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REAL ESTATE UK Buy to let Mortgage with deposit but no income?

SummerGladness

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Apr 2, 2018
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Hi guys,

So I'm a professional Poker player who wants to invest in property. My long term goal is to get to around £3k/month net profit as this would be enough to live on and be financially free. I own my own home outright paying in cash which is one of the positive criteria for getting a buy to let mortgage. However, from what I've read you would need to earn £25k+ a year also but technically I'm unemployed. This would also be problematic in proving how I could pay the monthly if it was unoccupied or picking up the excess if interest rates went up. In reality I could do those things but on paper it probably wouldn't satisfy the bank.

The alternative is to sink £150k into 1 or 2 properties which may only rent for £750-900/month but that's locking up too much £ for a small return. Ideally I'd like to put down a small deposit on multiple properties then have them cashflowing positively to increase the ROI.

So is this a realistic thing to consider? Is it even a valid investment plan to begin with? I could just purchase a rental property outright and continue to save the rent/poker winnings to acquire more but this seems very slowlane and I feel like there must be a more efficient way to invest. Like if I made £8k/year rental profit it would take probably 15 years of saving that rent to get another property. Seems like a bad plan even if it's very stable/low variance approach.

Sorry if I'm asking the wrong questions but at least it's a start to post something here and get the ball rolling. Thanks a lot guys :thumbsup:
 

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Michael Burgess

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Sep 30, 2014
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I have no idea what the mortgage environment is like outside of Canada, but at least here we face similar requirements for a normal mortgage - good credit, good income, stable job, etc.... *if you work with traditional A lenders*

A lot of options open up when you speak with experienced mortgage brokers; they'll work with lots of different financial institutions, credit unions, and private lenders to get you mortgage money. The interest rates, fees, and terms of the deal will be worse than conventional lenders the further you stray from what they expect though.

That said, as long as you have deposit money, and hopefully some credit history, you can likely get a mortgage. Start giving some brokers a call!
 

Brewmacker

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Jun 17, 2019
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Hi guys,

So I'm a professional Poker player who wants to invest in property. My long term goal is to get to around £3k/month net profit as this would be enough to live on and be financially free. I own my own home outright paying in cash which is one of the positive criteria for getting a buy to let mortgage. However, from what I've read you would need to earn £25k+ a year also but technically I'm unemployed. This would also be problematic in proving how I could pay the monthly if it was unoccupied or picking up the excess if interest rates went up. In reality I could do those things but on paper it probably wouldn't satisfy the bank.

The alternative is to sink £150k into 1 or 2 properties which may only rent for £750-900/month but that's locking up too much £ for a small return. Ideally I'd like to put down a small deposit on multiple properties then have them cashflowing positively to increase the ROI.

So is this a realistic thing to consider? Is it even a valid investment plan to begin with? I could just purchase a rental property outright and continue to save the rent/poker winnings to acquire more but this seems very slowlane and I feel like there must be a more efficient way to invest. Like if I made £8k/year rental profit it would take probably 15 years of saving that rent to get another property. Seems like a bad plan even if it's very stable/low variance approach.

Sorry if I'm asking the wrong questions but at least it's a start to post something here and get the ball rolling. Thanks a lot guys :thumbsup:
Hey OP,

Unless you can buy the property outright and can claim 100% as income you are on the wrong website. Like you I had the same "sidewalk strategy" before setting my sights on the fastlane approach.

I had paid around 40% off my apartment mortgage. I had excess cash flow from my 9-5, so I investigated how to get a buy to let mortgage and buy a new house at the same time.

Some lessons I learned a long the way that make this a slow lane approach:

  • Remortgaging te property to a buy-to-let resulted in a new mortgage of 30 years on the remaining balance.
  • Buy-to-let mortgage had a 2% higher intrest rate than a personal mortgage to account for risk. This was a 160% increase on mortgage repayments.
  • As a land lord I am still responsible for the rates/council tax
  • Rental Income now = my investment costs for the foreseeable future
To conclude, the housing market is a really fantastic passive income stream if you have made significant income through a lucrative fast-lane business and you can afford to buy the properties outright.

I will not see a significant passive income from my property until I retire haha. What good is it waiting to get a return on investment when I am that age. That was slow lane thinking on my behalf.

Good luck!
 

Kingsta

Bronze Contributor
Dec 6, 2014
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If you are in the position to buy a property outright, you could do the following -

1. Purchase the property for 100%
2. Get a tenant on an AST
3. Remortgage the property and show the lender that you have a tenant already in the property

You'll be able to pull out 75% of your money, leaving around 25% in. That's the strategy I would apply in this scenario.

I've worked with some lenders in the past on this basis, hit me up if you need any more info
 
OP
OP
SummerGladness

SummerGladness

Contributor
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Apr 2, 2018
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Unless you can buy the property outright and can claim 100% as income you are on the wrong website. Like you I had the same "sidewalk strategy" before setting my sights on the fastlane approach.
I actually could buy a property outright for say £120k but the rent might only be £550 a month. I don't see that as being a good ROI or particularly fastlane either though?
 

Kingsta

Bronze Contributor
Dec 6, 2014
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I actually could buy a property outright for say £120k but the rent might only be £550 a month. I don't see that as being a good ROI or particularly fastlane either though?

£120K returns £550 per month, which after expenses is say £450. This is a 4.5% ROI

If you do the following ->
£120K returns £550 per month. Refinance the property, you'll get a 8.13% ROI (after mortgage repayment, voids etc) on your money in (roughly 37K, including stamp duty, solicitors etc) and have ~85K to reinvest.
 
OP
OP
SummerGladness

SummerGladness

Contributor
Read Millionaire Fastlane
Apr 2, 2018
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£120K returns £550 per month, which after expenses is say £450. This is a 4.5% ROI

If you do the following ->
£120K returns £550 per month. Refinance the property, you'll get a 8.13% ROI (after mortgage repayment, voids etc) on your money in (roughly 37K, including stamp duty, solicitors etc) and have ~85K to reinvest.
What does refinancing actually mean though? I don't understand that term if I'm honest. I do actually think 8.13% is an ok ROI though if you could then get 85k back out to go with again in the future.

Is it like you mortgage the property using the tenant and their rent as proof you could pay it?
 

Brewmacker

Bronze Contributor
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Jun 17, 2019
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I actually could buy a property outright for say £120k but the rent might only be £550 a month. I don't see that as being a good ROI or particularly fastlane either though?
Yes that is correct, it’s not fast lane. Even if you bought the house for £120k and charged £550 a month. About £100 a month will go on rates, then there is income tax on top. So you will net around £330 a month. You would need 10 houses to get your £3000 passive income a month.
That is not even factoring in, renovation, repairs, cleaning, or letting fees.

Alternatively unless your rent can exceed your outgoings, and the bank accepts the risk of multiple buy-to-let mortgages you ain’t going anywhere fast. You need to do these numbers and find out how many mortgages to can get.

You could play around with interest only mortgages and hope that the housing market booms, but then the bank owns everything. They can take it back when they want. (A banker will always lend you his umbrella when the sun shines, and will take it back when it rains.)

You need to do your numbers matie and establish a rate of return. Read up about the risks of losing everything. A cousin of my dad lost everything to the banks during the last economy crisis because he spread himself to thin. He missed some mortgage payments, and they took it all. I heard last weekend he got out of the mental hospital ( I have no idea what is PC anymore)
 

Kingsta

Bronze Contributor
Dec 6, 2014
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What does refinancing actually mean though? I don't understand that term if I'm honest. I do actually think 8.13% is an ok ROI though if you could then get 85k back out to go with again in the future.

Is it like you mortgage the property using the tenant and their rent as proof you could pay it?
Refinancing is just taking a mortgage out on a property.

And yes, you use it as proof that you could pay it. This works in cases like yourself.

8.4% ROI isn't great btw, I do deals of +16% for single lets and +20% for Multi-lets (HMOs).
 

garyfritz

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Jul 16, 2011
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Read up about the risks of losing everything. A cousin of my dad lost everything to the banks during the last economy crisis because he spread himself to thin. He missed some mortgage payments, and they took it all.
Pay very close attention to this. Mortgaging a property doesn't increase your return; it just increases your exposure == risk. It's a leveraged bet on house prices, and leverage cuts both ways. If you're certain prices will go up, then e.g. buying 10 houses with 10% down gets you 10x more exposure than buying 1 house for cash. If prices go up, you make 10x more in capital gains. But if prices go down a lot, or if the economy slows and you have trouble making the payments, you end up like the dad's cousin.
 
OP
OP
SummerGladness

SummerGladness

Contributor
Read Millionaire Fastlane
Apr 2, 2018
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Yeah I wouldn't want to spread myself too thin or anything like that. I'm actually very risk averse despite playing Poker :innocent: :halo:.

@Kingsta are you UK based? I think HMO's would appeal slightly more because you spread the risk of unoccupied rooms compared to a family home for example.

Starting to dislike this as an investment approach now compared to something more fastlane.
 

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Kingsta

Bronze Contributor
Dec 6, 2014
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Yeah I wouldn't want to spread myself too thin or anything like that. I'm actually very risk averse despite playing Poker :innocent: :halo:.

@Kingsta are you UK based? I think HMO's would appeal slightly more because you spread the risk of unoccupied rooms compared to a family home for example.

Starting to dislike this as an investment approach now compared to something more fastlane.

Yeah I'm UK based, I'd suggest you do your own research on what's best for you. Real Estate has probably made more people rich than other industry
 

crick_magee

PARKED
Aug 16, 2019
1
0
1
Hi guys,

So I'm a professional Poker player who wants to invest in property. My long term goal is to get to around £3k/month net profit as this would be enough to live on and be financially free. I own my own home outright paying in cash which is one of the positive criteria for getting a buy to let mortgage. However, from what I've read you would need to earn £25k+ a year also but technically I'm unemployed. This would also be problematic in proving how I could pay the monthly if it was unoccupied or picking up the excess if interest rates went up. In reality I could do those things but on paper it probably wouldn't satisfy the bank.

The alternative is to sink £150k into 1 or 2 properties which may only rent for £750-900/month but that's locking up too much £ for a small return. Ideally I'd like to put down a small deposit on multiple properties then have them cashflowing positively to increase the ROI.

So is this a realistic thing to consider? Is it even a valid investment plan to begin with? I could just purchase a rental property outright and continue to save the rent/poker winnings to acquire more but this seems very slowlane and I feel like there must be a more efficient way to invest. Like if I made £8k/year rental profit it would take probably 15 years of saving that rent to get another property. Seems like a bad plan even if it's very stable/low variance approach.

Sorry if I'm asking the wrong questions but at least it's a start to post something here and get the ball rolling. Thanks a lot guys :thumbsup:
Hi there,

If you are based in the UK your first 3 Buy-to-let properties will NOT take your personal income into account.

After 3 it techinically becomes a Portfolio and then they will get stricter on the lending criteria.

If you can find a good property sourcer (better source ltd are a great one) you may be able to buy good properties for cash, then refinance and pull out 75% of your money - and if the cash flow stacks up you should be getting a positive ROI of around 20%.

I would double check this with a property specific accountant though but this is what I was advised in Northern Ireland.
 
OP
OP
SummerGladness

SummerGladness

Contributor
Read Millionaire Fastlane
Apr 2, 2018
33
35
107
31
UK
Yeah I'm UK based, I'd suggest you do your own research on what's best for you. Real Estate has probably made more people rich than other industry
Yeah that's why I have always been drawn to property. For me it always seemed a very solid investment in the UK because of the huge demand but lack of supply and this doesn't seem to be changing any time soon.

Honestly, I've found it hard to come across good information on property for the UK. Almost everything is part of a sales funnel or pitch for a course etc A few titbits of info then an up sell. If you could point me to any good websites or books it would be much appreciated.
 

Rokit1210

New Contributor
Read Millionaire Fastlane
I've Read UNSCRIPTED
Jul 11, 2019
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United Kingdom
Yeah that's why I have always been drawn to property. For me it always seemed a very solid investment in the UK because of the huge demand but lack of supply and this doesn't seem to be changing any time soon.

Honestly, I've found it hard to come across good information on property for the UK. Almost everything is part of a sales funnel or pitch for a course etc A few titbits of info then an up sell. If you could point me to any good websites or books it would be much appreciated.

Rob and Rob over at the Property Hub are absolutely spot on.

Their twice weekly podcast is brilliant. Sooooo much free information it's incredible. I've learned loads from them. If I remember rightly I think episode 322 may cover your OP but I'm not certain. I don't have time to relisten right now. I just remember them talking about zero income mortgages.

I believe they have a Youtube channel now too although I can't vouch for that.

The books are brilliant too. Hope this helps!
 
Last edited:

JamesQB8

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Mar 20, 2019
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Rob and Rob over at the Property Hub are absolutely spot on.

Their twice weekly podcast is brilliant. Sooooo much free information it's incredible. I've learned loads from them. If I remember rightly I think episode 322 may cover your OP but I'm not certain. I don't have time to relisten right now. I just remember them talking about zero income mortgages.

I believe they have a Youtube channel now too although I can't vouch for that.

The books are brilliant too. Hope this helps!
Thanks for the Podcast link.

I own one buy to let in the UK and have been thinking about plans for the future.

Any other stand out episodes you would recommend please?
 

Rokit1210

New Contributor
Read Millionaire Fastlane
I've Read UNSCRIPTED
Jul 11, 2019
6
13
17
United Kingdom
Thanks for the Podcast link.

I own one buy to let in the UK and have been thinking about plans for the future.

Any other stand out episodes you would recommend please?
To tell you the truth there have been a lot. It's tempting to skip by some, like the most recent was about investing in Leeds vs. Manchester. This is completely irrelevant to my current strategy but I learned so much about how to compare one deal against another in completely different circumstances.

I have skipped the odd podcast but I've been listening in the gym, the car, cycling to work etc for probably 6 months and I'm still not caught up. There's a lot of content and it's littered with gems of information and knowledge! They really are good at getting key points across.
 

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