How Do I Acquire Money To Start Investing In Property—Answering Your Questions!

Samuel Leeds

How Do I Acquire Money To Start Investing In Property—Answering Your Questions!

Hello there!

Today, I’m going to be answering some of the questions that you asked on my YouTube video last Sunday.

 

Q: Would you buy a property now?

Yes, I would buy a property now! As long as it is in the right area and the right price, I definitely would buy it.

 

Q: Rent to HMO or Rent to Serviced Accommodation?

This is a very good question!

Right now, I’m very excited about Serviced Accommodation because so many people have been handing their keys back to their serviced accommodation units during the lockdown. Therefore, I’d say Rent to Serviced Accommodation, even though HMOs are my first love, and I think they will become popular in about six-twelve months. But right now, Serviced Accommodation for sure as many people have become disillusioned of them due to the lockdown.

 

Q: I’m about to start on my first project to become financially free, which is converting my parents’ house to a seven double bed HMO. Is it better to split the profit with my parents to lower the income tax paid? Oh, and do you mentor one to one? If not, what’s the best way to find one when you don’t know a lot who are doing successfully in the property market? 

Samuel 365

Yes, I do one to one mentoring. I do it through Samuel365 in ninety-five pounds a month.

About you splitting the profit with your parents: yes, you can certainly do that to lower the tax. However, I would suggest you focus on making the most money rather than paying less tax. And you said that you just started out with property investing. Listen, you don’t have to pay a penny in tax until you make eleven-thousand pounds after starting! After you pay yourself eleven-thousand pounds, you are going to pay yourself in dividends. For thirty-thousand pounds in dividends, you only pay a 7.5% tax. With that, you can make almost forty-thousand pounds a month and pay tax in peanuts!

Therefore, I won’t worry about the tax; I’d just pay attention to making more money if I were you. I hope that helps!

 

Q: During the coronavirus pandemic, we saw tenants losing their jobs and being allowed not to pay rents or being evicted. Would you advise adding a legal clause in the tenancy contracts, to protect against tenants who lose their job during future pandemics? Especially with rent to Rents, where landlords aren’t likely to get mortgage breaks from the government, as it’s not their mortgage but the owners. How do landlords protect themselves while still being fair to tenants in tough pandemic/unemployment situations?

Samuel Leeds

Listen, I hope there aren’t any more pandemics like this one in the future. This is the first pandemic I saw in my life, and most people would tell you the same. And adding a legal clause to tenancy agreements to keep paying rent during future pandemics is something I wouldn’t advise to do.

People have been losing their jobs; they are not allowed to be with family, they can’t go out much; in this situation, it is only fair that they aren’t evicted if they get behind in paying their rents. The government had done this to protect people from eviction during the heat of the pandemic; it’s not like it would be for two-three years. I understand it can be very difficult for a landlord, but it is only fair to your tenants. Just be a good landlord and allow people to stay even if they are behind in their payments. After the pandemic is over, they will catch up hopefully!

 

Q: I’m looking to buy a two-bed property in Croydon where they’re planning to build a Westfield in the near future, is it better to buy an ex-council flat less than ¼ mile from the town center or about 5 miles away in a better area? 

I wouldn’t worry about them planning to build Westfield in the future; however, capital appreciation is a bonus, but you don’t need to worry about it right now. Look, their planning doesn’t pay your bills right now. The only things you need to focus on are if the deal is stacking and the cash flow is good. If the property is giving you good cash flow in your pocket every month, go for it!

 

Q: Do you think R2SA will work in the current market conditions?

YES! Because the markets are opening again, and lots of people have handed back the keys to their SA units.

 

Q: I love property to buy to let but don’t have money, how can I buy?

You can raise money to buy a property. You can do it in various ways:

  •         You can raise money from an angel investor or bank.
  •         You can get a side income and save it.
  •         You can find a great deal, make somebody else put money in and go fifty-fifty on the profit.
  •         You can do a Rent to Rent, where you control the property but don’t own it.
  •         You can do a lease option agreement where you can buy a property now but agree to pay for it later, and in the meantime, you can benefit from the monthly cash flow and get the capital appreciation that you can exercise at a later date.
  •         You can package deals and pass them onto an investor and charge a broker fee.

There are so many ways! Choose the one that attracts your fancy, and go for it!

 

Q: I’m currently 17 years old, hustling and doing car washes to be able to get insured, etc. to be compliant, as said from your video a year ago. Would I still be able to do deal sourcing without being insured?

If you’re going to be dealing with investors, and you’re going to be passing them deals, and you’re not insured, the danger of that is, if the deal goes bad and they try to sue you, it’s not pretty. 

It’s good that you’re 17 and are thinking like this, washing cars, etc. My advice would be to find a company that is insured that passes deals onto investors and ask them what kind of deals they are looking for. Then, find them those deals for a commission. When you get the commission, save it in your bank, spend that money on your education, invest in yourself, and start your business that is compliant. Good luck!

 

Q: Ref. buying a business rather than a house to avoid stamp duty, is it as simple as this? Obviously, for every house you buy, you could set up a limited company for next to nothing? Surely that would be way too easy?

 

I think you’ve misunderstood here. You’re saying that if you could avoid stamp duty by buying through a company. So you could set up a company and buy a house. It’s not that simple because you don’t avoid stamp duty by buying through a company, you could only avoid stamp duty by buying a house that’s in a company, instead of buying the house, you buy the company. That’s how it works.

Another way to avoid tax duty is by buying a property that is going to be serviced accommodation; you can also avoid stamp duty by buying a house that is inhabitable. I hope that helps!

Thank you so much for these questions! You can ask more questions on my YouTube, and I will do my best to answer them next week.

For more content related to property investing, subscribe to my YouTube channel.

For one-to-one mentoring from me, log on to samuel365 to get training for as little as 1 pound!


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