Hi Venture Travel,
I use a stacking system, this is what the property has to have.
Minimum 25% equity.
Living Tennants that can afford the rent.
In a Good State of repair.
If one of the above is missing I walk away.
All are re payment mortages over 20yrs.
Find me deals and I pay £1K per completion per 100k property.
Yes Im in it for the long term and it dose generate substancial revenues if this is done right, I mean for every deal I set up I would recieve any thing from £4-15k soon as the tenancey starts not in equity but in hard cash.
The most profit is from the £300k+ house's
Its not unusuall to purchase for £350K when the house is worth £480K mortage it for £380K minus £350K what you pay for it minus fees £3.5 to the finder £7K to lender, leagal and stamp duty will give £15k+ instant profit.
On the balance sheets it shows £480K minus £380 = £100k equity
Not bad Ehh ?
Now if you were to do two deals like that per year = £30k income
Then do one deal per month at £4K per deal x 10 =£40 k income
So by working smart and putting this into action £70K P.A. is achievable
The £70K minus fully expensed car, Gardener, House Keeping (I have brokers visit my home) pluss other tools & expense's that are nececeary to do business like , eating out with clients ect, weekends away ect.
This will Still leave you with £50K P.A.
To do this correctly you need agents to find deals ( I pay agents £1K per £100K) who will get the best deals plus usuall internet sites and possibly 15hrs work per week management time.
Set up costs are minimal a days trading will be ok £500 internet, 0800 free phone number and office address £400 good colour brochures printed £1000
Then with a bit of luck by the end of month one your up and running and in profit ?
Good Luck , I have done the courses and only been in this for just one year, through out this time I have bought of landlords who are screaming for the exits at well below market value.
Some are selling houses and apartments at 50% below what they have paid for them.
Its early days for me in the property game in one year the business has lots of equity and I purchased 15 properties the rent paid by tennants covers, maintenance insurance and mortage's.
I do not make nothing on the rents untill there fixed rental agreement runs out normally 2years untill I can increase the rent in line with my costs of borrowing. However I will do what ever possible to keep rents low as a happy tennant is a good tennant who looks after the property and stays there.
Out of the 15 deal I have done over the past year the income has been £30K after all expense's, car, equipment ect and set up charges.
2009 I expect to do at least 30 deals and take £130K after expenses this is because I forsee higher value properties will come on the books and it is these type of deals that bring in good initial revenue.
The equity at the end of 2009 should reach with 35 average houses £700K (20k per house) and 15 £900K higher valued houses (£60k per house)
If property values fall further these figure will ecrease, and will increase if the rise.
Over these two years I would have spent over 2000 hours of my time building this business, will it be worth it ?
Time will tell, I may only do 12 deals ?
If all goes to plan which I see no reason for it not to here are the figures.
£190K Income with £2,000,000 in business equity if prices stay similar to today.
I plan to repeat the same each year for 8 yrs, by then the rental income would have increased to give a good income.
I will never ever, never sell a property, when the next property bubble comes to a peak ( 1992 --2007 ) = 15 years or 2025 ish I will then go and buy an ice cream van and visit schools and parks to give children free ice cream on hot sunny days.
Due to time V effort core trading time has been reduced, my girl friend will take over the property business later this year so I can spend more time doing what I do best, Trading Stock Index's over a 12 month pieriod I do OK.
TAKE NOTE I STARTED THIS PROPERTY BUSINESS WITH NOTHING YOU CAN DO THIS TOO OR MESSAGE ME IF YOU OR KNOW SOME ONE WHO REQUIRES ASSISTENCE.
Sorry in advance for any spelling mistakes TomTom
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