I bought this house for £6
I went to visit a house that was bought by one of my students for 63 pounds.
The house was creatively financed and in this article, i’m going to be going around the house interviewing the student and showing you exactly how it was purchased for 63 pounds and the interesting thing is that, there’s a house just opposite that was in national media as it was all in different newspapers because it was being sold for a thousand pounds and everyone’s going oh my gosh this house has been sold for a thousand pounds but here’s the thing. the house that has been sold for a thousand pounds actually had a guide price of a thousand pounds and it actually was sold for 35,000 pounds.
On top of that, it had legal charges of 12,000 pounds as there was fire damage that was going to cost tens of thousands of pounds to fix and even though everyone was sending out how much of a bargain it was, it wasn’t a bargain.
This house purchased by my student, was a bargain and so, you’re going to see exactly how it was bought for just 63 pounds by Josh who’s 18 years old.
What kind of condition was the house in when you first bought it?
It wasn’t in a good condition but it wasn’t that bad.
It needed work done to it and I thank my parents putting through your education program as it has helped me achieve this much.
No one is actually giving me money at the moment as I’m able to manage everything myself after my mom helped in the decoration of the house as she’s the boss.
She’s the boss when it comes to decorating as she wanted the builders to paint grey as we’ve got a couple of tones of grey and we’ve got a little feature wall here.
We’ve also got a few more upstairs and when you’ve just got a plain white room it looks like a doctor’s waiting area as you want a little feature wall and it just brings a bit of life and a bit of color to the room.
How much does this fire cost?
Well, funny story, this actually came with the property as it belongs to the previous owner.
We’ve literally just cleaned it up and like I said, it wasn’t in a terrible situation like it’s uninhabitable and therefore, if you want top-rent in this area, it need some work done.
How much did you spend on the house in total?
I used seven thousand four hundred and eighty-five spend which wasn’t a fortune on it unlike the a thousand-pound house down the road that needed things like fire repair and therefore, we were going to look at ourselves and we did think about it as we had the conversation like should we just own the entire street? But then we looked at it and we looked at the costs and the thing is that, capital it can be using bigger deals and we can get a much bigger return.
We’ve got a small little hallway and then we have the bathroom which was originally a wet room and once again, it was probably one of the worst areas in the house as it was really in a bad condition.
We’ve completely retired everything, that is, new toilet, new sink, bath tub wasn’t even there like I said it was a wet room, a new kitchen as well and the tiles are the same and the decals on the side were changed, the oven and hob sinks are still the same and therefore, the kitchen didn’t need too much done to it as it was still in a pretty good condition and just needed a little bit of cleaning.
The new bathroom carpets, how did you manage to do it?
I’d say, that’s the power of the academy as I spoke to other academy members, got a little bit of knowledge from them and if you add somebody, they’re going to add some value to you and that’s exactly what I did and a fellow academy member recommended the builders because you know, I was close to them.
How did you even buy a house as a teenager?
Okay, so first of all, I didn’t buy it as it was bought through a company.
I was on the director’s list as we tried to set up our business bank accounts trying to get our compliance sorted out both for our standard property business, our holdings and my sourcing company and they wouldn’t let it happen and so, I resigned from both of them and I’m still not back on the director’s board yet and so like I said, the company owns it and I have been blessed that my parents have offered to be guarantors for the property.
Technically, these are some of the nightmares that you will face and people say this to me all the time.
I am very blessed that my family have been able to support me correctly but it’s about being a problem solver not a problem creator and being creative and if you’re in a network like the academy or any such property network, try to find people, build relationships, build a network and get one of those individuals to be a guarantor for you.
How did you buy this house for 63 pounds?
It’s actually ridiculous as in the end it ended up costing 63 pounds and that was the capital that was left in the deal and we use the BRR strategy.
For anyone that doesn’t know the BRR strategy, it’s when you’re buying a house preferably in a really bad condition where you can add value, you then refurbish the property and then you’re refinancing it so you’re remortgaging the property and pulling up the equity.
So basically, you’re putting money in and are able to borrow that money again based on how good the deal is.
I found the deal, presented the figures to my parents and showed them complete in-depth detail and the due diligence that I gathered on this deal.
They came out and saw it and what I did was to say to them that, you’re going to be putting your money in and you are going to pull it out as you’re already going to be leaving 63 pounds on the deal.
For the rent, it’s going to make that back in the first month.
Originally, the asking price for the house was 45 and they were very highly motivated sellers as we managed to negotiate that down to 39.5. We’re not paying stamp duty because we purchased a property five pounds below forty thousand.
First of all, with the mortgage payments that’s 97 pounds a month, it’s not breaking the bank as it’s not tons that’s interest only and crazy cheap. The achievable rent for the standards property we can get 475 pounds but the thing is that, the area it’s not the greatest in the world as it’s rough it’s rough but not super bad but it’s there so you have to be picky with your tenants that’s one thing that I’d say to anyone.
If you’re investing in a bit of a rough area, you’ve got to be picky with your tenants because most likely you’re going to get a bad tenant and so you want to make sure that your property which is your product stays in a good condition because your tenant is going to move out eventually and if they’ve left the place in trash, that’s more capital needed to be invested into this and then it’s no longer an asset as it just becomes a liability.
In conclusion, there’s going to be be a lot of obstacles and a lot of hurdles that come in your way such as, a little damage which for someone, they might just decide to pull the plunger on their business and so it’s about when you have all these little things that happen that are going to try to put you down, you keep in your mind the goal and what’s there for you and the more you push the good things that are going to come along when you push through the hard times will come.
Persistence is a really big thing and that’s something that I took along in sourcing as I struggled to sell.
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