This seems to be the most popular question amongst property investors at the moment. We have moved from a borrower-led to a lender-led market in a very short space of time and the credit crunch is certainly making it ever harder to get deals to stack.
But property is just like any other business – it doesn’t stay static. It evolves and all successful business people know this and grow and evolve with their market place.
So whilst some investors are giving up and pulling out of the market, others are simply lowering their offers. Some are investigating other market sectors such as HMO’s (multi-lets) which offer fantastic cash flow if you buy correctly, and some are seeking innovative financing strategies such as assignable contracts, to out-manoeuvre the lenders.
With every market cycle there comes new and increased opportunities – particularly if you can be a trailblazer ahead of the crowd. The key is in knowing your market place and then knowing where to look and how to harness the opportunities presented. Many investors are therefore focusing on the increased number of repossessions that the credit crunch will bring to the market. With an ethical ‘problem solving’ approach there is a massive opportunity for investors to grow their portfolio whilst helping others. Even with the PCOL (online court diaries) being shutdown following alleged consumer complaints of spamming from investors, the canny marketers out there are still finding ways to reach their target market.
For my money, the smartest full-time investors are those that are not just doing some/all of the above, but are stepping back to look at the bigger picture. Every business survives or fails on its Cashflow. In changing markets there can be increased lulls between deals, and tighter margins. There is no point boasting that you are still buying at the same rate if you are simply doing the same deals that DID cash flow but now need to be subsidised every month. So the onus is ever more on the king they call CASH FLOW. It may mean you rejecting more deals and growing your portfolio at a slower rate – but better to build a sustainable portfolio than one that is going to kill your cash flow… and kill your business!