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Over whelmed and need advice


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Hi guys I’m 22 years old and keen to kick start my properly journey this year.

I want to build a BTL portfolio via an ltd, I have done loads of research but I’m struggling with areas, I am not sure if I am not trying to find the perfect property but I am getting really hung up on the areas and I am hesitant to buy if it is not the exact area people have told me to look at this is mainly as I want to attract a good tenant and benefit from capital gains and not just buy in and old part of the town or city, I recognise I need to buy and through that I will gain loads of valuable skills and experience.

Does anyone have any tips for an over whelmed newbie? I would really appreciate any advice or guidance from someone with experience in what I am looking to set out to achieve.

 

if it helps my goal is to buy my first standard BTL this year use the positive cash flow and continue saving to get a deposit for my second purchase which I then want do as a BRR pull the money out to fund my third purchase and repeat until I’m at 5 once at 5 BTLS I want to move into the HMO market and build from there to get to 10 properties and redo my goals.

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Hi. Plenty of ambition. Nothing wrong with that.

It's harder to scale than you probably think. You can get good cashflow but you'll need to really supplement it with other income to get to where you are wanting.

I wouldn't look too far away. Why dont you want to buy where you live? 

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Hi Nic thanks again, the prices locally are to high I live in North London, I will be supplementing the deposits from my job and using cash flow as well as it builds up over time. How mainly properties do you currently own and how has your journey been?

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Well done for starting young, you will get there but it may take time. My honest view is unless your a builder doing the work, adding value is a small part and most gain will come from market uplift.

The bad part is your next purchase is also more expensive, the good part is with leverage this won’t be as bad. You certainly have time, but I’d say look at 5 years to get your money back or a lot of blood sweat and tears from yourself.

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Its always difficult starting out and I spent a year looking for the 'perfect deal' before deciding that 'good enough' was ok and went for a deal that was more than my budget but decent area - thinking back, my idea of buying BMV was too optimistic and I should have upped my budget at the start.

You also need to check that you are able to get a LTd mortgage etc upfront so you are fully informed. My advice would be to try a location that is not too far so maybe Northampton/peterborough etc as they are accessible from north London versus Liverpool/manchester etc - especially if doing BRR. 

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If you are struggling to find an investment area, you could pick a couple of broad areas like Peterborough (ideally not too far from you like others have said) and speak to some letting agents. They see properties all the time and if they are good and have been in the game for a while will know their areas inside out. Just say you are looking to invest in the area, give them an outline budget in terms of property value, and ask whether there are any areas which are in high demand and would make a good investment. You can even ask them about specific streets, postcodes, etc or even get them to draw in a map assuming you can get into the office (covid dependent). Most of the time they would love to talk to you as its what they're passionate about and you can get tons of invaluable insight from them. It should also help build relationships and give you an overview of which agents are good as I assume you will not managing the properties yourself. 

Once you have talked to a few agents you should have a fairly good picture of the good areas and hopefully a lot of them would overlap. Then you can use this information to narrow the area down and do further research - ideally walk through the areas, see what they are like, learn average historic prices for different types of properties in little sub-areas, rental values, etc. Then once an opportunity comes through - you'll know straight away if it's a decent deal or not. 

I got my first place around 6 months ago and I thought I would start with a low level refurb just like you say you're planning on doing. I'm very glad I did it as I did everything myself (apart from the stuff that requires a qualified person like the EICR or the gas safety check) and learned loads from it. Now I have the confidence to look into bigger jobs and know what to expect for certain things to cost which is really useful. Nothing beats actually going through the process yourself. Down the line I would be getting trades to do a lot of the work but at this stage it was important for me to get as much bang for my buck as possible as my pot wasn't huge. 

Finally - my biggest advice is to get more education early on. I recommend books as they are properly structured and it can be very easy to get lost in stuff if you read / watch bits and pieces here and there. The complete guide to property investment by Rob Dix is a great starting point but it it is worth reading as much as you possibly can as the ROI is insane. If you think about it - a £10 book and 8 hours of your time to read it could net you thousands in savings or gains. I know a lot of people would prefer a course /mastermind programme but really don't think it's worth it. The more I read about property, the more clarity I have in my head about the strategy I want to pursue and the more focused I am in my efforts to achieve it. 

Hope that's useful. 

Thanks 

Damyan 

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21 hours ago, lukel said:

I want to build a BTL portfolio via an ltd

Is there a reason? If you are starting I find tax advisers tend to suggest to buy a few first in your personal name. As for most people it makes little difference from a tax perspective. Though that does depend on your personal circumstances such as your income now and if you are a higher tax band already or if rental income will push you up a tax brand.

What I'm really saying is, the portfolio landlords talk about SPV's as it benefits them. Though its not the right answer for everyone.

21 hours ago, lukel said:

trying to find the perfect property

I think at some point you just have to pull the trigger. You are right to do your analysis and aim to find the "perfect property" but nothing is absolutely perfect. As long as the foundations are ok. The main thing is choosing the right opportunity at the time, not the right opportunity that may come up ever.

21 hours ago, lukel said:

I want to attract a good tenant and benefit from capital gains

Good - though no guarantee on either of them. They are both a gamble and you can prepare for the first and do checks. The latter is not up to anyone and investing in property is risky. You never know when a new peak is established and prices dont go past that point for X years.

21 hours ago, lukel said:

if it helps my goal is to buy my first standard BTL this year use the positive cash flow and continue saving to get a deposit for my second purchase which I then want do as a BRR pull the money out to fund my third purchase and repeat until I’m at 5 once at 5 BTLS I want to move into the HMO market and build from there to get to 10 properties and redo my goals.

It sounds like a great plan. I wish you the best of luck!

 

:wub: Get Mortgage Advice from my Team at Bespoke Finance on 08009202001 or email hello@bespokefinance.info 
:ph34r: 
Please don't take my messages on Property Hub as Personal Financial Advice, just a rambling guy passing time on a Coffee Break.
 

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What are you struggling with specifically? 
 

First thing I have done when I have decided I want to get 4-5 properties under my belt to aid retirement, is to listen to every podcast on here. I’m lucky, I became an accidental landlord in a northern city so I guess I’m further on than you, however you cannot put a price on research.

Even the simplistic things, have you listened / researched about the highest growth Uk cities? Have you then taken, Leeds for example and checked out all the places available for rent within a reasonable budget. Example 

- say you have £30k deposit, you can buy a £120k  place with that

- Id be hoping to get a ROI of 15% from that , so once factoring in mortgage payment, agents, tax etc. Prob looking at a rent of £650/675. 
 

- have you searched all the places for rent in your chosen location for that price. have you then opened a separate tab and searched every street to see what the previous sold prices were against the rent? Have you then looked at the sold Prices that have taken place in the last 10 years to see what potential capital growth could be forecasted? 
 

- Once you have found somewhere that looks like it yields well, you can afford the buying costs. Have you then researched the surrounding area for fundamentals to back up the capital growth and also to understand what your tenant demographic is to see how much “hassle” it could be?

honestly, in some ways you can over think it but it other ways it pays to do your research. Right down to transport links etc obviously.

generally, you know that the south is over values, so I’d look north.  Get yourself a decent agent, even if you make a personal trip up every 6 months (which you can expense) surely it’s got to be worth it.

 

 

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On 2/18/2021 at 6:26 PM, lukel said:

Hi guys I’m 22 years old and keen to kick start my properly journey this year.

I want to build a BTL portfolio via an ltd, I have done loads of research but I’m struggling with areas, I am not sure if I am not trying to find the perfect property but I am getting really hung up on the areas and I am hesitant to buy if it is not the exact area people have told me to look at this is mainly as I want to attract a good tenant and benefit from capital gains and not just buy in and old part of the town or city, I recognise I need to buy and through that I will gain loads of valuable skills and experience.

It's great to have lofty goals. I wish I was thinking like you, when I was 22!

Right now, there's a lot of focus on Northern towns like Manchester and Liverpool. Prices are a lot lower compared to London, and price appreciation is expected in these areas. Loads of London investors are buying in the North. I wrote an article on how to carry out long distance property investing

If you've never owned a property, then you are eligible for 1st time buyer programs like Help to Buy. The moment you buy an investment property, you will never be eligible again. So you may want your first property to be one that you live in 

In terms of being overwhelmed, it's very common! 

 

_______________________________________________________________________________________________________________________________
Vin Gupta
Property Investor and Developer
UK Property Blog: https://evolutionblogger.com/article/uk-property-articles
Travel Blog: https://soulfultravelguy.com/

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On 2/19/2021 at 3:57 PM, Adam Hosker said:

Is there a reason? If you are starting I find tax advisers tend to suggest to buy a few first in your personal name. As for most people it makes little difference from a tax perspective. Though that does depend on your personal circumstances such as your income now and if you are a higher tax band already or if rental income will push you up a tax brand.

What I'm really saying is, the portfolio landlords talk about SPV's as it benefits them. Though its not the right answer for everyone.

I think at some point you just have to pull the trigger. You are right to do your analysis and aim to find the "perfect property" but nothing is absolutely perfect. As long as the foundations are ok. The main thing is choosing the right opportunity at the time, not the right opportunity that may come up ever.

Good - though no guarantee on either of them. They are both a gamble and you can prepare for the first and do checks. The latter is not up to anyone and investing in property is risky. You never know when a new peak is established and prices dont go past that point for X years.

It sounds like a great plan. I wish you the best of luck!

 

Thanks for response, I will take on board everything you have said thanks 👊🏻

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Just now, lukel said:

Thanks for response, I will take on board everything you have said thanks 👊🏻

On the ltd yes as due to my job I would benefit from buying via an ltd.

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5 hours ago, EvolutionBlogger said:

It's great to have lofty goals. I wish I was thinking like you, when I was 22!

Right now, there's a lot of focus on Northern towns like Manchester and Liverpool. Prices are a lot lower compared to London, and price appreciation is expected in these areas. Loads of London investors are buying in the North. I wrote an article on how to carry out long distance property investing

If you've never owned a property, then you are eligible for 1st time buyer programs like Help to Buy. The moment you buy an investment property, you will never be eligible again. So you may want your first property to be one that you live in 

In terms of being overwhelmed, it's very common! 

 

Thanks I really appreciate it I will check the blog out as well thanks again 👊🏻

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On 2/19/2021 at 9:20 PM, ayns said:

What are you struggling with specifically? 
 

First thing I have done when I have decided I want to get 4-5 properties under my belt to aid retirement, is to listen to every podcast on here. I’m lucky, I became an accidental landlord in a northern city so I guess I’m further on than you, however you cannot put a price on research.

Even the simplistic things, have you listened / researched about the highest growth Uk cities? Have you then taken, Leeds for example and checked out all the places available for rent within a reasonable budget. Example 

- say you have £30k deposit, you can buy a £120k  place with that

- Id be hoping to get a ROI of 15% from that , so once factoring in mortgage payment, agents, tax etc. Prob looking at a rent of £650/675. 
 

- have you searched all the places for rent in your chosen location for that price. have you then opened a separate tab and searched every street to see what the previous sold prices were against the rent? Have you then looked at the sold Prices that have taken place in the last 10 years to see what potential capital growth could be forecasted? 
 

- Once you have found somewhere that looks like it yields well, you can afford the buying costs. Have you then researched the surrounding area for fundamentals to back up the capital growth and also to understand what your tenant demographic is to see how much “hassle” it could be?

honestly, in some ways you can over think it but it other ways it pays to do your research. Right down to transport links etc obviously.

generally, you know that the south is over values, so I’d look north.  Get yourself a decent agent, even if you make a personal trip up every 6 months (which you can expense) surely it’s got to be worth it.

 

 

Thanks for reaching out, yes I have researched a lot and covered a lot of what you have said I think I need to take the step and buy soon, I will take on board some of your posts raised that I hadn’t thought of thank you👊🏻👊🏻 

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On 2/19/2021 at 3:44 PM, Damyan Georgiev said:

If you are struggling to find an investment area, you could pick a couple of broad areas like Peterborough (ideally not too far from you like others have said) and speak to some letting agents. They see properties all the time and if they are good and have been in the game for a while will know their areas inside out. Just say you are looking to invest in the area, give them an outline budget in terms of property value, and ask whether there are any areas which are in high demand and would make a good investment. You can even ask them about specific streets, postcodes, etc or even get them to draw in a map assuming you can get into the office (covid dependent). Most of the time they would love to talk to you as its what they're passionate about and you can get tons of invaluable insight from them. It should also help build relationships and give you an overview of which agents are good as I assume you will not managing the properties yourself. 

Once you have talked to a few agents you should have a fairly good picture of the good areas and hopefully a lot of them would overlap. Then you can use this information to narrow the area down and do further research - ideally walk through the areas, see what they are like, learn average historic prices for different types of properties in little sub-areas, rental values, etc. Then once an opportunity comes through - you'll know straight away if it's a decent deal or not. 

I got my first place around 6 months ago and I thought I would start with a low level refurb just like you say you're planning on doing. I'm very glad I did it as I did everything myself (apart from the stuff that requires a qualified person like the EICR or the gas safety check) and learned loads from it. Now I have the confidence to look into bigger jobs and know what to expect for certain things to cost which is really useful. Nothing beats actually going through the process yourself. Down the line I would be getting trades to do a lot of the work but at this stage it was important for me to get as much bang for my buck as possible as my pot wasn't huge. 

Finally - my biggest advice is to get more education early on. I recommend books as they are properly structured and it can be very easy to get lost in stuff if you read / watch bits and pieces here and there. The complete guide to property investment by Rob Dix is a great starting point but it it is worth reading as much as you possibly can as the ROI is insane. If you think about it - a £10 book and 8 hours of your time to read it could net you thousands in savings or gains. I know a lot of people would prefer a course /mastermind programme but really don't think it's worth it. The more I read about property, the more clarity I have in my head about the strategy I want to pursue and the more focused I am in my efforts to achieve it. 

Hope that's useful. 

Thanks 

Damyan 

Hey Dayman, thanks for your advice I really appreciate it, I have read the book it’s the best thing I did completely agree on the book vs courses I really appreciate you taking the time to offer guidance I will certainly take it on board thank you 

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On 2/18/2021 at 9:07 PM, giles s said:

Well done for starting young, you will get there but it may take time. My honest view is unless your a builder doing the work, adding value is a small part and most gain will come from market uplift.

The bad part is your next purchase is also more expensive, the good part is with leverage this won’t be as bad. You certainly have time, but I’d say look at 5 years to get your money back or a lot of blood sweat and tears from yourself.

Thanks for taking the time to offer support Giles I’ll take it all on board thank you 

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On 2/19/2021 at 9:30 AM, haf1963 said:

Its always difficult starting out and I spent a year looking for the 'perfect deal' before deciding that 'good enough' was ok and went for a deal that was more than my budget but decent area - thinking back, my idea of buying BMV was too optimistic and I should have upped my budget at the start.

You also need to check that you are able to get a LTd mortgage etc upfront so you are fully informed. My advice would be to try a location that is not too far so maybe Northampton/peterborough etc as they are accessible from north London versus Liverpool/manchester etc - especially if doing BRR. 

Thanks I have checked I am able to use an ltd and agree on your points thank you 

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On 2/21/2021 at 1:06 AM, lukel said:

Thanks for reaching out, yes I have researched a lot and covered a lot of what you have said I think I need to take the step and buy soon, I will take on board some of your posts raised that I hadn’t thought of thank you👊🏻👊🏻 

Also mate, depending on your strategy, but people get really hung up (me included) on time to buy, should I shouldn’t I etc. If it’s a good area and the numbers add up for either cashflow or capital growth you will rarely regret buying somewhere, you can always change that decision in the future by selling or re- financing, If you never buy, you can never get back that time that you have lost. Even if you did a flip and couldn’t realise you re-finance straight away for example, there’s always silver linings in that you could rent it for 12-18 months , again yes wouldn’t have flipped it straight away but even though things didn’t go to plan, your still further on than you were.

the first one is always the best as it’s where you learn loads in good and bad situations from it! 

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5 hours ago, ayns said:

Also mate, depending on your strategy, but people get really hung up (me included) on time to buy, should I shouldn’t I etc. If it’s a good area and the numbers add up for either cashflow or capital growth you will rarely regret buying somewhere, you can always change that decision in the future by selling or re- financing, If you never buy, you can never get back that time that you have lost. Even if you did a flip and couldn’t realise you re-finance straight away for example, there’s always silver linings in that you could rent it for 12-18 months , again yes wouldn’t have flipped it straight away but even though things didn’t go to plan, your still further on than you were.

the first one is always the best as it’s where you learn loads in good and bad situations from it! 

Thanks mate, really appreciate it. Going to get on my bike and start buying 

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Hi Lukel

I've just sent a message to another hubber who is around your age and just starting out and thought you might benefit from what I posted to him. 

I thought I'd share some tips based on my own personal experience. The detailed considerations are covered in this article https://www.money-thoughts.com/post/should-my-1st-property-be-a-residential-or-buy-to-let-property, which I wrote, with my younger brother in mind. Here are some key points

  • Reflect on your goals and your 5 year plan.
  • Relax and take it easy..ish. One step at a time. 
  • Don't waste your 1st time buyer status (I assume you're a first time buyer) 
  • Consider buying a residential property and letting out a room or two. You'll benefit from the government's rent a room tax free scheme and you'll be building up your experience in property investment in a relatively low-risk way. This will also mean you don't pay Capital Gains Tax which is a major benefit of Residential property compared to Buy 2 let property
  • Within 6 months to 1 year of executing the residential purchase and getting lodgers, you might want to take a step back and reflect and decide if your plans need refining before getting the next one.
  • Try not to obsess about the number of properties, but instead think in terms of a cash flow target. 

I'll finish by encouraging you to start the property investment journey if you can. Because I started early, I've been able to achieve milestones I never thought I could back then (nb - I started from a position of homelessness). The snowball effect of property is very real. It starts slow and then builds momentum ... and then one day you look at yourself and think.... wow I've come very far from where I started.

Hope this helps

Bemi

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On 2/26/2021 at 11:04 PM, Bemi Odunlami said:

Hi Lukel

I've just sent a message to another hubber who is around your age and just starting out and thought you might benefit from what I posted to him. 

I thought I'd share some tips based on my own personal experience. The detailed considerations are covered in this article https://www.money-thoughts.com/post/should-my-1st-property-be-a-residential-or-buy-to-let-property, which I wrote, with my younger brother in mind. Here are some key points

  • Reflect on your goals and your 5 year plan.
  • Relax and take it easy..ish. One step at a time. 
  • Don't waste your 1st time buyer status (I assume you're a first time buyer) 
  • Consider buying a residential property and letting out a room or two. You'll benefit from the government's rent a room tax free scheme and you'll be building up your experience in property investment in a relatively low-risk way. This will also mean you don't pay Capital Gains Tax which is a major benefit of Residential property compared to Buy 2 let property
  • Within 6 months to 1 year of executing the residential purchase and getting lodgers, you might want to take a step back and reflect and decide if your plans need refining before getting the next one.
  • Try not to obsess about the number of properties, but instead think in terms of a cash flow target. 

I'll finish by encouraging you to start the property investment journey if you can. Because I started early, I've been able to achieve milestones I never thought I could back then (nb - I started from a position of homelessness). The snowball effect of property is very real. It starts slow and then builds momentum ... and then one day you look at yourself and think.... wow I've come very far from where I started.

Hope this helps

Bemi

Thanks Besim I really appreciate it 

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On 2/18/2021 at 10:26 AM, lukel said:

Hi guys I’m 22 years old and keen to kick start my properly journey this year.

I want to build a BTL portfolio via an ltd, I have done loads of research but I’m struggling with areas, I am not sure if I am not trying to find the perfect property but I am getting really hung up on the areas and I am hesitant to buy if it is not the exact area people have told me to look at this is mainly as I want to attract a good tenant and benefit from capital gains and not just buy in and old part of the town or city, I recognise I need to buy and through that I will gain loads of valuable skills and experience.

Does anyone have any tips for an over whelmed newbie? I would really appreciate any advice or guidance from someone with experience in what I am looking to set out to achieve.

omegle ometv cps test

if it helps my goal is to buy my first standard BTL this year use the positive cash flow and continue saving to get a deposit for my second purchase which I then want do as a BRR pull the money out to fund my third purchase and repeat until I’m at 5 once at 5 BTLS I want to move into the HMO market and build from there to get to 10 properties and redo my goals.

According to me there is nothing wrong with that.

It's harder to scale than you probably think. You can get good cashflow but you'll need to really supplement it with other income to get to where you are wanting.

I wouldn't look too far away. Why dont you want to buy where you live? 

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