THE QUESTION

I have made an offer on a flat which has a short lease of 71 years.  I was told by the estate agent that it would only be £200 to buy a 100 year lease, because the current owner was looking at extending it.  I have been looking online and the cost seems to be more around £10,000 or so.

I have emailed the solicitor and asked the estate agent again, but no one is answering my questions.  It's so annoying, should my solicitor answer quicker or is this the norm?  I don't want to waste my time if the lease extension is too pricey.

I wanted to buy cash to mortgage later, which would also release most of the money I spend on it.  But if my money is stuck in one property when I could be buying more then it's not a good decision to buy.

THE ANSWER

71 years is mortgageable, but you are planning to buy in cash so that’s not an issue for you.  Once you extend the lease it is certainly mortgageable.

The sensible strategy here is clear:...

THE QUESTION

As a new property investor with an abundance of desire, I see my strategy will be to mortgage at 75% LTV on an interest only, refurb and leave little or no money in, then re-mortgage and live off the cash flow and capital growth.  What advantage would it be for me to buy property outright as a cash buyer using alternative financing, unless I found a few incredibly BMV unmortgageable properties?

THE ANSWER

How many properties is it your objective to own?

How many 25% deposits do you have the cash available to make?

For almost everyone, they have less cash than the number of properties that they aspire to own.  So the simple truth is that everyone will run out of cash for deposits before they acquire the amount of properties they desire.

This brings into play one vital aspect, the knowledge and ability to recycle your cash; the need to understand and be able to use the same pot of cash to buy property after property.

To an extent I can see that you have grasped...

If you read my last blog post you’re probably wondering what those Ninja Investor Strategies I mentioned are:

• Strategy 1: 50% Below Market Value (BMV) strategy
• Strategy 2: 100% refurb strategy
• Strategy 3: 90% flip strategy

They’re all possible using bridging finance with the right lenders to turn you into an investor who can operate like a cash buyer.

Here’s a brief overview of each one:

50% Below Market Value (BMV) strategy

This is based on finding properties that are really cash-buyer only territory.  This is usually because the vendor either wants a quick sale for some reason or because they are considered unmortgageable by buy-to-let lenders.

When a mortgage-dependent investor finds a property that clearly can’t be mortgaged they walk away.  This leaves the field clear for the few investors that have the knowledge of how to buy this type of property.  Generally, these are cash buyers, but with the right strategy you can operate as a cash...

Most property investors start out using buy-to-let (BTL) mortgages to finance their property purchases.  The problem is that then your capital is trapped – at least for a while – and your ability to buy more properties is limited.  But not if you’re a Ninja Investor!

What’s a Ninja Investor?

Property investment is not just for people who have substantial cash reserves – anybody can become a successful property investor with a relatively small amount of available cash. 

Ninja Property Investors have developed a mind-set that isn’t limited to only buying properties through a mortgage.  With the right techniques they can buy any property that they’ve assessed as a profitable investment – whether it’s mortgageable or not. 

This speeds up their property portfolio growth – or profit generation because they know how to buy more property, faster, with less cash.

The secret is to think like a cash buyer...

If you’ve been in property a while you’ll remember the balmy days of 100% mortgages and 24 hour remortgages.  Things are tougher today and property investors need to be innovative to continue to invest in property and not end up with your capital trapped in bricks and mortar.

Many investors now think the only way to invest in property is to have saved up a substantial wad of cash to put down the 25% deposits required by most buy-to-let (BTL) lenders.

That’s not true – and a smart investor can actually increase their profits, rather than barely get by – if they know how.

Lenders have rewritten the rules

Before the credit crunch you could get 85% loan-to-value (LTV), you could get a same day remortgage and you could buy below-market-value and remortgage at true value.

Now things have changed.  These mortgages no longer exist and ‘no money down’ strategies are usually the result of hiding how the property is being financed from the...

Many investors see the Estate Agent as the adversary – or at best a necessary evil.  After all, their client is the vendor, that’s where their commission comes from.  But the smart investor knows better.

Unless you’re good at building rapport with estate agents, you won’t have many deals to consider, but there are ways to get estate agents to take you seriously.  They need to realise that the more sales their vendors make, the more commission they’ll earn.  If you are a multiple purchaser, they’ll start looking at you in a different light – if you know how to use the magic words that make them pay attention.

Look the part

Create a powerful, empowering first impression.  You know that old saying:

You never get a second chance to make a first impression.

Your appearance and mannerisms must portray confidence.  Confident people have a way of holding themselves that oozes positivity.  You can be sure that this...

Many people aspire to become a full-time property investor, but I wonder if they’ve considered the adverse effect it has on their ability to raise a mortgage.  They might find it better to slow down and take their time reaching that pivotal moment when mortgages are less critical to their property investment.

To be able to create enough passive income from property to be able to give up the day job and become a ‘full-time property investor’ seems to be a highly desirable state – a nirvana.  It is frequently encouraged on property courses and at meetings.  It is held up as the definitive status symbol, to be worn almost as a badge of honour.  Property speakers often spit out the term ‘wage slave’ as a form of derision.

There is undoubtedly great merit in finally being able to throw off the shackles of an unrewarding and unfulfilling job.  There is a huge sense of achievement in bringing about such a momentous life...

Most property investors start out using the mortgage system to finance their property purchases, but then your capital is trapped – at least for a while – and your ability to buy more properties is limited.  But not if you’re a Ninja Investor!

Ninja Property Investors have developed a mind-set that isn’t limited to only buying properties through a mortgage.  With the right techniques they can buy any property that they’ve assessed as a profitable investment – whether it’s mortgageable or not.

The secret is to think like a cash buyer – and this will enable you to buy more property, faster, with less cash.

Transforming to the Cash Buyer mind-set

• The Mortgage Buyer mind-set is to put down your 25% deposit when you buy a property, spend more of your cash on the refurb, then wait several months before trying to refinance to get some of your cash back out.
• Cash buyers have a superior mind-set; they buy property faster, they buy it...

A Ninja is a person skilled in ninjutsu, a Japanese martial art characterized by stealthy movement and camouflage.  So a Ninja investor is someone who buys property using stealthy movement and camouflage.

The keys to success are knowing things that others don’t and being able to do things that others can’t.  Match these with a positive mind-set and the willingness and ability to take swift action and you’ve got the raw material to be a real Ninja Investor.

Here are the essential dozen characteristics of a Ninja Investor.

1. They grow their portfolio (and bank balance) faster than most property investors.
2. They don’t tie up their capital in buy-to-let mortgages or limit their ability to buy more properties each year.
3. They have a cash buyer mind-set, so they don’t think in terms of mortgages and deposits.
4. They know that the cash buyer mind-set means they only need thousands, not hundreds of thousands, to buy like a cash buyer.
5. They are able to buy...

When you’ve refurbed your property and are looking to remortgage, you have a challenge.  If you’ve bought within the last year or so, the lender’s valuer will be focused on the sum you paid for the property.

It doesn’t matter if you paid 30% less than the identical house up the road went for – they’re only interested in what you paid, not what the property is worth.  So you need to take positive action to minimise the risk of a refinance survey down-valuation.

These are the six essentials you need to cover

1. Turn up – if you’re not there you have no chance of helping the surveyor to see the real picture
2. Provide an uncosted works schedule of all improvements made. Make this as detailed as possible
3. Provide plenty of photos of the property as it was when you bought it. Include ‘during’ and ‘after’ photos taken from the same angles so the surveyor understands the scale of work
4. Provide examples of similar...