Advice for new starter with healthy equity

Not having any form of income will hold you back I'm afraid. This is because most lenders require newbies to have an income to service their normal costs of living. Having lots of cash and equity doesn't change this.

There may be some lenders out there who will offer funding and to find them I recommend you to use a whole of market broker who is also a member of the NACFB. I can recommend one if you wish. Nevertheless, your options will be limited at best.

Some questions if I may please.

Are you married and if so does your spouse have an income?

Have you considered going into business with a family member who has a good credit rating and a decent income? You could structure the business so that your family member put in far less cash than you and that arrange for the title of any properties purchased to be registered as tenants in common with an agreed split on the equity, for example 90% in your favour. By doing this you could open up several more funding lines.

These are just my initial thoughts, whatever you do I wish you luck and if you haven't already done so, please read this series of articles I wrote explaining how to become a respected and successful landlord >>> http://www.property118.com/how-to-become-a-respected-profitable-landlord/60765/
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Buy Low and Sell High!

Do remember student lettings are seasonal and should be worked into calculations, as most student renting has guarantor the voids tend to be lower. Except check your local area for pursue built student accommodation, if their are any big plans it may cut down demand for your proposed plan.

A student property could also work as a HMO, so I'd probably be looking at the same route as you. BUT it does involve investing a lot of time in HMO's.

I'm an accountant by training, so I am very fond of numbers. How much will you earn, after expenses if you sink your £200k into property development or BTL? A boring insurance bond will get you about 5% without taking a huge risk, so logically your next business venture needs to bring in much more than 5%, or it is not worth the angst.

Mark has already pointed out the issue you have without visible income, but his solution is viable if you have trustworthy relatives/friends. But once you are in, you are in for the long game! Bonds and deposit accounts can be cashed in £1 at a time!

Reply to the comment left by "Jeremy Edwards" at "01/04/2014 - 16:08":

I'm all for keeping a blend of cash/liquidity and property.

The beauty of a geared investments such as property in a rising market is that it is possible to make money using other peoples money, both income and capital. That's much more difficult to do with other forms of investment.

Great to have a new sponsor on board, welcome to Property118 🙂
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My advice is get some training James. If you'd like to get in touch I can be contacted through my company, Vegan Investments or you can find out about me by looking up my name - I'll point you in the direction of local investor networks... I'm in South Wales, where in South Wales are you?
Or ask people on this network who they've done training with and how it worked for them?
I'm a bit busy at present but I'll help you as much as I can.
With greetings from,
Mike

I agree with Mike, you must get some training to guide you in this new venture.
Somebody I can recommend in the South Wales area is Kevin Green who featured on the programme Seecret Millionaire. He is a now a wealth coach specialising in property investment, see http://www.kevingreen.co.uk for details of his seminars and other training.

Be very careful of so called mentors, guru's and coaches. I suggest you start with a Landlord Accreditation course which should cost no more than £150.

If you do decide to get training, Google the person followed by the words scam or complaints. Good people are everywhere and you will not find complaints articles with any credibility. Bad people are either invisible or very easy to flush out with a few Google searches.

I also offer private Consultancy - see >>> http://www.property118.com/consultancy-mark-alexander/61522/ but I suggest you do a LOT more reading about the basics and then start making a plan before you even consider paying for Consultancy.

There are over 30,000 articles to read here, that should be plenty to get you started but be careful not to get "analysis paralysis" either. As Donald Trump said, don't wait to buy property, buy property and wait.

Always do your own due diligence and please read this full series of articles which will cost you nothing more than your time >>> http://www.property118.com/how-to-become-a-respected-profitable-landlord/60765/
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Reply to the comment left by "Mike Sosner" at "01/04/2014 - 18:38":

I have just read the BBC article about you Mike, fascinating niche.

I am a meat eater but nevertheless I do wish you well, you might well have eliminated 97% of your potential market but if the other 3% of the people in Swansea want to live in one of yours you will be able to be very picky and possibly be able to achieve premium rents.
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That’s usually the response Mark; my business started as and grew from a vegan project. It is generalist now, however I do still have referrals through the “vegan”, “vegetarian”, “spiritual”, “natural health” etc. networks. About 35% - 40% of my current tenants came this way and I also work with a number of the high street agents who supply me excellent tenants.

My first specialist property training was a three-day intensive under Kevin Green in 2003 (paired with another trainer called Rohan Weerasinghe). I can’t recommend Kevin highly enough! He is well-connected with the macro-economics, seeing the big picture, built his own portfolio from nothing to become one of the biggest private landlords in the UK, is a good trainer, and to boot, is a lovely guy. I haven’t seen Kevin for years although looking at his website I see the “Business and Foundation Property Training” he currently takes is a mix of both these facets, listing a lot of content to fit into two days. Read books too, James. I’ve lately been given Simon Zutshi’s Property Magic (which I haven’t read yet) and he’s very active in the current training field. I also constantly read and train in personal development material to keep my motivation at a pitch. Go for the highest level training you can! You’ll have the opportunity to ask questions, get feedback and tips from people who are working at a higher level than you are. It was explained to me before my first training that I’d learn a mass of strategies, any three or four of which might combine in buying a particular property professionally. What strategies work RIGHT NOW in the property market is most important as the market changes and this is what you should look for in the right training room. If you can get Kevin Green’s £197 early bird ticket you won’t go far wrong. James. I’ve met you also Mark when you hosted a day in Port Talbot a few years ago and you’re a really nice guy too!

Mike

P.S. Apropos your suggestion James: a 7-bed student HMO with an up to 19% yield that is not to be sniffed at is also high maintenance and not for the faint hearted, nor is it an easy first (or second) investment property. Landlord Accreditation is great to do once you become a landlord. It will teach you the basics about landlording. And you’ll find specialist HMO training (if you haven’t picked up all the variables already) after you’ve done what Kevin calls “Foundation” training, which will probably include how to assess a property investment on the back of an envelope. As Mark rightly says, things aren’t to be complicated, or delayed, but with a little boost so as to know what you’re doing – as I see it – progress should become simple.

Reply to the comment left by "Mark Alexander" at "01/04/2014 - 08:42":

Hi James,

I had a similar situation as yourself, albeit with a lower level of cash. In my case I am freelancing but don't yet have the full year set of accounts that a lender would need. I used a broker that specialises in helping freelancers/contractors get mortgages as they tend to have low income and high dividends. They looked into BTL for me, and there was not a single lender who would accept me with no salary/no accounts, even though I could prove I had enough cash to live off.

So I decided to use this disadvantage to my advantage, and buy a below-market value property that was only available to cash buyers hence the good price, thus increasing my yield and future resale profits. You don't get the benefits of leverage that you would have with a mortgage, but use what you have to your advantage. I bought my BMV property on the open market, and it was a "corporate sale", but unusually in very good condition, no damage, with hardly any works needing doing. I did this rather than buying at auction, because being a first time investor I preferred to have time to do full due diligence via my trusted solicitors to keep it low risk. As I learn and get more experience with a few transactions under my belt, I will then move to take on properties with a slightly higher risk e.g. auctions, properties that need work etc.

And once I have a full year set of accounts from my freelancing, I can then choose whether to go for a mortgage for my next property. One thing to maybe consider with advice from an accountant, is whether to create a Ltd company to hold the properties, and then pay yourself a salary from that company, so that in future you can get a mortgage. It's a very complex area though, so don't do it without professional advice. Generally it works well for what HMRC terms as property development, whereas for property investment i.e. buy to rent out, which is your plan, it is normally better to do this on a personal basis. You would need to weigh up the pros and cons of ownership structure v. benefit of being able to prove a salary and thus being able to access finance.