It’s the question everyone asks – how can I get started in Property? Today, I’m sharing with you some of the ways that you can get started, from financing your investment, finding joint venture partners and how you can present the opportunities to potential investors!
Today I want to say if you want to get into property investing at any point, then don’t wait, don’t hang around, do it now and I want to share with you how you can actually get started and invest in property with no money or with loads of money. It doesn’t matter what your situation is, whether you’ve got £10,000 in the bank, £100,000 in the bank or nothing in the bank.
You can start property investing right now and there’s some very simple strategies to be able to do that. I’m not going to get into the complex strategies today. I’m just going to show you how you can start your property investment journey whether you’ve got no money or lots of money with the most basic of property investment strategies for an example standard buy-to-let properties by refurbished or refinance properties and standard flips where you just buy it, do it up and sell it for a profit and you can use those flips and by refurbished or refinance projects to build up your own cash pot and then in a while, I’m going to show you how you can use your cash pot to grow yourself even faster and at twice the rate.
So look if let’s start off with how you can invest in property without any money because that’s a big one and that’s probably the most exciting thing. That’s how I started.
I didn’t have any money to invest in property, but I knew the strategies and that’s what I’m trying to teach everybody now that you can actually get into property and it doesn’t have to be complex either and there are no secrets either. That’s the biggest thing, you could spend thousands on training courses and education and so on which is fine. I’m not bashing them at all because some of those training courses are really good. But what I’m saying is that there are no secrets and if anyone selling you any kind of training that says this is secret only I know about this stuff then it’s absolute rubbish because we’re all bound in property by the same rules. We’re bound by the same laws, the same finance rules, the same purchasing rules. A property is just bricks and mortar. There’s no secrets about that.
Now, there are certainly different perspectives and different opinions and I guess slightly different strategies, but generally speaking you can only buy a property in a certain number of ways. You can only raise finance in a certain number of ways. So we’re all bound by those same laws. That’s why I say there are no secrets. There are just things that you know and things that you don’t, it’s a simple as that so you can always go out and find information. Hey, I’m trying to give it all to you for nothing but the rule is that you don’t know what you don’t know until you know that you don’t know it, Tom Soane 2020 but look, so if you’ve got no money and you want to invest in property, then I say to you start right now because this is a great time to buy property and invest your money in property or invest in property with no money.
So if we’re going to start off by using very simple property investment strategies to build up your cash, build up your income, build up your cash pot so that you can invest and grow faster and faster, faster. It’s like a snowball once you start investing, get a little bit of cash, invest in to get a little bit of cash, invest in 4, get a little bit more cash and so on and so on. It’s like a snowball just keeps going and going and going and then eventually I’m going to try and make it so that you don’t have to be pushing that snowball. It just rolls down the hill itself.
But hey, that’s the anonymous landlord, isn’t it? That’s the philosophy is not just about landlording. It’s the anonymous businessman. It’s the anonymous property investor. It’s the anonymous investor. It’s the anonymous landlord, right?
So first of all, if you have no money and you want to invest in property, what do you need? How much money do you need? First of all, of course you need a deposit, that’s normally 25% of the purchase price now again, I’m not going to get into complex strategies of any kind of other methods if you like to raise this capital and to save money here and save money there but standard purchase deposit 25%, legal costs and that includes your solicitors fee as well as things like your search charges, your registration fee, your transaction fees, all of those different type tiny little charges that you’re going to have. Legal fees about £1,500. It might be a bit less.
It might be a bit more, generally speaking that’s about what you would expect.
Stamp duty is your normal rate of stamp duty on a standard residential purchase plus 3% Now again, just go online get a just Google search stamp duty calculator, make sure you’re selecting additional property and then that will calculate it for you. That’s the easiest and quickest way to do. You’ll have a survey 9 times out of 10. If you’re buying with a mortgage, then you’ll generally have a survey that might cost you extra money. Some more gives lenders do give you free surveys, but you have to find those and you’ll end up paying for that in a different way. Maybe it’s a slightly higher arrangement fee, slightly higher interest rate, whatever one way or another you’re going to pay for a survey. So surveys normally up to about £500 again might be more might, be less depends on the property that you are buying and if you’re buying for a mortgage, then you’re probably going to have a mortgage broker fee, which is going to be about £300 again, maybe more, maybe a bit less. There are some mortgage brokers that do a no mortgage fee. Sorry, no broker fees service. Now I can’t comment on how good they are.
I personally I’m a big believer in buy cheap by twice. I don’t like paying cheap for service because I feel like you get a cheap service back. However, that’s not cement, I can’t say that that is absolutely true. I do know there’s a very good mortgage broker near me. Well, I know that the owner of it’s a very good bloke and they do a no fee service, but I can’t vouch for how good they are. Anyway, there is a mortgage broker fee to take into account, normally is about £300 if you’re paying any more than that, I’d possibly question what additional service you’re getting for more broker fee than £300. They’ll probably say they provide a great customer service, but is that really a unique selling point? I don’t know. I don’t know anyway, right so now you know exactly how much money you need to be able to buy this property. Now. I also want you to add to that any costs for refurbishment.
Now, let’s just say you’re going to buy a property that needs £10,000 spending on it. You’ll need all of that as cash and I would probably allow 10% for contingency. I always add 10% to the cost of all the refurbishment estimate to allow for anything going horribly wrong. I don’t know where they pull off wallpaper and then load a plasterboard falls down or they find a leak in the roof because it hasn’t rained for a long time. So we don’t know or any things like that you don’t know about you would never know that just go wrong. So now you know, how much money you need. How are you going to raise that cash? Well, obviously you’re going to borrow, right. That’s the thing and there’s a bit of a stigma or an apprehension from certain people about borrowing money. But I personally believe that borrowing money is fantastic. If you can borrow it at the right rate now, the rule is quite simple borrow money at a lower rate than it’s going to generate you in a return.
So if you’re going to borrow money at 10% but you’re going to get a return on investment at 20%, free money it’s just free money a free 10% money. I love it. So remember that now what I would also say is you’ve got to calculate the maths on this. It’s no good ramping up credit cards that you’re going to pay 20% a year on and they’re not paying them off once you use that money and make the profit because you’ll just continue spending 20% on interest and never actually make any profit on the return on investment you’ve used that money for.
Because you’re paying out 20% but you’re only getting back 10%, so you’re actually losing money.
Anyway, what I guess I’m saying is that if you’re going to borrow money then make sure you’ve calculated it correctly and you are going to make a profit from it, actual true profit now, so you’re obviously borrowing money, right? So you’re going to need to go and find places and people that you can borrow money from. I’m going to give you some examples of people and places and where they are and how you can get them interested in what you’re doing, right?
So first of all, though, you need an example of a property that you’re going to invest in or a property that you found that is a really good investment because if you go to an investor and you say hey, I want to borrow some money to buy some property and get into property investment that investors going to say Okay me too. Was it what, you know great. I don’t know. I don’t know what to do with that. But if you go to that person and say hey, I’ve got this property that I want to buy and it’s a great investment.
This is how much money we’re going to get back you’re showing them something real you’re giving them something they would normally have access to and profit that they wouldn’t normally have access to and it gives that investment vehicle, that investment person, that investment party something to actually sink their teeth into and get excited about so you need to make yourself an example property.
Now, you can actually just create an example of a property that you would invest their money in now. I’m going to give you all the places and people and all of the different ways to get investors on board with you, but this is the first step now, you’ve got one of two ways to do this; number one is you can create it and just make an example of a type of property or a property and make it as real as you can, a property that you’re going to invest in with somebody else’s money and write it out as an analysis and a report to show purchase price, costs, refurbishment. This is the schedule of work and then it’s going to be worth this amount of money.
So if you’re going to buy something for a £100,00, you’re going to spend a total of say £10,000 in fees and tax and refurbishments £110,000 but you’re going to sell it again for £150,000 say to the investor I need so for this property, I would need to borrow £110,000 from you and then in return I will pay you £11,000 on top so it’s a £121,000 and then I’ll take the profit, you’ll take the old profit and so on and so on make it into a thing that they can see and they know and they can understand, they call that deal packaging.
Your packaging a property up into a deal and you deal package for joint ventures, you deal package for investors, whether you’re buying that property yourself with somebody else’s money or you’re giving a packaged property deal to somebody for them to buy and you just get paid a sourcing fee or an intro fee. Anyway, so you package up a deal and you say hey, this is the property that I’m looking to invest in. I need to borrow this amount of money and you will get this much money back. Your guarantees are that you will have first charge on the property like any mortgage lender. You will have a charge on the property right now this is if you’re borrowing the whole amount of money, of course, you’ll have a charge on the property or you will have this as a loan. This will be a loan to me personally and I’m buying the property.
Anyway, what we’re doing is we’re saying to the investor. This is what I’m investing in. This is what I need from you and this is what you’re going to get back, right? So that was number one you create that number two is go and find an actual property take them to the property and let them see it feel it and understand what you’re looking to do and then you can say so this is what I want your money for and I’m going to give you a return on this investment.
Don’t take them to don’t take anybody to a property until you’ve signed some sort of NDA or contract to say that they won’t buy this property right? Trust me on that one, right so and something for you to remember investors of any type, it doesn’t matter whether it’s a bank, a mortgage lender, a loan specialist, a person, a friend, member of your family, all they want any investor. All they want a secure return on investment and minimal risk, right? That’s what investors want in a nutshell.
So if you can take those two boxes secure return on investment and minimal risk, then you will get their trust. Now, where do you get these investors and these people that will have loads of money to lend to you. Well, first of all go and speak to estate agents, estate agents have all clients, people that buy properties for them for investment. Estate agents will have access to that.
Now, of course, if you’re asking the estate agent to help you then they will need to be incentivized for that. You can’t just say to the estate agent. “Hey Mr/Miss estate agent. Could you go and find me some investors?” But I can make profit, they can make profit and you don’t get anything. That’s just not a good way to do business. Everybody has to be happy in any sort of business arrangement, right? So speak to estate agents. Just ask the question. Hey, I’ve got a property that I’m looking to invest in and I’m looking for investors to raise the capital so that we can all benefit from it. I’m happy to pay for your time. I’m happy to pay any dues introduced to you. Mr. and Mrs. Estate agent, if you can help me out. So your estate agent will have clients buyers, sellers, developers, investors that they could speak to and say hey Tom’s got a property investment and he’s looking to raise capital and he’s looking to do a joint venture. Would you be interested in speaking to him? Yes or no? It’s a simple question. Now, you’ll have to play the numbers right? Because you’re not going to speak to one agent who’s going to speak to one investor and that’s one deal done. No, it might be a lot more than that. I generally tend to I caught an 80/20 rule for a lot of these types of things meaning if I speak to 10 people then I might make or if I ask 10 people, eight of them might have the conversation with me and two of them might say yeah, I’m interested in that. I mean so 80/20 generally I mean a totally made-up rule, but it generally tends to work with a lot of things but also speak to letting agents because landlords are investors and a lot of the time you get landlords that maybe have a bit of money because let’s think about it.
A landlord is no different to anybody else other than they’ve just been smart with their money and put it into property, right? That’s what a landlord is. So speak to letting agents and find out if any of their landlords are interested in joint ventures or investing in property or whatever because you’ve got this property and you really want to raise the capital and make everyone some money and its great, right, but you’re not going to speak to one letting agent and get one deal. You have to speak to them all and they don’t even have to be in your area. Just I’ll leave that one with you.
Next you can actually also speak to your friends and family. I’m pretty sure that most people will have somebody in their family or in their circle of friends that either has a little bit of cash to invest themselves or knows somebody that does so you’ve got to put that word out if you really want to invest in property. No one is going to wake up tomorrow morning and say oh my goodness. I really want to make Tom a load of money. No one’s going to do that except you so you have to say right. I’m going to go find these people and you can do that. You can do it just by asking the question. What’s the worst-case scenario? Nah, I’m not interested things.
Okay next now, I’m not interested. Thanks. Okay. Thanks next. Nah, I’m not interested. Thanks. Alright, no problem. Glad we talked, next. Yeah, I’m interested, you never know. Our worst-case scenario is that they say no it’s not going to, you’re not going to stop breathing. You’re not going to lose anything. You’re just asking the question now, there is a benefit to this right, the more people you speak to the more chance that later down the line. They might say hey a year or two ago. You asked me if I wanted to invest in property. Well, are you still doing that? Because I’m interested. I’d like to make a bit of money. Well, you never know. But if you don’t go to speak to these people you will never get a yes. If you don’t ask a question, you will never get an answer. I promise you because no one like I said, no one is sitting there thinking. Oh, I really want to go and make Tom some money today nah just not happening except you right next.
What I’m getting at here is networking, right you need to go to property events. You need to go to networking meetings. You need to basically ask people for introductions to other people everybody will eventually know the person that you need to speak to so I’ll give you an example you might go to a business networking meeting or a landlord networking meeting or an investor networking meeting and you might say hey look this is my situation. I’ve got a property that I really want to invest in but I haven’t got the funds at the moment. So I need a bit of, i need an investor. I need someone to come on board and do a joint venture with me.
So there you go easy as that now in that room right here right now. They might say all I’m not looking to invest or I haven’t got any money either. I’m not trying to do anything. But I do know John. John actually is investing and so maybe I could link the two of you up. Yeah. Great. Hey, hey, thanks very much Brenda. Share the wealth by the way. I’m just going to stick this in as a little intro or interlude point or whatever that anybody who introduces you that leads to you making money, please share that wealth, please not just because that would encourage them to do more business with you and for you but because it’s the right thing to do, if Brenda has introduced you to John then she’s putting her name out there. She’s putting her neck on the line for you. And if you turn out to be an idiot and you lose John a load of money. That’s her neck on the line. So give her, share the wealth give Brenda what she’s entitled too, right. It might just be a few hundred pounds. It might be I don’t know a voucher. It might be something to say. Thank you. I’m going to make profit because of what you did for me. So here is my share.
This is sharing the wealth. Don’t forget that, pay it I think they call it paying it forward. I don’t know. Maybe that’s right or wrong. Let me know. But anyway what I’m trying what trying to get to is ask for those intros ask for introductions to people that might be relevant for you. And remember use your property example as much as you can, be known make people aware that you have a property investment deal and you’re looking for funding, you’re looking for joint ventures. You’ll be surprised how quickly people come out from the woodwork when the word start spreading the Tom has a property investment deal and he’s looking for a joint venture partners, I get it now, right? I haven’t even put a property investment deal out there.
All I’ve done at the moment is said I do get property investment deals. I Source properties, I invest in properties myself and I now get I must be three four emails a day, three or four messages a day just from people saying hey, I’d be interested in a joint venture with you. In fact, I’ve got a guy who’s up north literally the other end of the country. Who’s wanted, who wants to come and spend a day with me looking around properties to do joint ventures. Now, what does that mean for me? Well personally that means I now have access to more funds so that I can buy more properties and make more profit, fantastic now also I like being fair. I like to be able to go home at night and sleep. I hate the idea that anybody is unhappy with any kind of deal that we do. right? So I want to pass that on to you if you’re going to do a joint venture.
Yes, your instinct is to negotiate something which is the most incredible deal for you. But I want you to think slightly differently. There’s enough profit in property for everybody, right? I want you to think differently. How can we make profit for everybody? Right? You will get profit, you will still make profit and you’ve still got to make the profit targets that you want to make but I want you to focus on making other people profit too, we talked about Brenda and John, let’s work out a way that they can be happy to so they come away and go brilliant, Tom that was fantastic. Thank you very much. Now, why are we doing that?
Number one, we want everybody to be happy in the deal. We want everybody to make to walk away from it with a good feeling of making profit made a new friend, happy with the deal. Everyone’s happy right now. That’s wish, that sounds wishy-washy, but if everybody is happy in a deal they’re going to do more deals with you. If somebody in a deal process is not happy with the deal and they feel like they’ve been a little bit hard done by, you’re making loads of profit.
They’ve done all the work and I’m not making much, they’re not going to want to do deals with you simple anyway, right so coming where I’ve got to there but networking is that guess what I’m talking about there and hopefully when I do go off on these rants, hopefully you still pick out some information from them. Just the way my brain works. But you need to go all out. You need to go and find people that have money that are what they’re willing to invest. joint ventures armchair investors, whatever you want to call it. What you want to do is find people that want to join you on this property investment deal, right.
Now, what do you have and what do they have if you’ve got the property and the energy and the effort and the legwork and they have the money, you put the two together. What a great deal. If they are sitting on to money and they don’t know how to invest it they want to turn it into more and more money then you’ve got the property for them to do it and they wouldn’t normally have found that property without you. So they’d be happy with that deal and now you know what there are actually loads of people and I’ll be interested to hear from you.
If you are one of these people right but maybe has a bit of cash. Maybe you’ve inherited money or you’ve got a redundancy pay or you just saved up a load of money or you’ve got tons of equity or you’ve just got loads of money sat in the bank, you do have that feeling don’t you of I need to do something with it because it’s just sat there doing nothing at the moment, especially if it’s in your home, you’re living in it. It’s actually costing you money. If you’re not using the equity in your home, it’s costing you money.
So, you know that feeling that people have if you’ve got a bit of money thing, I don’t want to waste this and I want to I want to do something with it. Well wealthy people have that feeling all the time if they’re cash-rich. That’s the feeling that wealthy people constantly have it’s a different kind of stress, isn’t it?
I’d love to have that stress or £1,000,000 just sat in my bank doing nothing. I need to do something with it. Cool. If I could invest £1,000,000 today, I would turn it into a £2,000,000 in about six months. No doubt. Anyway, I should do a video on that. How would I do that? Turn £1,000,000 into £2,000,000. Well, I know how I do it. I’ve actually set out as a strategy so I know how to do it anyway, right? Find the wealthy people they need to do something with their money.
What’s next; social media? I’m all over it. So but look at all the social media groups that are for property investors, joint ventures, deal packages, landlords, anybody in property. There’s loads of Facebook groups. There’s loads of LinkedIn profiles of people that say, I’m a property investor. I’m an investor, all of those sorts of things now, either they will invest in your property or they will know someone who’d be interested. Network, networking nowadays is not just about going and sitting in the room with other people and network physically and verbally, it’s about social media networking too, get yourself out there join the groups comment on people speak to people message people say hey, look at this property. I’ve got I’m looking for a joint venture partner because I don’t have enough funds for it and to be honest by the way.
Oh my goodness me, be honest, don’t ever try and black or bullshit anybody when it comes to money or property, please I – do you know what? I see so many property investors, developers, landlords that get into an absolute mess because they’ve just lied.
I see people that take it. Like I saw, do you know what a prime example, right? There’s a developer landlord who has who had some like 40 properties and his business partner took out mortgages on all of those properties and didn’t tell the client or my client all of those mortgages were taken out and you know that’s going through a legal process right now, but just lying, cheating, stealing that sort of thing. I know that’s a bit extreme, but don’t do it just be open and honest about everything, there’s enough profit for everybody and if you pull the wool over people’s eyes, what you might make an extra £1000, you might make an extra two. But really what are you gaining and what are you losing? So be honest be open all times. If you never lie, then you never get caught. There you go, right. So now you’ve got the investor, right? So now you need to actually go and get a property. If you didn’t have a property in the first place.
Now, you need to go and get one. Now. I’m not going to go massively into this. I’m just going to give you a couple of tips. But remember the investor wants to make money with no effort and remember from earlier on they want a secure return of investment with minimal risk, that’s what investing is: secure return on investment, minimal risk, right? So and one thing to remember here is once you get this right, you find a good property, you get the job done you give the investor back their money plus their profit. If you can get it right once with minimal stress and hassle, then you’ll have access to so much more. I promise because not only will that investor maybe give you a bit of a I’ll give I’ll guess just get a bit of confidence in you to lend more but they might also have a network of friends and say hey, I’ve just done this joint venture with Tom and he was introduced to me by Brenda and we’ve done a deal. I just made £20,000 profit. So, you know, if you want to invest and Tom’s doing really well at it.
Do you know what? I get people now saying to me Hey, one of my friends is a professional Gambler, right you all know people that do that and they’re looking to use. They’re looking for investments to gamble to you know, make money. I’m not doing that myself but now because they’ve done it once and they trust that person is making them a profit. They are happy to share that with other people.
So look once you get it, right, once you get it right once you’ll have access to a lot more but remember job number one, right? And this is maybe going a little bit controversial perhaps. I don’t know but in your first property joint venture, your focus needs to be on making profit for the investor, right? If the investor makes profit that’s when you open yourself up to a whole world of property investing, if the investor doesn’t make profit, you’re less likely to succeed so job number one first property, make that investor a load of money and then they’re going to be like, wow, that was easy. I didn’t have to do anything at all and then you can start moving on to making more and more profit for yourself. Now what I would also say is listen to my podcast about where to find the property deals, right? Because I know I’ve been doing this for years.
So I know how to I could go onto the internet just on the internet now and pick out tons of good properties of I could go and walk down the road next to my office and find a property deal so I know how to do that, but maybe you don’t so listen to that podcast, I do go into quite a lot of detail about how to find awesome property investment deals, really good podcast. Actually. I was happy with that one. But that podcast by the way, we’ll teach you how to do your due diligence but it also shows you about how to find the growth areas, how to find the demand , high demand areas but also how you can profit from low demand areas and that sounds really crazy, but you can really profit from low demand areas. You can calculate the price uplift historically and forecast the price uplift in the future. You can work out how to add value, what value to add and not to bother adding and how to calculate how much to spend and also the risks you can do that, it’s easy to do but I’m not telling you about that podcast to sell that podcast.
Well, obviously I am I want you to go and listen to my podcast, course I do but I’m telling you that because then I don’t have to go through it in this whole video and this whole video will end up being an hour long video, right? But go and have a listen to that podcast about to find the awesome property investment deals.
Actually, I think I did it as a video on my Facebook page as well. So find it on Facebook hit like, share it around blah blah blah. Now, here’s a couple of really great tips and then I’m going to give you how a method on how you can do all of this if you’ve got a little bit of money to spend and that’s exciting, isn’t it? But great tip once you’ve got one investor you can get more and more and more properties right now if you if you are then I said that only one so if you then go and try and find loads of properties. You can only buy a certain number of properties, right?
Now, I know that you would probably be in a situation where you might get to a situation where you literally got so many investors and you’ve got access to do buy any property you want but eventually they’ll be a point where you can’t buy a property. Now what I want you to do with that is packaged it up and earn an introducer’s as fee and what I mean by that I went through it a little bit earlier on where youI think that property right and you package it into a deal for somebody so you show them what the property is you show them your due diligence about purchase price, costs, refurbishment, scheduler works and then the resale price or the rental price or the refinance value all of those things and show them, you spend this much money, Mr. and Miss. Investor and then you’ll get this much profit, show them that package it up into a product and then send it to them and get an introducer’s fee.
It’s a really good way of making a bit more profit at your property cash pot. Remember that that’s what we’re doing building our cash pot really good way of making a bit of profit adding to your cash pot without ever owning a property without ever buying a property and to capitalize where you’re not able to buy a property. Now, if you do that then you can do you can actually by the way here’s another great tip, you can actually do more deal packages then you can buying property right? Because if you’re buying property, all your time is taken up doing the property processing, all of your cash has taken up doing buying the property when actually to deal package you don’t need any money now, I’m very lucky.
I’ve learned deal packaging from the very best in the country, but I want to share that with you. I want to make sure that you know how to deal package, know how to find the deals, and know how to package them up in the track for the investors in a way that makes you profit and makes them profit and everyone’s happy. So all of this stuff, right? Oh by the way deal packaging has very minimal risk for you. You get paid up front too, which is great.
Anyway, all of this right is great but what about if you’ve got some money, you’re sitting on a know let’s say you’ve got £50,000 in the bank or a £100,000 in the bank and you want to make or a million, you know, I told you earlier on if you’ve got £1,000,000 that you want to invest in property. I’ll turn that into £2,000,000 in six months, easy. Oh, maybe I’m being a bit bold there.
I reckon I could turn into £2,000,000 very quickly. How about I just say that a bit better, I don’t want to put my neck too far on the block. But anyway, if you’ve got money, right you’re going to do all of the above all of those things. I’ve just done and told you about because actually if you’ve got £1,000,000 to spend then you could spread that £1,000,000 over more properties by doing more joint ventures, you’ll make more profit. You’ll have more spread of risk and you’ll end up with more properties, new portfolio generating you more income because we all know you got more properties you get more income right, simple as that, but if you don’t want to do that and you just want to use your own money, then I would say follow my podcast which shows you where to get the investment deals. Definitely like I was saying earlier on and make sure that you’re using finance look if you’re totally uncomfortable with raising finance to buy properties, if you’ve got £1,000,000, then you might well be able to buy I don’t know, in my area you’ll be able to buy about what crikey about six or seven properties, right with £1,000,000, half-decent by to let. In other areas it will be 20, in other areas would be 30, but generally speaking it will be a similar sort of income. But if you use mortgage finance to buy all of those and you concentrate on your net profit, you’ll probably generate twice as much income and still have the same £1,000,000 worth of equity.
Give you an example, you could have-you could buy let’s just say you could buy six properties with £1,000,000 worth of equity. Sorry six properties with £1,000,000, right? You then own six properties worth £1,000,000.
Now that might generate you. I’d know I’m making this number up that might generate you £50,000 a year in net profit because pretty much all of your rent income is net profit minus management, whatever. Or would you have let’s say 30 properties still with £1,000,000 equity but generating you a £100,000 profit. Well me personally, I’d rather have 30 properties for sure. I’d rather have 30 properties with £1,000,000 equity than six properties with a million-pound equity make sense. Hopefully it does because you get more income you spread your risk more if you’ve got six properties and 2 tenants moved out, that’s one third of your income gone.
If you got 30 properties and 2 tenants moved out then that’s only you still have 28 other properties generating you income, right? So spreads risk minimizes that risk, increases your income and you still got the same equity.
So I like using finance, but some people don’t some people are just uncomfortable. Some people would rather have £50,000 a year coming in than a hundred thousand a year coming in so that they don’t have to have a mortgage under, that’s fine. Everyone’s each to their own right but I will tell you this the top investors in the entire country use finance. So I’ll leave that note with you but either way if you can make profit for everyone then why use your own money if you can make profit for everyone using other people’s money like banks and built and banks and lenders and mortgage lenders and investors and joint ventures all that then why use your own money or at least why use all of your own money? Everybody just wants to make a bit of profit without putting in any effort, right? And that’s where you will capitalize if you can make profit for other people and for yourself and your selling point is hey, I’m going to make you £20,000 profit, Mr./Mrs. Investor, and you don’t have to lift a finger. I’ll do all the work.
I mean would you if I said to you if you have if you had £100,000 that’s just sitting in your bank right now and I said to you hi, Mr/Ms Investor, if you if you use that £100,000, I will give you £20,000 profit in six months and you won’t have to do a thing. I’ll do it all for you and you just get £20,000 in six months plus your original £100,000. Of course you take that, right? I take that, I would take that and I want to get to the level where I’ve got so much bloody money coming in that it’s coming in here and it’s returning me, I dont know 15% return on my investments, 15% yield coming into me, right and then I’m putting it straight out to other property people sourcing agents and joint venture partners. I’m just throwing it all out as coming in here at 15% profit and I’m throwing it back out there to make another 15% profit and then it’s coming back again with another 15% profit and then I’m putting it back out again for another 15% Profit just compounding, compounding, compounding and that’s how you make loads of money and property. Well, that was good so know that is one way to make property, that is a load of ways to make property without actually having any money or with having money. I’ve probably given a bit more than I should there but I like sharing this stuff around because I do believe that if you’re going to be the best version of yourself at one thing and that might be property investing then you need to be the best version of yourself at everything. You need to be the best version of you.