propertyrush
1 - How much does Propertyrush cost?
You require £50,000 of which our membership fee (Membership Commission) is £20,000 per tranche. The remaining £30,000 Member Fund is held by you for the deposits, solicitor, mortgage arrangement fees and refurbishment costs. We charge a Refurbishment Management fee of 10% and the Letting Management fee is 10% of rental payments on each property. The Procuration Commission of £15,000 from each property is usually remortgaged out of equity from capital growth, usually due after 5 to 7 years when the property has returned 70%-100% of the original purchase price. This ensures Propertyrush is fairly rewarded and motivated to negotiate hard on price, to get the best deals to make you a Propertyrush Millionaire. |
2 - Propertyrush’s £20,000 membership outlay is a big lump of cash, why do you charge £20,000, couldn’t I do it myself?
Its simply value for money, you contract our expertise to find and manage 10 BTL property purchases for you over 7 years, from one £30,000 sum, recycled 10 times to build your £1,000,000 portfolio generating an average gross rental income of £72,000 per annum before expenses or taxes. “Propertyrush does the work, you get on with your life”, your career and keep the security of your existing income, without any of the hassle of you making expensive mistakes or having to personally deal with estate agents, solicitors, valuers, lenders, builders, plumbers, electricians, letting agents or tenants. In reality it would be extremely difficult for most individuals to manage this 10 times for just £20,000 over 7 years, whilst continuing to maintain their current lifestyle, and without giving up their existing career. What’s that worth to you? |
3 - Why do you charge a Procuration Commission of £15,000 on each property?
The £15,000 Procuration Commission from each property ensures that Propertyrush is fairly rewarded in the future for finding the properties and negotiating hard on the purchase price to make the project successful. The Procuration Commission also ensures Propertyrush has a vested interest in each property’s success, that is brought into the consortium under member ownership, managed by Propertyrush for the benefit of the member. |
4 - Who manages the £30,000 slush fund (Member Fund) and in who's account is it held?
You, and in your account. |
5 - Do I have to set up a separate bank account to hold my £30,000 working capital.
No, you may use an existing bank account that you already have, for holding funds, making payments and receiving rents. However it may be prudent and easier to keep track of your funds if they are in a separate account from your normal current account. |
6 - How can you recycle £30,000 to buy 10 properties?
The principle is simple and similar to a Coca-Cola retailer buying a can of Coca-Cola at a wholesale price of £0.40p then retailing it for £0.80p making a profit of £0.40p or 100%. Buy two more for £0.40p each, retailing them each for £0.80p to get back £1.60 or 300% profit. Buy four more and retail them again for £0.80p each to get back £3.20 or 700% profit, starting with just £0.40p to multiply the effort each time by recycling the original cash and the profit. Propertyrush is effectively doing this for our members using houses like commodities, the difference is that houses are a necessity not a luxury and houses in the UK are in short supply. However you don't sell to trigger a capital gain which would incur CGT. Instead you remortgage to draw out equity up to the £30,000 seeding capital when the property can sustain the recycling of funds into another property. |
7 - I am worried about not being able to progress forward with getting mortgages because I am older and on a low income, can you help?
Yes, being older or having a low income may not necessarily be an issue, if you are raising funds from equity in property to become a Propertyrush member, and can borrow less than 65% of the property’s loan to value (LTV) or, you have more capital to increase your purchasing deposit from the standard 25% to 35% some mortgage lenders will accept your mortgage applications. |
8 - What if buy-to-let mortgage interest rates increase, can this affect me?
Yes, however many buy-to-let mortgage interest rates are currently fixed and would not be affected by an increase until the offer period ends. Where members are on variable rates they may consider changing to fixed rates.However with the economy in poor shape and the pound being low, it may be difficult for the Bank of England to justify significantly raising interest rates in the short term as this is likely to be counter productive. Higher interest rates could ultimately lead to more mortgage arrears, repossessions and failing businesses. The expectation is that, low interest rates should help UK exports and tourism, and whilst nothing's certain, standard variable rates have averaged 6.98% between 1995 and 2008. |
9 - Why should I use an interest only mortgage, rather than a capital and interest repayment mortgage, surely I’ll save money?
It is true that you'll pay less interest on a capital and interest repayment mortgage assuming you keep up to date with your payments. Hence many people would prefer not to have any mortgage interest payments on a buy-to-let property because the assumed wisdom is that they'll make more money. For example, if you purchase a buy-to-let property for £100,000 with all your own cash, with no mortgage, and let it out for £9,000 p.a. you’ll have a 9% gross return p.a. on your capital. However a good rule to remember about buy-to-let property is, the less capital you put in, the more money you’ll get out. By comparison, if you purchase a £100,000 house with a £75,000 mortgage at an interest rate of 5.5% and £25,000 if your own cash, then let it out for £9,000 p.a. you’ll receive a return of £4,875 p.a. or 19.5% p.a. on your £25,000 capital even after the interest only mortgage payment of £4,125 p.a. That’s 10.5% p.a. more return by leveraging your cash with interest only mortgages effectively paid by your tenants. Therefore having an interest only mortgage may mean you pay more mortgage interest; however overall, your leveraged return is likely to be greater. |
10 - Can I have a print off of your entire presentation so that I can write some notes.
Our presentation is not suitable for general release however on request we can provide our brochure and key facts documents about our costs and services. Can I have a print off of your entire presentation so that I can write some notes. |
11 - Will I be provided with the costs of purchasing the property before I decide to purchase a recommended property?
Yes, our Independent Financial Adviser will provide you with a Key Features Illustration detailing the costs of purchasing each BTL Property for you to decide if you want the property or not. However by the time you are provided with details of a recommended property, the property has already been assessed, with its figures analysed and the best purchase price negotiated to provide the best deal. We do not recommend a property to you unless the figures stack up! |
12 - Will I know how much the refurbishment costs are likely to be on my BTL property before work commences?
Yes, our builder will be carrying out a survey on your BTL property to provide you with a schedule of the work that is required to bring the property up to an accredited standard for social housing. |
13 - Can I have a print out of the services that Propertyrush’s membership fee buys?
Propertyrush Ltd find properties, negotiate discounted prices, oversee the purchasing process with an appointed solicitor, arranges the mortgages through Kiskidee Ltd, oversee any refurbishment needed for Peterborough City Council Accreditation. Propertyrush then hands over the letting and management of member properties to our sister company Letsrush Ltd. Terms and conditions are detailed in our Strategy Agreement. |
14 - What are the timescales involved for purchasing my first BTL property after becoming a Propertyrush member?
Our guide to the timescales for each stage of the process is outlined in the Propertyrush Strategy Agreement you can obtain on request. |
15 - I’m not in a position to join Propertyrush now, however I know someone who is interested, do I receive anything from Propertyrush for referring them to you?
Yes, you may be pleased to know that Propertyrush will pay a commission of £500 directly to you for recommending friends, clients, or members of your family that join Propertyrush Ltd to build their BTL property portfolio. Terms and Conditions Apply. |
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