A strategy required for my Investment properties

[Northern Property]

Hello All, great site lots of information that is really useful, Thanks. (cant believe I haven't come across it)

I am after advice as I found myself at crossroads.

My situation is I am from North east England, firstly I own my own home its worth £190,000 with a mortgage of just £50,000 which I am comfortable with. I am currently working in Engineering role but I am wanting to branch out int property full time and trying to find best way to fund this dream. I will try and outline my situation as best as I can and hopefully someone could assist me in helping achieve my ambition.

• I also own a 3 bedroom end terrace house valued at £90,000 with a repayment mortgage of £54,000 15 years remaining. My Mortgage is currently £300 a month and I have tenants paying £525 a month. They have been there over 6 years.
• I own a property overseas that is worth £120,000 with mortgage of £250 a month that I use myself for holidays and family, rental covers the mortgage and generates no profit. Happy a property will be paid for to retire too.
• I have also bought a 4 bedroom Victorian town house for £145,000 in a tourist destination this was in need of updating and structural repairs (damp, rewiring, change of sanitary system, and general refurbishment) I have spent £42,000 on it to date with another £10,000 estimated to complete it. I have been told it will fetch offers of around £250,000- £270,000 on completion. As its in tourist area I have also been informed it can rent during peak season for £800 per week and off peak £500 with view of achieving 25 weeks a year plus weekends. My mortgage on this is just £55,000 and all works completed have been paid for.

As I have come to a stage where I want to leave the rat race and concentrate on going into property full time, can anyone advise on what strategy they would use and how to refinance to increase my returns.

I hope you can assist

 

[Nicholas Wallwork]

Hi there,

Firstly well done so far what a cracking start to your portfolio!

You have a lot of equity here especially in your own home and the last refurbishment project you mentioned (one finished).

If I was you I'd remortgage those two and free up all the equity you can. Re-invest that in good professional multi keys in a busy town center (maybe Manchester or Liverpool for you?). You've added loads of value and you can do it again I'm sure so so your due diligence, find the right deals and keep investing. Invest for cash flow not capital growth but always add value in some way... You can increase capital gain but don't rely solely on the market to give you those gains... They will probably come for longer term investments but don't rely on the market as this is as good as gambling in my opinion...

Do you have a good mortgage broker?

 

[Northern Property]

Good Morning Nicholas

Firstly thanks for your reply.

I don't have a mortgage broker I use typical high street lenders, just shop about for rates. All My Mortgages are repayment at present.

My plan now is to use some of my equity to obtain interest only mortgage for a house where I purchased my 3 bedroom rental where I can purchase one thats in need of a bit of care for around £75,000, spend £5K on it and rent it for £500 a month. with a £25,000 deposit. I estimate the mortgage would be around £115 a month @ 2% so would generate £385 cash flow.

My nearest City is Newcastle, but I am currently looking at properties in smaller towns in North East.

What would your advice be now on building my portfolio by purchasing interest only?

 

[Le Seb]

Hi,

I completely agree with @Nicholas Wallwork I think he is spot on. Invest for cashflow and life will become real sweet.
With mortgage rates this low it's the best time ever to invest, and you have the chance of living in the north where prices are a lot less bloated than London.
So yes, if you can remortgage and find a good deal to buy, you will increase your cashflow further.
What to buy? Well that depends on your budget, apartments usually do well, but commercial property is also worth looking at, I don't know that area for commercial property, but look at it, you could be pleasantly surprised. If nothing else it diversifies you a little, which is never a bad thing.

Seb

 

[Nicholas Wallwork]

I don't have a mortgage broker I use typical high street lenders, just shop about for rates. All My Mortgages are repayment at present...

My nearest City is Newcastle, but I am currently looking at properties in smaller towns in North East.

What would your advice be now on building my portfolio by purchasing interest only?

I would certainly suggest interest only as it gives you better cash flow now and the debt is naturally eroded through inflation anyway.

I'd invest where there is good tenant demand on the fringes of the city where transport links are excellent. Small towns are more for owner occupiers and demand won't be as strong...

Finally definitely get yourself a good mortgage broker as they will have more access to specialist lenders and often better rates you need experts on your team!

Looking forward to following your journey on here so please keep sharing...

 

[Northern Property]

Thanks for advice, appreciated.

Yes my proposed Strategy was to strengthen my cash flow whilst using my assets for equity but try and keep initial properties repayment.

Commercial property I have looked at and feel out my comfort zone with it, lots of shops/ businesses appear and go within short timescale in our area.

Mortgage broker, always been wary of, what to you advise to find a trusted and proven broker in my area.

Once again thanks.

 

[sergerybrin]

It's a really useful information. I read this and getting strong point of view for buying the apartments own.

 

[Nicholas Wallwork]

Mortgage broker, always been wary of, what to you advise to find a trusted and proven broker in my area.

Once again thanks.

Well firstly the broker doesn't have to be in your area! Mortgages are from major banks (and some specialist smaller lenders) and they are rarely on the high street. High st banks are normally good for home mortgages but buy to let lending often requires looking a bit further afield...

Do your research and ensure the person or firm you choose has "whole of market" capability meaning they are not just tied to specific lenders... Also ensure they have access to specialist lenders for buy to let and bridge loan financing... This should give you a good idea that they know what they're doing. I'd suggest a commercial broker too as commercial finance is often used for slightly larger BTL projects like large HMOs and the like as the income helps give a higher valuation than bricks and mortar...

If you get stuck feel free to msg me and I can recommend a good broker we've used.

 

[Michelle Barringer]

Have you considered some hands off investments in your portfolio? Once you have the finances sorted this is worth considering so that you can make your capital work for you - i would suggest this is a good idea as part of a portfolio so you can spread your risk and focus on a smaller number of hands on projects whist making money on hands off projects at the some time - especially with returns of 10% on offer you can use some of your equity to simply create an income stream for you.