How to Invest in Property!

REALIZING WHAT I WAS DOING WRONG

…it was only when I read a book by Will Hill, now out of print, that I realized what I was doing wrong. I further went on to read Rich Dad, Poor Dad, by Robert Kyosaki and the penny dropped. I had to stop working for a salary and start building wealth through investments so that my money would work hard for me – making more money – rather than us constantly having to work to get the money at the end of the month…

The problem was I had very little money. It took me the best part of the year to save up £350!

Then I found a book by Harry Hawkins “No Money Down Property Millions!” which planted a seed in my mind that you don’t actually need any money to buy property! At last, I thought, I can get on with investing in property WITHOUT ANY MONEY…

I stopped wasting time watching TV, reading the papers and started spending any free time I had educating myself on how to stop working for money and et money work for me.

MY FIRST MISTAKE

The first property I found to buy, for investment purposes, was through an estate agent. It was on the market for £85,000 whilst next door was up for £125,000! However, the property was in a miserable state of disrepair. The bathroom was a shambles, there were ceilings missing, the whole porch needed rebuilding, skirting and doors and door frames were missing. There was no carpet and the back garden was mainly brambles and rubbish.

I announced I was quitting my 9 – 5 job, much to the horror of my parents and threw myself into property renovation. Richie quit too and joined me. Eight months later an immaculate property, lots of sweat and tears later an immaculate show home condition property was back on the market (complete with new garage) and sold for £139,950.

Now, with hindsight, I know we should never have sold. We should have refinanced the property and rented the property out then to this day it would still be going up in value. Never mind. You live and learn!

GOALS

I soon learned that I needed to set goals. Specific goals not just I want to buy 4 buy to let properties this year… but I want to buy 4 properties below market value, not requiring any money in, giving me at least £50,000 cash out within the next six months.

Goals help spur you on, they stop you idling, keep you looking forward and positively and get you where you want to be.

You need to set your own goals and to think big.

THEN YOU NEED A STRATEGY

It’s all well and dandy having goals, but you need a clear defined strategy to get you to what you want in life.

Also don’t set your goals too low…

In 2006 I set myself the goal of buying at least 8 more properties to let out, with a good cashflow each month after all costs. We actually bought 12. So perhaps if we had set our sights higher we would have got further ahead!?

MENTORS

Mentors are a great way to keep yourself focused and on track. Why not follow in the footsteps of someone that has already done what you want to do. learn from their mistakes and avoid wasting time and money on what went wrong. Simply copy their successes and get where you want to be faster.

When you need a reality check a mentor can be there for you. They can explain creative strategies and finance tricks so you can make the most of your resources.

How to find a mentor…

Ask friends
Family
Through work
Through networking at events
Through online networking such as ecademy or facebook.

BUILDING ON SOLID FOUNDATIONS

If you are rubbish at budgeting your normal day to day expenses and are always overdrawn you will really need to look at your spending habits before you start investing for your future.

Property investing is a great way to build wealth, however, you need to start with a good foundation or your money will just seep away.

You should start as you mean to go on. Create separate business accounts from your personal ones.

Keep good records of money in and money out, this will make life so much easier when you come to do your tax return or give it to your accountant.

To solve your money problems, simply spend less than you earn and invest everything you possible can. To learn more about saving money I recommend you check out moneysavingexpert which is run by Martin Lewis.

PASSIVE INCOME

Property investing will not get you passive income. You need to do your homework and buy at the right price to generate positive cashflow. You need to maintain your property and look after your tenants or find a very good letting agent who can.

You will need to invest both time and money in property investing. Unless you have more money at your disposal than time and you can invest in someone else’s time in order to look after your property and tenants.

WIN WIN

Win win is all about keeping everyone happy. You need to buy at the right price for you. Your seller needs to be happy that they are getting a good deal (or the best in their circumstances). If you have been brought the deal by a property finder, then they will need rewarding, otherwise in future they will not bring the best deals to you. Your tenants need to be renting the best property available to them, so you need to maintain properties to a high standard (if we wouldn’t live in the property we wouldn’t rent it out). If you are buying a property to sell it on and you have bought below market value then sell on at a good price so that the next person is also getting a good deal. Be honest and keep your word. Remember “what comes around goes around”.

Property investing is all about building relationships with people. Being honest and living up to your reputation will so you no end of good in the long run. Do not let anyone down. Integrity is what all the biggest and best property investors have, just look at Dolf De Roos!

FINDING A FINDER

For goodness sake always do your own due diligence on an investment that you are going to buy. Don’t take anyone’s word for it – they are not going to buy it and end up with it for, more than likely, the rest of their lives.

However, sometimes it is best not to do everything yourself. Work and other commitments can get in the way.

Sometimes you need to put your trust in someone else. The question is – who?

Local letting agents to the area you want to invest in can be a good solution.

Alternatively there are “property buyers and finders” working all over the country.

If you are working full time or are a full time housewife or househusband building relationships with these people can be worth it’s weight in gold.

BUYING BELOW MARKET VALUE

Buying property BMV (Below market value) is one of the most sound tips that can be given. After all you make your money when you BUY. We aim for 10 to 25% below market value to lock in equity and protect ourselves an our investors from any turn in the market, to ensure we are never a desperate seller ourselves – we can still sell on at a discount giving some discount to the next buyer and still ensuring a profit.

Tying up less capital (if any) ensures that our return on investment is strong. We also get a higher yield for our money than the investor that pays the true market value of an investment (this is the price it will actually sell for in the current market in 6 weeks – usually a lower figure than what the property is on the market for with an estate agent).

These are “genuine” under market value investments, not over inflated or developer discounts for off plan purchases. All our properties are researched with true comparables, i.e. recently sold similar properties in the same area, for comparison.

5 Steps to Quit Your Day Job and Start Online

I read a discussion thread in a forum on a weekly — if not daily — basis about how people are struggling to quit their job to start online. The promise of working at the comfort of their own home and be their own boss are very compelling. Not to mention the kind of lifestyle they could get by working from anywhere in the world.

The problem is, success doesn’t come overnight. It takes a lot of time and effort.

For those who have the luxury of others supporting them while they plunge into the new venture full time, congratulations! However, not all people are that lucky. Most still can’t leave their job because that is the only source of income to support them.

Don’t give up hope though. Here are 5 steps you can take to start online and quit your job without much pain. If you aren’t afraid to work hard, this can be a great model for you:

1. Keep your day job
If your day job doesn’t allow you to work 8 hours and you must work overtime most of the day, find another job. It doesn’t have to be something you like, just something that could support you. Note that you’re doing this momentarily.

That way, you can allocate more time to work on your online business. Three to five hours per day is a good start.

2. Aim high, but start with the lowest hanging fruit
You can’t afford to be slow. Although you can build one business slowly and steadily, it is always recommended that you start with the lowest hanging fruit. It doesn’t have to be the main business you want to work on.

Some ideas include working as a freelance, offering services to others who need it. If you can make web sites, find local businesses who are looking to get their business online. If you are good at designing graphical elements, offer your design work to start the income stream.

After you’ve successfully build the income to the level that it can support your living expense, it’s time to quit your job. Although it may not be the kind of business you want, it’s obviously better than working for others.

3. Invest in yourself first
To contribute and make a difference to the world, you must invest in yourself and build a better individual first. This is also required to build your own business.

Just because you’re good and knowledgeable in programming doesn’t mean you can build a successful software business. Know your strengths and weaknesses and invest in improving yourself.

4. Balance with actions
Nothing turns in life without actions. Ideas are important but if there’s no action, there’s no result. It is important that you balance learning with taking actions.

After you gain some confidence with some of the online business models, you can start planning and doing.

5. Never give up
Others have been there and done it. There’s no reason it can’t work for you. Let’s admit it, if it doesn’t work, most likely the problem is in how you do it. Don’t expect different results if you keep doing the same thing.

With that said, I don’t recommend that you jump from one web site to another. It is just a complete waste of time. Focus on one or two and work on it until you see results. Building your name, credibility, getting the traffic, growing your list, maintaining relationship with the audience, all take time. It’s very critical that you are patient and persistent.

Quitting your day job and risking everything to start online is not a smart move for most people. With this easy model, you can start online safely and go full time gradually.