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Best way to invest 100k in property: How would you do it?


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1 hour ago, jamie stewart said:

Try not let the job get you down Ben - easier said than done, I know. You will eventually get there. It took me 6 years to reach the point I could quit my job. My advice would be to save as much as you can, keep motivated by attending meetups and reading books, and keep educating yourself between purchases to make each one better than the last.

Cheers mate. Nice to hear someone who thinks the same way as me. Though it was me being a miserable sod and constantly just living for the weekend lol 

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4 hours ago, jamie stewart said:

Loving the response to this post, so thought I would chime in with my own 2 cents...

I was in a similar position but I had around £150k to invest. My capital came from selling a portfolio in New Zealand - and there's no capital gains tax in NZ! I moved back home to the west coast of Scotland with the intent of building a portfolio ASAP. Like alfonso mentioned above, property is relatively cheap here and rents are high which produces great cashflow.

Over the next 20 months, I was involved in 10 property deals: I bought our family home, added 7 BTL's to our portfolio and sourced 2 off-market properties and managed the refurb for clients. The majority of properties in my portfolio are 2-3 bed terraced houses which I picked up for £40-70k, and then used the BRR strategy to recycle most of my cash out the deal. All my properties are rented and the before tax monthly cashflow (after mortgage, insurance, management and maintenance fund) is £1,995, so £285 per property on average.

The cashflow from my portfolio allowed me to quit my high-stress, long-hours job just before Christmas. I'm 30 years old and I'm effectively retired. I spend my days with my wife and 5-month old daughter, working on a hobby business and I've recently taken over the management of my portfolio (adding another £290/month to cashflow).

Achieving financial independence as soon as possible has always been my goal. For me, I would rather have my time and freedom to do as I choose than work a job I hate, no matter how much it paid. Therefore, my strategy has always prioritised high yield properties to replace income from my job. I accept that I may not make as much money in the long run if I was to target areas likely to experience strong capital growth, but living life on my own terms now is a much greater reward for me.

Whatever way you decide to invest your £100k should be tied to your values and life goals. The true value of money is in letting us experience life to it's fullest.

This is my dream also. I'm 28 and if I can achieve this by 40 I will be very happy.

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4 hours ago, jamie stewart said:

Loving the response to this post, so thought I would chime in with my own 2 cents...

I was in a similar position but I had around £150k to invest. My capital came from selling a portfolio in New Zealand - and there's no capital gains tax in NZ! I moved back home to the west coast of Scotland with the intent of building a portfolio ASAP. Like alfonso mentioned above, property is relatively cheap here and rents are high which produces great cashflow.

Over the next 20 months, I was involved in 10 property deals: I bought our family home, added 7 BTL's to our portfolio and sourced 2 off-market properties and managed the refurb for clients. The majority of properties in my portfolio are 2-3 bed terraced houses which I picked up for £40-70k, and then used the BRR strategy to recycle most of my cash out the deal. All my properties are rented and the before tax monthly cashflow (after mortgage, insurance, management and maintenance fund) is £1,995, so £285 per property on average.

The cashflow from my portfolio allowed me to quit my high-stress, long-hours job just before Christmas. I'm 30 years old and I'm effectively retired. I spend my days with my wife and 5-month old daughter, working on a hobby business and I've recently taken over the management of my portfolio (adding another £290/month to cashflow).

Achieving financial independence as soon as possible has always been my goal. For me, I would rather have my time and freedom to do as I choose than work a job I hate, no matter how much it paid. Therefore, my strategy has always prioritised high yield properties to replace income from my job. I accept that I may not make as much money in the long run if I was to target areas likely to experience strong capital growth, but living life on my own terms now is a much greater reward for me.

Whatever way you decide to invest your £100k should be tied to your values and life goals. The true value of money is in letting us experience life to it's fullest.

This is my dream also. I'm 28 and if I can achieve this by 40 I will be very happy.

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2 hours ago, ross w said:

This is my dream also. I'm 28 and if I can achieve this by 40 I will be very happy.

Quitting the job by 40 through property is definitely achievable. Once you start building momentum, you'll probably figure out ways to reduce the time to achieve your goal. It's hard work, but totally worth it. All the best with building your portfolio.

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On 3/9/2019 at 5:25 PM, jamie stewart said:

Loving the response to this post, so thought I would chime in with my own 2 cents...

I was in a similar position but I had around £150k to invest. My capital came from selling a portfolio in New Zealand - and there's no capital gains tax in NZ! I moved back home to the west coast of Scotland with the intent of building a portfolio ASAP. Like alfonso mentioned above, property is relatively cheap here and rents are high which produces great cashflow.

Over the next 20 months, I was involved in 10 property deals: I bought our family home, added 7 BTL's to our portfolio and sourced 2 off-market properties and managed the refurb for clients. The majority of properties in my portfolio are 2-3 bed terraced houses which I picked up for £40-70k, and then used the BRR strategy to recycle most of my cash out the deal. All my properties are rented and the before tax monthly cashflow (after mortgage, insurance, management and maintenance fund) is £1,995, so £285 per property on average.

The cashflow from my portfolio allowed me to quit my high-stress, long-hours job just before Christmas. I'm 30 years old and I'm effectively retired. I spend my days with my wife and 5-month old daughter, working on a hobby business and I've recently taken over the management of my portfolio (adding another £290/month to cashflow).

Achieving financial independence as soon as possible has always been my goal. For me, I would rather have my time and freedom to do as I choose than work a job I hate, no matter how much it paid. Therefore, my strategy has always prioritised high yield properties to replace income from my job. I accept that I may not make as much money in the long run if I was to target areas likely to experience strong capital growth, but living life on my own terms now is a much greater reward for me.

Whatever way you decide to invest your £100k should be tied to your values and life goals. The true value of money is in letting us experience life to it's fullest.

 

Congratulations and well done to you on your achievements and your success. It is always inspirational hearing what others have done, to see what is possible, and to use it to drive myself in my own journey. 

Life goals is the key to decision making, and this is something I am giving considerable thoughts too. 

I am looking at 50k to invest, and will need to invest it in a way the aligns to my objectives. I need to keep an eye on the prize. 

 

 

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5 hours ago, kent614 said:

 

Congratulations and well done to you on your achievements and your success. It is always inspirational hearing what others have done, to see what is possible, and to use it to drive myself in my own journey. 

Life goals is the key to decision making, and this is something I am giving considerable thoughts too. 

I am looking at 50k to invest, and will need to invest it in a way the aligns to my objectives. I need to keep an eye on the prize. 

 

 

Completely agree with you: getting clear on what you want from property investing is definitely the key. It's easy to get swayed by the opinions and success stories of others and chase strategies that won't ultimately produce what you want.

As I mentioned, my goal has always been to make enough money from property to be able to quit my job. If it wasn't property, I would have invested in dividend-paying shares or looked to start a business that provided passive income. But in my opinion, property is by far the easiest and quickest way to achieve financial independence.

£50k is a fantastic amount to invest! Not sure where you are, but £50k could by 2 properties (or even 3 at a stretch) where I'm from. Happy days.

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On 3/9/2019 at 9:25 AM, jamie stewart said:

@jamie stewart

Over the next 20 months, I was involved in 10 property deals: I bought our family home, added 7 BTL's to our portfolio and sourced 2 off-market properties and managed the refurb for clients. The majority of properties in my portfolio are 2-3 bed terraced houses which I picked up for £40-70k, and then used the BRR strategy to recycle most of my cash out the deal. All my properties are rented and the before tax monthly cashflow (after mortgage, insurance, management and maintenance fund) is £1,995, so £285 per property on average.

The cashflow from my portfolio allowed me to quit my high-stress, long-hours job just before Christmas. I'm 30 years old and I'm effectively retired. I spend my days with my wife and 5-month old daughter, working on a hobby business and I've recently taken over the management of my portfolio (adding another £290/month to cashflow).

 

@jamie stewart good to hear your progress, looks like you're doing well !

Everyones goals are different, and so their strategy should be different too.

Im happy sticking with my day job for income, so I don't want property to be my new day job - ie lots of work.
I want to be hands off in property as much as possible to generate passive income, so my thoughts of how to spend £100K are ...

Buy properties from 80-100K - costing about 25K each with deposit/fees.
So thats 4 properties which should Net about £1K a month.

If you can add value/buy cheap and refinance at a higher value then you can re-use the deposits again down the line.

If you don't spend the rental income, but save it for the next deposit, you can buy another property approximately every 2 years.

So in 10 years you will have 9/10 properties. 

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I see from this thread that many people have decided not to go down the route of investing in off-plan, new or nearly new properties in cities through sourcers such as PropertyHub Invest. Does anyone mind sharing their thoughts on why they have decided to go down their specific routes rather than this one?

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18 hours ago, darren-221 said:

@jamie stewart good to hear your progress, looks like you're doing well !

Everyones goals are different, and so their strategy should be different too.

Im happy sticking with my day job for income, so I don't want property to be my new day job - ie lots of work.
I want to be hands off in property as much as possible to generate passive income, so my thoughts of how to spend £100K are ...

Buy properties from 80-100K - costing about 25K each with deposit/fees.
So thats 4 properties which should Net about £1K a month.

If you can add value/buy cheap and refinance at a higher value then you can re-use the deposits again down the line.

If you don't spend the rental income, but save it for the next deposit, you can buy another property approximately every 2 years.

So in 10 years you will have 9/10 properties. 

Like the investor approach, Darren. Great option for anyone with a career they enjoy and who wants to remain as hands-off as possible. You may not achieve max ROI by making your assets "sweat" as much, but the tradeoff of more time and less stress could be worth it. Either way, you're going to end up with a portfolio that enables lifestyle choices and a comfortable retirement. As you mentioned, your approach comes down to your goals.

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Good thread with lots of interesting ideas. I've been lurking for a while, and I've decided to finally post, hello all!

I am indeed looking to invest  £100,000; I've been looking at flips, because I enjoy the renovation side of them. What I do not enjoy is having tenants. I'm ok with making flips my work, because essentially this is what I used to do for someone else, only for them to benefit from my architectural work. I want to continue doing it, but for myself.

This leaves me with two choices I cannot pin down:

either purchasing a property in Liverpool or Sheffield, using all cash, but having to relocate there to project manage the construction work, not to mention the trips to view properties beforehand. Also I don't know the cities well, and areas seem to change one road to the next, unlike London. Estate agents only deal with what's in their patch, and they expected me to mention which areas are owner-occupiers. I based it on the city studies I found in the Property Hub magazine, obvs.

Or looking for a property in London, which I do know, supplementing the money with a bridging loan. Incidentally I only last week found out that the LTV refers to the gross amount, including all fees and interests, not the net you'll get in your bank! Did. Not. Know. That. And this required recalculating everything.

I will have to decide which is better for me; thanks for the ideas in this thread, all.

Finally, didn't Rob and Rob used to recommend a company for bridging loans? I remember phoning them last year, asking for general information, but lost the number and cannot remember the name.

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Best way to invest £100k in property - attending 20,000 Property Hub meet ups. :D

And if I had another £100k, I'd pump it into a couple of deposits for 3 bed freehold, standard BTL homes up north, and set some funds aside as a cash buffer. Keep working as I enjoy what I do, build up the savings, and repeat in a couple of years. 

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Debating this myself right now ... thinking of 2 flips at a time to learn the ropes, but tempted with 3 x 3 bed btl in birmingham/greater Manchester for the capital gains rather than tie it all up in flips!  Heart wants to flip now and quit the day job, head wants the long term capital gains, feels like lots of us can’t wait to quit the job ! Need to get clear on this - going to listen again to the pod that talked about different investor profiles ! 

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17 hours ago, emma jayne said:

Hi Silvia - have you considered linking with a local source/proj manager up north to manage for you? Personally I am relocating up north to do it myself, but not in your area. 

 

Think the propertyhub linked bridging co is lendswift 

kind regards

emma 

Lendswift! That's it, thank you.

I suspect the project manager would get paid more than I earn, plus, I do enjoy being on site. I might have to give serious consideration to relocating. I think I'm suffering from analysis paralysis, like Rob and Rob say. 

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This is a tricky one and subjective to the amount of "risk" the OP has, their age, commitments etc etc.  There is never a 1 answer fits all, as someone who is 21 has a lot more options than someone who is 60.  The first port of call would be to spend a few months just taking in education, so books, podcasts, forums etc.  

 

Personally my key aim is to grow the passive income side.  That is key for me at the moment as I run a BTS business.  If the market crashes then I need to ensure that I have regular income regardless so worst case scenario I can put my feet up for a few years and get fat(ter).  Once I have achieved my basic living costs + extra to be comfortable then I would look at capital growth etc.

 

For the OP they have a few options (hundreds really but these are what I would have done):

1/.  Use the £20k to purchase 5 x BTL's.  Where I operate you could quite easily pick up 5 x BTL's.  For arguments sake lets say £65k purchases plus all fees and round it up to £20k per property.  These could achieve between £425-£450PCM.  Minus mortgage at £125 and you have approx £300 gross (Yes, I haven't included voids, maintenance, insurance etc).  This would generate a turnover of £3,600 per year.  5 of these would be around £18k per year, so in theory you are not far off being able to purchase an additional BTL every 12 months.  As we all know you would benefit from the snow ball, so examples:

Year 1 x 5 Properties = £18k (you top up with 2k of your own money!)

Year 2 x 6 Properties = £21.6k.  Purchase 1 property and have £1.6k spare

Year 3 x 7 Properties = £26.8k.  Purchase 1 property and have £6.8k spare

Year 4 x 8 Properties = £32.6k.  Purchase 1 property and have £12.6k spare

Year 5 x 9 Properties = £45k.  Purchase 1 property and have £25k spare

Of course this doesn't cover tax, insurance etc etc but its a very simplistic way to see how pooling the money and re-investing can grow.

 

2/.  They could "invest" in someone else such as the standard JV or private loan agreement.  This way they could use their capital and grow it, then use the profits from this to acquire BTL's.  Example again (all gross, no costs to keep it simple):

Year 1 - Loan £100k @ 10% = £10k income (Total £110k)

Year 2 - Loan £110k @ 10% = £11k income (Total £121k)

Year 3 - Loan £121k @ 10% = £12,100 income (Total £133,100)

Year 4 - Loan £133,100 @ 10% = £13,310 income (Total £146,410)

Year 5 - Loan £146,410 n@ 10% = £14,641 income (Total £161,051).

 

They could also mix it up, so do the 2nd one and buy 1 single BTL every 2 years with the £21k profit.

 

3/.  MOVE to where the opportunities are.  Pack it all up, take the risk, and make your millions.......

Rent a property at £500PCM, live off a very low amount of money and get a couple of BTS under your belt.  Get experience, 1 flip will turn to 2.  Keep re-investing, keep turning the money over.  Pick up a BTL along the way where you are rinsing and recycling your money (not all of it, but enough).  It is simply amazing what you can achieve in 2 years doing full time.

I started back in Feb 2007 and now I am very fortunate to be purchasing my 20th personal property, as well as another 5 that I have found for clients and will be renovating them and managing them (we also set up a lettings agency at the start of this year and have 14 properties on the books - most are in the purchase stage).

 

I was fortunate as I was in between careers so was able to just jump in head first, but I started with just £25k.  £100k would allow you a couple of years wages and have the money to get the first property and renovate and sell.

 

 

It is a tough one, but regardless a £100k is an amazing starting pot and the OP should be able to do well from it regardless.

 

Darren

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Hi Darren

Thanks for such a thorough answer! I’m in such a similar position! Just getting a residential on house near Halifax and moving up north. Contracting to pay the bills at the mo. In a dilemma as to whether to let or sell the house near London so have pot of money to flip as struggling to get anything more than 15k out of it from remortgage! Equity release is a bugger! Really motivated by your story! Makes me tempted to sell up and flip though know it is very competitive! Do you have any regrets yourself? Emma 

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22 hours ago, emma jayne said:

Hi Darren

Thanks for such a thorough answer! I’m in such a similar position! Just getting a residential on house near Halifax and moving up north. Contracting to pay the bills at the mo. In a dilemma as to whether to let or sell the house near London so have pot of money to flip as struggling to get anything more than 15k out of it from remortgage! Equity release is a bugger! Really motivated by your story! Makes me tempted to sell up and flip though know it is very competitive! Do you have any regrets yourself? Emma 

Hi Emma,

Do you want to move back to London or is your plan to stay up this way (It's much nicer up here!).  If you are planning on going back to London eventually then I would personally look to keep the property and let it out, as I imaging buying something in 5 years time would be rather costly?  If you are just packing up and jumping ship then I would just sell it and have a bigger pot of cash.  If you are moving up here to actively flip then the more cash the better.  I think that decision is one that only you will really know.  If you can flip now without selling the London property do that and then review selling the London property at a later date.

I have zero regrets, you definitely get out what you put in, and if you can go full time it will certainly make a difference.  Being hands on at the very beginning is great and an amazing learning tool.  You also get to know your trades better as you are on site.  I still use some of the lads now that I used on my very first job.  If you never go for it then you will never know what you can achieve.  I was fortunate that i was in between jobs and that I live where property is cheap, if I was southern based then there is probably zero chance i would have ever even looked at property, never mind gone full blown into it. I think you moving to where the property is available is an amazing feat on its own, and you should really give yourself a pat on the back!

Darren

 

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