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HOW TO GROW A PROPERTY PORTFOLIO
FASTER THAN YOU THOUGHT POSSIBLE
KEVIN WRIGHT POSITIVE PROPERTY FINANCE
The problem with buying
property as an investment is
that you need capital to put
down as a deposit – and then
it’s locked into your property for
six months or more, until you can
remortgage. The days of ‘no
money down’ mortgages are
gone; you need a deposit to get
any mortgage these days.
At this rate you’ll be lucky to
manage to add two properties
a year to your portfolio, unless
you have a big nest egg. The
secret is not to lock your capital
into a mortgage, but to use
creative financial packages
specially developed for property
investors.
DO YOU FIT THE BUY-TO-LET
LENDER’S TYPICAL PROFILE?
It’s easy to imagine that lenders
love property investors, because
they have plenty of assets so
their mortgage is secure.
Wrong!
Buy-to-let lenders like their
clients to have a nice secure full
time job earning a minimum of
£25,000 a year and have their
own cash for deposits. They
don’t like you to have too many
properties as that may mean
you will soon leave your nice
secure job, which makes them
nervous.
They expect you to be able to
put 25% down on each property
and then to go away and just
pay your mortgage each month
until it’s paid up.
They don’t like people who want
to remortgage their property
after six months when the
4
IN ASSOCIATION WITH TENANTS HISTORY
property has been refurbished
and is now worth a lot more.
Serious property investors are
going to find it tough.
Since the flexible mortgage
products were withdrawn
from the market in 2008 when
people talk about ‘no money
down’ strategies what they are
really describing is a method of
concealing the true purchase
procedure from the lender.
This is fraud and any legitimate
investor, bridging financier or
credible mortgage or finance
broker will have nothing to do
with it.
However, there are creative
means of putting together
finance packages that are
entirely legal and don’t put the
lender, the purchaser or the
property at risk.
CASE STUDY
of the refurb the bridger
valued at market price of
£125,000.
The bridger released 65%
of market value (£125K) on
completion, releasing £81,250,
which covered both the
purchase price and most of
the refurbishment costs.
The finance structure that
Kevin Wright put in place
made this possible without
Akhtar needing a substantial
cash investment to purchase
the property outright.
To be successful in bridging
finance you need an
experienced bridging
lender and a solicitor who
understands bridging
finance and can complete
transactions in days, rather
than months.
Akhtar Khan used bridging to
buy a property that had fallen
into disrepair, had a kitchen fire
and was unmortgageable. The
owners had two charges on
the property of £50K and £55K,
although the property was only
worth about £75K. ()A