Diary Of Mike - Member of the old housemouseuk discussion forum

Brief CV

Mike is a full-time property investor and dealer operating in an inner London suburb. His property experience dates back to letting bedsits in his own home in the 1980s. The real growth in the scale of his activities came from the mid-1990s when he rapidly built up his rental portfolio. He left his (unrelated) job at the end of 1999 to concentrate full-time on property investment and dealing

Monday 4 March

Coming under a lot of pressure from Brian the agent to complete on the purchase of Toucan Court. Still waiting for the Freeholder's "Licence to Assign". Brian says that buyers often complete and wait for the Licence to follow. Adrian my solicitor says that, without the Licence, he cannot complete the purchase with a mortgage and he would strongly advise against completing the purchase for cash. Adrian is not a hidebound paper-shuffler, but a businesslike solicitor who works for several developers, dealers and investors. The problem is that the contract was based on the Licence being available by 25 February, and either party can now walk away without penalty. It's a good deal - I don't want the seller to walk away! Discuss the situation fully with Richard my joint-venture on this project. We decide to run the risk of the seller withdrawing,

Complete on the sale of Letchworth Court at last. The Charlton Building Society has not yet told Adrian the redemption figure for the mortgage on Letchworth Court, so he has to hang onto the full proceeds of sale on client account - he can't give me the equity. Irritating. The whole sale has been irritating - the buyer's solicitor strung things out for a week just before exchange of contracts with misleading excuses, until I threatened to withdraw the contract. It turned out that a condition of the buyer's mortgage was that she needed to arrange life insurance. Why on earth couldn't the mortgage company have made that clear early on? Or perhaps they did, and the buyer just forgot to action it? It would have been better for the solicitor to be honest. Foot-dragging suggests something to hide, such as the buyer having found something else and trying to hold the first one 'in reserve'.

Tuesday 5 March

Brian has spent a lot of time pushing forward the Licence to Assign. All agents spend a lot of time on the phone chasing up solicitors, but Brian will get off his backside to act as a courier of papers and people if that's what's needed to clinch a deal. That is the sort of agent that you want to deal with.

Take a call from Paul, my 'second-string' mortgage broker. He is more orientated towards commercial finance, and I left a message for him last week to ask whether he could arrange a larger line of dealing credit than my bank has given me. He can of course - that's his job, and he's good at it. But, I ask him, will my bank be miffed? Or will they see it as healthy competition, and be a little bit more obliging at the next annual review of my facility with them? I'm a bit wary about rocking the boat, and Paul agrees. He says that, if I have a good relationship with the bank (and I do) then I should nurture it and not go elsewhere as well. I thank him for his advice and ring off, leaving him commission-less on this occasion. But, like anyone who's any good, he's up to his eyeballs with his other clients, and he knows I'll be back one day soon with some business for him.

Wednesday 6 March

Finally complete on the purchase of Toucan Court, for cash at this stage. There is a mortgage offer from the bank, but the paperwork hasn't yet been completed.

Go round with Richard my joint-venturer to plan the renovation. Living room and open-plan kitchen have been well cleaned, don't look too bad though tired and dated. We're thinking that, in the current firm market, we might sell on this flat for a quick modest profit without doing any renovation work. Open the bathroom door to be knocked back by a really foul sewer-strength stench. Perhaps the S-bends have dried out; flush the loo, run the taps, in between taking gulps of fresh air out of the living room window (the bathroom has no external windows).

Phone Brian the agent to come round. While we're waiting, play 'hunt the meter' - no gas in this block, but an exhaustive search fails to reveal the electricity meter in the flat or anywhere on the communal landing. Make a mental note to ask Brian to phone the previous owner to ask where the meter is.

Brian arrives, he's bemused by the bathroom problem. But the smell seems to be abating, so we open all the windows in the flat and discuss the resale. Agree that Brian can have a week to get an offer of £115K as it is, otherwise we will refurbish at a cost of £5-6K for an easy resale at £125K. Forget to ask Brian about the electricity meter.

Thursday 7 March

The Charlton has still not told Adrian the redemption figure on Letchworth Court, which was sold on Monday. This is now a real problem, because I need the equity towards the three purchase completions due tomorrow.

I also need the bank's mortgage money on Toucan Court, which was purchased for cash yesterday. Phone Adrian my solicitor; the bank's papers arrived with him this morning. Go to collect them; then home for my wife Susan to sign them as well - she is the Company Secretary - then return to Adrian. Normally the documents have to go back to the bank's central processing office 200 miles away. But my branch will short-circuit all that when needed, so I phone Paul the Chief Clerk at my branch to explain the situation and ask for the cash tomorrow. He'll see what he can do. Make a mental note to reinstate Paul on the Christmas bottle list. I was a bit hard-nosed last year, and took off everyone who was basically doing no more than the job they were paid to do. It sure slimmed the list down!

In between all this, fax the Charlton twice and telephone them. Extract a commitment to send out a Redemption Statement on Letchworth Court today without fail. This comes from a faceless but genuine-sounding voice on the phone. Ask his name - he gives his first name. The friendly modern first-name style of doing things. And of hiding when things go wrong. "And your surname please?" He gives it. Not that it will do any good if he doesn't deliver. From top to bottom there, they couldn't care less.

Worse to come. Later in the day Adrian the solicitor rings. The Charlton will not be sending any money for the purchase of Daubney Court tomorrow because they have not received my mortgage acceptance back. What!? How did this slip through the net? Turns out to be a classic case of everyone thinking that someone else is pushing it forward. The Charlton's original Offer Letter said that a personal guarantee is required. This was wrong (as it always is). In fact, the terms of that mortgage product only require a guarantee on the excess over 65%. Bruce the mortgage broker had asked them to issue an amended Offer Letter (as he has to do with all of them), they hadn't done it, and no-one had followed up. Ouch! Should I approach Quickloan Enterprises, the quick-finance specialists? I have dealt with them before. But 24 hours is a very tight timescale indeed. No, one of the sellers might just have to wait, even if it means me being served with Notice To Complete and a claim for interest and consequential losses.

Friday 8 March

Drop in on Adrian the solicitor at 7.30am to return various documents. The Bank sent the cash for Toucan Court yesterday - good, a brownie point for them, they can act quickly when there's the need.

Charlton faxed through the redemption statement for Letchworth Court last thing yesterday, so a slug of cash is released there. Even better. This means that I just have enough to complete all three purchases due today if I dig deep into my overdraft facility. Well, that's what it's there for. At least on this occasion I won't have to waste time at the bank drawing down cash on my collection of credit cards.

Chat to Adrian for half an hour. You pick up interesting little snippets by keeping in touch with people in all the trades and professions related to property.

Fax instructions to the bank to make a same-day transfer to Adrian.

Brian the agent phones mid-afternoon with an offer of £107,500 on Toucan Court. This is well below the target of £115K set last Wednesday, but the offer is from a cash buyer who he's dealt with several times before. He owns several in the block already and will exchange contracts in 2 weeks. No-nonsense buyers like that are few and far between. And a quick sale frees up the equity in the flat for the next deal. Agree with Richard my joint-venturer that we will drop to £110K for this buyer. Do we tell Brian straight off, or try negotiating down from £115K? Decide to declare our bottom line of £110K in recognition of the strong status of the buyer. Phone Brian to tell him. Half an hour later he's back - Mr Cash Buyer will go to £108,500 and no more and is 'going to be away next week so we need to zip it up now'. I've heard that one before! Tell Brian that £110K was the absolute bottom line. Looks as if we don't have a deal there. I'm not going to lose any sleep over it.

Saturday 9 March

Drop my son off for his weekly hour-and-a-half music rehearsal, then drive to IKEA and buy a dozen self-assembly dining chairs. Just time to pop into B&Q for a new drill before collecting my son. Spot the model that Gary the builder lent me - top-of-the-range and pricey, but I was very impressed how it drilled holes in concrete lintels like a knife through butter. I haven't had a new drill for more than a decade. Remind myself that I saved more than a grand recently when completing the purchase of Bishops Court - it is in one of the 'deprived wards' where there is now no Stamp Duty on purchases up to £150K. Buy the drill. PM Drive over to my self-storage room and unload the chairs.

Sunday 10 March

Mother's day. Phone my Mum - she got my card. Hear that her friend Maud has been admitted to hospital, unlikely to return home. Mum, Maud and a handful of others in the block are old-style Regulated Tenants on 'fair rents'. I have an idea: perhaps fax the company that owns the flats to express my interest in buying Maud's flat (subject to Maud's Regulated Tenancy), ask them what price they'd want, pick it up at a discount, then I'll have vacant possession soon.. On reflection, best not to mix business and family-related matters. And the company that owns the flat would doubtless smell a rat, so it would come to nothing anyway.

Monday 11 March

Went with Gary the builder to see last Friday's three purchases. These will all be let, once refurbished.

I had already earmarked Bishops Court as my 'guinea pig' to install electric heating. I've got fed up with gas Combi boilers going wrong. Every different make of boiler needs a specialist gas fitter to repair it. It's hard for the letting agent to track down these specialist fitters and when they do, they're booked solid for days ahead. Tenants end up cold and unwashed then want compensation. I've had that three times over the last winter.

Daubney Court I bought unseen on the say-so of Richard my joint-venturer, knowing it would be just like the other one I bought in the block last year. Will do the same refurb job. No central heating, so I suppose this should become all-electric as well. Daubney Court will look a lot better in a couple of years when new railings and entryphones have been put in.

33 Lanlyne Court I also bought unseen. Condiss Endin, the agents, included this flat in their weekly newspaper advert last autumn. I'd never dealt with them before and when I phoned, I was smugly told that they confidently expected offers well above the level I had in mind. I just asked them to note my interest on their file. When the seller saw sense on price a month ago, Condiss Endin didn't come back to me. The seller appointed a second agent - Brian at Toprank, who phoned me straight away (he knew that I already owned No. 11 in the block). I exchanged contracts on No. 33 in 24 hours, and now here I am hoping to squeeze another bedroom out of it. I can't quite see how, but Gary can - take space off the master bedroom for a small kitchen, with a new doorway from the hall. The old kitchen can be released to become a single bedroom. Yes, it will work. Today's young graduate sharers are perfectly happy with a small kitchen - they tend to eat out, take away or microwave a packet. Again no central heating.

Why do purchase completions always end up bunching together? A bit like the buses, nothing for ages then three come along at once! On reflection, this 'bunching' does give valuable experience of managing multiple jobs and means you're forced to concentrate attention on what's important in the refurb, rather than fretting about trivia.

Will need to really bone up on electric heating. Don't want a lot of tenant hassle in months to come, if I get three flats wrong.

Tuesday 12 March

Nick phones from Hardgoing Agents. Miss First-Time-Buyer has increased her offer on Meadow Court to £130K. Ask Nick what solicitor and lender she'll be using - he doesn't know. Unimpressive! Patiently explain to him that using a family solicitor who works 10 till 4 in a sleepy country town is a recipe for delay and hassle. And I want to check with Steve, my mortgage broker, that her intended lender will indeed lend 95% on this sort of property. Nick will quiz Miss F-T-B.
Write to notify the gas, electricity and water companies, and local authorities (for Council Tax) about four purchases and two sales within the last week or so. Easy to get into a muddle with the different local authorities, and the gas board selling electricity and vice versa. In the post is another demand from London Electricity - this time a 'closing account' for 11 Lanlyne Court, still very much on the books and being furnished for letting. Egg on my face with this one. Turns out that I told them I'd sold it, not purchased it. Wrote to put them straight. At least they haven't sent me a bill for £1,700 like British Gas did for this flat - and they took the gas meter away without me knowing, so their final reading can't now be checked.

On Friday I complete my purchase of another flat in Lanlyne Court - No. 22. The bank has offered finance, but I can't recall signing their mortgage deed. Find that I haven't. My fault - I hadn't told the bank when completion was due. Will have to ask them yet again to pull the rabbit out of the hat and bypass their usual procedures. I seem to be making rather a habit of it, I mustn't exhaust my goodwill with the bank.

Wednesday 13 March

Have half the money in the bank for Friday's purchase of 22 Lanlyne Court, I need the rest of the money from somewhere. Call Brian at Toprank Agents to see if the seller is in a chain. If he is, I must get the money; if not, a 75% probability is good enough - I'll just be hit for interest for the delay, not a tide of claims up the chain for hotel bills and furniture storage. Brian not there, leave a message for him.

Then ring the bank to see whether they can deliver the cash by Friday. Paul the Chief Clerk is away today, I speak to Neil who promises to have a word with David the branch manager and get back to me.

Perhaps the Charlton can deliver the money I still await on Daubney Court, completed last Friday. And if all else fails, I'll speak to the quick-money specialists, Quickloan Enterprises. I'm a previous customer of theirs, and they should be able to get the money to me in 48 hours from start to finish. They're not cheap, but I can live with that as long as they deliver. I never mind paying a premium price for a premium service, but I resent paying for poor service.

Half an hour later, David the bank manager phones back. He is up to his eyeballs and can't really spare the time to do the paperwork that is the job of Paul the Chief Clerk- but he is willing to advance the money on Friday without having the signed mortgage deed back in my solicitor's hands. Now that's what I call service! Obviously, my solicitor will need to "undertake to hold the deeds to the order of the bank" - jargon for not letting me get my hands on the deeds to use as security elsewhere. Thank David profusely - and mean it!

Thursday 14 March

Call Nick at Hardgoing Agents. What's happened on Meadow Court since we spoke on Tuesday? It turns out that Miss First-Time-Buyer wanted to have another look at it yesterday (so why was she making an offer the day before?), she will use a London solicitor, is 'very keen' (aren't they all - talk is cheap!) and will appl to the Allkingdom Building Society, 'who will definitely lend 95%'. I don't feel much enthusiasm - Miss FTB is a weak buyer because she needs a 95% mortgage. Tell Nick I'll come back to him later today.

Later, I fax Nick to say that I'll agree to have a contract sent out to Miss First-Time-Buyer's solicitors as long as her mortgage survey is done within a fortnight and she exchanges contracts within five weeks. Also, no price reduction if the surveyor downvalues the property for mortgage purposes, and I want Hardgoing to go on showing the property.

I've sold enough property to know that the agent won't bother to go on showing it, if he can get away with it. So I say in the fax that if Miss F-T-B falls away and Hardgoing haven't got a reserve buyer lined up to take over, then I'll want to consider appointing another agent along with them. That should give Hardgoing an incentive not to let it slide!

Past experience shows that you have to get clear agreement on timescales right up front when you're selling a property. Otherwise, you end up tangled in a web of moral commitment, feeling frustrated and angry while the buyer runs rings round you. The buyer insists that he's still 'very keen' and that it's all the fault of an iffy mortgage broker 'who came well recommended' or a slow solicitors 'who I've been chasing every day' or delays on the sale of their own property (never their fault, of course!). The agent tends to take the buyer's side, trying to hold the deal (and his commission) together, hoping against hope that it will all go through and that he won't have to start showing the property all over again or lose the instruction to another agent.

When you're selling, you want a signature on a contract, not a lot of hot air. In exchange, you stick to your side of the deal - no gazumping as long as the buyer meets the originally agreed timescales, and a 'last chance' 48 hours notice of withdrawing the contract if they don't.

Friday 15 March

Call Richard my joint-venturer. The sale of the studio flat in Peshawar Court is dragging on at a snail's pace. This one has been a bit of a dog - it has been hanging around for months. Studios can be hard to shift unless the market is firm. Tony, the boss at Hardgoing Agents, told us a week ago yesterday that the buyer's solicitor 'just needed to apply for a Water Board search, expected back in two days, then ready to exchange'. Now I find out, six working days later, that the solicitor has only just posted the contract to the buyer! As always, estate agents tell you what you want to hear. They see their job as having to humour buyers and sellers while sluggish, hidebound solicitors waste time by insisting on posting the contract to their client for signature rather than accepting the client's faxed authority to sign on their behalf. Agree to get Adrian the solicitor to fax the standard 'get a move on or else' letter: 'our client considers that there has been ample time to exchange contracts and now requires exchange within two working days after which he may withdraw the contract without further notice'. The time is right to send this letter: its receipt should trigger a twinge of guilt at slow progress and create the impetus to get contracts exchanged. If the letter is sent too early, it's just ignored or creates resentment.

On the way home, bump into Vince, a negotiator at Solidly Competent Agents. Chatted about the current state of the market and who's doing what locally. A bright spark, he will be a branch manager in a couple of years. It's worth getting to know promising agents early in their careers. So many run-of-the-mill agents have a 'sell, sell, sell' mentality, as if they're selling fitted kitchens or double-glazing. You tell them a hundred times that you only want to hear about property that matches your requirements (especially when it's keenly priced for a quick sale!) but still they ring up every time they get a new instruction 'in case you might be interested'. It took me years to learn that it's a case of 'none so deaf as those who won't hear' - it's a waste of time trying to get your message across to that type of agent.

Monday 18 March

Adrian the solicitor rings. The buyer of Peshawar Court is at her solicitor's office even as we speak. There is just a small point about the bill for external painting of the block - did I agree to pay half of this flat's contribution to the bill? Yes, I did. A last-minute flurry follows between the solicitors to reflect that in the contract, then Adrian phones back to say that contracts have been exchanged.
What would have happened if Adrian hadn't sent the 'kick up the backside' letter last Friday? The buyer's copy of the contract would probably still be sitting under her tea-caddy at home, with her intending to look at it tomorrow evening 'when she has a bit more time'. Then posted back on Wednesday (if you're lucky) to arrive back with her solicitor a couple of days later, then to sit in the solicitor's in-tray for a day or two - we're into next week by now. The small last-minute point, which was nailed on the spot today, would no doubt have triggered another round of correspondence between the solicitors, effortlessly carrying the whole transaction on into the week after next, still with no exchange of contracts.

Tuesday 19 March

Richard my joint-venturer phones. Brian from Toprank Agents has been on the phone to him, trying to tie our sale of Toucan Court. Last Friday week (8 March) our minimum was £110,000; Brian's applicant (who has now returned from holiday) was then offering £108,500. Can we move?

We chew it over thoroughly. The offer is from a strong buyer. We could certainly get more than £108,500, but the buyer would almost certainly be weaker. We have a weak buyer on the go already for Meadow Court (last Thursday), and we don't want too many weak buyers - they tend to frazzle nerves and exhaust patience! So, we'll accept a bit less.

Just one problem - on 8 March, we were adamant with Brian that £110,000 was our bottom line. Won't we lose credibility with Brian if we drop now? The answer is simple and elegant. Richard will tell Brian that the £110,000 bottom line was on the basis of the buyer wanting to wait for the freeholder's Licence to Assign before completing, just as we did when we bought. We'll drop £1,000 on our sale as long as the buyer will complete without waiting for the Licence. After all, the Licence doesn't matter, does it? - Brian told us so himself last Monday 4 March, when we were buying!

Wednesday 20 March

Threatening letter from British Gas - they're going to Court if I don't pay the £1,700 they say I owe at 11 Lanlyne Court. Fire back a letter headed 'Notice of Intention to Defend Court Proceedings' (marked with yellow highlighter), and 'Recorded Delivery' (which makes the clerk at the other end think twice before 'losing' a difficult-to-deal-with letter). I enclose a copy of my month-old letter to them, which said it wouldn't have been physically possible to use that quantity of gas and could they check their source records for the meter reading, surely it was a transcription error. (I can't check the reading because they took away the meter). I also enclose a copy of their standard sweet-as-treacle standard reply to my earlier letter 'Your letter is important to us, we will let you have a reply within ten days', pointing out that the 10 day period is well expired and when do they expect to reply?

The sale of Toucan Court is tied for £109,000. Our property is going off the books quite briskly at the moment, reflecting the buoyant midrange market in the London suburbs. Chat with Richard my joint-venturer about firming up some of our other contacts to get more deals, hopefully including some with a bit more meat on the bone. One thing about the property business is that it's easy to start thinking that other people are getting all the plums, that you could have bought cheaper and sold for more money and/or more quickly. Of course, you tend to hear about other people's successes rather than their failures, and it's important to recognise what you're doing right yourself. Richard has been doing a bit of cold-calling lately. As a former agent himself, he speaks agents' language and knows how to get on the right wavelength with them. What fazes him is trying to get any sort of sense out of the gormless junior staff who should really be kept away from client-facing contact if agencies value their image! Some of them have absolutely no initiative at all, have no idea whether properties are still available, when they can be viewed, or when someone will be in the office who can answer questions intelligently. Still, "obstacles or stepping stones, it depends what way you look at them" - every potential purchaser who is put off by incompetent offhandedness is one less potential competitor when you do finally get some sense out of the agency.

Thursday 21 March

Phone Bruce the mortgage broker. What's happening with my three remortgage applications to the Charlton Building Society? The surveys were done several weeks ago, but I've not received offers or even acknowledgements. Bruce sets about the energy-sapping business of trying to get some sense out of the Charlton. He phones me back to say that the Charlton claims not to have received the surveys, so Bruce has spoken to the valuers, Mowsouts who are 'looking in to it'. Remortgages always seem to be a hassle, and to take ages. Well, I suppose the lenders aren't under the pressure of completion deadlines as they are for purchases. The Charlton's ongoing inefficiency irritates me, but their interest rates are keen, they have given me a large facility and they're not unduly fussy about ex-local authority property.

The Charlton do have their limits though. I was surprised and delighted last year when they offered me a mortgage on 11 Lanlyne Court, my first purchase in that reinforced-concrete block - I thought I would have to use the Bank's money, where my facility is a lot lower than it is at the Charlton. On the back of that success, I bought No. 22 Lanlyne Court, expecting the Charlton to play ball again, but this time they were spooked by the fact the block is concrete! It would have been nice if they'd told me that they weren't going to offer again - instead, they just kicked my application into touch, and it was left to Brian the mortgage broker to extract the reason. Why then had they lent on No. 11? "The valuer didn't notice that it was concrete." All very odd.

Friday 22 March

Look through my "Weekly Review" file - realise it's been nearly three weeks since I looked at it. Two things need attention.

First, seeking planning permission at Trowel Street. This has been a real saga. In 1999 I bought a house being converted into three flats, which had a side plot just big enough for a couple of flats to be erected. It took me ages to find an architect to make an approach to the local planning authority - as always, anyone who's any good is working flat-out for their existing clients. Things weren't made easier by the fact that it's in a different area of London from my main operations. Persistence paid off, and I was eventually introduced to Bill at Backwater Architects. Bill has had no joy with his informal approaches to the local Council. Is it worth applying for planning permission anyway? I decide that I will, and will then appeal when it's refused. It will be valuable experience. As a full-time property investor/dealer, small-scale development would be a natural extension of my present activities.

Second, my negligence claim against Telford's the letting agents. Their professional indemnity insurers have made me an offer, but it's not enough. I don't want the time, hassle and cost of a Court case - but neither do they! I had intended to try and squeeze a bit more out of the insurers, and I have already spent a lot of time composing an 'iron fist in a velvet glove' letter - quite a work of art, one of my better efforts. But on reviewing my file, I'm not now clear that my case for significantly more money is really strong enough to warrant the effort still necessary to finalise the letter. I decide to accept the insurers' offer. I won't get back all my losses that arose from Telford's incompetence, but that's life. I scrub the carefully crafted letter, and send a one-liner to the insurers accepting their offer. A weight off my mind; I've been very busy in recent weeks, look likely to remain so and I want my energy to be fully involved in what I'm doing now, not trawling over what went wrong in the past.

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