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  • New Members

    Advice & guidance for 19 year old newcomer

    Hi,

    I'm looking for advice. I'm 19 and i have £5k in the bank. I have a decent job were I earn £25k per year.

    Ever since I was 12 I wanted to get into real estate but I just don't know my best way forward.

    I went to a Samuel Leeds crash course and felt like I seen right through the lies.

    I think property sourcing may be my best way to make money to then progress to buying property but I'm not to sure. (Any advice there is appreciated).

    If that is the best way could someone please suggest videos, blogs, podcasts, mentors or courses that would help me to full understand how to do it.

    Any advice/help is appreciated

    Thanks,

    Rhys

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    Hi Rhys, I started off the same as you.  Samuels leeds is a great Mentor.  I wish I knew about him a while back.  The Course I took when I started was with Goliath Sourcing Academy, they are very good and offer a Free kick start Course to show you the basics, I'd recommend taking a look.  Hope this helps and good luck

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    Hi Rhys and welcome.

    As you know, we have a long thread on here about Samuel Leeds which I suggest that people read before parting with any money.

    As for Goliath Sourcing Academy, I've never heard of them.  A quick look at their website showed some red flags:

    1.  No company registration number displayed.

    2.  No privacy notice.

    3.  No ombudsman scheme membership details.  If they are sourcing deals, as their website says, they are caught by estate agent legislation and are required by law to be a member of an independent redress scheme.

    All of the above are a legal requirement, so that fact that their website is not compliant is not a positive starting point imho. 

    The company was incorporated in November 2014 and shows net assets of minus £17K, which seems a bit out of kilter with their claims of "building their business by sourcing deals" before they started training others.

    With regards to getting started with your situation, you have a very similar position to another recent poster and I direct you to my answer to them, as I think it is an option for you to consider as well.

    I hope that helps and good luck.

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    09331953 is the Company Number with Companies House.

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    Thanks Geoff and I see you are a new member, so welcome.

    Whenever we have deal sourcers posting here, they have to adhere to our community safe-guarding protocols, which means they need to display their ombudsman membership details.  Please could you advise yours?

    Also, I checked your company on Companies House and it was incorporated on 5th November 2018.

    On that basis, I have to ask how credible your claims are of Samuel Leeds and Goliath Property Sourcing being good courses are?

    As you only started in business a matter of two weeks ago, I don't think it is unreasonable of me to suggest that it might be a little early to give testimonials/recommendations?

    In my role of Community Manager, I have to point such things out, especially bearing in mind that two people on the Samuel Leeds thread who originally gave glowing testimonials, later contacted the moderator and asked for those testimonials to be removed.

    Perhaps, if you are already successfully selling some deals, you could give some links and examples by way of substantiating your testimonials?

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    Hi Rhys  whilst this is a landlord forum at your age I believe you need to be focusing on buying your own home.

    It is good that you have started saving - but with a £25k salary you should be able to save far more in a year - unless of course you have moved out of family home to rent privately.

    Try to save enough for maybe 20/30% deposit on a fixer/upper with at least 2 beds and take in a lodger to help fund things

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    Saving isn't the issue. I've only recently moved into the job about 6 months ago so I think the 5k saving isn't to bad . Would it be better for me to buy a house for myself first or save up the investment deposit?

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    Buy your own house first and get to understand what ownership is all about.

    Hence my suggestion for a fixer upper as that gives you a hands on training course.

    Plus having lodgers will be a bit of a crash course in human nature and putting the two things together will give you a better feel for what being a landlord is all about.

    Also have a read of HHSRS as to issues you may have to deal with later as a landlord. 

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    To put some context on this issue.

    CML (Council of Mortgage Lenders) data shows that nationally FTBs have gross household income of £38k - plus average 17%/£24k cash deposit - plus of course all the buying fees a few thousand on top.

    They borrow average 3.11 x income (£118k) and pay average £142k for their first home.

    Some 75% of FTBs are couples - many of whom will then have 2 full time wages (though half of that 75% also have kids).

    Across the 600 sq miles of Greater London average FTB borrows 3.8 x income of £60k with av 30%/£100k deposit - hence pay av £328000 for first home.

    You say you can pro rata save £10,000 pa - so in 2 yrs time you will have the same deposit (£24000) as the national average FTB - though probably unlikely to have a 52% pay rise to get your income to their £38k average - and usually you need to be in a job for 12 months before being eligible for a mortgage.

    If you wanted to replicate national average FTB - and borrow just 3 x salary ( £75000) then that then needs a deposit of £67000 to buy at £142000. That then needs a further 6 yrs of saving - and of course nobody knows what will happen to house prices in that time frame.

    Noteworthy though is that just since you were born 19 yrs ago - prices in SE are up 5 fold - and in parts of London up 10 fold.

    MMR stress tests new mortgage applications at a 7% mortgage rate - and that translates to monthly repayments for a 25 yr Repayment Mortgage of around £700 pcm per £100k of loan and lenders would want loan payments at max 40% of gross income for affordability.

    In your case that means max loan payments of £10000 pa - or a max loan of £119000.

    That said monthly household bills in your own home will be around £400 pcm or more - plus loan payment £833 - total £1233 pcm.

    Ask yourself - could you up your savings rate to £15000 pa/£1200 odd pcm?

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    Thank you for such thorough advice! I'm really taking it on board. I currently work in steelworks and in my first year I'm on more of a placement salary. When I hit 12 months it will then go up to £33k per year. Also I have a girlfriend who is earning roughly £24k. We could get a mortgage together in due time.

    What is your opinion on FTB mortgage schemes of 5% deposit? Is that worth it or just a rip off?

    Also what's the deal with lease option agreements? Is that just an eleborate scam? I think it seems to good to be true...

    Thank you for taking the time to reply it is greatly appreciated!

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    Hi Rhys,

    Here is some information on lease options for you:

    Lease options guru fined $18million

    As stated above, I strongly advise you to stay away from the "get rich quick" schemes.

    The suggestion to buy your own home first and take in lodgers is an excellent one.  You should look into shared ownership and/or Help to Buy, but you can only buy new build, not pre-owned property.  There is lots of advice in our First Time Buyer tribe about this, so dive in there. Smile

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