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Beginner to Winner!


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Hey everyone!

Just to introduce myself... My name's Shane, I'm 34, I live in the South West of England, I work full-time as a head chef and I'm an absolute beginner when it comes to property. Since a teenager, I have always dreamed to be a property investor, yet, I had the wrong mindset that it wouldn't be possible for me to achieve this. However, that mindset has since changed, and I'm now going to make my dream a reality. I know it will take a lot of hard work, education, determination and working with the right people to make this happen, but if I put as much effort into property as I have done in my catering career, then I know I can successfully do this!

So... my short term goal is to have the keys to my first (BTL*) property by the end of next year, and my long-term goal is to have a portfolio that will allow me to have more freedom to travel more (my other passion), and also to retire earlier & comfortably.

To achieve my short-term goal, I am saving roughly about 75% of my wages each month to build up capital and being very frugal with my spending. I'm taking the time to read as much information online, reading useful books, watching as many informative videos as possible, taking advantage of the free courses/tools that PropertyHub and other sites have to offer, plus talking to those with experience. Is there anything else I can be doing in the meantime?

*I also have a question based on my short-term goal. An estate agent friend of mine recently mentioned that I would need to have a residential mortgage first before having a BTL mortgage - something that changed in the last couple of years or so... Is this true, and if so, could I change the residential mortgage to a BTL mortgage soon after? 

I have so many other questions, so if you're able to offer me any further advise, information or even mentorship to help me begin my journey, I'd be really appreciative.

Thanks in advance,

Shane

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Hi Shane,

No, you don't need to have a residential mortgage or own your own home before getting a BTL mortgage -  that was incorrect advice. As an example, if you're familiar with Rob & Rob from Property Hub and The Property Podcast, then Rob Dix will openly say that he doesn't have a residential mortgage because he prefers the flexibility of renting, but he has a portfolio of BTL properties using mortgages.

That said, you will have less options as a FTB/FTL (First Time Buyer & First Time Landlord) and the interest rates available to you will be higher than if you were already a homeowner. Not all lenders will lend to you, but some will. This purely comes down to risk profile for a lender. If you already own your home with a mortgage, you have a proven track record of paying a mortgage on time. You also have another asset that the lender could force you to sell if you fail to repay your BTL mortgage, so there's much more security for them.

Ultimately, it's worth paying higher rates initially to get started as long as your cashflow is still positive, and then you'll have more options in future when you come to remortgage. I would always recommend working with a broker who specialises in BTL as it's not a simple process.

Chris (www.fintentional.co.uk)

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Hi Shane,

I love your ambition! I'm sure you will achieve your goals. Here are some thoughts:

  • Don't buy you 1st property in the south west. It's expensive and yields are low. In the North of England, good BTLs are avilable for under £150k. That way you can buy quicker and get moving on your journey
  • If you really want to quit your job and travel, then BTL alone won't get the job done. There's not enough money in BTL. As you get more experienced, look into more profitable deals. e.g. HMOs and commercial property
  • Do you have a pension? You can convert it into a SSAS, and buy properties inside the SSAS
  • If you want to travel, then make sure you have a good agent to manage your properties. You really don't want to be calling up plumbers on Skype, in the middle of the night

I too share your passion for travel! I have my own travel blog - link here. I would highly suggest that you try to make money while you are travelling, and not just reply on property. This will make your goal far more realistic. 

Do you know what the most profitable niche on the internet is? It's food blogs recipes. Food blogs and Youtube videos are extremely popular as people need recipes. You could make money while travelling, by providing recipes online. 
 

_______________________________________________________________________________________________________________________________
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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Thanks, Chris, for taking the time to respond and for answering my question regarding BTL mortgages. I was a bit surprised when he told me this, I'll be honest. But I'm glad that isn't the case, although it does sound like my options are a bit more limited regardless. In my scenario being  FTB/L would a guarantor be needed, or just a good credit history + sufficient funds?

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Hi EvolutionBlogger, thank you so much for responding! I really love the fact you're also an avid traveller like myself. What would you consider to be your personal favourite countries you've visited? Feel free to check out my Instagram page... https://www.instagram.com/gotlostbackpacking

Regarding your points,

- I definitely will be investing in the North. I lived in Manchester for 10 years and have good area knowledge, but I'm also open to investing in other areas including Leeds, Bradford, Hull, Liverpool etc.

- I also understand BTL isn't a get-rich-quick scheme, however, it is a lower risk when compared to BRR/flips, plus I feel it is a better option for me as a beginner? I must admit, I have also considered R2R in HMO's as a way to generate income, however, I'm unsure how this would fit around my full-time job?

- And agreed, I will need to have a good system in place to allow me to do the things I want, without late night skype calls as you mentioned haha As for writing recipes, well, I'm not sure that's something for me to be honest, but totally understand what you're saying. 

 

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21 hours ago, KST88 said:

Thanks, Chris, for taking the time to respond and for answering my question regarding BTL mortgages. I was a bit surprised when he told me this, I'll be honest. But I'm glad that isn't the case, although it does sound like my options are a bit more limited regardless. In my scenario being  FTB/L would a guarantor be needed, or just a good credit history + sufficient funds?

Usually just a good credit history and sufficient funds. Some lenders may require a bigger deposit (for example, only offer a 65% LTV rather than 75%). The market is always changing so it depends what products are available at the time. Always best to ask a broker.

Also on R2R strategy - in reality it's almost impossible to make money doing this. Certainly not a strategy I would recommend!

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On 9/27/2022 at 6:59 PM, KST88 said:

Hi EvolutionBlogger, thank you so much for responding! I really love the fact you're also an avid traveller like myself. What would you consider to be your personal favourite countries you've visited? Feel free to check out my Instagram page... https://www.instagram.com/gotlostbackpacking

Regarding your points,

- I definitely will be investing in the North. I lived in Manchester for 10 years and have good area knowledge, but I'm also open to investing in other areas including Leeds, Bradford, Hull, Liverpool etc.

- I also understand BTL isn't a get-rich-quick scheme, however, it is a lower risk when compared to BRR/flips, plus I feel it is a better option for me as a beginner? I must admit, I have also considered R2R in HMO's as a way to generate income, however, I'm unsure how this would fit around my full-time job?

- And agreed, I will need to have a good system in place to allow me to do the things I want, without late night skype calls as you mentioned haha As for writing recipes, well, I'm not sure that's something for me to be honest, but totally understand what you're saying. 

 

I viewed your instagram. Your photos are really awesome! I would really consider content creation (blogging, youtube etc.). If you want to go travelling, it would be much easier if you can make money while travelling. I appreciate that you are time poor, but I would keep this in the back of your mind. 

I love Norway. The country is stunning and the people are very respectful/tolerent. It's also off the beaten track - which I like! 

BTL is good for a 1st investment, as you can learn about property. If you want to quit your job, then you won't do it with BTL alone. You'll need to work on more profitable deals, e.g. HMOs or commercial. I mentioned SSAS pensions in the last message, as you can lend money to yourself and buy more properties with your pension funds. I talk about these strategies on my property blog

Happy to discuss further over email or a quick call if you want 

_______________________________________________________________________________________________________________________________
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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