Build A BTL Property Portfolio From 0 to 10 In 3 Years With £30k

hi guys it's stephen here today in this video i'm going to be talking to you about how you can build a vital investment property portfolio from nothing to 10 properties in just three short years i've been thinking a lot about buy to let's recently as the market's gone crazy over the last 12 months and in particular how can manufacture my profits in the fastest time possible and take advantage of the low interest rates that are currently available at the banks right now although those interest rates do look like they're on the rise so i've put together a blueprint of how i would do this and you can actually get access to it right now for the bargain price of i like so this is something that anyone can do as long as they earn income or some kind of salary because you're gonna at the end of the day you have to qualify for a buy to let movies you don't need to have loads of money to start but you're gonna need to have some money saved up for your deposit your stamp duty and your legal fees this is exactly the method that i plan to use when building up my own buy select portfolio and actually pretty excited by it because i totally think it's cheap [Music] for those of you who don't know me i've been properly invested for over 20 years and i sold off all of my uk buy to their properties a while back now because i've been living overseas where i've bought commercial and residential property i've now come back to the uk and i've decided that i wanted to buy commercial real estate for cash flow which is what i've been doing and i've been talking a bit about those in my in my uh videos on the channel and what i want to be doing now is focusing more on buy to let some residential real estate but manufacturing my profits which is what this is all about first we need to find a residential first we need to find a suitable residential property to buy now we're not going to be looking in there we're going to be going back to my desk and first of all we're going to look at high yielding postcodes whereas we should start to look so let's go [Music] finding residential property that cash flows will require a bit of research i've spent some time researching areas where there's a potential for high yields and these are the areas that i would start to look in for investment property this is a website that i found as part of my research and it's really banked up to date with a yield map based on 2022 numbers and they talk about postcode regions so they're delving into not just regions into specific postcodes but what's interesting to note is that the top 10 there's only one place in the south everything's kind of in the north there's a few in the way in wales there most buys to let investors head north if they want cash flow um what's interesting is that liverpool isn't on that top 10 list on any of those postcodes and even on this list it's way down in 15. this is where i would be focusing on if i just wanted to buy for cash flow but if you've watched my videos before if i'm talking residential i'm probably trying to get also capital appreciation most of these postcodes are up north so if you live near these postcodes that's a bonus but it's not entirely essential that you have to live near where you invest let me explain why i say that i bought property in another country and just hired a local property manager to look after that property for me but first to mitigate that risk i went over to that place checked out that area walked the streets interviewed different property managers i spent a few weeks over in another country doing this it was in america where i bought these properties in two different states as well in america it wasn't even just one state it doesn't matter where you invest really you should let the numbers dictate to you where you invest not the location in the uk the average full-time salary is 31 285 pounds which equals monthly 2807 pounds what we're looking for here is we're setting ourselves a goal to become financially free so this equates to around 260 pounds per month as our goal for each property we're dividing that by 10 to achieve our zero to 10 properties and to enable ourselves to become financially free at the same time assuming you're on an average full-time salary by getting to those 10 properties with that amount of cash flow per property so the core part of my strategy to be able to get to 10 properties is to go and find properties that need fixing up now the reason why i'm looking for these properties is i want to add value this is where i'm manufacturing my profit so i want to look for properties that have been neglected they need a bit of repair not to the point that they're falling apart but they need a bit of work done to them and therefore i can then do that work and hopefully increase the price beyond the amount that i've paid for that property and for the work that i've paid on that property therefore manufacturing a profit and by doing it this way we're able to condense the amount of time it takes us to go from one to ten properties which i'll explain in a second about how we do that so you may have seen a show called the great house giveaway now this show is a bit like homes under the hammer but the difference is you get to actually see them do the work homes under the home you just see kind of before and after shots how about i buy your house auction pair you up with a complete stranger whereas this one you actually get to see all the sweat and the hard work that they put into fixing up this home and all the problems that they go through and so it's quite inspiring quite motivating but it gives you a kind of warts and all view of what it's like to actually do this kind of refurb or renovation this is exactly the type of approach that i'm looking to do apart from i'm probably not going to get hands on i would employ a contractor to kind of do the work for me rather than do it myself but that's just me you might want to get hands on and do the work yourself to save yourself even more money because the more work you can do yourself the more profit you're potentially making but with the strategy that we're going for we're not necessarily going to be trying to get a property that needs to go back to its shell because we wouldn't be able to get a buy to let mortgage on that type of property we need something that kind of needs some light fixing up so it might need the bathroom refreshing the kitchen refreshing those types of things but someone could move into it today maybe but it needs a good decorating needs a good clean garden needs fixing up that type of stuff it's not necessarily gone to auction it could be with an agent that with as described as it needs modernizing and that type of thing i've had different experiences with this i've done some light refurb work on properties spider legs that i've had in the past i've owned in the uk but my biggest task i've ever done is i put another story on a single story house now this was in another country where single-story houses are quite commonplace i basically used a builder to do all the work for me negotiated a fixed price contract and you know that took a certain period of time and there was penalty clauses in there if they run over time and those types of things milestone payments money was borrowed from a bank to pay those milestone payments as we progress through the different phases of that build so with my strategy to get to 10 properties in three years i'm not looking to do renovations or extensions or adding other stories on anything i'm just looking to kind of do that light refurb work bathrooms kitchens painting that type of thing i'm not looking to extend might knock down internal walls that kind of thing that are non-structural so anything that's non-structural i'll potentially do structural stuff that requires planning try to stay away from so let's find out how we're going to get from 0 to 10 properties in 36 months so i'm going to be looking in ng7 in nottingham which was on the top of that list of the track capital best yield postcodes so here is just this quick scan of me going through riot move and finding similar types of property this property was up at auction it was up for 68 grand and there was another one that went to auction as well and sold around 80 000 pounds so these are the types of properties to look for these ones may be okay to get a buyer to let mortgage on maybe need a bit too much work what i'm looking to do is look at what i can then sell these properties for and as i'm looking through i'm looking through this already sold properties list and finding that they've been sold for between 160 180 000 pounds so depending on what our buy price is we should be able to make a decent amount of profit so we've got our first property we're going to refurbish we're going to it's going to take us six months to get through there so we need to make sure that we've got as i said before we've had our deposit we've got our stamp duty and legals that we're covered we need to have that amount of money saved up and that will determine how much that is will determine which location you're looking in if it's up north you'll need less money if it's in the south you need more money and don't be forgetting you're actually going to need to have some spare cash for the refurb of that property you can also borrow that money if you need to via a bridging loan you can even nowadays get a refurbishment buy to let mortgage which allows you to get a certain amount of proportion up front to buy the property and then they'll give you another load of money to do the actual refurbishment once you've bought that property with bridging loans you're able to get access to your money between five to seven days so that's probably what most people will do is get a quick bridging loan you know six to nine months but you want to be making sure you pay off within six months it's expensive to get a bridging loan so you need to factor in that interest payment in all of your costs because you want to make sure that what you're buying for plus your refurb plus your interest that you've got to pay you're holding costs are not going to be more than the property is going to be worth at the end of all the work that you're going to be doing in six months time so we've now completed our first property it's six months later so we've got a decision to make about what we're going to do with this property our exit strategy as some people would call it are we going to sell it or we're going to refinance it now there's two trains of thought with this one if we're going to sell it you're going to have to pay capital gains tax because you've not lived in it it's just been an investment so any gain that you've made on that property is up for capital gains tax which might be worth doing because depending on how much that profit is you only pay capital gains over 12 300 pounds and therefore it's only going to be a small percentage of what the difference is between your profit and that capital gain if you've not claimed any capital gain in the current tax year the other side is you can refinance it but when you refinance it you always have to leave some money in the deal which is called equity and you can likely think that you gotta leave 20 behind in that property so you can't get access to all your money capital with selling it through and paying capital gains tax you get access to all your money minus the capital gains tax cost that you've got to pay so that's something that you need to decide for yourself which one of those two makes sense for you for me i'll try and refinance take the money out and at least i'll get my initial deposit back out and then or near enough most of that and then that gives me the money to go again onto the next property with probably two we're going to be doing something slightly different again with this one the plan would be here to jv joint venture to buddy up with another property investor now this is because we want to leverage our experience that we've now got from completing the first property which took us six months to do we can take that to the property investors say this is what i've just done this is the money i made the profit i made from this how about we do something similar and we can just split the profits ultimately what we're looking for is an investor that's going to put down the deposit and also get the loan and you're not putting any money into the deal here other than your time experience and you'll look after the deal so it's up to you whether you project manage it whether you get hands-on and work with contractors to do the work and then you just split the profits 50 50 at the end of the deal and you'd make sure that you signed a contract between you get something written up that's kind of just basic that just says what the deal is who's responsible for what what's the profit split what's the exit strategy now to find people to buddy up with you want to be going to property meetup groups there's enough of them around different areas up and down the country in the uk and you're going to find someone that's a similar level to you maybe not done any development yet but has got was looking to buy a buy to let property you can pitch them with your approach as to how they can manufacture their profits rather than they just got to buy and hold for a certain amount of time now property three comes from where you've got your money from property one the cash back out from that one you go and do the same thing again as property one you buy this one on your own and again it takes you six months to get that one done but with this one the thing that we're doing differently here is we're going to run that at the same time as property two with our jv partner we're also doing one on our own at the same time six months so you've got two properties to look after in that six month time frame so this might come down to when you try and look for properties in the same area might make sense because that's where you've already done one and you might be able to find more opportunities in that same area for the next two properties if you know what you're looking for which you should do if you're starting to really understand that local area now you may find this difficult running two parallel projects at the same time especially if you're in a full-time job but you should know what needs to be done you've got the experience you can plan out what needs to be done who needs to do what but this is an important way that you and ohio are going to be able to get to that 10 properties in that three year time frame so once probably two and three are done six months later we're now at a point where we need to decide on the exit strategy property two when you join venture when you're buddying up with someone it's likely that the exit strategy is to sell because you're not life partners or anything like that you want to go your separate ways you want to get your profit and go so you're paying capital gains tax but again it's split between you if neither of you have claimed any capital gains tax so far that means you both get around 12 000 pounds kept tax-free from capital gain in the previous example if you're earning 50 000 a year the capital gains that you would pay is 3 69 pounds and that would be divided by two because there's two of you so that's all you'd have to pay capital gains tax so not even 2 000 pounds each if you were to sell that property for 160 grand having bought it for 120 plus refurb so with property three the exit strategy there would be the same property one just refinance that get the cash out put that money down to go again on another property so at the end of year one we've done three out of our ten properties now we're into year two so probably four and probably five we're doing parallel we're doing those two at the same time and with the first one here that would likely do is we're going to buddy up with someone again now this means that we will do the same thing it could be that if the first one was successful that person wants to go with you again if not you've had this time a year now where you should have been networking with like-minded people talking to them about what you're doing getting people inspired and motivated by your doing and that they want to then kind of buddy up with you and understand what you're doing along the way but again you're not putting any money in these deals they're putting everything into it which sometimes it might work sometimes it might not work you might have to do 50 50 on the deposit which you could do because you got some money from the sale of the other one and you've got the refinance out so it's up to you how you play that one but for me i'd be trying to angle that i'm not putting any money in the deal it's just my time you'll look after the whole refurbishment process the other person's just like a sign-up partner that you give weekly updates or things like that too property five then again this you do on your own and you use the money from the other properties in year one to put down as a deposit on this one so you could go with a slightly bigger deal if you wanted to now or just put or just keep going doing the same thing that we've done so far in the same area that kind of price point you know the 120 grand or so the exit strategy again would just be to refinance so you want to be holding this property and you're trying to make sure that your cash flow that 260 pounds per month to meet our financial free goal of that 31 grand a year and with property six and property seven again we're going to parallel these two probably six would be a jv with a with another property investor it could be the same one as before or a new one that you've built up a reputation now you're going to be able to find buddies to joint venture with out there and again you'd look for the similar types of property no money down probably seven you're going to be doing on your own and you're going to be using the money from the previous property you put into this one that you're then going to refinance out of and by now everything would be like clockwork hopefully you know what to do you know what you're looking for you know how long things take you know the risks easier you know what to look out for probably now got a power team of builders around you that will know what you're expecting the quality of finish that you want and just be able to get in and out and you should hopefully be able to knock that six months down to a shorter time frame but we're still allowing six months i would say anything between three and six months that you could achieve these types of things so at the end of year two now we've done seven property transactions now we're into year three and it's the same principle again we're going to look to jv with someone for property eight and sell that property pay the capital gains tax and we part friends we we split the profits and property nine and property ten you can potentially do yourself rather than jv with the money that you've got from the other ones from the jv and the deposit from the refinances so you've got potentially two properties that you can do yourself so that's nine and ten we can do now same principles look for the same types of properties refinance those properties out so we can keep going so there we've got to 10 properties in three years we could actually get to 11. we would parallel a cut eight and nine together and then 10 would just be done on that last one but you could jv again with someone to get to 11 in that in that 36 month time frame if you really wanted to so after three years you've got no end of experience you've done 10 probably transactions you may not own all of those properties because you've sold them to enable you to get going so you might be left with say six depends on your exit strategy with jv but i've just shown you a way that you can go from zero to ten properties within 36 months so i hope that's given you some inspiration motivation you can actually go out there and build your own property portfolio from zero to ten properties in three years thanks so much for watching i really do appreciate it and i'll see you next time [Music] so [Music]

Channel: Stephen Duncombe

Views: 180,344

Keywords: property investing, buy to let, rental property investing, buy to let uk for beginners, brrr property, how to invest in property with no money, buy to let first time buyer, how to build a property portfolio uk, how to build a property portfolio quickly, property investment strategies uk, uk property investment, how to start a property portfolio uk, build property portfolio uk, property investment uk, property portfolio, buy refurbish refinance rent, property investor uk

Id: 9KR8mCTGssM

Length: 19min 51sec (1191 seconds)

Published: Wed Feb 23 2022