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Cash pot - realistic monthly return on investment


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Hi all 

Potentially I will have around 700k on investment and I would be looking to purchase as many houses as possible to replace my work income. Ideally I'm thinking of Liverpool to invest and would be putting down 25% on each property. Realistically how much income do you think it's viable to generate per month (taking into account all expenses and I would be a hands off Investor)? As I'm only interested in cash flow initially.

All comments appreciated - thanks in advance

James

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Hi James

You are in a privileged position with that kind of investment pot available. You will find some suggestions in here: https://www.thepropertyvoice.net/soundbite-episode-i-250000-invest-property-easy-right/ 

In particular, I would suggest that you look at number 5, as your plans sound like you will be busy buying lots of properties for some time otherwise. With this sort of capital investment fund, you can enter into a completely different market, not open to most and that could bring you into several opportunities that might surprise you. Perhaps look at portfolio purchases or small blocks on the portals or in auctions for example? One way of doing this could be to buy ready made blocks of 6 units or more at a time and/or companies that hold multiple assets...this will save on SDLT and in some respect transaction costs (and time) too.

Best

Richard

Richard W J Brown a.k.a. The Property Voice

Property Investment Strategist

10%+ ROI property deals every week: check out PROPERTY DEAL TIPS
Amazon best-selling author Property Investor Toolkit & #PropTech, YPN Magazine columnist & PODCAST host

Web & Blog: The Property Voice | Curated property news & insights feed

Facebook Page | TwitterLinked In

Let's connect...mention The Property Hub :)

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Thanks Richard

Yes I'm fortunate and ideally would like to split money between investments (shares) and property. To buy flats in bulk can you go directly to the house builder or usually do you need to go via an intermediary and pay them a sourcing fee?

James

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This is a super complex questoin with too many variables to give a straight answer.  As a start lets assume yopu get 10 properties at 150k each giving 700 minimum in rent (numbers work in the midlands so could be better in liverpool etc). at 40k per properties for deposit and expenses then you are looking at 10 properties. Assuming each one has a 50% mortgage interest cost and 10% management plus 10% buffer then you are looking at 30% return so 200 per house i.e 2000 per month for all 10. The 10 properties would have cost you 400,000.

There are a huge amount of factors not considered eg - unlikley you will get 10 mortgages, - tax implications depending on personal versus LTD plus a load of other things

Then there are options like HMO or buying blocks of flats and many others so you really need a lot more advise than this forum to be honest. The numbers above are so rough that I would not be making decisions on them for sure. You could probbaly double the 2k per month by doing this differently - but those will bring you into different challenges

 

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7 hours ago, haf1963 said:

This is a super complex questoin with too many variables to give a straight answer.  As a start lets assume yopu get 10 properties at 150k each giving 700 minimum in rent (numbers work in the midlands so could be better in liverpool etc). at 40k per properties for deposit and expenses then you are looking at 10 properties. Assuming each one has a 50% mortgage interest cost and 10% management plus 10% buffer then you are looking at 30% return so 200 per house i.e 2000 per month for all 10. The 10 properties would have cost you 400,000.

There are a huge amount of factors not considered eg - unlikley you will get 10 mortgages, - tax implications depending on personal versus LTD plus a load of other things

Then there are options like HMO or buying blocks of flats and many others so you really need a lot more advise than this forum to be honest. The numbers above are so rough that I would not be making decisions on them for sure. You could probbaly double the 2k per month by doing this differently - but those will bring you into different challenges

 

Thanks - I need to think about it further. Ideally buying in bulk sounds attractive as should be able to purchase a few properties at a discounted price. Thanks for the suggestions very much appreciated!

James

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Hi James

You should be able to secure a discount when acquiring a large block or portfolio. To perhaps whet your appetite, I did a quick search using a tool that I have and found these within 5 minutes:

https://www.zoopla.co.uk/for-sale/details/49811320

https://www.zoopla.co.uk/for-sale/details/53784352

https://www.onthemarket.com/details/7686918/

https://www.zoopla.co.uk/for-sale/details/53831193

http://www.expertagent.co.uk/EstateAgentSoftware/EstateAgencyProperties.aspx?pid=a1806ae2-9b6e-4909-bdac-98d067c106ca&aid={2249d4b9-656d-4d2d-bd9b-02dac4c8c862}

Finding them is not that difficult, just search using the search terms investment or investment portfolio on the property portals and set the minimum price to say £500k/£750k+ or more to filter out single properties. You could also try the commercial agents (start with Rightmove Commercial). Registering with specialist property sourcers and buying agents is another option, who would charge a fee but in theory should either bring you discounted deals or the value add of time, knowhow, contacts, etc. to offset their fee.

So, now you know you can find such larger deals, the harder part is structuring them. Here you might need some support and guidance, as it will need careful due diligence, planning, financing, etc. But it would still be a lot better than ploughing ahead trying to find dozens of individual transactions, that's for sure!

Drop me a message if you need any further pointers or contacts.

Best

Richard

Richard W J Brown a.k.a. The Property Voice

Property Investment Strategist

10%+ ROI property deals every week: check out PROPERTY DEAL TIPS
Amazon best-selling author Property Investor Toolkit & #PropTech, YPN Magazine columnist & PODCAST host

Web & Blog: The Property Voice | Curated property news & insights feed

Facebook Page | TwitterLinked In

Let's connect...mention The Property Hub :)

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