Millionaire Challenge

Colincbayley

tinktay84 wrote: »

hmmm interesting.....

My husband nearly fell into the trap of going to one of these seminars that teach you how to get properties without a mortgage or some twaddle but i refused to let him pay £99 for the privilege.

I have seen loads of properties that are below £30k but the areas they are in are a bit touch and go.Im in a good position with my husband being gas/plumbing, myself being able to do the cosmetics and several other trades at my disposal but wouldnt want to spend £30k on property, £10k on refurb then have it sat empty.....

How did you start out?We have basically moved out of the home we had a mortgage on and rented it out but are now sat waiting to make our next move

I spent a good 6 months reading anything and everything on the subject before making my first purchase. Various books and websites on the subject.
The key (if my view) is to buy cheap, refurb nice (but don't spend loads) then rent out to good tenants. Charge a fair market rent, only buy properties where your prepared to live yourself, only buy freehold, avoid ex LHA houses, have a plan, have a budget, never sell, remortgage to release deposit for next house ONLY after looking at your figures very well, stick to areas your know well, don't trust estate or letting agents (use them for advice, but also do your own reseach) have a very, very good team behind you, (solicitor, mortgage broker, plumber, sparks, labourers) Have ££ in the bank for the unknown!

All pretty easy really with planning and research. One property let out is a risk to me. On my sums 11.5 properties was the safe point (Can't remember how I got to that figure) and of course, more than that is even better.

Good lucck

tinktay84

Some good advice there and yes as you say, alot of it is basic stuff but its stuff that unless you really look into and make sure you follow it can really let you down.
As I say I am very lucky to have a network of trades available to me who i would trust to deliver in good time, in good quality and at a reasonable price.
I totally agree with the buy where you would live rule and am starting to see the ex-LHa side of things but wouldnt rule it out. Our property is ex LHA but as we had lived there a long time we had basically gutted it so anything bodged previously has been ripped out and redone. We did the hosue up with the view of us staying there so spent more than we would had we intended to let out from the get go. We still did it 'cheap' for the standard but certainly wouldnt have gone to the effort of terracotta tiled hallway (bargain buy from large well know diy), travertine kitchen tiles and brand new kitchen(bargains) and knocking the toilet and bathroom into one making room for a 90x90 quadrant shower and separate bath (again cheap cheap as we got bargains and hubby is plumber)

I have worked on some houses for middle men and a lot of these are ex LHA and the amount of work needed to put right what the previous tenants/trades has been crazy but some have been ok.

rictus123

I might be talking rubbish here but im sure i read its 9 so if rent income is 25% above mortgage payment then for every 2 that are rented, it covers one not being rented/needing repairs etc. So 9 properties - 6 rented out at least to break even/cover costs of repairs on others...

or is that total rubbish?Obviously not all rents will be exact same...

Colincbayley

It is not the so much the work involved with ex LHA housing that I was referring to, more that (in my view) Non-Ex LHA houses increase in value more (and quicker) that EX-LHA. At least they have for me.

Saying that, a friend of mine has over 110 ex LHA houses and makes a very good living from them. Hence each to their own I guess.

Colincbayley

rictus123 wrote: »

I might be talking rubbish here but im sure i read its 9 so if rent income is 25% above mortgage payment then for every 2 that are rented, it covers one not being rented/needing repairs etc. So 9 properties - 6 rented out at least to break even/cover costs of repairs on others...

or is that total rubbish?Obviously not all rents will be exact same...

No, you are quite right, that is spot on. However the figures will vary depending on rent charged and the finance costs. For me, 11.5 was the safe point. I now have 30, so way past worrying about it now.

tinktay84

wow colin thats great, is that in 10 years you have built up or longer?

Yes I agree with regards to increase in value my property is very good sized 3 bed with seperate dining/kitchen and 3 car drive, enclosed back garden etc but is only a fraction of the cost of a non ex lha house a few doors up with smaller footprint but same amount of beds. I am not out to have massive profits on each though, Im looking more to be able to offer mid range rentals and not with a view to sell. I see that increase in value is good for further mortgaging etc so am not saying im stuck to a set plan(rambling now I know).
Just to be able to get a mortgage on another property right now would be great!im self employed with 1 yr books but perfect score and my OH has good paid job but with bad credit so we are in a bit of a no go zone.The property we have on the go seems to hold no relevance despite it being on long term let with good returns and low mortgage

Bikertov

Very interesting thread this ... For my tuppence-worth :

To get to be a Millionaire, you need to only do two things. Seems obvious, but !

1) You need to earn / get more than £1m. Be it from a well paid job over a short period, or a not-so-well-paid job over a long period, or from buying things at one price and selling at a higher price.

2) Don't spend what you got in 1) above.


OK - sounds like I am taking the mickey a bit, but think about it in the context of what everyone has written so far.

1) You have to have £1m to be a millionaire. If you never have it in the first place, you won't be there. So you have to work at it, getting a better paid job, doing more hours, starting a business and/or doing something outside of your normal work to get it (such as investing in property). The trick is, very few people get to earn that much out of their own work, so get other to earn it for you - ie by renting out a property, having a business with staff that earn for you etc.

2) Don't spend it all. Look at all the pop stars and footballers who earn loads, but just blow it on anything and everything. Not just fast cars and loose women etc, but on all the trappings, advisors, stylists and hangers-on that are quite happy to take the money. How many end up bankrupt ??

For us lesser motals, that means watching our expenditure carefully. Call it frugal or whatever you want, but the more you spend, the less you have out of what you earned.

Things like 'premium' food in the supermarket - just cos it's in nice packaging. Almost the same as 'normal' food that is 25% or 50% cheaper. Or renting things instead of buying - when you rent, you are just paying someone else to buy it, let you use it and make a profit out of you. House, car, TV etc - it's all the same. Look for discounts, (genuine) offers, coupons etc. Don't pay full price. Stockpile when things are cheap (if they have shelf life) if you will use them anyway. Not buying a brand new car, that loses money straight from the showroom. Not buying brand new technology when it is at a premium.

I could go on, but hopefully you will start to get the idea.

tinktay84

bikertov,
I am constantly being ribbed for my 'scrooge' like qualities. When i had a sandwich shop we went to a wholesalers that, at the end of a day, actually paid you to take bread from them!

This worked as the particular bread was a multibuy. For example buy 10 loaves and save £3.00 so when they reduced bread to 5p a loaf and you bought 10, the till still took £3 off your bill. We pointed this out to the cash and carry but they said they couldnt over ride it so had to just go with it.

My husband always goes to supermarkets at a set time and heads straight for the reduced aisle. We rarely pay full price for basic items such as bread, potatoes, most veg etc as there is always loads reduced.We quite often get minced meat for less than 50p too.I do stock pile stuff and we sometimes treat ourselves to the next one up on shower gels if they have an offer on

Witlim

wow im loving this thread - for about 10 months i have started saving seriously for the future. i was inspired by reading MSE forums. im a 24 year old, male still living at home im a civil servant on 21K and feel i could be doing soooo much more and have bigger targets in my mind. i am signing up to this challenge.

Thanks for the inspiration!

im in.

Shark

I would love to be rich too. Frustrates me hearing about how money goes to money.
I remember hearing someone once quote about how when they were poor and unknown they could not afford food or new clothes, but once they became rich and famous they got it all for free.

I am currently unemployed and searching for work. I have a good degree from a good University but this does not seem to be enough to get me in the door anywhere.

I have made about £50k profit in the past 2 years from gambling and hope to keep my winning streak going while looking for work. 5% down, 95% go till I hit the big £1,000,000!