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  • Refurbish/Develop

    Fresh start with £150k what would you do?

    If you had to start all over again from scratch and had £150k as a healthy starting pot what would you do in this modern age and knowing what you know now?

    -Start a SPV LTD company due to section 24 etc?  -Start both a 68100 (Buying and selling of own real estate) and a 68209 (Other letting and operating of own or leased real estate)?                  -Persue it through your personal accounts or any other suggestions?

    Would you leverage with bridging loans for the flipping company and use those profits generated to buy more properties to flip or would you start to build the BTL portfolio and use the profits as deposits? Or a bit of both?

    I'm in this current situation now and it got me thinking that this could turn into quite an interesting discussion.... thoughts?

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    Wouldn't get involved in anything other than bog standard resi letting.

    Use deposits for buying

    You would be able to buy about 4 properties

    Remembering that to take income from the company you can only take £2000 tax free.

    Build up resilience to IR increases by retaining all profits in the business bar possibly the tax free drawings

    Delay gratification for about 35 years then realise all the value.

    Hide the cash away from HMRC, job done!!

    That is what I will be doing!!

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    How does this make more money than investing in any other strategy for 35years?

    Certainly cant make living out of property with 4 B2L....

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    I built a portfolio  in the old fashioned way

    Equity release from main ressi to get capital

    Leveraged to 85% . Saved rent surplus,  refurbed and remortgaged aggressively

    Now I would do it all again but within a company or yes maybe two

    Flipping produces a quick buck but not a sustainable asset base

    I`m yet to be persuaded of the advantages  of selling an asset unless perhaps you

    i) cannot release equity to re invest so need to sell to expand

    ii) have  overcooked your business strategy or lifestyle or just desire a better lifestyle now rather than later

    iii) are starting to wind down and taking profits to spend,  pay down other mortgages, buy properties cash, tax issues

    I`m at iii) at the moment

    Some avenues to obtain cash have been  curtailed,  others though have opened up

    The fundamentals are still there.though despite the ongoing furore

    House prices I believe will be twice where they are now  in maybe 15 - 20 years time

    So more houses is good rather than less

    You can still get good positive cash flow in several  areas

    Mortgages are available to leverage up

    You can still buy well and add real value and make 10K + on paper in 4 weeks

    If you keep the asset, bleed it where appropriate and wait patiently

    Then  compound interest starts to really take hold and magnifies your  capital gains over time

    I would prefer a million in equity across a portfolio  rather than a million in the bank

    The former would double quicker than the latter in my view

    Delay gratification - That in itself can be very  gratifying. I have found.

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    Jonathan Clarke. http://www.buytoletmk.com


    BTL is still a good bet

    But If I had a Million in the Bank I would only invest about 20% into Property JC

    The rest I would invest else where ??

    BTL can be a great place to invest part of your wealth but not all your wealth

    My own choice is diversification

    I would buy Property if it was cheep and high yielding

    The great days have been in the past Its a different world

    But as you know I will not sell any of my residential property I own now its the bedrock of my investments and give me cash to enjoy life and invest in other areas.

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    Learn Change and Adapt ?????

    All comments are for casual information purposes only. If you wish to rely on any advice I have given please ensure you obtain independent specialist advice from a third party. No liability is accepted for comments made.


    I would kick myself in 15 years if I only invested 20% of a mil in property

    That other 80% would be very unlikely to  produce as good as return in another asset

    Thats 80% into  markets I know little about

    But you could buy an 800K property with that 80%  for 700K

    Spend 100K on it modernising it building an extension maybe and it could be worth 950K

    Thats 150K profit in say 6mths ( minus costs )  Cant be bad

    In 15 years it could be worth 1.9 mil

    I would struggle to beat those returns elsewhere with 700K

    If I could I would look at it for sure

    What do you know that could match that ?

    Diversification works for some but too much is made of it in my view

    A carpenter doesn't become a bricklayer after 20 years in the trade

    An accountant doesn't one day diversify to become a solicitor

    All that hard work experience and know how just let go

    A property investor as astute as yourself  should trust your knowledge and expertise built up over the years.

    Stick with property. shuffle around a bit if you like and do a few different strategies but stay within the same field

    Thousands are starting or staying with property and you have got a big head start over them

    Join them

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    Jonathan Clarke. http://www.buytoletmk.com


    You are relying on three  aspects to achieve your goals

    1 Capital Growth

    2 Taxation and Regulation

    3 Lending Policy

    If there is more changed for the worsted in the above you would see your goals being harder to achieve

    I'm sticking to my Guns on this one JC until I see what govt policy is and lending policy too

    Cash is King and I will not put a penny more in property until I see some clarification.

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    Learn Change and Adapt ?????

    All comments are for casual information purposes only. If you wish to rely on any advice I have given please ensure you obtain independent specialist advice from a third party. No liability is accepted for comments made.

    Let me share with you one of my ISA funds as I have done in the past on PT

    My last up date was  25 April £11664

                                        9 June £12068

                                  Profit £404.00 Tax Free

    That's a yield since 25 April to date of around 3.47% I know its a short window of time but I am happy with this sort of performance d that's clear profit I can get my hands on in a few days JC and all tax free too think of how long it would take to make the same profit in BTL and how much your profit would need to be after paying 40% tax around to achieve the same money in your hand

    That's why I will not invest in BTL at present its not worth the risk or the effort if you have cash to invest

    Pension funds are even better when the govt gives you Tax relief at 40%

    Put your 800k in ISA and Pension and it will give BTL a run for its money

    Investment has a bad name just as BTL has in the Publics view

    IFA of the past have bad press too but I don't use IFA,s if I can help it because you can cut out all the fees if you understand what your doing

    Just in the same vain I would not join a property club with Guru's who take investors money

    I am happy to watch and wait and see where BTL going for now.

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    Learn Change and Adapt ?????

    All comments are for casual information purposes only. If you wish to rely on any advice I have given please ensure you obtain independent specialist advice from a third party. No liability is accepted for comments made.


    ISA`s are also  vulnerable to changing government policy. Any investment getting too big for its boots is

    If people now piled out of BTL into ISA`s and got excessive returns  then the government might  turn their focus onto ISA`s

    Your growth in your ISA fund over 45 days is impressive but unfortunately statistically of little validity as the sample time span is far too small.

    If it maintains that pace for a year though then thats approx 28% pa..... I have my doubts that it will .?

    If a 28% pa return could be had for sure then I feel the ISA market would take off. I would pile in

    People with 50K in a bank at 0.5% get £250 pa. They  would surely put it in an ISA fund and get 14K tax free return

    Is there any evidence that is happening I wonder ?

    I aim for  a rental income  of approx £10 per day per property after mortgage lending which is  roughly equivalent to your ISA return

    So you get £404 for 45 days I get approx £450 for the same period but appreciate mine is then taxed

    But the significant differences are

    1) I get income on a BTL just like  your ISA does plus potential capital growth as a bonus  . ISA`s are a one trick pony

    2) I can leverage my capital to 75% so thats £1800 per 45 days as opposed to your £404.  ISA`s are a one trick pony

    3) I cant buy an ISA at a 10K discount. A BTL I can....  ISA`s are a one trick pony

    4) I cant add 10K value to my ISA by putting a new bathroom in and painting it magnolia ..  ISA`s are a one trick pony

    ISA`s have their place yes to store a contingency fund maybe but they frustrate the hell out of me .

    I used to add to my ISA allocation religiously each year but when i compared like for like returns with BTL I pulled out of the majority of my holdings and placed them in BTL

    You say you will wait for clarification before putting any more pennies into property.

    But the government is never clear.

    They obfuscate routinely chopping and changing their mantra at will. U turns are made all the time

    They said they would not raise income tax in 2015 . They lied. My income tax bill will go up 5 fold

    I cant wait for clarity or i would never invest . The goalpost have always moved and always will.

    But you are watching and waiting that`s fair enough.

    Dont stay out in the cold too long though DL and miss the next BTL boat

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    Jonathan Clarke. http://www.buytoletmk.com


    In My strategy I will look again at BTL and If I see a great opportunity I will Buy again

    I don't see that opportunity at present Prices are rising in the NE and rent inflation is low

    I have to look at what is in vogue at present from a Tax Point of view and ISA and Pension at present are a better place to invest at present than BTL

    I think the Tory Govt will leave ISA and Pensions alone at present because its an area that is really hidden from view

    You don't get the Hype in this sort of investment field its far more less political than BTL d much more tax efficient at this point in time

    I have met ISA Millionaires who draw 50k a year tax free even though they are 40% tax payers and my aim is to be a ISA Millionaire using both my wife's and my own allowances

    The govt will only change The Tax rules on ISA when or if ISA Investors are hated as much as BTL Investors

     I also thing its prudent to have funds behind yourself encase we have further changes in S24 to pay down debt if needed

    Pensions are so powerful in Company formations If the Company can afford it  40k a year again tax free is not a bad thing

    The funds can be passed down tax free outside of IHT

    My other goal is to be a Pension Millionaire too

    BTL is not finished Its just not as great as it was and My feeling going forward it will not make the same money as it has done in the past 20 years

    I would urge you to look at the MG Recovery fund for long performance results  and yes that's what counts

    The figs I am showing are my own findings and I want to show the results that can be achieved when you look outside of the BTL box

    M&G Recovery fund has made over 25% in the past year the Two years before were not great but if you average it out over the years it gives BTL a run for its money pound for pound  

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    Learn Change and Adapt ?????

    All comments are for casual information purposes only. If you wish to rely on any advice I have given please ensure you obtain independent specialist advice from a third party. No liability is accepted for comments made.


    So we need an honest and transparent like for like comparison

    What should the OP do with their 150K

    Property or MG Recovery Fund

    Property could be 5 x 100k units @ 75%LTV yielding 7% and 5% capital growth pa

    Buying 5% BMV and spending 5K which adds 10K to value . Modest strategy

    Year 1 that`s 75K growth already built in...... and thats just year 1

    Periodically pulling out equity and reinvesting over a 20 yr timeframe

    Does MG Recovery beat that taking into account all associated and variable BTL costs

    My simple excell spreadsheet cant cope I`m afraid

    But 18 years on after taking out 40K from my main ressi to start a portfolio I dont think the comparison would be favorable to MG

    BTW how long would it take to become an ISA millionaire  able to drawdown 50K pa ?

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    Jonathan Clarke. http://www.buytoletmk.com