Hi all

I'm new to this forum and in the VERY early stages of research, but am having some trouble finding certain information on the net. I've just sold my house and have £18k to invest, so want to work out what I'm realistically going to be able to do ith it!

I was wondering whether most investors obtain their mortgage offer before putting down deposits on off-plan properties so they can pay the balance on completion, or whether it's more usual to just sell before this time?

Also, if one does obtain a mortgage offer, does this have to be done right at the start before reserving any properties?

I have a bunch of other questions too but will save those for another post!

Thanks in advance

Louise

Hi Louise,

To answer your queries, most off plans you will find here can take up to 2 years to complete, so as mortgage offers usually have an expiry period (e.g. 3 months) I think most people reserve and then wait until nearer the completion date to apply for any mortgages.

You need to judge for yourself how easy it will be to get finance in the country you invest in and take a calculated risk - for example Poland is getting more sophisticated now for loans to foreigners whereas other markets are in their infancy in this respect and may require you to register a company there first etc.

Selling before completion (flipping) seems to be the exception rather than the rule as most gains and tax benefits come from a longer term investment, but some do it - bear in mind that the set up and selling costs can be high so you may need to see a big jump in value before making any profit.

I've tended to reserve and then work out the mortgage later. Don't forget fit out and final finish costs together with solicitors fees, finders fees and insurance etc.

Others can add their own thoughts, but I would suggest you look through this forum to get a general feel of what folks are doing, and also take your time to research the market you are thinking of investing in - things are quite unpredictable at the moment...

Good luck...

Thanks very much for your reply.

I guess it some ways it's a good thing to have to secure a mortgage closer to the completion date as my credit isn't fantastic at the moment, so leaves a bit of time for it to recover and to get a better paid job!

Worse case scenario, if the buyer can't secure a mortgage before completion, is a sale process fairly straight forward? i.e. does the developer sell it for you, or do you need to find your own buyer, obtain the payment, and then pay the developer?

This is a complicated question and depends on a lot of things:

What country you try to flip in - some easier than others. Property Secrets may have a selling service in some places.
Your initial contract may not allow flipping.
Tax - you will most likely be taxed for capital gains on any profit you make.
Fees - may wipe out any profit (or lead to big losses) when you add everything up. Selling fees may also be very high.

In general, take some time to get to know the buying/selling process via this forum and its posts - there are a lot of pitfalls that can lose you money.

For me, to have to flip because I couldn't get a mortgage sorted out would be a disaster and probably lose me a lot of money. Do some careful research as there are no guarantees that CEE property is a sure thing to make you huge profits.

On the bright side a mortgage shouldn't be unobtainable - most applicants seem to be able to get one sorted out...

Hi there and welcome to the PS forum.

As mentioned in earlier posts, investing in CEE property can be very daunting and without proper research and guidance, could cost you dearly.

Please, look around the forum and ask any questions you can think of or alternatively, call our sales team to discuss the options.

If finance is a concern to you, please feel free to contact me at PS and i can have a chat with you and refer you to the appropriate broker.


Best of luck!!

Lee O'Connell

Hi Louise,

I tried to contact you earlier today to discuss your options and go through the basics when investing in CEE; unfortunately there was no answer so I will try again tomorrow.

My team and I are on hand to speak to any of our newcomers about taking that first step into investment in emerging markets. If you would like to arrange a call please email me on PDM@propertysecrets.net with a suitable time and phone number, alternatively you may call me on 01270 539576 or Kim Stokoe on 01270 539575.

Kind regards,

Martin Grainger
Head of Portfolio Development