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REAL ESTATE - Frequently Asked Questions

- What is Bartercard Real Estate?
- How does investing using Bartercard Real Estate Work?
- What is Buy-To-Let and how does it work?
- What criteria does Bartercard Real Estate use to select properties to promote?
- Can I pay the deposit in Trade Pounds?
- How are the properties priced?
- How do I obtain finance?
- Will my lender recognise Trade Pounds?
- What are the benefits of investing my Trade Pounds in real estate?
- Can I pay some of the purchasing costs using Trade Pounds?
- I want to cash convert my Trade Pounds. Is real estate the answer?
- How do I find out about properties for sale through Bartercard?

What is Bartercard Real Estate?

Bartercard Real Estate is a wholly owned subsiderary of Bartercard UK. Promoting properties to members of BCUK on behalf of other BCUK members.

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How does investing using Bartercard Real Estate Work ?

Bartercard Real Estate gives you the opportunity to invest one Trade Pound as if it was a cash pound into investment property.

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Whatis Buy-To-Let?

Buy-To-Let (BTL) investment is a term used when investors purchase a property with the minimum amount deposit required (usually 15%) and finance the remainder with an 85%. The idea being you let the property out and your tennant repays your mortgage for you. Bartercard mirrors the Cash BTL marketplace allowing members to use Trade Pounds in place of Cash.

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What Criteria does Bartercard Real Estate use to select properties to promote?

Bartercard Real Estate look at the following qualifying criteria prior to promoting overseas properties:

Area of investment – Looking for suitable BTL areas that show good trends of appreciation such as London & Home Counties or show suppressed appreciation (below national average house price) such as Birmingham, Bristol, Cornwall, Devon etc.
Rental Income – It is important to have the correct rental income to cover your mortgage outgoing on whats known as 100% cover, this in most cases is a requirement from your mortgage lender.
Deposit contribution and Lending – The deposit contribution is determined by the availability of lending and the rental income, the maximum loan-to-value (LTV) in the UK at present for BTL is 85% of the value of the property this means that the minimum deposit required is 15%
‘Subject to Valuation’ – We have the agreement that if the property valuation doesn’t meet the market price the property will be sold at the valuation price.

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Can I pay the deposit in Trade Pounds ?

Yes. Bartercard Real Estate holds a client escrow account for all overseas investments where deposits can be held. Your solicitor in the UK that undertakes your conveyance will need to hold a client escrow account to run alongside their cash client account. The Deposit usually 15 – 30% in the UK is used as you as part payment at settlement. For example, say you were purchasing a £200,000 property with 15% Trade Pound deposit. T£30,000 (15 per cent deposit) is put into your solicitors client escrow account and will be held there and disbursed with the mortgage funds on completion by your solicitor

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How are properties priced?

All properties sold by BCRE are sold with the agreement of ‘Subject to Valuation’ with the vendor, so buyers can buy with the peace of mind of purchasing at the correct price. In the event the property valuation does not meet the market price set out by the vendor, the vendor will either reduce the price to the valuation price and maintain the Trade Pound deposit or withdraw from the sale and you would get your reservation and sourcing fees paid back.

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How do I obtain finance?

Finance is subject to status, there are no guarantees from Bartercard Real Estate that you will be guaranteed a loan. We recommend speaking with a registered Independent financial provider to find you the best interest rate and term that suits your budget. Your lender may require what is known as 100% rental cover this means that the rental income needs to be sufficient to cover the mortgage payments in some cases you can do what is known as income topup meaning you cover the difference between rental income and mortgage outgoing.
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Will my lender recognise Trade Pounds?

Your solicitor reports to your lender the nature in which your deposit is paid, essentially your trade pounds are treated as a cash deposit and are paid as your funds.

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What are the benefits of investing my Trade Pounds into Real Estate?

Members often forget the real cost of their Trade Pounds in real estate transactions. For example, your cost of a Trade pounds is 40 pence. If you purchase a property for £200,000 with a 15 % deposit. That is £170,000 in cash / mortgage & T£30,000.

The real cost of the Trade = £30,000 * 40p = £12, 000

Do you know the cost of your Trade pound? if not speak with your Trade Co-Cordinator for a review.
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Can I pay some of the purchasing expenses in Trade Pounds ?

If your solicitor is a member of Bartercard you may be able to pay their legal fees using your Bartercard, their fees are usually £650 - £1000 + vat. If your mortgage broker is a member of Bartercard you may be able to pay their arrangement fee and in some cases the valuation fee using your Bartercard.
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I want to cash convert my Trade Pounds. Is real estate the answer?

Members often cash convert their Trade Pounds as well as make a capital gain when they sell their investment on. However, Real Estate investments should always be viewed as a medium (5 – 7 years) or a Long (7 – 10) term investment.

Initial outlays such as stamp duty and other disbursements often make it hard to get your money back if you were to sell the next day!

It is also not recommended to sell ‘New Build’ properties when the developer is still selling onsite, would you buy something second hand if you could buy new for the same price?

Bartercard Real Estate promotes stock direct from developers in our membership. Developers do not appreciate buyers purchasing a property using trade pounds as a deposit at their cash price only to have them put back up for sale the next day on the cash market. For example. If a developer sells five houses in a 20 house development to Bartercard members and then five are then put back on the market at the same time as the developer is marketing the remaining houses, it can actually devalue the project depending on supply in the area.
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How do I find out about properties for sale through Bartercard?

Please click here to download our terms of reservation for UK Investment or uk.bartercard.com/uploads/File/Terms of Reservation Overseas 2008.pdfTerms of Reservation Overseas

By reviewing, signing and returning terms of reservation you will be aware of your obligations and will also be entered into our email distribution list and notified of all new UK investment opportunities.

We currently have over 250 members registered to receive information on new investments and eligible to reserve a property. All properties are on a first come first served basis and are often not available for long.
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