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Really happy to have found such a wealth of information in one place, some log hours ahead reading through so much information!
I am finally in a position to think about starting to build my own portfolio however am wondering if now is a terrible time to think about this?
I have just sold my house and have another property to live in for the next 12 months free of charge (a friends place), I have £220,000 cash to and some experience in building/renovating property, with a strong phonebook of contractors I have worked with.
Although the simple answer seems to be take the first step and buy a property and get the ball rolling im keen to know the direction im heading in before I begin. The dream has always been to have a portfolio of properties rented out and bringing in a healthy income. I have read endless different tactics of people who have done this and many different strategies of how they achieved this but due to the amount of different ways I am now stuck wondering how to proceed.
I have begun looking at the idea of a 'mentor' or someone who is currently thriving in this strategy to help advise me along the way with how to build strategically. Would this be a sensible way forward to have someone else to guide me on starting out for the first few years?
Any advice would be warmly welcome!!
Hi Mike and welcome to the tribe.You seem very well placed to start a "buy at a discount, refurb, re-finance, and hold strategy" - which I believe is one of the most effective strategies in the current market conditions.The best thing is just to start. The journey of 1,000 miles starts with a single step.The only time any of us have to get started is NOW. You cannot go back into the past and purchase property and you cannot take the DeLorean into the future and buy property. So you just have today - with your current situation, health, mortgage products, interest rates, etc. These could all change if you wait a year. That is why I have always advocated just getting going.If you read the book by T. Harv Ecker, called "Secrets of the Millionaire Mind", which I highly recommend, he says that successful people do not go ... Ready! Aim! Fire!. He says successful people go ... Ready! Fire! Aim!. In other words, the lights are never all going to be on green and if you wait for them to be, you will waste your life. You fire at the target, and you may well miss, but you keep adjusting your aim (through actual experience) and that enables you to eventually hit the bullseye.Start with something low risk, like a basic refurb - kitchen, bathrooms, decorating, and carpets - and gradually work your way forwards from there.The idea of a mentor is a good one - but don't pay huge fees for training and education - find someone who is doing this via this forum and ask them if they could meet you for a coffee. You could also start attending landlord and property investor networking events - for instance the next Landlord Investment Show is in Birmingham on 15th May and is free to attend.Join a Landlord Association as well as it is worth its weight in gold in terms of support. Property Tribes is partnered with the Residential Landlords Association and our members can enjoy a 25% discount off membership. The true success to anything in life is sustained and intelligent action on a daily basis. I think you just need to START! Once you make a commitment to something and start taking action, you will find that things start to open up for you and come your way.Good luck and hope that helps for starters.
Vanessa Warwick Landlord and Co-Founder of PropertyTribes.com **If you have got value from Property Tribes, find out how you can support it in remaining a free to use community resource**
Thank you for the reply and the advice! Love the analogy and makes perfect sense. I have heard the first step is always the hardest but whole heartedly agree nothing will succeed or fail without that step.
I will look into the Landlord Associations, always keen for more information. Thanks again and congratulations on a fantastic site!
he says that successful people do not go ... Ready! Aim! Fire!. He says successful people go ... Ready! Fire! Aim!.
All well and good until the lack of aim makes them blow their own brains out (or to put it less dramatically, go bankrupt.)
Not if they keep adjusting their aim through fine-tuning it.
Would be too late to adjust the aim once your brains are splattered over the wall!
Ok, I'll stop now !
The point is that you have to make a start at some time, because the lights are never always on green and if you wait for them to be, you will end up never doing anything at all. Once you actually start doing something, you can learn and improve and make your aim better through experience. I think you may have taken the analogy a little far!
I did take the analogy too far, haven't had a coffee yet this morning!
My serious point though is that if they don't "aim" i.e. carry out diligence and just work on the basis of starting now regardless, they'll very often end up investing in the wrong thing such as Glenn Armstrong / London Capital Finance / Inside Track etc.
Sound advice from Vanessa as always.
The only thing I disagree on is not to aim or have a goal before you start. I find that the most important part. You will notice many investors are worried about S24, PRA stress test, sustainability of portfolios etc... it is mainly down to lack of planning. Some examples below:-
S24 - have a portfolio structured in such a way that you will not trigger S24 higher tax bracket. You need to do this at the first and not in the middle of the growth. Incorporating is not the best idea generally speaking, but many has done what the government wants them to do.
PRA stress testing - most of my investor mates in London are unable to refinance and further expand their portfolio due to lack of structuring of the portfolio to deal with stress test. For example, we buy 1 high yielding property (income covers 3 mortgages) and 2 capital growth properties for longer term growth. So every 3rd property we invest in is high yielding.
I think you get the idea. None of these government interventions will bother you if you play the game, but you need to know the rules of the game and play it wisely.
For clarification, I did not mean that you should not have a goal before you start.The "Ready! Fire! Aim!" strategy means having a bullseye/target but taking action to be able to hit it, rather than waiting for all the lights are on green to do anything, because they never will be.I absolutely subscribe to having something to aim for, and having clear goals.
I would only buy my first property when I have a fairly good idea what my 10th property odd to be like.
It is like a journey to a destination. I don't start driving till I have setup my Sat Nat (Google map). The reason is 2 folds, no point starting if there is no destination decided, point 2, Google map will provide you with all the obstacle (traffic, road works etc...) to enable you to make an informed decision ie. Detail planning of a alternative route. There is really a little too late if you start setting up your sat nat after starting the journey.