There was a time when you could get into property with no money, lenders were happy to provide 100% mortgages or a version of this, then the recession came along and lenders became very cautious.
If you’re thinking of getting into property or have started to look into it, you may be looking at having to save a substantial sum in order to get started. Buy-to-let lenders want security – so they expect buyers to be able to put a good chunk down – typically 25% of the purchase price (no wonder young people are struggling to get onto the property ladder – that amount is going to take a while to save).
So you might as well give up now – right?
Wrong! You just need to know how to become a Ninja Investor.
These are the investors who understand how to fund their purchases more intelligently than with a standard buy-to-let (BTL) mortgage. They buy low, fund at value and get their money out quickly – even if they keep the property as a BTL.
If you think there’s something dodgy here – think again. Ninja Strategies are legal, ethical and accessible.
You may be able to get 100% funding, but to start with you’ll need a little of your own money – but it doesn’t need to be 25% of the purchase value of your first property. If you can find the right property with a motivated seller, you can buy at below market value (BMV).
If you were planning to apply for a BTL mortgage, you’d still need 25% of the price you were purchasing at. But if you use bridging finance to get started you could get 70% of the full value of the property – regardless of the actual purchase price.
So if you found a property worth £200K and, because of the condition or the seller’s personal situation or some other reason (and there are many), the seller can’t sell to anyone requiring a mortgage, there’s your opportunity.
An unmortgageable property is cash-buyer country. In other words, the only people able to buy would be a cash buyer – and cash buyers don’t pay full price for anything.
If you polish up your negotiation skills and can stand your ground, you could bargain down to as much as 50% BMV. With the right bridger you could get a £140K loan, which gives you the purchase price AND money for a refurb.
However, even if you only negotiate the seller down by 25%, that would still leave you only needing an additional £10-15K, instead of £50K to make the purchase.
It all makes getting started look more accessible.
One warning: To make this work well you will almost certainly need a good broker and also a solicitor who is familiar with processing bridging funding. Of course, our brokerage does this kind of funding all the time so you’ll know where to start looking!