New buy to let site, anyone using ?

SomeUnusedName

Hi there

Not sure it is so new but it is the first time I see them http://www.fasthousesales.ie/ anyone know anything about them?

Cheers

The_Conductor

Some of the claims on the main page of this website seem far too good to be true- such as "House in negative equity? We can sell your house for the mortgage value." etc.

I'd be highly suspicious of whoever is behind this website- their claims seem far too good to be true.

xper

Well, the title on the website is "Faulkner Madden | Property Consultants" and it is registered to one David Madden as a "sole trader" since last August. Their main website is EDIT:link removed not what I thought!

So I would assume from that that it is a legit business rather than some fly-by-night scam ... nothing. The claim on the front page that "We can sell your house for the mortgage value" does seem fanciful on the face of it. No doubt the devil is in the details.

From the prospective buyer's point of view, it does seem like a pretty standard rent-to-buy scheme but for a second-hand house rather than a new one which has been more usual lately. As with all such schemes in the current market, it probably doesn't work out as great value for most buyers but might suit some.

Looks like the y have spotted a business opportunity and are going for it. As a buyer/renter or seller, I'd certainly be getting my own solicitor to examine it very closely to see what the possible pitfalls are and I'd spend a long time be churning the numbers to see what the long-term outcome could be.

the_syco

From; http://www.fasthousesales.ie/#!how-it-works/c24ib

With us, it's ok if you:
> Only have a small deposit (some of our properties you can buy with as little as 2 or 3% of the purchase price)
> Are new to the country
> Are self employed
> Have little credit or credit that's in need of repair
> The Advantages of Buying A Home without getting a Mortgage

Is this a new angle of the sub-prime mortgage market?

The_Conductor

the_syco wrote: »

Is this a new angle of the sub-prime mortgage market?

My thoughts exactly.
Can't see how the fundamentals of this have any basis in sound economic reasoning- from the perspectives of either buyers or sellers. It seems far too good to be true from every possible angle.

Penguino

xper wrote: »

Well, the title on the website is "Faulkner Madden | Property Consultants" and it is registered to one David Madden as a "sole trader" since last August. Their main website is http://www.maddenpropertysaleslettings.ie/

So I would assume from that that it is a legit business rather than some fly-by-night scam. The claim on the front page that "We can sell your house for the mortgage value" does seem fanciful on the face of it. No doubt the devil is in the details.

From the prospective buyer's point of view, it does seem like a pretty standard rent-to-buy scheme but for a second-hand house rather than a new one which has been more usual lately. As with all such schemes in the current market, it probably doesn't work out as great value for most buyers but might suit some.

Looks like the property consultants have spotted a business opportunity and are going for it. As a buyer/renter or seller, I'd certainly be getting my own solicitor to examine it very closely to see what the possible pitfalls are and I'd spend a long time be churning the numbers to see what the long-term outcome could be.

We are www.maddenpropertysaleslettings.ie and are not associated with fasthousesales.

We have never been associated with this website.

Grolschevik

smccarrick wrote: »

Can't see how the fundamentals of this have any basis in sound economic reasoning- from the perspectives of either buyers or sellers.

Hmm... from this:

smccarrick wrote: »

Some of the claims on the main page of this website seem far too good to be true- such as "House in negative equity? We can sell your house for the mortgage value." etc.

Plus this:

>With us, it's ok if you:
> Only have a small deposit (some of our properties you can buy with as little as 2 or 3% of the purchase price)
> Are new to the country
> Are self employed
> Have little credit or credit that's in need of repair
> The Advantages of Buying A Home without getting a Mortgage


...it looks like the business model is an attempt to match up rent-to-buy buyers who have little or no deposit or prospect of getting a conventional mortgage, with those desperate to sell their house and recover as much as possible of their mortgage value.

The former group would presumably end up paying much more than the current market value of the house over the long term in the attempt to fulfill the claim that "we can sell your house for the mortgage value".

cookie1977

And what does this mean?

What's in it for the seller?
​
- Get the price you need, even if you are in negative equity

xper

Penguino wrote: »

We are www.maddenpropertysaleslettings.ie and are not associated with fasthousesales.

We have never been associated with this website.

My apologies. I jumped to a conclusion there.


There's a fair scattering of Maddens in the Irish property industry, it would seem from a little further searching!

SomeUnusedName

Anyone a solicitor here ? If its rent to buy for second hand homes it could be (maybe) genuine.

D3PO

SomeUnusedName wrote: »

Anyone a solicitor here ? If its rent to buy for second hand homes it could be (maybe) genuine.

rent to buy is a stupid scheme. Banks wont accept the "rental payments" as a deposit, the sales prices are never set to go down so the agreed sale price will be most likely higher than the properties worth (you can be sure theres a clause for the asking price to increase in a growing market)

I have NEVER EVER EVER heard of anybody who partook in a RTB scheme that says it was a good thing.

Forget about it. If you want to buy save hard get a deposit and then go to the bank.

leonidas83

Taken from website

Why people should buy a home this way:
> Pay your money towards owning your property rather than dead rent.
> No need to try and save a large deposit.
> No need to worry about property prices rising before you've saved enough money.
> Buy a property today with a very small deposit.
> Move in tomorrow.

Absolute nonsense, added to this are the list of properties they have for sale. Counties such as Tipperary, Sligo, East Galway, Longford & Mayo feature high on their list. No disrespect to those counties but their not in highly sought after areas. The prices their looking for dont represent value for money either. Quite a bit above average & you can be sure your going to be paying this off for a long time to come should you sign into it.
They must have serious capital behind them though which is baffling

SomeUnusedName

HI

Surely there is plenty of people who want to sell their houses (and move elsewhere) and people who want to get their first home, I assume lack of lending is a big big problem at the moment. on paper it sounds to me like it should work, but logical thinking and house sales don't generally correlate.
All I m saying is I wish it worked and would be cool to know if it does or if anyone who knows about legal detail can see if they sound legit?

leonidas83

SomeUnusedName wrote: »

HI

Surely there is plenty of people who want to sell their houses (and move elsewhere) and people who want to get their first home, I assume lack of lending is a big big problem at the moment. on paper it sounds to me like it should work, but logical thinking and house sales don't generally correlate.
All I m saying is I wish it worked and would be cool to know if it does or if anyone who knows about legal detail can see if they sound legit?

In order for a scheme like this to work you need a desperate seller, a desperate buyer (unable to get credit) & an opportunistic middle man willing to screw over both in order to make a gain. If that doesnt bother you, your on the right road with this

D3PO

SomeUnusedName wrote: »

HI

Surely there is plenty of people who want to sell their houses (and move elsewhere) and people who want to get their first home, I assume lack of lending is a big big problem at the moment. on paper it sounds to me like it should work, but logical thinking and house sales don't generally correlate.
All I m saying is I wish it worked and would be cool to know if it does or if anyone who knows about legal detail can see if they sound legit?

is it "legit" ? yes it is most likely "legit" It is a good value proposition or something thats fundamentally sound ? No.

You would be an idiot to even think about something like this.

If people want to get their first home they should save a deposit which frankly they could do if they were genuinely able to afford the fluctuations in expense owning a house.

If you cant manage to save a deposit then your not a good canditate to owna hsoue its as simple as that. Not everybody should be able to afford a house if you cant then its tough you rent.

leonidas83

D3PO wrote: »

is it "legit" ? yes it is most likely "legit" It is a good value proposition or something thats fundamentally sound ? No.

You would be an idiot to even think about something like this.

If people want to get their first home they should save a deposit which frankly they could do if they were genuinely able to afford the fluctuations in expense owning a house.

If you cant manage to save a deposit then your not a good canditate to owna hsoue its as simple as that. Not everybody should be able to afford a house if you cant then its tough you rent.

D3PO, you seem to have a good understanding of how this works. Just one query I have, is this company paying the seller of the house the difference between the deposit & the overall cost of the house? if so, they must have serious capital behind them

D3PO

leonidas83 wrote: »

D3PO, you seem to have a good understanding of how this works. Just one query I have, is this company paying the seller of the house the difference between the deposit & the overall cost of the house? if so, they must have serious capital behind them

I cant comment on this particular scheme. If that were the case they would need to be regulated by the Financial Regulator. They dont seem to be which would indicate no they are not supplying the capital.

Id bet a dollar to a dime its the usual crap rent and use your "rent" as a deposit and go to the bank. The bank of course at this point will laugh at the application refuse it and bam the "rent" which will be higher than market rents for the same areas becomes forfeited.

The "seller" takes the rent minus the agents fees. Seller and Agent are happy and the buyer gets left curing why they didnt listen to boardsies who told them its a mugs scheme.

on the miracle that somebody actually did get a mortgage (wont happen) and decided to go through the Agent would collect commission on the sale so its win win for them anyway.

The second you see the marketing bullsh*t that they have on their website you know its a pile of crap, you dont even need to worry abotu reading the fine print.

SomeUnusedName

Thanks for the advice. I couldn't see how this would work and now it makes sense

davidmaddenfhs

Hi guys, I just wanted to get some information across, what we do is not a scheme it is a way of buying a property when the banks are not lending. We have had many happy buyers that have mortgaged and now own the rent 2 buy properties they were living in.

How we differ from previous rent 2 buy property transactions in Ireland is we make sure the buyer builds up 20% - 30% equity so obtaining a mortgage is a lot easier. Where as other companies only offered a 3 year rental term and the buyer was only obtaining roughly 4% - 10% equity which was not good enough for the mortgage lenders.

Yes the rents are slightly above market average but they have to reflect the mortgage value on the property which are actually at more favourable rates than most could obtain today.

We help homeowners sell that have previously had difficulty in selling their house, it is not to good to be true because in most cases the homeowner may not have all their equity released for anything from 2 -5 years and upwards.

Selling and buying through rent 2 buy is not for all and is certainly not a scam so If anyone has any questions please fell free to email me and I would be happy explain in more detail.

Regards,
David Madden

D3PO

davidmaddenfhs wrote: »

Yes the rents are slightly above market average but they have to reflect the mortgage value on the property which are actually at more favourable rates than most could obtain today.

No they dont. The "buyer" could equally reflect the mortgage value by saving the additional money spent on above market average rents. The main aim of the scheme is to benefit the landlord and yourselves if anybody is naive enough to think otherwise they are sorely mistaken.

rather than email how about you be transparent on here about your "scheme"

A) Is the buyer locked into a purchase price or if house values drop further will the purchase price drop in line with this ?

If the buyer was refused a mortgage despite building up all this wonderful equity :rolleyes: are they entitled to a refund of the difference between the above market rate rent and what they would have expected to pay to rent outside of the scheme ?

C) Do you get commision on the rent paid ?

The answer to the first one is yes. I know it and you know it and anybody with any cop on knows it. So how prey tell is that a scheme looking at the interests of a buyer.

Automatically this removes the potential to get a mortgage as the valuation versus the banks valuation wont tally and therefore no mortgage offer will be forthcoming

The second answer is no. Why if this was such a focused scheme to help people buy would there be a scenario where you take advantage of them not getting mortgage approval

And we also know the answer to the third one. Hey you gotta make a fast buck somehow right :rolleyes:

Explain how you "hel" the sellers who couldnt normally sell. That in itself is a crock of crap. Anybody can sell if they price their property at the correct price. Now if your saying they couldnt do that as they are in negative equity and banks wouldnt accept those lower sales prices your saying your ripping off the buyers through your scheme by making them pay more.

Which is it ? You cant have your cake and eat it David.

Your on the look out for uneducated, gullible, desperate buyers. Spin it how you like but thats what it is.

davidmaddenfhs

Yes the owner benefits in the fact that they sell their house but who would do a deal that didn't have to that was not getting a good outcome? Also the buyer gets to secure a property at a price they are happy with. Yes ideally everyone would save and then get a mortgage to buy a property but this is not an ideal market at the moment so we provide a solution to this.

A) Yes the buyer is locked into a purchase price if the property decreased in value, but this also stands if the property increases in value which by the time they complete the sale they will have secured at property below market value.

No the buyer makes a decision (along with his/her solicitor) in renting 2 buy with the knowledge that if they cannot secure a mortgage they would have to vacate the property by the agreed date. However we have sold houses through rent 2 buy over a 25 year period so the new buyer will never have to apply for a mortgage, the length of term varies from property to property.

C) No we do not get commission on the rent paid neither does the property owner, every penny of the rent comes off the overall price of the house. Obviously there will be interest on the current mortgage but this is included in the monthly payments and not increased by us "for a fast buck".

Selling at the moment is not all about the right price, it is also affected by the lack of mortgages. However we cannot help everyone sell their property, there are a lot of factors involved that decide what property we can sell.

Lastly we do not force anyone to buy a property from us, we make sure all parties involved hire a solicitor to read through the contracts.

I think all your points may be referring to previous rent 2 buy properties in Ireland but I can assure you we have an entirely different business model.

D3PO

Firstly I must say thanks. Its refreshing for somebody to talk honestly about this despite being a vested interest. You have shown more integrity than most.

I think you understand why I have a cynical take on this. The crux of the issue is that house prices are not going to rise anytime soon, which means the person interested in proceeding through such a scheme cannot get a positive outcome.

This is for two reasons the bank wont lend because their valuation will be lower than the sale price, meaning the person wont be able to complete meaning they will end up essentially paying high rent for a certain period.

HOWEVER Id be interested in hearing more about your next comment re 25 year rental with a view to ownership transferring at that point. How exactly does that work ?

What are the CGT implications to such a seller as a Non PPR for that period ?

What way is the sale constituted in that a transfer of deeds would trigger gift tax ?

What happens if the house owner dies during that 25 year period ? How does the executor of the will have to manage this ?

What annual rental reviews / increases take place over that term ?

Sounds interesting defiantly a different approach to RTB but too many unknowns IMO

D3PO

guess my questions just got too tough for him.

Anybody can market the hell of of something like this but the devil is in the detail.

SomeUnusedName

Fair enough tho, It s great to learn about these things.