How to buy a property using none of your money

How to buy a property using none of your money


– Hi, Saj Hussain here. And in this video I wanna talk
about how you can purchase property using none of your own money. Yes, you heard me right,
using none of your own money. It’s absolutely possible and something that I would do regularly. However there’s many, many
different ways this can be done. There are some that are a bit questionable in terms of tactics that
people use and strategies. But for me it’s really
important that we’re doing what’s legal, what’s
correct and what’s safe. So let’s talk about two ways
we can do that in this video. It’s just a quick video so
let’s use an example property. Let’s talk about a property
let’s say it’s 100,000 pounds you found an opportunity where
you can purchase a property for 100,000 pounds that you need and you also need some
money to renovate it to add some value to make it worth more than what it might be right now. So you need 100,000 pounds to purchase, I’m sure you’ve heard of
bridgers and private lenders, there will be lots of people that would be quite happy
to lend on a project particularly bridgers,
if the deal is right they’ll typically lend you
about 70% of the purchase price. In some cases it might be more than that. So let’s say a bridger agrees
to give you 70,000 pounds and then you need another 30,000
pounds for the renovation. By the way if you’re thinking about it, you can be able to meet the
criteria to get bridging. Let’s say there’s a great friend of mine who provides bridging finance, so there’s two simple criterias. As long as you’re breathing
and you’re not bankrupt then you can get bridging,
it’s that simple. Bridgers are really private individuals that are using their money, family money to lend out for short-term
projects generally within a year where they can cycle their
money and get it back. So let’s assume that you’ll
be able to get bridging at 70% of the purchase price,
in this case 70,000 pounds. You’ll need another 30,000 pounds for the balance or the deposit. There’ll be many private investors that you can get that money from, I’m gonna talk about that
in another video in terms of having suitable private
investors for your funds. But if the deal is right
you can borrow 30,000 pounds from a private investor
and let’s say you’ll need a little bit more for renovation, let’s say another 20,000 pounds
or so to cover other costs, purchase cost, a little
bit of work on the property and also things like stamp duty as well. So you’ve got 50,000 pounds
from a private investor, 70,000 pounds from a bridging company so in total you’ve got
about 120,000 pounds. That’s enough to purchase
a property at 100, 20 for costs and renovation
so total spend 120,000 pounds. Now let’s say you’ve added to
about 50,000 pounds of value I mean it’s not always
possible but for the purpose of this explanation, let’s say you add 50,000 pounds of value,
now you’ve got a property that’s worth 170,000 pounds. If you simply sell, and walk
away with gross property of 50,000 you still have got the interest that you’ll need to pay your
investors or property share depending on how you structure
it, you’ve got your bridger to pay back their money
with their interest as well. So you’ll still walk
away with a nice profit and really you haven’t
used any of your own money to do that deal, 70,000 pounds
coming from the bridger, 50,000 pounds coming
from a private investor that’s funding that deal for you. So that’s one simple way you
might be able to do that deal. Now if you are keeping the property, you’re looking to remortgage that property let’s say you take the 75%
mortgage out of 170,000 pounds that will probably
release you enough money to pay back the bridger, the
private funds you borrowed and some of the interest and costs. You might be left with
a little bit of money that you’ll need to pay yourself as well depending on the rates and
the terms that you’ve agreed. But pretty much, you could
end up with a property with none of your own money
that you’ve repaid now back and you’ve got a traditional
mortgage on that property. The other way to do that or it
might be you’re just selling the property and you
walk away with profit. So that’s one method. A second method may be
you might be thinking, well actually I’m not gonna be able to get 50,000 pounds
from a private investor. I haven’t got access to
those kinds of cash from there’s nobody that’ll
lend me that kind of cash. But there might be friends or family that would like to help you that may be cash poor but asset rich. So what do I mean by that? Well it might be that they
own a property or properties that have very little debt against them so they have a large amount of equity. They may not necessarily wanna sell those to release the money, they
may not wanna remortgage those to release money but they’re
security that can be used in those properties, equity
that can be used as security. So you can have 70,000
pounds from your bridge as we’ve talked about before. But you could actually
borrow another 50,000 pounds using that security to
raise the rest of the money so now you’ve got your total 120,000 pounds in that situation. So I hope this stuff is making sense, if not comment in and
I’ll try and explain it a little bit better or I’ll
come back to you individually. But essentially now,
if you’re in a position where you’ve got a property
that’s got the right deal, you’ve got 70,000 pounds from
a bridger for the purchase, you’ve actually got another
50,000 pounds as a top-up using a different property as security that’s somebody else’s, it doesn’t even have
to be one that you own. Somebody’s prepared to work with you and trust you and supports you in that. So just two simple ways where
you can purchase property using none of your money,
something I’ve been doing for a long time and still
continue to do right now in terms of other people money. My preference tends to be all of the funds come from private individuals and that’s how I tend to form my deals. So on that note if you’re somebody that’s got say more than 50,000 pounds that you’d be interested
in getting involved with me on a project let’s have a chat. I tend to say at least 50,000 pounds cause it’s a reasonable amount
of money to get involved. It could be significantly
more, send me a message we can have a chat about
how that could work and how we can work together. But that tends to be the way I work, I’ve purchased the properties outright using private investors’
cash upfront at the beginning and for the renovation,
and then depending on whether we’re keeping it,
flipping it, remortgaging, whatever it is that we’re gonna do. So I hope that makes sense,
it was just off the cuff quick few minutes to share
with you about purchasing property using none your own money. Let me know what your thoughts are, if there’s any questions pop them into the comments box below and I’ll come back to
you as soon as I can. So until the next time,
and the next video, thanks so much for watching. (whirring)

4 thoughts on “How to buy a property using none of your money

  1. Hi Saj,

    Is it possible to get bridging without working? I have £50/60k in cash but I don't work.. so I wanted to know whether you could get bridging without working

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