The stamp duty holiday for a large part of 2021 created a buyer’s market - in fact some estate agents were desperate for more properties to sell. But as we all know trends change and as property prices rise the pendulum may swing the other way.
However, a smart property investor doesn’t look at the overall property prices, but seeks out the juicy deals that aren’t within everyone’s reach.
Does this mean you need a big fat nest egg sitting in your bank account? Definitely not. A very modest sum can be all you need to get started.
This depends on you knowing the secrets of Ninja investors! There are lots of strategies that can turn a modest deposit into serious profit in a relatively short time. Here are my three top tips:
If you look for cash buyer only opportunities, you’ll find that most of these properties have a couple of things in common:
Unmortgageable doesn’t mean a bad deal. Unmortgageable properties have a problem that the lenders don’t want to know about. This can be anything from being run down and in desperate need of refurb to suffering from subsidence. Most problems have a solution and the smart investor takes a close look, works out whether the problem is solvable, how much it will cost to do that and then decides on how much they’re prepared to pay for the property.
Cash buyers never pay full price - so sellers of unmortgageable properties already know there will be some negotiation to be done.
If you’re wondering how you can buy cash only deals if you don’t have enough cash - the answer is a short-term bridging loan. You cover the deposit and the bridging lender loans you the rest – with the right bridging product, you can even borrow the refurb costs too
Properties can sometimes be found for as much as 50% below market value. Even after extensive refurb, there’s a substantial profit to be made - and you get your money back out at the point of refinancing - ready for the next deal.
The process for buying a property usually goes make an offer, complete, refurb. However, you can alter that to increase your leverage. It’s possible to make an offer and refurb before completion.
This means you would need to have an agreement with the seller - and a legal one at that. A peppercorn deposit can be agreed to reduce your upfront costs as well as the commitment to complete on both sides.
This means you can uplift the value of the property before you actually have to pay the agreed price. This means all the additional value you’ve created is pure profit!
The faster you get the deal done, the sooner you get your money out. To do this, use bridging finance rather than a BTL mortgage to complete your purchase.
Exchange contracts quickly. This can be done as soon as your loan is approved and as soon as your solicitor is able to arrange it. We are talking days, rather than weeks and certainly not months.
Complete as quickly as your solicitor can (and use a solicitor experienced in bridging loans)
If you have bought using tip 2 - On the day of purchase start your exit strategy. This means if you’re planning to sell, put it on the market. If you’re planning to hold it, you can begin the remortgaging process, with the right choice of lender.
By using these Ninja investor strategies you won’t need to worry about what property prices are doing. You can create profitable deals and extract your money from each of them quickly. This, in turn, allows you to do more deals in less time with less cash.
You can learn more here: