This strategy is something I teach as part of the Ninja Investor Programme and it’s often a revelation to my students. It’s all about being smart with your financing.
There are some criteria to take into account:
Bridging finance is ‘******* expensive!’ in most people’s minds.
This still largely true if you’re using it for its original purpose, buying a new main residence before selling your current one but that is a small percentage of the bridging market. Commercial use is the main way bridging is now used i.e. to make money on properties you don’t actually live in. ...
The first question I get asked whenever I mention bridging as an option for property investors is “Isn’t that expensive?” - usually accompanied by a sharp intake of breath!
My response is usually “Compared to what?”
If you’re planning to use bridging to finance your main residence, yes it is. The interest rates are higher than traditional mortgages....
At property events many investors who are just getting into property ask my advice on which is the best strategy to follow. There’s never a ‘right’ answer, everybody’s circumstances are different.
When I mention bridging finance as a means of funding a property purchase most investors do that sharp intake of breath and, inevitably, say “Isn’t that expensive?”
Most people see bridging as an expensive option as the interest rates are much higher than a mortgage - but, for the smart investor, bridging is only expensive if you don’t use it intelligently.
Property can be so stressful and emotional sometimes. One of my investors has pulled out for personal reasons and the vendor wants to complete early next week. It’s a good deal, but it looks like I’ll lose my deposit - any ideas?
When you enter the game of playing with private investors, you have to take on the chin that you are dealing with individuals who...