Hey guys welcome back James Bennett here the property coach I hope you are all keeping well just dropping this blog to let you all know about an amazing strategy we use called buy refurbish and refinance so if you’re looking to start your journey into property investment you’re going to want to hear this
For those of you that follow me on socials, you will see us undertaking refurbishments of property all the time and then quickly repeating the process, again and again, we simply use a process of recycling our cash through the property I say simply that’s because I have been doing this for quite some time
This strategy has enabled me to build a large property portfolio by simply reusing my initial investment multiple times knowing what to look for and being creative This can work for you just like it has for me But in all fairness, it is a complex property investment strategy made simple through experience So today I would like to share my experience with you so you can do the same
There are 3 main parts to this strategy as the name suggests buy, refurbish and refinance so I will break it down into the 3 categories for you
So you can easily understand the steps
First of all, buy that stands for the purchase of the property But before you simply buy any old property there is some careful due diligence that needs to be done to make sure you buy something suitable
When we start looking for property to adopt this strategy we first of all need to find a property where we can add value now this can be done in many ways you could locate a large property and divide it up into multiple units and then refinance them individually after you have split the titles
Or you can look for say 2-bed houses or flats that you can convert into 3-bed properties this will naturally add value
The way we tend to favor is to buy run down unloved properties at the right price and give them a full refurb that normally includes small extensions new layout new kitchens new bathrooms new flooring decorated to a high standard landscaped garden and a boost in the curb appeal of the property
This in turn again naturally increases the value of the property
So you have found a property you can add value to you must now check that the area can support the increased value you have added to the property so you need to check sold prices within a quarter of a mile and look for the highest price of similar properties say most sold for 100k its likely the selling price in that street is going to be around 100k
So now you know the likely end value in that street you have to now do a calculation I call reverse engineering
Complicated it might sound it's just a case of working backward
So here is an example start with the 100k end value
If you see a house for sale in the street for 90k and it needs 10k spending on it to make it worth 100k it’s not likely to be a good BRRR deal to make it worth your while you need to purchase that house for around 70k this then enables you to
Spend the 10k renovation costs plus your £2800 stamp and legal costs you will have a 100k house that owes you £82800
Now comes the refinance part
You now have a 100k house that you own outright or with a bridging loan that cost you £82800
You will now take out a buy to let mortgage on the property they will want a 75% loan to value on the house so you will need to leave in 25k this leaves 75k to be released to you to then roll on to the next project with this example you also will leave £7800 of your own money in the deal but in essence, you have just secured that property for £7800 that’s likely to give you a monthly income of £625 minus your interest-only mortgage costs of £125 that’s a healthy £500 per month of the one property
And you simply repeat the process within a year you could have 3 of these deals in the bag and well on the way to becoming your boss using the power of property
So if you have had a tough year with the covid lockdowns ect and don’t want to return to the daily grind at the office or simply want to become your boss this is a great way to get there
I will be doing a lot more in-depth videos and blogs on individual aspects of this strategy but if any of you need to ask any questions or would like a bit of friendly advice daily from someone who does this on a daily basis then please get in touch for a free call to get you pointed in the right direction
Now if you like the idea of recycling your cash through property using creative methods and having multiple exit strategies at your Fingertips get in touch today for a free strategy call to see how we can help you secure your future through property investing
we are running a very limited number of of of mentorship packages over the next 6 months where we will invite you to visit our projects and support your property investing goals and needs
If you want to book a free strategy call with a member of our team to see if you would be a good fit and you are serious about getting started in BRRR or just want a friendly chat to find out more then please book a FREE strategy call
We would be more than happy to assist you moving forward with your property venture