Olympics effect sends East London prices soaring

Anyone that bought a pad in East London before London won its bid to host the 2012 Olympics, will now definitely be having the last laugh, as new figures reveal that property prices in the area have skyrocketed by 26 percent since the triumph was announced.

With two years until the opening ceremony London comes over all Lord of the (Olympic) Rings for the London 2012 Games, Lloyds TSB research has measured house price performance in the fourteen postal districts located close to the Olympic Park.

Some parts of London close to the main site for the London 2012 Olympic and Paralympic games have seen a sharp rise in house prices since the capital was awarded the Games in July 2005. Homerton and Shoreditch – both in the borough of Hackney – have seen average prices rise by 69 per cent and 53 per cent respectively, significantly above the Greater London average of 36 per cent.

East London will see a massive upgrade in facilities as a result of the hosting of the Olympic and Paralympic Games. The area will benefit from a 500 acre Olympic Park reaching from the Hackney Marshes to the Thames, which will include an Olympic stadium, aquatic center, along with several other sporting complexes and a 17,800 person Olympic village.

Significant transport improvements are also taking place – investment is trebling the capacity of Stratford Regional Station, the main transport hub for London 2012 which is expected to accommodate 120,000 passengers and enable 200 trains every hour during the Games. A range of other transport improvements serving the Park are already underway, including an extension to the Docklands Light Railway (DLR) and increasing capacity to the Jubilee Line.

Part of this rise is likely to have been due to an increased interest in property in these locations from both buyers and investors as a result of the associated regeneration taking place.

The picture, however, is mixed. Things aren’t so rosy over in Stratford, the location of the Olympic stadium – which has been a whopping great building site for a few years now. Stratford saw a meager three per cent rise in average prices, a far smaller increase that any of the other postal districts.

Perhaps this is indicative of people wanting to be close the Olympic effect, but not right in the heart of it. After all, the stadium will remain after the Games have finished and this may put people off living close to a major sporting venue or tourist draw card that will attract crowds and noise.

Suren Thiru, housing economist at Lloyds TSB said, “Some areas close to the Olympic Park have experienced a sharp rise in property prices since London’s successful bid to host the 2012 Olympic and Paralympic Games. Part of this rise is likely to have been due to an increased interest in property in these locations from both buyers and investors as a result of the associated regeneration taking place.”

“Looking forward, property prices across East London are likely to receive a boost from the legacy of improved infrastructure and transport links left by the London 2012 Olympics.” (What Mortgage magazine).

Other News

Yorkshire Building Society has launched two new best buy mortgage deals for people who need to borrow up to 90% of the value of their home.

For those who would like a little extra help with the initial costs of their mortgage, similar products are also available at 5.19% fixed for two years or 5.89% fixed for three years. Both products carry a £495 fee and include a free standard valuation and free legal service for those buying a property, or free standard valuation and £250 cash back for those looking to remortgage.

Tom Girling, product manager for mortgages said: “Both our two and three-year fixed rate deals offer fantastic value to borrowers with a 10 per cent deposit – an area of the market where only a handful of other lenders area currently striving to offer competitive deals.

“At Yorkshire, we’re trying to help as many people as possible obtain a mortgage and offering fixed rate loans to borrowers with a 10 per cent deposit is just one of the many steps we have taken to diversify our product range.
However, by ensuring we only offer fixed rates in this area we can make sure our borrowers have piece of mind when it comes to their mortgage payments whether they are looking to buy their first property or remortgage.”

(for different types of mortgages in the UK see previous blog)

Real estate investors need to use the benefits of the internet and use free websites that can allow them to understand more about specific properties and areas. We can not just rely on others but we need to learn how to back up what others on our team might tell us about properties and areas.

Trulia.com

We can search for a particular area or zip code to bring up properties. After focusing on a particular property we can click on the google map of the property and click on the street view. Many properties will allow us to see a photo of the property and also see how around the neighborhood. This can allow us to get a feel for how old the neighborhood is and if there are discouraging points that we see. This allows us to assess it without having to drive out to the neighborhood. We can also look at sales graphs and see the reports on properties sales in that area. We can also use the comparables tab and see the whole list of similar homes have sold in the area. Look over the list and compare the latest comparables and eliminate those that are much older sales.

Education.com

This website can be helpful for us to determine the insight of the schools in the same area we are searching for properties. We can click the links to all of the schools in the area. Click on the details and look at all of the statistics of the teacher to student ratio etc. We then could click the link to the school district. We call them up to determine which of these schools are OK to the better schools. They are more likely to give us insight if we quote them statistics that we have already researched out. Our intent is to target properties in areas that don’t have the really rough schools that buyers and renters would not like their children to attend.

Bestplaces.net

This website can allow us to get statistics on areas of interest. We can see a percentage of projected future job growth. We can call the chamber of commerce and determine based on their statistics as well what the projected jobs will come from. The intent is knowing that buyers and renters want to be in areas with more jobs.

These websites are free and allow us to become more savvy real estate investors. We don’t want to just take our teams word on their insight but we want to verify it by doing our own due diligence. These websites can feel more confident in our investing.

Real estate investors are always looking for ways to protect themselves from frivolous law suits. We want to protect ourselves from losing money or personal assets. One of the tools that we can benefit from is the use of the land trust. Trusts can give us an edge in protecting ourselves in a few ways. Trusts have been established to help with Estate Planning.

Parts of a land trust:

1. The land trust consists of creating a name. Many times we can list it as the address of the property.
2. Trustee: this is the contact person that one would call if they had any questions about the trust.
3. Beneficiary: This is the individual or business that owns the trust.

Hiding the owner of the property:

Banks that hold notes:

The ownership of property can change from an individuals name to the name of the trust. This is recorded in the county records and can allow searching sources like banks that hold the mortgage or others not to know for sure who holds title. This could allow an investor to take over payments of a previous owner, and then place ownership of the property into a trust. The bank in turn does not know who ideally owns the property because the paperwork showing the beneficiary does not have to be recorded at the county.

Accident Attorneys searching for sources to sue:

If an investor has placed their rental property in the name of a trust it keeps away those that could damage them wrongfully. A tenant that claims a wrongful suit of injury could retain the help of an accident attorney. The accident attorney though would need to see legally who owns the property. After investigation at the county it is clear that there are no legal records showing the beneficiary or owner of the trust. This can cause attorneys to move on to other cases that are more legitimate.

We are constantly working all the avenues we can as investors to make money from real estate. Many people get turned off by the concerns about the hassle of managing the repairs of rehab work. Others don’t like the idea of having to deal with renters who might call them in the middle of the night with a plumbing problem. We understand that there will always be some kind of problem that we are solving to help others and to help us earn an income.

Let’s consider an area of real estate that doesn’t require rehab or late night repairs.

Note Brokering:

How to find notes:

There are many sources online that we can pay to get a list of personal note holders.

If we want to find them without paying a fee we need to go to the county records to look at the public records on real estate. There we can look up properties based on the counties search tools. Many times, counties will have this information on a county website. We can do a search for address after address and focus on who the lien holders or mortgage holders are on that particular property. Most will list bank after bank that holds the mortgage on each property. Look at the rare ones that list an individuals name or family trust. These are the properties that were sold by seller financing. We can either send a letter to the address listed or do further research to find a phone number for the note holder.

What to ask the note holder:

Tell them who you are, and that you found that they are the note holder of a certain property from the public county records. Ask them if they have interest in selling off their note for a discounted one lump some of money. This is all about finding a motivated note holder. If they have interest, get all information about the property and the details of the payments and interest rate that they receive. Let them know you will get back to them when you can find a buyer for their note.

Where to list this note:

Do a search online for “note selling, note buying, and note brokering”. You will find many websites where notes can be posted to sell. One could also list the note in the classified section of the newspaper.
We only want to list generalities and never the address of the property. If we get an interested party we can give them more details about what is owed on the note and interest rate etc. We need to factor in the cost of the note changing hands through the services of a title company or real estate attorney. We should also factor our brokering fee.

Finalize the deal:

Talk to the note owner about what their final lump sum of funds would be after the discounted asking prices, the transfer fees, and your brokering fee. The deal can be finalized and all benefit. The seller of the note, the buyer of the note, and we receive a brokers fee. This is a process that can take time to get a system down but it can result in funds that we can make without the typical hassles of real estate.

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