Leap of faith or road to disaster?

Im on a buying spree at the moment! and wanting to buy a few more!.

Has anyone looked at refurbing converting office into flats ect? as planners seem to allowing this more often.

Have you ever heard that you now have to NHBCS ON CONVERTIONS NOW? As well as building Regs!.
For them to be mortgable for resale.
I try and buy within 20 mile radius of my home!.
have refurbed over 23 properties in the last 4 yrs, kept and rent 11 and refurbing 4 at present!
I have to say I LOVE IT!.
but I do seem to have a good Reg team to pull onto the different jobs!
so I don’t get ripped off!!!
they soon get to know im no dumb blond!, ha ha lol! but they do try!

Not sure I would like to do it without my reg team! AS I really do hate it when they try it on with you!.

I also buy cash reburb then mortage so only pay fees once! and release 75% LTV!.then repeat but only if im keeping it!.

ALSO MARK!
I really enjoy all your articles VERY VERY IMFORMATIVE!

Reply to the comment left by "Simone Gilks Adv CeMAP, CeCM" at "11/11/2013 - 12:26":

Thank you

Reply to the comment left by "Jonathan Clarke" at "11/11/2013 - 13:24":

Jonathan - I did not understand what you meant by "Another 20% on every £1 for capital growth" could you help me out please?

I can help with that. If you borrow 80k and invest 20k then you can buy a 100k asett. If that asett increases by just 4% you make 4k which is 20% return on the 20k you invested. Same principal for rental profits if you make 4k there too.

As JC says, if you only get a quarter of that its still a combined 10% overall return on your capital invested.
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Reply to the comment left by "Mark Alexander" at "11/11/2013 - 22:23":

Thanks.
So how do you calculate ROI when you go to buy a property?

When you are getting a new 75% BTL, for 100k with 25k invested, say you are getting 5k pa rent minus £300 pm mortgage payment leaving £2400 pa for you, would you say you are getting 9.6% ROI before tax, insurance and maintenance etc?

Hi Paula

Yes Thank you Mark . That is exactly what i was getting at . Go against the grain of ones parents who probably instilled the notion that you should pay off your mortgage.

It was hard at first to borrow and keep borrowing as you get a lot of negativity from parents and peer groups around you. But borrowing to invest in BTL property is good debt not bad debt. It produces income and capital growth .

If one can make 20% - 40% return on each £1 you invest of your own capital why wouldnt one want to borrow as much money as one can to achieve that. The banks agree and think its a good idea as they readily agree to lend you a massive 80% against this asset called property.

Try getting them to do that against gold, shares, fine wine or art and you will be laughed at and shown the door . Against a property though they will welcome you in ask you to take a seat make you a cup of coffee and say `Now how can we help you madam` .

They know property is a sure fired bet long term, so much so they will give you 80% towards it . They have done their sums because they make on it as well. They are not a charity. Use and abuse their generosity . Borrow borrow borrow money to make even more money

You are both winners in this JV venture

Reply to the comment left by "Felix Cited" at "11/11/2013 - 23:44":

Yes Paula that`s right but I would suggest you need to look at a higher yielding property to increase your ROI if you want a portfolio with a decent income. I go for low market high yielding ( 10% ) properties. I aim for at least £300 pcm net positive cash flow per property - so thats after mortgage , maintenance , insurance etc

Example ...

100K property @80% LTV achieving £750 rent pcm
So 9% yield ( yearly rent divided by purchase price of property)

20K deposit so 80K borrowed at say 5% interest only = £333 pcm.
So thats £417 gross profit pcm. As I self manage that leaves me about £350 net which is £4200 pa income which is 21% return on that 20K

If prices go up 5% in 2014 which indications are that they will then my 100K property is now worth 105K. Thats a 25% ROI built in on my original investment of 20K So add 5K and £4200 together and you have £9200 which is a juicy 46% gross return on your 20K each and every year . ( take off a bit for fees etc )

Now imagine you buy at a discount as well and add value through a refurb to increase the value of your asset yet again and then remortgage and withdraw equity as a deposit on another property you soon start to grow more and more . You can do it to a point where you get infinity yield - yes infinity yield on some property.

This is because they are bought with 80% from one mortgage company and 20% from another so 100% funding AND you are still making a rental income profit . So none of your own money is invested but you still get a profit . Infinity yielding asset.

How beautiful is that !!
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Reply to the comment left by "Felix Cited" at "11/11/2013 - 23:44":

Hi Paula

Have a look at the Finance section of this website, 5th tab from the left in the blue navigation bar at the top of this page. If you hover over the word finance you will see a dropdown menu. Check out the Buy to Let Mortgage Sourcing System and the Landlords Calculator. I would be very interested in your feedback.
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Reply to the comment left by "Jonathan Clarke" at "12/11/2013 - 00:22":

It's taken me a while to get there.... Where on earth do you find places that cost so little and rent for so much? Certainly not on Rightmove? Are they student lets and HMOs? I also had no idea you could get 2 mortgages from different sources on one property either.
Wild !

Reply to the comment left by "Felix Cited" at "12/11/2013 - 09:52":

Milton Keynes Buckinghamshire is where I invest -
The land where milk and honey flows!
35 mins by train from London Euston

Not student lets or HMO`s - These are single lets in the LHA marketplace
Networking with agents and other contacts secures some deals. You have to work at it though . By the time it comes on Rightmove I like it to be already sold to me and have the `Sold STC` in the corner.

Friends who see it as sold when it makes rightmove say to me - oh you missed out on that one . I smile but havent the heart to say - yes sold to me and I was out there 1st to view with the agent seconds after they have taken the instruction 🙂