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?
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.
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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.
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.
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.
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.