In this video I thought I would address a problem which is quite a common problem that I find when I am talking to would-be investors, and that is that the would-be investor wants to get into property and they have a plan for getting into property, but on closer examination it seems like they are pursuing the wrong strategy. A particular example, I was with somebody recently who said that they wanted to get into buy to let and they want to build a portfolio but they haven’t got any money for deposits, and they don’t like the idea of raising private finance, in fact the idea scares them. I’ve done other videos on this and I’ve done a video recently about what to do if you feel scared of raising private finance, I don’t think you should by the way. But, in this particular instance the person I was speaking to was quite clear that despite my urging to the contrary they didn’t feel that they were able to raise any private finance and so they were wondering what to do.
It seemed to me quite a simple solution because if they don’t have any money and if they are nervous about going out and borrowing money from private investors, then probably wanting to put together a portfolio of buy to let properties is the wrong strategy. What they should’ve been doing is thinking of how they can put together a plan which would help them to do no money down deals. I’ve done videos on my YouTube channel about no money downs so please do have a look at that. That would be one way of building a portfolio.
The alternative is to think about other strategies which don’t require upfront capital, so maybe starting off by going into rent to rent. One thing which they could definitely do, particularly in the area in which they are located which is good for cheap property and good for buy to lets, which is why they were thinking about buy to lets, but as they couldn’t afford to buy the buy to lets themselves, the obvious alternative or the obvious strategy which I was encouraging them to undertake would be to find properties for other people. In other words, to become a deal sourcer or a deal packager, to find properties, to negotiate a great deal and then to pass that deal onto another investor and take a fee. Why? Because they could, because they don’t need any upfront capital to do that, plus they could use the income which they receive or the fees that they receive from selling those deals and start to build an nest-egg which they can then use as a deposit to start investing in their own properties.
What I realised was when I was talking to this particular person is that they have got the enthusiasm and they’ve got the energy to get into property but they probably weren’t channelling it in quite the right way.
So, if you are about to get into property or if you are thinking about getting into property have a very careful think about what it is you are trying to achieve and then think about what is the best way to achieve what you want to achieve. What is the best strategy? And very often it is not the most obvious strategy which is the best strategy to follow.
Peter
Peter Jones
(ex) Chartered Surveyor, author and property investor
https://www.ThePropertyTeacher.co.uk
PS. By the way, I’ve rewritten and updated my best-selling e-book, The Successful Property Investor’s Strategy Workshop, which is an account of how I put together my multi-property portfolio, starting from scratch and with no money of my own, and how you can do the same.
For more details please go to:
https://www.ThePropertyTeacher.co.uk/the-successful-property-investors-strategy-workshop