Category Archives for "Property Investment"

Can I do Property Investment with LITTLE Money?

Can I do Property Investment with LITTLE Money?

By Matthew Moody | Business , Property Investment

Hello, and a warm welcome back to our Professional Investor series, where today we're going to be looking at, can I do property investment with little money?

Photographer: Micheile Henderson | Source: Unsplash

Now, the short answer is yes, but the longer answer is, keep reading as I explain exactly why and how you can do this.

So my name is Matthew Moody, from The League of Extraordinary Investors, and it's my task to really pull out some of the intricacies of investing in property and make sure you understand exactly how to do them in a safe, ethical manner.

So without further ado, if you've not subscribed or liked the channel yet, please do, because it just helps us to, A, make sure that we get this out to more people, and, B, it also just helps us to understand are people watching this and is this information of use.

So give me a like, and subscribe to the channel, that would be great.

So, can I do property investing with little money?

Well, you can, if you do it in the right way, so I'm going to teach you four things today to think of in terms of investing in property, and considering how to do this in the right manner so that you can actually start investing, because you don't necessarily need as much as you think.

But, let me make this very clear, you do need some money.

So, you might have seen some of these adverts out there where they said, "Oh, we can buy property with no money", or, "You can get into property from as little as 1,000 pound", or whatever it may be, utter bunkum and nonsense.

It's just not true, it's just not true.

But I'm going to show you exactly how you could do that with some money, but you'll need a little bit more than that I'm afraid.

So let's kick off with the first of our four items I'm going to be covering today, and this one is about hidden cash.

Photographer: Christian Wiediger | Source: Unsplash

Now, the first thing I always ask people, when I start working with them from a client perspective is, go away and complete, what I call, a hidden cash tracker to understand exactly what you already have access to that you've maybe forgotten about.

And these are things such as pensions, savings, stocks and shares, even premium bonds, assets that you actually own, so this could be say, a really great car, or maybe you live in a house that's got a lot of equity, you might even have access to things such as paintings, really expensive animals, collectibles, precious metals, all those types of things.

Because then you're able to then put together exactly what you have access to at this moment in time, and also, don't forget this, what's in your attic?

Because a lot of people have a lot of stuff stored up there they never use, or the garage, and you could easily get access to maybe 500, 1,000 pounds.

And I would say every little £1,000 pounds helps, it really, really does.

So, hidden cash, the first place to start, what have you already got access to that perhaps you could use in a better way to start investing in property?

So that's the first place to start.

And normally this works out pretty well for people because they found that they've got a lot more than they thought they had. And for those people that haven't got a lot, they can then start thinking about what the next steps in terms of how do I start investing?

Because the second piece then is, the location, because let's face it, if you're living in say London, in the Southeast, it's difficult to invest because house prices are astronomical, I'm sure you'll agree.

Mews road
Photographer: Bruno Martins | Source: Unsplash

So you have to start thinking about investing in other areas. And there are plenty of areas in the UK, where for less than £80,000 pounds, you can pick up property.

And I'm talking about lots of property, lots of different areas.

So I'm going to give you a quick list right now, just to think about places such as Derby, Bradford, Blackpool, Stoke, Newcastle, all these kinds of areas.

You can pick up property for, £60, £70, £80,000 pounds!

Now, if you're going to buy those types of properties and we're talking about a standard one bed flat here, nothing interesting, nothing really sexy, but it will start to make some money from you.

You will need anywhere from probably £14 to £18,000 pounds, give or take; £14 to £18,000 pounds, to purchase one property. That's going to start and then bringing in cash to you and crank up cashflow and yield, and then looking at what you can then do there to purchase other properties.

So this is a slow burn strategy I'm talking about right now, this is not a quick strategy. I'm going to be talking about strategies on another article because this is the next piece as well is, you also have to determine your strategy.

And as I said, I'm going to go through this in another session, so I'm going to go through it right now, but depending on what strategy you decided to do in property will also depend on how much money you need.

Let's say, for instance, your strategy is very simple, buy one bed flats, do them up, extract a little bit of cash by refinancing them. That's it, very, very simple.

Then you're going to need a lot less money than say, for instance, buying a plot of land, getting planning permission on it, building a house and then selling it on, you'll need far less money, versus let's say buying a HMO, whether it's a ready-made HMO, or one you're going to convert yourself, make it into a HMO, refinancing it, and then pulling some money out.

You know, the difference in intensive amounts of money needed are significant. We're talking at the very low end, maybe £12 to £18,000 pounds, very high end, maybe talking £100,000, £200,000, in terms of actual money to put into the deal.

So, these things obviously add up and it's important for you as an investor to be aware of the different strategies and how much money you'll need for each one.

Now, the good thing is I wrote a book about this called, "Cracking the Property Code", and in this I detail 45 strategies, that's 45 strategies, that you can do in property investment.

Cracking The Property Code

And I also detail in each one of those, how much money you'll need, what your return investment will be, how much support you might need to do this, and it really breaks it down.

So you can look at, well, how much money do I have right now? And which of these 45 strategies could I get going and doing with? And some of the strategies you need millions to do, but some of them, you need very, very little money at all.

So the strategy's also highly important.

Now the fourth one, and this, again, it's important, is what is your end goal?

Because obviously if you are investing into property and you're starting to get going, you have to have an end goal in place. And it is important that you do that, why, why is it important?

Because property investment is always a mid to long-term strategy.

It's never really a quick strategy and it is also risky as well.

You know, it is risky.

So you have to be thinking about, well, do I want to, say, replace an income? Do want to build a pension pot? Do want to, say, leave a legacy to my kids? What is it that I want out of property investment? Why am I doing this?

But hopefully what I've shown you through this short session is you can actually get started in property for very little money, £12 to £18,000 pounds to get a bargain basement, little one bed flat, which you can then start renting out and making a couple hundred pounds per month, or whatever it may be.

So if you've had some value today, you've enjoyed what I've said, please do subscribe and like the channel, I really, really appreciate this.

This is Matthew Moody, from The League of Extraordinary Investors, and I'll see you again very soon on another Professional Investor series session.

Matthew Moody

Should I invest in property?

Should I invest in property?

By Matthew Moody | Property Investment

It’s a curious question isn’t it.

I mean, have you ever read or seen the “Sunday Times Rich List”?

The Sunday Times Rich List

Its awash with people who are so rich they can’t even count their money.

And whilst I’m guessing you may not have any aspirations to be on this list, I’m also going to assume that you’re reading this because you’re not quite sure.

In this article I’m going to share four reasons why you should invest in property and what to consider next.

If you like what you hear, remember please hit subscribe and like this article.

So property.

Is it for me.

Isn’t it for me?

Well, here is one thing a lot of the entries on the Sunday Times Rich List have in common.

You guessed it.

Property.

So while the simple answer may be yes, it’s a little more complicated than that and I want to break it down for you into a few simple ideas based on over 25 years in business and property investment.

Let’s kick off with

The Doctrine of Self

Now when I say self, I mean this in the sense of the understanding that you have, of you the person, the mind, the connection, with everybody and everything on our planet.

Yama
Photographer: Jr Korpa | Source: Unsplash

Now this is not about some hokey pokey religion or trying to convert you to new age thinking .

No, this is much more important than this; this is about you truly understanding yourself, what it is you want, what it is you’re prepared to do for it, how you are prepared to live your life and finally how are you going to execute on this; your life, your one shot, your chance.

So the doctrine of self is very much about the starting point of your understanding.

Because I can tell you property strategies, I can share tactics, I can give you tools, I can show you codes, I can break this all down for you and show you how easy investing in property can be.

But if you do not embrace this, does not understand it, is not willing to be open to new ways of thinking, new ways of doing then my work here is in vain.

And your time spent taking this information in is wasted.

Perhaps it is enough for now to believe in and trust in me when I say yes you should invest in property and I'm gonna show you why right now

But please be aware when I'm sharing this information, you will find what some call the monkey or the ego will be in the back of your head saying ‘well this isn't right’ or ‘you can't do this’ or ‘that doesn't make sense’ or ‘some people can do it but not you’.

Ignore this put it to one side and be focused on the message try and understand the words at the same time .

Our next idea for you to contemplate is what I call

The Planning Code

Now you may have heard the term planning in many different guises, from preparing a project plan to planning what you will be doing this weekend, to applying for planning permission to build something.

The Centre Pompidou calendar
Photographer: Curtis MacNewton | Source: Unsplash

The planning code is all around your ability and your understanding to take control and the plan because if you don't, let me tell you this is what will happen .

  • Regret
  • Unhappiness
  • Wasted opportunities
  • Melancholy
  • Sadness
  • and a 100 what ifs .

It is imperative that you plan But most humans try to avoid this .

You've probably got that friend that says to you ‘I don't like to plan anything I just like to go with the flow’.

Now that can work in certain circumstances and if you are leaving this aspect of your life down to luck, then Good Luck (no pun intended) but is that really what you want to chose for yourself when you get to the end of your life, you're looking back and reminiscing what you have and haven't done

Maybe or maybe not?

I'll put it to you that the greatest thing you can do for yourself, for your family, for your future legacy is to plan the **** out of your life .

Now if you don't want to do that, that's fine and probably property investment is not for you because if you want to invest in property, you have to plan at some level because it's not just going to happen

But if you don't want to, that's fine, I don't judge you, I don't blame you, I just accept that that's what it is .

This is where planning gets exciting though, if you can imagine that you can dream what it is you would like and once you've dreamt what it is that you would like; you can then create a plan around how you'd like to get it.

Photographer: Masaaki Komori | Source: Unsplash

How exciting is that I mean seriously everything you see around you has been planned.

And whether you believe in God or universal being or anything of that nature all you need to do is look up and take in everything that you can see that was planned that came from someone dreaming and then created it.

  • the cup
  • the pen
  • the pad of paper
  • the tablet
  • the laptop
  • the phone
  • the radiator
  • the window
  • the tray
  • the bench
  • the bird
  • the house

Everything you see someone dreamed and planned and then it was created

Now some people say ‘I don't believe that I can't do this’ or ‘it never happens to me’ but the thing is these things do take time, and you can plan something and it may not happen for 10, 15 or 25 years!

In fact sometimes it may never happen, but if you've got a firm plan in place then surely just the joy of the journey along that path to try to get to that goal, is going to be a heck of a lot more interesting than wandering around aimlessly from day to day, week to week, with no real intention or direction on where your life is going.

So the fundamental core behind having a plan is this

  1. it gives you clarity
  2. it gives you direction

I always liken it to if I'm going to go right now leave my house and go to Frankfurt how would I get there?

Would I just get my car and start driving?

Of course not, I'd want to plan out how exactly I'm going to get there

Am I going to take a train, am I going to take an aeroplane, how am I going to get to the airport?

From going to the airport; am I getting a taxi or a train to the airport or drive myself? Then parking up, what do I want to do when I get there, where am I going to stay and how long for?

This is a plan. Now this is a mini-plan for sure but in your life you need a plan too and this doesn't necessarily need to be pages upon pages but it does need to be a plan.

And if anything you take away from this, it's if you're going to be successful, you want to take control of your life you need a plan.

You need a plan.

Now we're going to look at another idea and whilst planning is fundamentally important and there are dozens of tools and strategies and techniques and tips that I can give you on this topic, now I want to cover another one which is equally important.

But before we do this, if you’ve liked this episode so far, remember please hit subscribe and also like my channel. It really helps more people benefit from hearing this highly valuable information.

So here we go the next one is this:

The Survival Code

Why is this important?

Because humans have a set of needs and these were described in Maslow's hierarchy of needs and one of them is our ability to want to and have to survive; so if we are approaching this from the perspective of building this up, creating this, then it's important for us to push this through in a way that allows us to create a plan.

The first thing we need to do is to survive, and this is the first step along the way so to speak of the grand idea; should you invest in property, why yes you should but be aware that to begin with you will be investing to survive.

Let's put it this way if you're in a job right now and you’re earning £40,000 pounds per year, most investors will start off with the idea of replacing the income with income from property, and the ultimate aim to as we say in the UK ‘jacking the job in’ and live off the proceeds of your rental income.

To invest in property is not just about putting money into property, it is also about providing lifestyle and choice and freedom.

But for now the best thing is understand what your plan needs to be.

Write down on the back of an envelope or a post it note or whatever the answers to these questions.

  1. What are your monthly expenses right now?
  2. How much is your rent or mortgage?
  3. What are you paying for utilities?
  4. How much you spending on entertainment, car or commuting?
  5. How much do you put into insurance and savings accounts?
  6. What do you spend on going out, hobbies, clothes?

So pretty much everything you spend in a month but you need to know how much it is right now because that is the survival code.

Let’s say your take home after tax is £1800 pounds a month, and you've worked out that your current bills or expenses amount to £1200 pounds per month.

This is the survival code or what I call your survival financial freedom; that's the number to which you have to get to in order to not have to work if that's what you wish to do.

Photographer: MChe Lee | Source: Unsplash

It's also the number you need to get to if you wish to have alternates and choice.

Let's say that you actually pretty much like your job but you do want to create an additional income stream because this is about creating constructs for the next idea.

Now if you've managed to create income so that you don’t need to pay your expenses anymore from your salary, this means you can utilise the salary to do other things which could be stuff that maybe you've always wanted to do but have been pulling off.

Things such as that grand holiday or an amazing bit of kit that you've wanted such as a car, home hifi or gym equipment.

With the extra income coming in you can afford to do that, but you can also move forward to consider the next idea which is this :

The Wealthy Construct

This idea is all around the creation of legacy and the creation of building up assets for future generations.

This is not something you should enter into lightly, it's not something you should just choose one day to do and the next day decide not to, because this will take planning, it will take living frugally for a period of time, it will take discipline, dedication, certainty, tenacity but the end result will be a wealth beyond your imagination and by that I mean this.

We talk about millionaires and billionaires all the time but have you ever truly really sat down and considered what does that actually look like, what does it actually mean, how does it impact me and how do I make this a reality for myself?

There's a reason why most lottery winners who win millions of pounds very rapidly go broke and end up being exactly where they were and sometimes in a worse case scenario 2, 3, 4 five years later.

A lot of this comes down to the first idea I showed which is this whole concept of the doctrine of self.

In order to embrace and take up on new ideas, we need to embrace and take upon our own self

We need to be open to those new ideas and new ways of learning and changing in order to develop ourselves better.

Now not everyone is able to do this quickly, it does require work and effort, it does require sacrifice but if you're able to do it, if you're able to set out this plan, if you’re prepared to live in a very frugal manner; you can build enormous wealth.

This may not happen overnight and could take 10-20 years but you can still live a very nice life along the way and enjoy all of the creature comforts that come with this.

But it is about creating that plan, focusing on the survival element of replacing the tyranny of paying bills every month and then building up your wealth on a consistent basis.

What are the options if you're not going to invest in property; what else are you going to do?

The typical person will do this. They'll join a company, join the pension scheme (but they may not do this straight away, it might take a little while to get up and running, there may even be barriers to entry) and then you start paying some money into the pension and the company matches with their own contributions and you think it's going to be hunky-dory!

Then you look at your pension pot few years later and think ‘well that doesn't look very good’ and ‘it's not really making very much every year’ and ‘what's this large management charge for’ and before you know it, you are considering ‘how do I take control of this pot of money and do something better with it?’

It's one of the main reasons why people invest in property because the control is down to you; the upside or the downside is down to you.

Too many people are very keen to mitigate responsibility, abdicate responsibility and pass on responsibility to other people and then blame them when it all goes wrong.

But you're not one of those kind of people are you?

No no no, you are someone that's going to take control and make this happen for yourself so why should you invest in property?

Three reasons

Firstly, property is the only asset that you can leverage against and borrow money against sometimes depending on how it's done up to 100% of the value of the property.

Secondly, property gives you cashflow from day one if you set it up property

Thirdly, property gives you something that stocks and shares can never give you which is capital appreciation.

So it's commonly agreed that property generally doubles in value every decade or so; so if you bought a property for £100,000, in 10 years time it should be worth £200,000.

I hope you enjoyed this article and that you took some learning points away from it and remember; when you're considering the question, should I invest in property, I would leave you with this question back to you.

Why shouldn't you invest in property?

If you can come up with a list of 10+ reasons why you shouldn't do this then send it to me because I feel confident that I can batter down those obstacles and show exactly why that thinking is potentially wrong and potentially going to impact your wealth significantly.

Most importantly; the real reason to invest in property is to take control back and to allow yourself to build up your wealth not hand it to governments or tax officials wherever you may be in the world.

If you enjoyed this session please do subscribe, show some love maybe even like this episode.

If you have comment or a question, I would love to hear it drop it below or wherever you are able to put comments or questions and I’ll happily answer them until next time.

divitiae in conspectu bonis, legatum cum viventem.

Matthew Moody
Grand Master

League of Extraordinary Investors.

Not Every Deal is a Property Worth Having

By Matthew Moody | Life Skills , Property Investment

Deserted house
Photographer: Gilles Desjardins | Source: Unsplash

Over the last 18 years of analysing hundreds and hundreds of properties, I’ve worked out what works and what doesn’t.

From that, when I founded my League of Extraordinary Investors, I created the Tenets.

The Tenets (or Principles or Beliefs) are based on the way in which an Extraordinary Investor approaches the property market.

Each tenet is equally important but this one is a particularly thorny one to get right, especially for new investors.

I’ve lost count of the number of deals I’ve turned down because of this tenet but it dwarves the deals I ended up going ahead with.

The tenet is dictated to as thus…

Not Every Deal is a Property Worth Having

What does this mean?

Often when a new investor is in the first flushes of learning about property investment, analysis, due diligence and the prospects of retiring early through property investment, they will be pretty keen to find a deal.

They will jump onto property portals daily, network with possible sourcing agents, walk the streets (if local), scour the emails and forums and be addicted to waiting for the phone to beep or ring for any hint of a deal that they think would be a good deal.

But often deals do not turn up straight away.

It takes dedication, commitment and a willingness to forego the attachment to a deal and instead turn it into a purely business decision.

And the days turns into weeks and the weeks into months and the new investor is no further along than they thought they would be.

Now there are often several reasons why this happens but we’ll discuss that another time in another article relating to the Immutable Laws of Investing.

For now though the critical thing to remember is this:

Stop
Photographer: Jose Aragones | Source: Unsplash

STOP!

Desperation breeds a certain kind of reckless abandonment and folly which then leads to making rash decisions which then come to bite you in the derriere later on.

I speak from experience, so to make the point here’s a wee story that will turn the hairs on your chest white…

15 years ago in a darkened room somewhere in the shires…

You’re frustrated as hell.

You need a new deal. The itch needs to be satisfied.

It’s been too long since you last experienced that exultation of a cracking deal completed and a bottle of champers uncorked.

You’re looking and looking but you can’t quite find what you are looking for.

There are deals popping up here and there but they are not quite right or with enough discount or enough potential value-add.

Is your area dry? Have all the deals gone? Are you pushing too hard?

Whatever it may be, you are stuck.

Then a nice young smiley man appears and tells you about an amazing deal on 2-bed duplex apartments in an up-and-coming area of Yorkshire.

This deal is stupendous, there’s no money down, there’s a massive humungous discount, a large cash-back and the rental demand is rather fabulous.

Oh and you’ll make a tidy packet every month on the rental cashflow.

What’s not to like!

Fast forward 12 months later and you’re in bed with not one but two of these deals and you rapidly find out the bitter twisted truth.

  1. the developer could not sell the units to normal folk because normal folk don’t buy what they built
  2. the finders fees was 3% (a vast fortune in those days) which meant your actual discount trickled away
  3. another 300-400 units went on the rental market at the same time as your unit
  4. people really don’t like rooms with a light vent in them
  5. a duplex can be called a duplex but can also be referred to as a 1 bed 1 bath flat with a dodgy small second room with no window (but it does have a light vent)
  6. just because the area has demand does not mean to say that this particular development on the edge of the town has demand
  7. when you finally rent your crappy flat, the cashback has gone, the rent is so low its rather laughable and you’re in a negative cashflow every month
  8. the service fees and ground rents are so much higher than you thought they would be
  9. the agent you were recommended by the ‘developer’ turned out to be inundated with so many units they stopped accepted new landlords … and the new agent you found via another recommendation turns out to be worse than useless, they are actually woefully incompetent
  10. cash-back disappears very quickly when you aren’t receiving rental income every month

So why share this rather sad little story.

Because it illustrates the point perfectly.

On the face of it, getting hold of a 25% discount on a property sounds like a steal.

But sometimes, things are too good to be true and sometimes you want to walk away.

Not every deal is a property you want to add into your portfolio.

So don’t rush into a deal.

A deal will come up every day or every week or every month depending on your area.

But you have to buy your deals in line with the other tenets which I will cover in a future article (some of which I did not follow either).

And this is the reason for my sharing my stories for you to consider, reflect and maybe avoid the same mistakes I made.

So the next time you are wanting to satisfy your itch for a deal; remember to ask yourself the question.

Does this deal take me nearer or farther away from the goals I set myself when I started my investment portfolio?

nice building cruddy deal

As for me, the swish new apartments I bought proved to be my first and only foray into apartments and within a matter of years, I sold both of them at a huge loss and vowed never to buy like this again.

In fact, I’m probably still paying for them in terms of lost time, income, energy and focus…

Be warned:

Not every deal is a property worth buying…