Property investment can be very much a solo career, but a smart investor has a strong network surrounding them.  It makes everything easier and projects go more smoothly.  These are my recommendations for who you should have in your little black book.

• A solicitor who is familiar with property - and, if you’re serious about building your portfolio, understands how bridging finance transactions are carried out and is sufficiently flexible and efficient to carry out the legal requirements swiftly.
• A good independent broker who can access the whole market and has experience of mortgages, bridging and development finance and will give you good advice.
• A reliable builder, carpenter, painter & decorator, electrician, plumber, and maybe a gardener, who will help with refurbs.

It’s wise to build good relationships with your local estate agents too.  If they know you’re a repeat purchaser and you can process purchases efficiently they’ll start to...

THE QUESTION

How would you structure this to use as little of your own money as possible?

Property: 1 shop downstairs and 1 residential 2-bed flat upstairs

Single freehold title

Buying price £65k

• The shop is leased for £4200/yr.
• The flat is currently vacant (could bring in £4500/yr).
• Some value can be added by extending the lease on the shop, and placing a tenant upstairs.
• Minimal refurb required. Both up and down currently share an entrance.
• Vendor finance may be an option for a few months.

How would you structure the offer to the vendor?

How would you add value?

What is the best way to finance it?

At what point would you put it on a mortgage?

THE ANSWER

The shared entrance could be problematic if the shop owner and the flat tenant are unconnected 

1. How would the tenant get access to the flat out of shop opening hours 
2. How would the shop owner guarantee the security of their stock, if the flat tenant had the keys to the shop?

Your ability to get a...

The answer to that is that it depends on who is actually selling.  If you’re purchasing from someone who has finance problems and may be in arrears with their mortgage, it’s definitely not a good idea – mortgage lenders prefer not to lend when you are buying from owners experiencing financial hardship.  However, if you’re looking at properties that the lender has repossessed and are now for sale - with vacant possession - they could be a profitable purchase.

The reasons for repossessions are many, but they all come down to the current home owner being unable to maintain their finance.  This might be because they’ve lost their income, a divorce whether neither party is able to maintain the property alone or a family fallout where joint heirs exist.

Realistically, the lender just wants their money back - with no regard as to whether the current owner gets anything out of the deal or not.  That’s why repossessed properties often...

THE QUESTION

What are the best sources to buy BMV?  I want to take my portfolio to the next level and maximise on returns.

THE ANSWER

This is a sensible way to leverage your profits and there are a few simple rules here.

1.  Only spend time with sellers that NEED to sell.  Everyone on Rightmove wants to sell their property, otherwise why list it.  But probably 90% + are happy to let it sit there until they achieve something close to the asking price. 

What you need to find are those few sellers with a more urgent need to sell, they can’t wait 6, 9 or 12 months to get a good price.  They need to sell quicker and quicker means cheaper - in other words they’re motivated sellers.

These people may have to move for work, to look after elderly parents, finalise a divorce or want to complete probate.  They don’t have time to sit around waiting for someone to buy - and then wait for a chain to resolve.

2.  Only look at properties in...

Nobody likes to admit they’ve fallen short and as long as nobody know what you’re aiming to achieve, you never have to stand up and be counted.  But with no fire under you, will you achieve all you hope to?

This isn’t just a property thing - it’s pretty universal - but people who are wannabe investors are many.  They know it’s possible, because other people are successfully investing in many different ways, but they’re not taking action.

What holds them back?

The number one stumbling block is fear.  This is usually fear of failure - and failure when you’re dealing in assets worth hundreds of thousands can be life-changing.  However, sometimes it’s fear of success.  It sounds crazy, but some people worry about what changes they’ll have to make if they are hugely successful.

Procrastination also happens because everyone is different.  Individuals look at other investors and can always find a reason why...

THE QUESTION

Who would be a good lender for existing B&B properties, with an estimated value of £400k?

THE ANSWER

There are specific commercial lenders that lend on B&Bs.  

With very few exceptions, B&B owners will have run their B&B in a certain way.  Show me a B&B owner and I can give you a very accurate description of them and their business mind-set, a B&B owner avatar, if you like.     

With numerous B&B and guest house finance arrangements under our belt, we know there are, invariably, very big issues getting mortgage on them.  On the face of it, it looks like difficult to almost impossible to finance these properties. But, if you know the workaround to it, it means you can pick them up very cheaply.   

The first thing you need to get from any B&B owner is their last 3 years accounts, because any commercial lender wants to see how much cash the business is generating to support a mortgage payment....

THE QUESTION

I have converted an end-terrace into two flats and these are both listed for sale. The building is presently owned by the Ltd Company as one freehold, unencumbered, with individual leaseholds to be drafted to prospective purchasers once sold.

Whilst I wait for these to sell, what options exist for raising finance towards the purchase of the next project?  What LTV ratios and lending rates could I expect to be offered?  Assuming that any form of traditional bank lending is a non-starter, what type of lenders could I approach?

Having all cash tied up in this one asset obviously results in quite the large opportunity cost!

THE ANSWER

Leveraging your cash into the next deal is the perennial problem for developers and there is a simple answer to your conundrum, but if you are thinking of using a mortgage, forget it, it’s a non-starter.  No mortgage lender lends when they can see the property is on the market to sell.  Nor do they lend when they know...

When you start a career in property your first purchases are often more by chance than planned, but once you’ve caught the property bug it’s important to start thinking ahead.

It’s a fact that people spend more time planning their holidays (and that’s gone really well this year!) than planning their careers!  However, there’s been a long-term survey running that has proven over and over again that the top 5% most successful people in the world have one thing in common - they are driven by goals and follow their plans with dedication.

This means that if you want to be successful, you need some goals, a plan to achieve them and the right mind-set to help you to achieve more easily.

Goals don’t work!

Goals are dreams you’re prepared to take action on - but they don’t happen without a bit of effort. 

Firstly, goals need to be specific.  ‘More buy-to-let properties’ isn’t a goal, it’s not measurable...

THE QUESTION

Is it possible to finance a well below market value property with 100% of the purchase price via bridging - and then refinance the next day to a BTL mortgage? Doing this would you get a true valuation of the correct value when you refinance and not the BMV purchase price?

THE ANSWER

The chances of you borrowing 100% of the purchase price are remote.  The only ways you might be able to do this are:

• To pick the property up 30%+ below the asking price
• Put up a property you own already with little or no mortgage on it as additional security.

There are a few bridgers who will lend on value rather than purchase price and this will reduce, rather than eliminate, the need for a deposit.

For refinance, you won’t get it mortgaged on day one, but you can get it remortgaged within 6 months by using the right mortgage lenders.  However, be prepared to pay more than leading market rates for this.

There is only one way to get it valued above purchase price paid - do...