Get into property with no money #4 | how to raise finance2 | how to work with angel investors?

This video is all about working with angel investors and using the finance raised to do the ‘buy-refurbish-refinance’ strategy. This is a great way to buy property recycle the funds to pay back to your investors and grow a portfolio.

Hello everybody so nice to have you here welcome to my channel today’s video is the fourth in a series and we’re going to be covering two topics in this series it’s my two favorite ways this is how we’ve done the majority of our deals but first welcome so nice to have you here my name is dev’s if you like these videos please consider subscribing and hitting the

Bell for notifications to see where new videos are coming my video is generally about property and about our build development that we’re doing if you’re interested seeing those please click the link so today we’re going to be talking about angel investing and brr by refurbished refinance all of our deals have been bought with these two processes because we didn’t

Have any money of our own so this is how we did it okay everybody we used an angel investor so that is somebody with perhaps a large amount of capital who wants a better return on their money than what they can get in the bank and everybody knows at the moment you can’t get very much for your money in the bank you know i did a quick look on money-saving expert

And like the best deals are like two percent interest but let’s face it a lot of people they’ve got cash in the bank and they’re getting less than one percent interest a year see it’s just really not great guys so this is a way for people with perhaps a lot of capital a lot of cash to get better returns on their money and property is such a good way to do this

Because you’re actually buying something solid rather than perhaps investing in stocks and shares or perhaps a business which is so unstable and stocks and shares it’s just you’re investing something that doesn’t actually technically exist with property you buy bricks and mortar so like worst case scenario you still always have the house at the end so i just think

It’s such a good investment if you’ve got a lot of cash so we borrowed some money from investor and we paid interest to them so we were paying between five and ten percent depending on the deal depending on the risk and you want to see like where they’re at what do they want what do they need in order to make the investor feel safe and secure there’s a couple of

Ways in which you can work with your investor so you probably have a very very long-term investor who just wants to give you the money and just have that money on loan for a very long period of time to give them perhaps a fixed rate of interest and you can go out and you can go and buy property when you’re paying an investor interest if you’re obviously to have a

Property that’s going to produce a higher amount of income so perhaps you want to choose something like hmo you might want students or perhaps you could do a property that you then rent out a service accommodation so you make enough money in order to make some profit for yourself be able to have you cost and also pay your investor so that would be a way how to use

That money for a long period of time and just keep paying them month after month so some investors obviously aren’t gonna want to invested you for that long a period of time maybe we’ve got some got very long term they’re happy just to leave their money setting their property and paying you both nicely which is great and that’s brilliant if you can find investor

Like that but perhaps somebody you know they might want their money back after six months maybe eighteen months could be three years five years however long but you need to be able to give them their money back but still hold onto a property so there’s two ways in which you can get your investors money back the first way is lips now flips is a capital generation

Strategy so obviously you gonna be hopefully making some money and then being able to put that money into another property which will then produce income however please be aware with flips you need to make sure there’s enough profit margin in that because it’s far too easy to overspend on the refurb and then perhaps you have to accept a little offer so please be

Aware with flips you need to make sure there is enough profit margin in this but flips gonna be really really profitable and i know someone who’s making really good money out of them and they’re doing them just every year they get a couple done and they’re like making a really decent amount of profit so with that you could you could buy your property refurbish it

Sell it and then you’ve got your chunk of money and obviously with that strategy you can actually something whatever you live even if you’re in the south and the house is a really expensive if you can borrow enough money from your investor to buy it in the first place you can make some decent money so a lot of the strategies that i’ve been talking about before are

Very much dependent on getting it in the north whereas with the flips you can do this anywhere in the country as long it’s got a healthy buying market people going to be buying it at the other end the second strategy in which you can pay your investor back is called brr and this is actually one of my strategies as part of this series i’m going to be covering that

In this one as well because i think they’re really linked together now brr or buy refurbish refinance it’s when you buy a property you do renovation you refinance it because it’s worth a lot more and then you’re able to pull out that money through the refinance and then pay your investors back now that works really well on paper in reality it’s quite difficult to

Find those properties which the numbers stack up as well as that so i’m just going to run through the numbers just so you know what you’re looking for so let’s just say that you bought a property for 60,000 pounds it’s in a really rough state you end up spending about 15,000 pounds on the renovation and then we’ve got to give ourself a bit of space with the fees

Stamp duty solicitous all that let’s just say we’ve got five thousand for all those fees and then perhaps it’s a bit of room there okay so all in all we’ve spent eighty thousand pounds to buy the house so that will include the mortgage the deposit and all those fees and the refurb we’ve spent our eighty thousand but now this house when it’s all done up is worth a

Hundred thousand now if you were to get an 80 percent loan to value mortgage you would then have eighty thousand of your mortgage come out at the other end now that eighty thousand will then pay for your purchase of it in the first place it happens the sixty thousand in the first place pays off the original mortgage and pays off your angel investor of that deposit

To begin with and then you also have another twenty thousand so then pay for your refurbishment and your fees so hopefully within that refinance you can then pull all of your money out and pay the investors back so you’ve essentially bought a house for free now this strategy if we have done quite a few times it took a long time for me to get my head around exactly

What right areas where this work you know i did i’ve done hundreds of viewings trying to find houses like this it does work but it requires a lot of effort and a lot of viewing so just bear that in mind with the strategy it is wonderful but bear that in mind i will be doing some case studies showing you doing a walkthrough of some of the properties we’ve done and

All of us are in this strategy so you don’t see exactly what we’ve done and how we’ve got there so that is the kind of overall idea of brr and that’s how you can get your angels money back now if you don’t like hmo or perhaps to doing a student property generally getting money out deals we pull all of it out through the refinance it’s really really difficult so

Maybe you need like a longer-term angel but the money that’s left in perhaps you’ll leave ten twenty thousand pounds in the deal which you can’t pull out and the refinance so perhaps that’s then when you get a longer-term angel investor perhaps someone who’s at perhaps a bit more cautious doesn’t want to do something crazy like the buyer and the refurbish but

It’s happy to have some money left in a property and you can just switch use that angel to pay off the previous angel which you might be paying a higher rate of interest because it’s a higher risk they have a lower risk they have a lower rate of interest and you’re able to cover those costs obviously want have a higher paying tenant in those kind of properties so

That is angel finance and buy refurbish refinance i hope you really enjoyed that video some really fun talking about it i loved it strategy obviously i get really pumped about it is really exciting for me if you’ve got any thoughts or comments please comment below i’d love to hear what you think you’ve got any more questions i’d love to chat that through with you

Please consider subscribing if you’ve enjoyed the video it’s been really great to chat to you today and i hope you have a wonderful day i’ll see you in the next video but that’s all for now see very soon and have a great day all right bye you

Transcribed from video
Get into property with no money #4 | how to raise finance2 | how to work with angel investors? By Debs Davies