Strategy Advice for BTL + SPV rookie

[joncorrigan]

Hi All,

I've been using 14days in an isolation hotel to research, educate and prioritise my investment strategy, to ensure a secure and free future.

This forum has been trailed, books read and umpteen brilliant Podcasts listened to, so thanks firstly to Rob + Rob  for their inspirational effort and to everyone else involved on this forum!

Background:

I'm a single 34yr old expat, but although I live abroad it's not essential to my job, so I now intend to move back to the UK at the end of this tax year. Seemingly a hard decision to ponder, but when taking advice and simply writing a page of pro's and con's... Blighty was the clear winner at a score of 8/2. I work on a month on / off basis when the going is good, I'm a sparky by trade, useful and experienced in a site environment, plus my brother is a builder. I currently have no property to my name and will have 200k - 230k in cash savings by the time I get back to good old GB. My salary is meant to be just north of 120k but is currently chopped due to the obvious. 

Now... onto the strategy (in brief form)

Short Term Goals (2.5yrs)

• Move back to the UK and purchase a modest private residence with the aim to refurbish, create equity + keep until I feel the need to upgrade 
• Purchase x5 BTL properties (each 60-80k) using an SPV by means of directors loan(s) and BRR strategy 
• Continue working away + reinvest all SPV profits 

Mid Term Goals (5yrs)

• Have purchased x10 BTL's using compounding rents / BRR / directors loan model 
• Upgrade private residence, be building good equity and overpay mortgage if possible (life may get in the way here) 
• Continue to enjoy my away job + reinvest all SPV profits 

Long Term Goals (10+yrs)

• Company owns 20+ BTL's with a mixed spread of high yield / capital growth focus
• Primary residence has low mortgage repayments / high equity
• Option to scale back my day job from being staff to contractor and pick my jobs as and when
• At this stage I hope to be able to re-evaluate my portfolio and either press on investing or take some equity through sales, pay off chunks of finance to move closer towards a monthly passive income of 5k.

I will adjust along the way and the numbers are not set in stone... ie If some of the portfolio has gained some capital growth and the money may be better elsewhere, then I intend to be as fluid as I need to be, because at 45 - 50yrs old, yield will be priority. 

I have the rest of this year to fine tune this plan but that's the general strategy right now. 

I would really appreciate some general feedback, thoughts, experiences, criticism and anything you this is good for me to hear.

Thanks for reading and good luck.

Jon

[haf1963]

The stratgey is fine on paper but won't be as straightforward in reality. Definitely do-able though and very similar to the position i was in 5 years ago when i started. It took about. a year to buy/renovate/rent/mortgage each property and after doing 3 it became clear that  the net return was not sufficient as SPV mortgage rates are high (4%) and there are various costs ascociated with running a compnay and conforming to all regulations. I then did a buy/extend/convert-to-hmo and this (not yet mortgaged) is giving me a great return and a better investment than the other 3 put together from a yield perspective. I will mortgage this year as my next project is a build of a small block of flats.  My original 3 will good me good capital growth over time but the hmo/flats will be better for income.

So the strategy is ok but you will need to be prepoared to adapt as its very likely you will change as you learn.

[joncorrigan]

Hi,

Thanks for the response, that's great. I will need to adapt and change yes, inevitably making mistakes.

I just wanted to put the general gist out there to see if it had potentially any disastrous flaws, I guess i'll keep trying to learn what I can this year and then see how I go.

.... there's no substitute for experience, so thanks for sharing yours. 

All the best.