Reply to: BTL Landmine BOOM

[Zoiderman]

I reckons he's working on greedy.

Me, well, I am still running around with my tail between my legs, heavily chastened.

[PAH]

I remembering seeing an interview with Buffet where he was asked his key secret to investment, and he said "When people get greedy, I get scared...and when people get scared, I get greedy"

What's his current facebook status, Scared or Greedy?

Greed leading to Stupidity is rife, and I am guilty of it.

It's human nature to be greedy. Everyone thinks they're worth more in a capitalist society. You don't see footballers moaning they're being overpaid, yet they're a prime example of achievement and talent (particularly the England football team ) falling far short of apparent worth.

Some might say contractors are another example, but they'd be wrong. Ask Bob's employer.

Shame there's no workable alternative outside of science fiction. Not workable due to the greedy having all the control.

[Zoiderman]

I used to have 3 houses, 2 of which were investments. I remembering seeing an interview with Buffet where he was asked his key secret to investment, and he said "When people get greedy, I get scared...and when people get scared, I get greedy", and using this adage, I sold up in late 2007 and early 2008, when most of my IT contractor brethren were all getting into BtL. Quite perplexed to see the area go up a little more for a while, and thought I'd made the wrong mistake and tried to get back in, in summer 2008. One of the best things that ever happened was not being able to aggree a price until the market went pop. I still have one house that I cannot sell, but luckily, have a relatively low interest rate on a 60% LTV.

What Buffet didn't say, was bears of limited intelligence (like me), shouldn't play about in areas they know nothing of. I am relieved more than anything, but still face a loss on one house, if the whole shebang comes down. Greed leading to Stupidity is rife, and I am guilty of it.

[PAH]

He disappeared for a while after that one.

Not so long ago he'd have disappeared for good. Shame we're mostly too soft to deal with this scum properly.

There's got to be plenty of bored stalkers out there looking for a new target. Just need a way of attracting enough of them to the scumbag and it'd be like a scene from a zombie film.

[DimPrawn]

I used to know a double glazing chap who went bankrupt so many times he got barred from being a director. His son and wife became directors from then on, but he was still running the show on a day to day basis.

Last seen sipping champagne in local pub while the liquidators were in the process of locking out the workers... He disappeared for a while after that one.

And came back with a different name, I kid you not.

If he were any lower down in the human scale of scumbags, he'd be a recruitment agent. I kid you not.

[Sysman]

Happens a lot. I sometimes think it's a mugs game to pay your dues when you can go bankrupt and start again so easily.

Just need to know how to play the game so you can do a phoenix without losing your assets.

Seems there's no real downside with all the scum getting away with it.

I used to know a double glazing chap who went bankrupt so many times he got barred from being a director. His son and wife became directors from then on, but he was still running the show on a day to day basis.

Last seen sipping champagne in local pub while the liquidators were in the process of locking out the workers... He disappeared for a while after that one.

And came back with a different name, I kid you not.

[DimPrawn]

Happens a lot. I sometimes think it's a mugs game to pay your dues when you can go bankrupt and start again so easily.

Just need to know how to play the game so you can do a phoenix without losing your assets.

Seems there's no real downside with all the scum getting away with it.

You mean...Grant Bovey to be declared bankrupt | This is Money


and....Anthea Turner¿s bankrupt husband Grant Bovey back in business | Mail Online

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[PAH]

Did I mention that the directors of the new company were the same folks, or relative of, the bankrupt company's directors?

Happens a lot. I sometimes think it's a mugs game to pay your dues when you can go bankrupt and start again so easily.

Just need to know how to play the game so you can do a phoenix without losing your assets.

Seems there's no real downside with all the scum getting away with it.

[Sysman]

When the assets of the building companies were sold, at a premium as you suggest, wouldn't these go to the creditors (thus paying back their 10% at the very least)?

It depends on the deal the new company struck with the liquidators. Those 10% deposits were probably only a small part of the total debt. I believe that those who had paid were offered some discount is they agreed to go with the new price, but they had still been stuffed.

Did I mention that the directors of the new company were the same folks, or relative of, the bankrupt company's directors?

Bankruptcy in the building game is rife. The builder of my parents' first house went that way after signing everything over to his wife and was still running around in a nice Merc for many years afterwards. Fortunately for my parents, that happened after they had taken possession of the house, although the road never got the promised landscaping, which I assume they had paid for.

[FudgePacker]

There was another side to that game as well, which happened to some rather nice houses that were being built near me. Having received everyone's deposits, the builders realised that the houses were suddenly worth a lot more, so conveniently went bankrupt. Bang went the deposits and the prices got raised.

When the assets of the building companies were sold, at a premium as you suggest, wouldn't these go to the creditors (thus paying back their 10% at the very least)?

[Sysman]

Isnt it called flipping ? Pre 2007 crash millions of flippers in US would "book" a house while it was being built by paying a deposit of 10%. The idea was that by the time the house was completed the price would have zoomed by about 30% and you then sell it without ever having lived in it.

Great idea to make money, sit at home and watch the cash roll in.

Canary Wharf was like that. When I heard about it I reckoned I would be joining it too late in the game to make a decent buck, and my fears proved well founded.

There was another side to that game as well, which happened to some rather nice houses that were being built near me. Having received everyone's deposits, the builders realised that the houses were suddenly worth a lot more, so conveniently went bankrupt. Bang went the deposits and the prices got raised.

[Sysman]

I discussed this several times with people going down this route, they would not be talked out of it. They looked at me like I was trying to steal money from them.

Yep. I had an Aussie colleague who came back late from holiday Down Under because he bought a third house under similar peer pressure. He already had two houses and was so utterly convinced by is friends' arguments that he wouldn't listen to any of us.

He did manage to extricate himself after a few years, but at one point he had 2 houses and nowhere to live, because he had tenants in both of them.

[PAH]

I wonder if there's an establishable price point where property is beyond the realms of the workers and into the realms of the wealthy, who will always be able to afford the property, so those properties will be less likely to fall significantly?

Such as can be seen in parts of London, and probably other wealthy areas in the home counties.

So maybe it's worth paying more for a property in a better area, as it's the better long term investment if buying at the top end of a bubble.

Providing one can comfortably afford the repayments of course.

[lukemg]

Pretty simple really - House prices in most areas will go sideways or edge down over the next few years (inflation means they are effectively going down if just flat) BUT there are massive variations across areas and types. Everyone knows high-end is doing well in that London (foreign money in readies, bonuses).
I don't think the cuts have really come in yet so still expect some falls as people hanging on by fingernails get shaken out.
BUT as with many investments, if you can think 5-10 years instead of months you can do well AND demand for rental property is only going up as mortgage approvals go down and the divorce rate stays high.
Wouldn't touch it myself, too much grief, will stick to stocks/shares etc.

[PAH]

smart people who can see the full picture have got a good chance of doing well.

What's the current full picture and how can we do well?