Distressed Assets.co.uk: All you need for purchasing property repossessions

Background

The UK property market has been in retreat for some time now and relentless press negativity combined with well publicised economic woes have meant that property purchase is not on the agenda for the vast majority of the population.

Opportunities in the UK are rife for the serious property investor because of a unique combination of factors including restricted finance and a rise in repossessions. Many lenders, private individuals, companies and developers hold portfolios of properties which they are desperate to sell quickly so that they can restore their financial positions. In many cases prices are now half what they were even 18 months ago if you know where to look and are prepared to dedicate time and effort.

Despite press scare mongering the UK is better placed than many European economies to ride out the current recession as we can at least control our own interest rates, print more money and devalue our currency to encourage exports (although the government would deny that this final option is happening). The bottom of the housing market is likely to be reached far quicker than most people think with prices also likely to flatten rapidly in the months ahead.

Distressed Assets

Distressed Assets is effectively a sourcing agent that finds massive value property on behalf of our clients throughout England and Wales.

Our three main sources are auction houses, lenders who hold repossessed property and developers who may have run into financial difficulty and are willing to sell their property through an intermediary at a serious discount.

Process

We do all of the due diligence on your behalf from viewing the property through to financial analysis and legal research. Our criteria are as follows:

• Significant discount to what the property has previously sold for (we generally look for at least a 30% discount).

• High yield- we are generally looking for a gross yield of more than 8%.

• Condition- we only source property that requires little or no work (cosmetics such as some painting, or new carpets are permissible). We often find property that can be immediately rented out with no work needed whatsoever.

• Rental potential- we only source property in viable areas which will rent out easily, we also recommend agents to use.

• Legal Research- we carry out detailed legal due diligence to ensure that any potential problems are identified and dealt with or avoided.

Finance

Finance is a limiting factor: a 25% deposit is required as the maximum loan-to-value that can currently be obtained is 75% with interest rates starting at 5.49%. In many ways this is a positive factor as it removes many amateur investors from the market.

We have a dedicated financial broker who will liaise with you directly to obtain the best finance available in the quickest possible time.

Conclusions

We can only deal with a maximum of 20 clients at any one time as the sourcing process is very time consuming and we aim to offer a bespoke service. We believe that the window of opportunity for distressed assets is relatively short as the UK housing market is likely to stabilise in the second half of the year and, for those investors with capital held in euros, the favourable exchange rate makes this opportunity even more attractive.