against current uncertainties. So, how do you measure long-term value?

I'd urge you to have a read of this: http: / /www .pspremier .co .uk /blogs /ps _premier /investing _in _uncertain _times /post -231 .html

Hope it helps

cheers

Thanks Robin. That certainly gives me a few more points to think about.

I agree that taking a long-term view is one of the best approaches. Luckily, I have a 10 to 15 year time-frame before I need to consider selling up, so I'm comfortable with this approach.

I'll certainly take a look at the article you have linked to.

Thanks again!

Hi Rehman et al,

Property Secrets asks through its terms and conditions that personal details are not passed about through the forums; I see that you have already contacted someone selling property in Estonia; we cannot police the forum 24 hours a day so this has unfortunately slipped through.

Please can I remind people not to post email address details.

I will contact you later today if that is ok with you? I can talk you through the deals Property Secrets has available at present and distinguish your investment preferences.

I have your phone number on your account so will be in touch soon.

If anyone else would like to discuss their investment needs please email me and I will call you back at a convenient time to yourself.

Kind regards,

Martin Grainger
Head of Portfolio Development
pdm@propertysecrets.net

Hi TonyB
I would love to read your up and coming report re these deals - particularly in regard to areas to be considered. Auctioneers are no help with manipulated guide prices to give a false picture of achieved results. They are all at it

Tom C

When referring to BMV deals in the UK it is important to segregate the market from new build/resale or repossession. Each market has its own idiosyncrasies. There are plenty of bargains out there and some (especially new build) are easy to navigate. Moreover, from my own view point, I am not so concerned with what is due to happen in the market over the next 3 years or so or even if we see another 20% wiped off values. What I am concerned about is gearing and rental yields. If I am enjoying sufficient rental yields (when the cost of ownership is in low single digits and likely to fall further) then I am happy. Unless a major shift change in the rules of economics is about to occur (possible?) or the UK housing market shortage is solved in some other way price becomes somewhat academic. We know that the market WILL return it is more a question of when - as long as I am convinced that all other due dilligence is solid and the rental market is strong then I and others that I deal with are happy filling our boots. I also believe that the lenders are 'waiting' for the market to bottom out before they offer higher LTV/LTP percentages but this is a chicken and egg situation. The market will continue to decline whilst lending is limited. One party will need to give way and my guess is it will be the banks. Additionally, developers offering discounted properties will do so for a very limited period of time. As their new build deals are sold (and they are being sold) the developers are seeing cash injections into their P&L's which keep their shareholders/accountants/sub-contractors happy. Once they have generated enough cash then they will simply remove these discounts from the market. I would expect to see the larger discounts removed before the end of 2008.