In this blog I'm going to share with you answers to the six most frequently asked questions about property investing. I'm going to start with some of the more basic questions and then move on to some advanced ones. So one of the most frequently asked questions I get is, where is the best place to invest for people looking for the best kind of return on their money? Well, my honest answer is I think you should invest where you live or where you work. Or at least that's where you should check first of all. It might be where you live or work is a great place to invest. You just might not be aware of it. If that doesn't stack up so well or if it doesn't make cashflow for you, then you can invest further afield. If you're looking for areas that will do really well. My top tip here is look for areas where the population is increasing faster than other areas.
If that's the case, you've got lots of people moving into the area, looking for work. Well, you will have a higher rental demand and you should have higher capital growth. So that's really where I think you should invest.
How Much Money Do You Need to Start Investing?
Next question I get all the time is, how much money do you need to start investing? Sometimes people have a little pot of money and they don't know if that's going to be enough or not. So the answer to this question is, it depends. It depends where you invest. Some areas are a lot more expensive and will need more money. There are areas which are a lot cheaper and they'll need less money. It also depends how you invest and what strategy you use. If you're using traditional property investing, you can generally get a 75% investment mortgage, which means you need to find the 25% deposit. Plus there might be some buying costs, taxes, legal costs, etc, normally about 5%.
So in other words, if you were to make an investment, you probably need about 30% of the purchase price. If you're doing things traditionally, with a £200,000 pound property, you'd probably need about £60,000 in cash and 150 in mortgage. But I do hope that you're not just doing that, there are many ways of creatively investing in property where you don't use as much money.
One of them is called Momentum investing, where you can quickly recycle your deposit and go and use it on your next property. Otherwise known as BRRR, where you buy a property, you refurbish that property, you refinance, you then rent it out.
A great way, if you're starting to invest in property is Rent to Rent. Now the big downside is you don't actually own the property.
“I love Purchase Options because they can be used in conjunction with many other investing strategies”
You literally rent it from a landlord who for whatever reason is struggling to rent it out themselves. Then you rent it out at the full market rent. You make a difference between what you pay the landlord, and obviously what you can charge at the full market rent.
Now you need to make sure that the property is rentable. Often the problem is the landlord might be a distant landlord. They don't really know how to rent it out. They're not managing it very well. As long as you're local and you know how to do that, that can be a great strategy to start.
Even better than Rent to Rent is when you do a Purchase Lease Option. Similar to rent to rent, you have a guaranteed rental income to the owner, but you also have the rights to buy that property within an agreed time period at a price that you fixed today. So as well as getting cash flow, using Purchase Options, you could also get equity growth on property that you don't even own. I love Purchase Options because they can be used in conjunction with many other investing strategies.
What’s the Best Way to Find Great Deals?
Question number three is, what's the best way to find great deals? There are lots of ways of finding great deals. I believe the very best strategy is to look for what we call motivated sellers. These are people for whom speed and certainty is more important than the amount of money they get. That means they might be flexible on the price and all the terms of the sale.
You can of course work with Estate Agents but you need to know what to say to agents when you come across one. They need to believe you and think you're credible.
Finally, I love to buy properties off market. You do that by reaching out to property owners, to see if they want to sell their property. You can go direct to landlords by getting the list of HMO registered landlords from the local council. You then can go on the land registry to find out home details. You then write to those people and see if they're interested in renting or selling their property.
So lots of ways of finding great deals, you just need to get the specialist knowledge and then take action on what we teach you.
What Do I Say to a Motivated Seller?
Once you've found one of these Motivated Sellers, question number four is, what do I say to a seller? How do I get them to sell their property to me? Especially if it's below market value. Episode number 37 of my Podcast is probably one of our highest downloaded episodes. We've had thousands and thousands of people download this because it's ‘22 Questions You Should Ask Property Owners’. Now some of these questions are pretty obvious. I'm sure you'll have thought about them. But I guarantee there'll be questions in there that you've never thought about. They will help you to identify exactly what's going on for this seller and how you can find an ethical solution for them. So check out episode 37.
“The voucher code you should use is a ‘BLOG’. If you’ve already been to pin Meetings, you can give that voucher code to family, friends, anyone that you know, who might be interested in property investing.”
Where Can I Find Cash Investors?
Question number five, I'm asked all the time is where can I find cash investors? Now these are people who've got money sitting in the bank doing nothing for them. You can work with these people through a Joint Venture or a Private Loan. A lot of people struggle with this because they think, well, I don't want to ask people for money. Well, I don't think you should ask people for money. You want to explain what you're doing and show how you can help them make money. Most people like the idea of making money. So the obvious people to start with are family and friends. People who already know you, who trust you and like you, and they might want to work with you to make some money together.
You can also find investors, people who've got money. They come to property network meetings, they come to property training events because they've got money. They invest too and very often realise there's some time and effort required. Maybe they're too busy or they're a bit scared or they don't have the knowledge. They don't have the time. They would love to work with someone like you, who's got the knowledge. You can find great deals and you could work with those people. So you should absolutely be going to events, networking events, like the property investor network meetings. If you've never been to a pin Meeting, you want to go to www.pinmeeting.co.uk. It lists all the meetings around the UK. Most of which are currently still virtual. We are going back to some physical meetings this month, and we're expanding pin around the world. So this time next year we'll have pin Meetings all over the world. There will be ones close to where you live or where you work. So go and check out pinmeeting.co.uk.
If you’ve never been before, it’s only £20 to come to a meeting. But when it goes to the checkouts, instead of paying this, if you've never been, you can use the voucher code to get you free access to your first meeting. That's just for your first one. So you can come along at no cost and check it out, see if you like it or not.
The voucher code you should use is a ‘BLOG’. If you've already been to pin Meetings, you can give that voucher code to family, friends, anyone that you know, who might be interested in property investing.
I actually believe that virtual networking is easier to some extents than physical networking. You don't have to awkwardly approach someone, interrupt them. You're literally put in a breakout room and you start talking to people. So that's a really good way to meet people. The other great way to meet people who've got cash to invest is by coming to some of our bigger events. Property Magic Live happens in September every year. Strategy Implementation Live happens in March. They all have 500 plus investors from all over the UK, all around the world. You can connect with people. Many of whom have money, they just want reliable people to work with. So there's lots of cash out there, actually finding the deals is more of the challenge.
How Quickly Can I Replace My Income?
Question number six, people want to know, how quickly can I replace my income? Well, I guess it depends on a few things. First of all, it depends on how much you earn, how much you're looking to replace. It depends on how much action you're prepared to take. If you're prepared to invest in yourself, to get the knowledge and support to get there.
But we have a couple of episodes that might be useful for you. One of my favourite strategies is HMOs, Houses of Multiple Occupation. Most investors only do Single Let properties, they don't really understand HMO’s. But once you understand them, you know how to do it properly. You'll see it's a very powerful property strategy.
Something that puts people off HMO’s is not being able to manage it. Well, guess what? You don’t have to do the management yourself. I don’t manage my HMO’s, someone else does that for me. Obviously I pay them to do that but it means I don’t have to spend my time being a landlord. That's not what I want to do. You've got to remember to value your time.
100% FREE Rent to Rent Video Series
In This No-Cost Rent To Rent 3-Part Video Series, Mark Fitzgerald Will Be Sharing:
How to create great cash flow from properties you don't own
How to find landlords and do great deals
How others have used this strategy to achieve great success
Top tips on how to work with landlords
Click Here to Gain Access
Share this Post