I had a very interesting meeting with Barclays today. They came to my house to discuss the equity within my portfolio.

I wrote to them last week (and 28 other large lenders) asking them to lend me on the equity on my home as a 2nd charge up to 80% of the value of the property. The reason for this is because I face some redemption penalties if I were to remortgage the whole amount. To my surprise they have, in principal anyway, agreed to loan me 16.5m GBP. This is as long as my properties value up to what I say they are worth. I was quite prudent when I put the values in and they should value up well in excess of what I have said.

Anyway this has made me put my feelers out and its amazing what you can find! My office has found me a 13 bed guest house with a 2 bed owners flat attached for 115,000 GBP. One snag. It has to be used for holiday use. I looked in to it and I am going to make an approach to the council to see if I can at least use it semi permanently for off peak seasons and holiday use during peak seasons.

The sort of annual profits you can expect is:

42 weeks at 50 GBP per week for 13 rooms (permanent use) = 27,300 GBP
10 weeks at 100 GBP per week for 13 rooms (holiday use) = 13,000 GBP
52 weeks at 100 GBP for 2 bed flat = 5,200 GBP

Total Rental & Holiday Income = 45,500 GBP

Mortgage Costs = 6,164 GBP

Gross profit before operational expenses = 39,336 GBP lets say 35,000 GBP.

Expenses will include management, repairs, rates, insurance and sundry. I will estimate 10,000 GBP. So expected profit will be:

35,000 - 10,000 = 25,000 GBP

To buy a 13 bed guest house at 115,000 GBP I will need around 25,000 GBP. So all in all I am looking at a 100% return on my money and earn 25,000 GBP per year till I die! This is a high risk investment as you will have the council watching your every move, but I reckon its worth the risk.

I will keep you informed.

If you want to get involved with this sort of high cashflow investment then have a chat with one of my guys - e-mail enquiries@ahuja.co.uk or request a callback

Good luck with your investment goals.

Ajay

Join Ajay’s daily newsletter

Get live property investment deals, free courses and property investment tools sent straight to your email inbox at no cost every single day.