General

Frequently Asked Questions

 

I’m just looking for good property deals to increase my portfolio.  How can I make a return from the Rescue My Properties?

With our focus on creating solutions for clients we have a range of products which allow investors and property funds to take advantage of our multi faceted strategies. This process allows investors to purchase properties with up to 60% discount or for them to invest into property funds that acquire these distressed portfolios and offer a return and capital growth. 

I’m sure I’ll be okay with my property portfolio as my cash-flows are positive!!

You are always welcome to a one-hour free initial consultation with no obligation, and where we will be happy to advise how you can improve your cash flow and overall situation. Generally anybody reading this FAQ has a potential to either improve their portfolio or an opportunity to streamline and cut costs.

Rescue My Properties can improve your cash flow by offering 80% of rental incomes (as per the definition below) to our clients without the bother of the day-to-day management of the property portfolio.

To be clear on the strength of this Unique Selling Point (USP), please read the detail below.

Definitions:

Gross Rent = Total rent received from a property

Rental Income = Income after payments to lender

Net Rental Income = Net profit after all expenditures related to the property – such as repairs, council tax, management, etc…

For most landlords the cost of fully managing their properties is 12% of GROSS RENT.

The cost of repairs, maintenance (i.e. boiler replacements, roof repairs, miscellaneous), statutory costs (EPC, GSC, insurance, inventory, legal’s),

service charges, ground rent, tenant find etc. on average amount to another 15-20% of GROSS RENT.

Here is a simplified example:

Rent                                                                       = £1,000pcm

Mortgage                                                                – £600pcm

Management (12%)                                                – £120

Maintenance + Other Expenses (18%)                   – £180

————————————————————–

NORMAL LANDLORD CASH FLOW                     = £100pcm

Rather than paying approximately 30% of your GROSS RENT on maintenance, management and all property expenses, Management Consultants For You take 20% of RENTAL INCOME to manage all these costs.

Here is an example, with this 20% of rental income scheme applied:

Rent                                                                        = £1,000pcm

Mortgage                                                                – £600pcm

—————————————————————

RENTAL INCOME                                                  = £400pcm

Maintenance, management + expenses (20%)      – £80pcm

—————————————————————

CASH FLOW FROM Rescue My Properties        = £320pcm

To reiterate:

Cash flow under normal management                = £100

Cash flow during Management Consultants

For You management                                            = £320

Where more than 30% of the portfolio consists of properties with a service charge (flats), we will recalculate the percentage and advise accordingly.

Will my signing up to the Rescue My Properties Programme affect my credit rating?

Our clients feel that losing their credit rating is dangerous. The irony is the harder you try the less control you have. An example is provided below:

Client A: Has a successful cleaning contracting business. The client has 40 properties which have been in negative cash flow because of  the overall impact of fixed rate and SVR, where Client A has happily been putting in £11,000.00 per quarter for approximately two years.  The net result being her credit file seems to be intact but she has accumulated approximately £150,000.00 of cash debt from business income, family loans and loans from friends, overdraft to keep her portfolio sustainable – in the hope that the property market recovers. Our aim is for credit to be kept, but at an expense – the underlying question is – how much money do you have to keep your credit intact?

Once it became unbearable because of her financial constraints she returned to Rescue My Properties realising all her hard work was equal to nothing.  Her credit rating was declining because of default payments both on credit cards and mortgages. Twenty years of work with a net result of realising that ‘credit’ in this market does not mean anything after all! She was being handled by the financial system in the same way as anyone without a credit rating would be irrespective of her history.

Rescue My Properties Programme is not able to improve, change or correct the credit rating of their clients. A person can just as easily lose their credit rating within months of defaulting on their payments irrespective of the history of their payments and can just as easily amend their credit rating by paying promptly afterwards.

Equally so, clients are still finding raising finance difficult, because the lenders aren’t interested in lending. Credit rating in this market has already been lost by clients due to no fault of their own. The credit rating agencies have re-written the rules of their scoring, where unlike previously just secured borrowing was taken into account, now unsecured borrowing is also calculated. Consequently a person with properties is now seen as high risk.  The net result is that you are probably scoring badly already – and for this purpose we strongly recommend you check your credit rating (i.e. with Experian or Equifax) report and check your credit rating if you have doubts on this issue.

How comprehensive is the Rescue My Properties programme in terms of the solutions it provides for property related problems?

The Rescue My Properties Programme is a turnkey solution for every aspect of property related problems.

We aim to help people through the emotional trauma of debt; through to relieving them from the burdens of running their properties, to negotiating with the lenders to dispose of their assets and potentially to remove clients debts. Between each phase the application of the solutions may vary but every possible scenario has a credible answer with Rescue My Properties.

What is the DRP61?

DRP61 is an in-house programme as part of Rescue My Properties that facilitates a solution for debt removal. This is not limited to mortgage debt and may extend to credit cards, loans and overdrafts.

Do you have any case studies? What is your track record?

We have case studies which are growing week on week. We have dealt with property clients with buy to let property and residential property ranging from one residential property looking for a solution to a client owning 46 units with an approximate value of £110 million.

I know of people suffering with their property issues, what do I do?

Anyone who may be suffering needs immediate help and support. If the person in question hesitates in coming to see a professional company then the best you can do is console them and give them some sincere advice.  Once an individual accepts they need help, it would be advisable to direct them to us. 

What are the common problems you encounter with your clients with property problems?

Accurate and complete information is important – Upon the transference of information to us, important items are sometimes omitted which therefore make managing the clients’ case difficult. We do ask in the initial engagement letter that all disclosures are made and failure to provide correct information could have an impact on how we perform.

I have creditors chasing me trying to make me bankrupt.  Do you deal with managing creditors?

We have in-house consultants that deal with complex creditor situations and also work alongside top insolvency practitioners and law firms. Each case can be very different in nature. Hence, it will be imperative to meet one of our consultants to give them as much detail as possible before we can advise you on the best way forward.

What level of confidence do I have that my information will not be disclosed to anyone?

All our clients are signed up to Non-Disclosure Agreement (NDA) and we hold all their information in confidence.

My properties are fairly highly geared and in positive cash-flow, does your Rescue My Properties solution allow me to come out with my properties intact?

Historically we have not encountered anyone in such a situation.

The nature of the Rescue My Properties and the type of clients coming to us are those in distress, therefore it is very rare that any individual properties are worth keeping. However, as we have to judge on a case-by-case basis, we will attempt to retain any assets that are worth salvaging.

In most cases clients are not sitting on good Loan To Value (LTV) properties, hence there is no real equity release on disposal.

We create a solution by negotiating with the lenders as this is the only avenue where negative equity can be turned in to a potential windfall. But, this only works in cases of disposal.

I have already lost half of my properties. I have issues with bailiffs, council tax, credit cards and loans, mortgage arrears and overdrafts.  Does the Rescue My Properties help me in these areas? Is it too late to help me?

It is never too late as you will see. The Rescue My Properties programme is a comprehensive turnkey solution with answers to almost every problem within the property market. We can still help you with the problems you are facing. Sometimes simple things like helping to reduce the stresses and strains allow people to create clarity on how to deal with the lenders. The rule of thumb is that the earlier you come to us the higher the probability of reducing your stress, removing your debts and negotiating with the lenders.

How do I know that you won’t run off with all my distressed properties?

In this market properties have little or no equity. To compound matters there is limited availability of credible buyers. The majority of portfolios that are at an LTV of 70-90% will lose all if any equity at the time of sale.

Hence, there is no financial reason for anyone to run off with your properties. In fact it is the opposite; we are the leading solution provider for property.

Where does Rescue My Properties make its profits?  What is in it for you?

Rescue My Properties programme makes its fees by:

  • Charging upfront fees per property for full consultation services where agreed or Fees against the programme where agreed
  • Fixed fees for stopping repossession
  • Asset Appraisal to analyse where your portfolio could have problems either now or in the future
  • The reduction of monthly charges for properties
  • Cost reduction in general
  • Finder’s fee from potential investors on disposal
  • Investor finance
  • Yield return from investors money
  • Commissions on debt removal

What is it that you can do for my distressed property that my accountant or solicitor can’t do?

We are business consultants hence, we have multiple disciplinary expertise in different areas to provide broader skills than an accountant or solicitor can provide. We have developed this unique and specific solution to the property market for over 3 years.  With our affiliate organisatons eg. www.Immediatebankclaims.co.uk, www.mc-4u.com, we can provide:

  • Immediately stopping repossessions
  • Negotiating with lenders
  • Write-off mortgage debt
  • Restructuring debt
  • Asset consolidation e.g. IVA/Bankruptcy/CVA

Do you have unsatisfied customers?  Can I speak to your customers?

All our clients have signed Non-Disclosure Agreement (NDA’s) with us and their information is confidential. Although it is not uncommon for people to have differing opinions, we can confirm that at no point have we ever had any issues of malpractice.

If you want to contact one our customers we will ask some of them if they would like to speak to you for your reference but not insist. Many of our clients, because of distressed property issues, have suffered a major setback in their life, i.e. with tenants chasing for unprotected deposits, relocating homes to create a new life, relationship issues with their spouses and therefore, may not wish to give disclosure in a public forum.

Do you deal with IVA and bankruptcy/insolvency issues?

Through our service the option of bankruptcy and IVA can be discussed.

 

Extreme Optimism over balanced pragmatism  

(Client Fact-find)

 

Below are the remarks made by distressed landlords who find the increase in interest rates a difficult scenario to accept.

The property market will recover!!

Clients may sometimes provide sketchy information and presenting it to us to be fact in order to justify a means to holding on to their property portfolios. We do not discourage such an approach and leave the door open for them to come back as and when they discover the truth.

What if interest rates stay low for the next few quarters?

This situation is wonderful for clients with negative equity and low interest repayments because it allows the majority of property owners to enjoy day to day cash-flow. The unanswered question is what happens when interest rates do go up. Very few people have been able to answer this question realising that unless they do not accrue the positive cash flow to off-set the interest rate increase then they will effectively end up paying out of their own pockets.

So the real question is do you delay the inevitable or do you take action now.  Low interest rates will not guarantee capital growth. In simple terms you will become a slave to your mortgages and whether in the short-term there is positive cash flow it does not mean that money is yours to have, rather it is yours to save and keep for when the interest rates increase.

On average our calculations prove that the money you have accrued during the low interest rate period may only take you through 9-12 months during the interest rate hike; after this period any shortfalls in interest payments will become your liability.

Assuming that you have been able to service 12 months of your interest payments after interest rates go up what will happen next? We have yet to meet a client that has cash-flow reserves to throw into this problem.

Those clients who have cash reserves have come to the understanding that the cash in their hand will probably be worth more to them at a later stage.  Where they will be able to purchase properties at a realistic price with good yields (worst case scenario 40% deposit for a Buy-to-let)

Many clients that have come to us had been purchasing their properties on capital growth formulae and are content with positive cash flows.

Compounding this problem is the reduced rental values in the public sector which will invariably impact the private sector and drive down yields.

In the last 30 years, on average, interest rates have been much higher than in the last 10 years, going up as high 15%.  During the financial crisis of the early 90s interest rates were well above 10% for more than three years. For example between July 1988 and September 1991 interest rates remained above 10%. (Source: Bank of England)

I am making positive cash flow, do I need the Rescue My Properties?

Positive cash flow is a short term solution. Having the title of a property which is losing value every day and the potential for interest rate increases does not allow for a clear strategy to hold on to a property.

What will happen if I don’t do anything? What could be the implication?

You are sitting on a major catastrophe. Hence, planning or being clear about your issues is important. The following need to be addressed:

  • Your health
  • Stress and relationships
  • Impact on personal home/finances
  • Cash flow for business
  • Dealing with creditors e.g. credit cards, mortgages, overdrafts, loans, car finance, council tax, bailiffs, relentless phone calls from debt collectors, LPA receivers, repossession etc.
  • Freedom from perpetual debt i.e. even if you give your keys into the lender the financial liabilities are still yours
  • Consider how to remove these liabilities from your life

How does the Rescue My Properties deal with the Landlord and Property Act (LPA)/receivership?

Rescue My Properties  has dealt with over 5000 properties facing arrears or disposal.  Hence, we can safely say we have seen every scenario the LPA Act is applied to.

Rescue My Properties experience has shown that the LPA act is wrongly implemented when dealing with Landlord’s rights and tenant’s rights.

There are many inconsistencies in how the LPA is presently being implemented. As a result of these inconsistencies both landlords and tenants can face serious hardship.  www.immediatebankclaims.co.uk our affiliate organisation has launched a group action to provide accountability for the banks actions.

I have 10 properties. Is it worth holding on to my properties for the short-term with the uncertainty of events?  My portfolio is just about breaking even every month and has little equity and is being eroded by the day.  How do I get out of all the liability I have taken on without it taking me under with it?

These are the points you need to reflect on:

  • We haven’t had a client with properties that have had sufficient equity worth selling – most or all properties are highly leveraged. It is correct to assume that any equity available is being eroded by the day as the property market is further declining.
  • This is the question for you to answer: if the property has little or no equity why would you continue managing something with no gains. Are you happy to be a slave to the property?
  • Lowered interest rates do prolong the inevitable – they do not treat the cause.
  • In most cases where disposal takes place in the market a shrewd buyer will be looking for a forced sale price or a below market value price which diminishes any equity available.
  • Rarely do we find a demand vs. supply issue where a CHANCE BUYER is willing to pay the asking price for the property and in this case you are set to make a windfall.
  • You are chased for all the redemptions and short falls that properties in negative equity attract.

There is no solution to the problem; merely a withdrawal from all the problems that will slowly and gradually become worse and worse. That is why earlier decisions are better because they put you in a position of strength with regards to the creditors.

Some of my properties are fantastic and the others are completely useless.  What do I do? 

We will need to understand how you define ‘fantastic’. Any property that is higher than 50% LTV of today’s value would be regarded as manageable, but clearly not fantastic. The reason for this assumption is that we are in a declining market which means 50% of today’s value could end up being 70% LTV within a year from now.

Normally most portfolios are joined in one way or another and therefore the problem is holistic. There may definitely be units you could hold on for longer but they will all fall into the same predicament one way or another. The difference is timing.  So we address everything from the now and say if a property can be disposed off earlier with some equity. We operate with pragmatism and practicality on behalf of the client.

The example we give of a fantastic unit at 50% LTV if this be the best scenario? Then give a thought to the following points:

  • When is the fixed rate due to expire?
  • What if the employment market worsens?
  • What if the property values fall further?
  • How much money are you making from it?

Having a low LTV can be misleading as it doesn’t necessarily confirm that you can service the debt or whether you will able to raise any finance. In certain cases we have encountered properties that are very difficult to sell and therefore the LTV means nothing. There is one argument that can be presented and that is, a long term hold if the rental value can suffice the interest payments once the interest rates go up. Are you prepared to top up the difference that the interest payments will make?  And for how long?

Some questions we have been asked – by Rescue My Properties phases

Please refer to the Introduction to Rescue My Properties booklet to understand the process customers go through when working with our Rescue My Properties consultants

Phase 1 – Client Fact-find – Create clarity within the Individual (half hour free consultation with a Rescue Associate Consultant (RAC) )

I feel a bit confused by so many things you do.  What is it that you can do to help get clarity?  How do I get out of the mess I am in?

Rescue My Properties can help to deal with any suffering by referring the client to Phase 1 of our Programme (Well being Programme) after a free face to face meeting for a fact find. This will help us to establish ‘where you are’ and ‘your issues’ both on a personal and financial note.

The Rescue My Properties Well Being Programme is designed to cater for the human fallout that the financial crisis has created.

Rescue My Properties have the ability to negotiate and write-off your negative equity debts.  In addition, our Immediate Bank Claims organisation can help stop repossession in 24 hours as well as pursue banks for damages if you have already lost your properties to the banks from any oppressive or aggressive action they have taken.

Is there anybody else suffering?  Can you help me ensure that the important things are saved?

You will be surprised to learn how many other people are in your predicament. What Management Consultants For You regard as important are your health and your relationships and therefore if these are intact it will be an achievement. 

I worked so hard, how do I let go?

We empathise with your sense of loss, and have compassion for what ultimately became an illusion through no fault of your own. Hence, the most important point is to realise the tough reality that the illusion was an illusion.  The common characteristic we find in most clients are denial. Once you accept the inevitable then it becomes easier to let go.

Phase 2 – Detailed Assessment – Collect financial information from client: property portfolio and personal income and expenses, confidentiality agreement, basic financial picture, detailed financial audit sheet and portfolio actual sheets. Subject to additional contracts you can take out, Management Consultants For You can organise:

  • A full appraisal of your portfolio
  • OR a consolidation of your portfolio

I am reluctant to give you all my personal information.

It is very important that all true and clear information be given on the on-set in order for us to provide the solution. Failure to disclose all the facts after signing an NDA (confidentiality agreement) will jeopardise your position and not be conducive to this programme working. 

Phase 3 – Formalising our Relationship – Head Office agrees contract for services and fees to include the handover of important documents for Rescue My Properties (Letter of Authority, Power of Attorney, Rescue My Properties contract, letters of transfer agent, tenancy information, bank accounts).  After your initial consultation with the RAC your formalisation of the relationship will be between Head Office and yourselves by way of agreement and contract.

Can’t I do the Rescue My Properties Programme myself for myself? 

Yes you may attempt to run the programme yourself, but the properties have been in your ownership and yet you have found yourself at this crossroad. It is natural to assume you have found it difficult to manage yourself and therefore our support and services are required. Rescue My Properties have 8 years of history in dealing with complex property portfolio problems, this experience allow us provide valuable help in creating clarity in their personal and business lives.

What will happen with my rentals?

We are aware that many of our clients have left their businesses or 9 to 5 jobs and have become totally dependent on the income streams generated from their property portfolios. Our methodology involves only the first month of all collections of rentals coming to the Rescue My Properties programme, whereby we need to reconcile and confirm all the information provided. Thereafter, every month 80% of your rental income is paid out to you without the stresses and strains of the management of your property portfolio and disposal.

Please note that as your property portfolio diminishes via disposals, legals, LPA or any other controls – this will affect the rental incomes – this will be accounted for per month.

How do I pay my fees for your services?

If you have the finances for your fees then it is £750.00 + Vat per property.  Historically all our clients have preferred to hold on to their cash due to the uncertainty of their future life and have taken the option for us to recover our consultancy fee cost from Rescue My Properties. We neither discourage nor encourage either option, but are sensitive to our client’s day-to-day needs.

Phase 4 – Reconciliation – Completing property audit sheets to help compile a clear picture of the monthly rentals, tenant details and lender payments

 What happens at Phase 4?

Rescue My Properties staff reconcile all information provided by client with the actual information to get complete clarity over the financial position of the client.

Phase 5 – Operational Transfer – Taking control of day to day running of the property portfolio with a mind to reconciling the information received in phase 4

How do you take over any running of the operations of my properties?

We normally take over the running of a property portfolio within 7 days of you signing up to our contract for services by using our network of agents on the ground.

What happens with my present agents?

The normal protocols followed by agents in transferring to new agents.

I have 357 properties.  Do you have the resources to deal with level of workload with Rescue My Properties staff?

We have dealt with over 5000 properties. We can easily scale up to 10,000 properties as we have 200 lettings agents working with us around the UK who are part of our operational delivery team to provide you a seamless service.

Phase 6 – Quarterly Progress – Conducting regular reviews of Rescue My Properties progress

Who conducts the quarterly updates for my portfolio?

The Rescue My Properties accounts department will run, manage and monitor all the finances for your portfolio and will conduct the quarterly update.

Phase 7 – Negotiations – Rescue My Properties unique formulae in dealing with prime lenders

What is that the Rescue My Properties can do with the lenders that I cannot do myself?

Rescue My Properties works with a legal affiliate organisation called www.immediatebankclaims.co.uk that specialises in dealing with multiple portfolios and know the criteria of lenders when negotiating on behalf of clients. They are also able to negotiate more favourable terms as they are dealing with multiple portfolios; hence the lenders have a great deal more to lose if a reasonable outcome is not agreed.

 

Debt Removal Programme

Frequently Asked Questions – DRP61

 

 

DRP61 – Debt Management – Runs concurrently from phase 3 to phase 8 

 Phase 8 – Debt Removal – Rescue My Properties Acquisition process & Disposal process as well as Credit Repair

 Do you guarantee success in debt removal? 

 There are no guarantees in debt removal. Each case is treated individually and lenders criteria for negotiating debt removal vary.

Can I benefit financially from the sale of my properties once I have signed up with you?

 Yes you can. We have a simple formula for ensuring that you benefit from any sale of your property providing a finder’s fee is paid.

In case of equity being released from the property, if the equity released is higher than the finder’s fee then the client is entitled to keep all the equity, but not entitled to the finder’s fee, or as agreed from time to time.

How do you define a soft landing?

 A soft landing is removing you from the day-to-day pressures of your property problems. Thus, allowing you the comfort of the cash that you presently earn from your properties and assisting you in dealing with the lenders.

You will have a support team of dedicated professionals helping you through every phase and ensure a soft landing rather than be in a position where you are on your own.