Buy Below Market Value: Get Two Properties for the Price of One
TL;DR: Simon Zutshi shares how to buy two properties for the price of one. You buy below market value from a motivated seller. Then a same-day remortgage pulls most of your cash straight back out. He calls it the property funding formula. On a £200,000 property bought at 20% below market value, you put in around £26,700 instead of £53,200. That leaves enough to buy a second property. Here is exactly how it works.
Table of Contents
- The Goal: Maximise Your Return on Investment
- How Traditional Buy-to-Let Investors Do It
- The BRRRR Strategy and Its Limits
- The Property Funding Formula Explained
- How to Buy Below Market Value From Motivated Sellers
- The Numbers: Two Properties for the Price of One
- Frequently Asked Questions
What if you could buy two properties for the price of one? In this episode of the Property Magic Podcast, Simon Zutshi shares exactly how. The secret is to buy below market value from a motivated seller. You then use a clever same-day remortgage to pull most of your cash straight back out. Simon calls this the property funding formula. It is far more powerful than a traditional buy-to-let investment, or even the popular BRRRR strategy. Here is how it works, and how the numbers stack up.
The Goal: Maximise Your Return on Investment
As a property investor, one of your main goals should be to maximise the return on every investment you make. The best way to do that is to put in as little of your own money as possible. The less cash you tie up in each property, the more money you have left to buy the next one.
This is the engine of portfolio growth. Keep your money moving and you can grow far faster than an investor who locks all their cash into one deal. The property funding formula is built around exactly this idea.
Key takeaway: The fewer pounds you leave in each property, the quicker you can build your portfolio. Minimising your money in is the key to a strong return on investment.
How Traditional Buy-to-Let Investors Do It
Most people start with a pot of money to invest. It might come from savings, redundancy, inheritance, a divorce settlement or business profits. They want that money working hard and earning a strong return.
The Power of Leverage
Property has long been seen as a safe investment. It gives you monthly cash flow, which many other asset classes do not, and it gives you long-term capital growth. Investors also use leverage. You can borrow 75% of the purchase price from a bank. That means you only put in 25%, plus stamp duty and legal costs. You then pay the bank interest each month on what you borrow.
The traditional buy-to-let investor finds a property, negotiates, agrees the deal, and buys it with their deposit. Then they sit back and wait. As the property market rises, the value goes up. They can then remortgage, release a chunk of cash, and use it to buy the next rental property.
There is a downside. Remortgaging adds debt, so the monthly cash flow on that property dips. The theory is that the profit from the next purchase more than covers the dip. This approach works if you buy well, but it has one big problem. You have to wait years for capital growth. Building a portfolio large enough to replace your income can take a very long time.
Key takeaway: The traditional buy-to-let model works, but it is slow. Waiting for capital growth can take years before your portfolio replaces your income.
The BRRRR Strategy and Its Limits
More sophisticated investors speed things up with the BRRRR strategy. BRRRR stands for Buy, Refurbish, Refinance, Rent and Repeat. You buy at a discount and spend money improving the property to force up its value. After six months you remortgage at the higher figure. If it goes well, you pull most or all of your money back out to fund the next deal.
Where BRRRR Falls Short
BRRRR is faster than simply waiting for prices to rise. But it comes with real drawbacks:
- You need more money up front, because on top of the deposit, stamp duty and legals you also fund the refurbishment
- Building costs have risen sharply, and reliable contractors can be hard to find
- You usually wait six months before you can even apply to remortgage
- The refinance itself then takes several more months to complete
- It is rarely possible to pull every pound back out, so some cash often stays in the deal
Leaving some money in is not a disaster if it still earns a good return. But there is a faster, smarter option that avoids most of these problems.
Key takeaway: BRRRR is quicker than waiting for growth. But it needs more cash, depends on a refurbishment, and means a six-month-plus wait to refinance.
The Property Funding Formula Explained
Back in 2006, Simon learned how to buy from motivated sellers at a significant discount. Buy a property at a discount of 32% or more, and you can use same-day remortgaging to buy it. You use none of your own money. Simon calls this the property funding formula, and it is one of his pioneering innovations.
How Same-Day Remortgaging Works
You buy the property for cash using bridging finance. On the very day you complete, your solicitor pulls down a remortgage to pay the bridging back. You cannot normally arrange a remortgage in a single day. So Simon works with lenders who let you set it up before you own the property. They simply need to know the purchase is going through. The remortgage is then ready to draw down the moment you complete.
The private bridging company can provide up to 100% of the purchase price. The only limit is 75% of the open market value. This is what lets you buy below market value and recycle most of your cash on day one, with no six-month wait.
Key takeaway: The property funding formula uses bridging plus a same-day remortgage to buy below market value. You recover most of your cash at once, with no refurbishment and no long wait.
How to Buy Below Market Value From Motivated Sellers
When most people first hear this, they think no one would ever sell at 32% below market value. Simon thought the same in 2006. He was wrong. When you find a truly motivated seller, take time to understand their problem and offer an ethical, win-win solution. Sellers can be far more flexible than you expect.
A Distressed Seller, Not a Distressed Property
There is an important distinction here. You are looking for a distressed seller, not a distressed property. A distressed property needs a lot of work. It might be worth £200,000 in good condition, but you buy it for £150,000 because it needs doing up. That looks like a 25% discount. Yet if the work costs £50,000, there is no real saving. You want a genuine discount off the true market value without much work to do.
In the 2026 buyer's market, getting a discount is realistic:
- A genuine 10% discount off the price is not hard to achieve at all
- A truly motivated seller should let you buy at 20% below market value
- A discount of 32% or more turns it into a no-money-down deal
Finding these distressed sellers takes time, persistence and skill. Most investors simply do not have it, which is why the right training matters. Simon has taught this exact strategy since 2006. His team at property investors network can help you learn how to find and help motivated sellers.
Key takeaway: Look for a motivated seller, not a property that needs work. A genuine 20% discount off true market value is the sweet spot for the funding formula.
The Numbers: Two Properties for the Price of One
Let us run a real example. Say a property is worth £200,000 and you buy it at 20% below market value for £160,000. That is a £40,000 discount, and the rent might be £1,150 a month.
The Traditional Purchase
Buying this in the normal way, here is the cash you would need:
- A 25% deposit on the £160,000 price, which is £40,000
- A mortgage of £120,000, at 75% loan-to-value
- Stamp duty of around £11,200
- Legal costs of around £2,000
That is a total of £53,200 in cash. You could then hold the property for six months and remortgage it at its true value of £200,000. A 75% remortgage gives you £150,000, which releases £30,000. After a survey and legal fees of a few thousand pounds, you end up with around £27,000 back in your pocket. That is decent, but there is a better way.
The Property Funding Formula Purchase
Now use the same-day remortgage method on the same property. The open market value is £200,000, so a 75% mortgage is £150,000. Your purchase price is £160,000, which leaves a shortfall of just £10,000 to put in as a deposit, instead of the usual £40,000. That alone is a £30,000 saving. Here is the full cash requirement:
- Deposit shortfall of £10,000, the gap between the £160,000 price and the £150,000 mortgage
- Stamp duty of £11,200
- A bridging fee of £3,000, which is 2% of the £150,000 borrowed
- Slightly higher legal costs of £2,500, as the solicitor handles both the purchase and the refinance
The total cash needed is £26,700. That is just over half the £53,200 you would normally invest. It also leaves around £26,500 of your original deposit money available to buy a second property the very same way. In short, you buy two properties for the funds most people use to buy one. You tie up far less cash per property, your return on investment rises, and your money goes much further.
It Works With Other People’s Money Too
This even works when you have run out of your own deposit money and are using other people's money. You borrow less, so it is easier to fund. The higher return also lets you pay your investor well until you give their money back.
Key takeaway: On a £200,000 property bought 20% below market value, the funding formula needs about £26,700 instead of £53,200. That leaves roughly £26,500 to buy a second property straight away.
Learn the Property Funding Formula in Full
Simon runs complimentary live training that walks through the property funding formula step by step. You will see how to access the private bridging finance and how same-day remortgaging works in practice. You will also learn how to build the correct power team of broker and solicitor. Most brokers and solicitors do not, so the right team is essential.
Frequently Asked Questions
What Does It Mean to Buy Below Market Value?
To buy below market value, sometimes shortened to BMV, means buying a property for less than its true worth. In this strategy you buy at a discount from a motivated seller. They need a quick, certain sale. The property itself does not need work. A genuine 20% discount off the real market value is the target.
What Is the Property Funding Formula?
The property funding formula is Simon Zutshi's method for buying a property using a same-day remortgage. You buy at a discount using bridging finance, then refinance on the day you complete to pay the bridging back. It lets you recover most of your cash immediately, without the refurbishment or six-month wait that the BRRRR strategy requires.
How Does Same-Day Remortgaging Work?
You buy the property for cash with bridging finance, and your solicitor draws down a remortgage on the same day to repay the bridging. The remortgage is arranged before you complete, with lenders who allow this as long as your purchase is genuinely going through. The bridging company can lend up to 100% of the price, capped at 75% of the open market value.
Is This Different From the BRRRR Strategy?
Yes. BRRRR relies on refurbishing a property to force up its value, then refinancing after about six months. The property funding formula needs no refurbishment and no long wait. You buy below market value from a motivated seller and refinance on day one, which is faster and ties up less of your cash.
Can I Use This Strategy With No Money of My Own?
If you buy at a discount of 32% or more, the funding formula can become a no-money-down deal. At a 20% discount you still need some cash, but far less than a normal purchase. It also works well with other people's money, because you borrow less and can offer your investor a strong return.
Final Thoughts: Invest with Knowledge, Invest with Skill
The property funding formula shows what is possible when you combine buying below market value with same-day remortgaging. Instead of leaving £53,200 tied up in one property and waiting six months, you put in around £26,700 on day one. That keeps enough cash to buy a second property. That is how you buy two properties for the price of one and build a portfolio far faster than the traditional buy-to-let route.
It does take the right knowledge. You need to know how to find motivated sellers and how to access the bridging finance. You also need a power team who understand the process. Get those pieces in place and this strategy can save you tens of thousands of pounds on every property you buy.
To learn the full step-by-step process and see how to access the funding, join Simon on his complimentary live training. As Simon always says, invest with knowledge, invest with skill.
Listen to the full discussion on the Property Magic Podcast. Subscribe to the channel and hit the bell icon so you never miss a new episode.
