How to invest in properties!

REALIZING WHAT I WAS DOING WRONG

…it was only when I read a now-out-of-print Will Hill book that I realized what I was doing wrong. Then I went on reading Rich Dad Poor Dad by Robert Kyosaki and dropped my penny. I had to stop working for a salary and start building wealth through investments so that my money would work hard for me, making more money, instead of constantly having to work to make ends meet…

The problem was that he had very little money. It took me most of the year to save £350!

Then I found a book by Harry Hawkins “No Money Down Property Millions!” which planted a seed in my mind that you don’t actually need money to buy property! Finally, I thought, I can continue investing in a property WITHOUT MONEY…

I stopped wasting time watching TV, reading the newspapers and started spending my free time educating myself on how to stop working for money and make money work for me.

MY FIRST MISTAKE

The first property I found to buy, for investment purposes, was through a real estate agent. It was on the market for £85,000 while the one next door was £125,000! However, the property was in a sorry state of disrepair. The bathroom was a mess, the ceilings were missing, the entire porch needed a rebuild, the baseboards and doors and door frames were missing. There was no carpet and the backyard was mostly brambles and trash.

I announced that I would be quitting my job from 9 to 5, to the horror of my parents, and launched into the renovation of the property. Richie also quit and joined me. Eight months later, an immaculate property, much sweat and tears later, an immaculate property in model home condition was back on the market (with new garage) and sold for £139,950.

Now, looking back, I know we never should have sold. We should have refinanced the property and rented the property and to this day its value would continue to rise. No matter. You live and learn!

GOALS

I soon learned that I needed to set goals. Specific Objectives I not only want to buy 4 buy-to-let properties this year… but I want to buy 4 properties below market value, with no cash required, giving me at least £50,000 in cash in the next six months.

Goals help stimulate you, stop you from slacking off, keep you looking forward and positive, and get you where you want to be.

You need to set your own goals and think big.

THEN YOU NEED A STRATEGY

It’s great to have goals, but you need a clear and defined strategy to get to what you want in life.

Also, don’t set your goals too low…

In 2006 I set a goal of buying at least 8 more rental properties with good cash flow each month after all costs. In fact, we bought 12. So maybe if we had set our sights higher, we would have gone further?

MENTORS

Mentors are a great way to stay focused and on track. Why not follow in the footsteps of someone who has already done what you want to do? Learn from your mistakes and avoid wasting time and money on what went wrong. Simply copy your successes and get where you want to be faster.

When you need a reality check, a mentor can be there for you. They can explain creative strategies and financial tricks for you to make the most of your resources.

How to find a mentor…

ask your friends
Family
through work
Through networking at events
Through online networks such as academy or facebook.

BUILDING ON SOLID FOUNDATIONS

If you’re lousy at budgeting your normal day-to-day expenses and are always overdrawn, you really need to take a look at your spending habits before you start investing for your future.

Real estate investing is a great way to build wealth, however, you must start with a good foundation or your money will simply vanish.

You must begin as you want to continue. Create business accounts separate from personal ones.

Keep good records of money coming in and going out, this will make life a lot easier when you come to do your taxes or give them to your accountant.

To solve your money problems, simply spend less than you earn and invest as much as you can. For more information on saving money, I recommend you check out moneysavingexpert, run by Martin Lewis.

PASSIVE INCOME

Real estate investing will not give you passive income. You need to do your homework and buy at the right price to generate positive cash flow. You need to maintain your property and take care of your tenants or find a very good rental agent who can do it.

You will need to invest time and money in real estate investment. Unless you have more money at your disposal than time and can invest someone else’s time to take care of your property and your tenants.

WIN WIN

Win-win is about keeping everyone happy. You need to buy at the right price for you. Your seller should be happy that he is getting a good deal (or the best deal in his circumstances). If a property finder has brought you the deal, then he will need a reward, otherwise he will not bring you the best deals in the future. Your tenants must rent the best property available to them, so you must maintain the properties to a high standard (if we didn’t live in the property, we wouldn’t rent it). If you are buying a property to sell and have bought below market value, sell it at a good price so that the next person will also get a good deal. Be honest and keep your word. Remember “what comes, goes”.

Real estate investing is all about building relationships with people. Being honest and living up to your reputation will have no end in the long run. Do not disappoint anyone. Integrity is what all the biggest and best real estate investors have, just look at Dolf De Roos!

FIND A SEEKER

For God’s sake, always do your own due diligence on an investment you’re buying. Do not take anyone’s word – they will not buy it and will end up with it, most likely, for the rest of their lives.

However, sometimes it’s best not to do everything yourself. Work and other commitments can get in the way.

Sometimes you need to put your trust in someone else. The question is – who?

Local leasing agents in the area you want to invest in may be a good solution.

Alternatively, there are “property buyers and finders” working all over the country.

If you work full-time or are a full-time stay-at-home mom or husband, building relationships with these people can be worth their weight in gold.

BUY BELOW MARKET VALUE

Buying a BMV property (Below Market Value) is one of the most accurate advice that can be given. After all, you make money when you SHOP. Our goal is 10-25% below market value to secure capital and protect ourselves and our investors from any changes in the market, to ensure that we are never a desperate seller – we can still sell with a discount giving some discount to the next buyer and still ensuring a profit.

Holding less capital (if any) ensures that our return on investment is strong. We also get a higher return on our money than the investor who pays the true market value of an investment (this is the price it will actually sell for in today’s market in 6 weeks, usually a lower figure than it has the property). market with a real estate agent).

These are “genuine” under market value investments, not over inflated or developer discounts for off-plan purchases. All of our properties are researched against true comparables, meaning similar properties recently sold in the same area, for comparison.