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long term investment vs short term bets!

One attribute you need if you are going to embark on property investment is:

Patience

Yes you can get rich quick in property if you take extreme risks and catch the market right.  However that is luck.

When I started investing in property in 1996 I had no idea we were going to get one of the biggest property booms in history.  All I thought is "if I get 10 of these properties the profit will match my salary and I can leave work". 

That was my sole goal.  Get a portfolio of 10 properties which will provide for me in the future till I die.  The only problem was the property bug got hold of me!

I remember I still lived at my mother's house.  I only had a computer for about 2 months and I created an excel spreadsheet (this sheet became very big over time!).

I put the monthly rent, monthly mortgage cost and I would calculate the monthly profit I would get for each property and then at the end was the grand total.  As I remember it was around £800 profit per month and I had 4 properties.

I did not even think of capital growth.  I do not think I even knew the term (I was only a trainee accountant and property was no big thing back then).

In my spreadsheet I added another 3 lines:

Estimated Value

Mortgage Balance

Equity

Why I did this I think was to make me feel good.  So I could say to myself "If I sell up I am worth £x pounds!".

So I did the figures and the figure came out at £14,000.  So I told my mum "I am worth £14,000 you know!".  She wasn't impressed.  And there I was thinking women were impressed by how much you are worth!

As I had that good feeling of being worth £14,000 it took me a couple of hours to realise I could access this £14,000 to buy more properties.  You see before I would save up around £5,000 from my salary and then buy one property.  This way instead of waiting for me to save I could simply remortgage and buy more.

No saving, no waiting.

I was only restricted to how much cash I could lay my hands on by the valuations I could get and remortgaging.  In ten years I got my portfolio to the size of 200 properties.

Fast forward to now.  THERE ARE NO RESTRICTIONS.  I do not have to lay my hands on any money.  I can buy no money down.  If I can find the deals I can buy.  As long as the banks lend (which they are under obligation to by Gordon and Alaistair) then I can buy as much as I want.  My personal goal is to buy 600-800 properties this year alone. Maybe more.

This applies to you too!  If you are already an investor with a good credit file then you can buy also - BIG TIME.

So imagine this:

  1. buy £10m worth of property
  2. hold for 3 years
  3. sell when market recovers at £20m
  4. pay your tax at 18% + costs
  5. clear £8m net of tax
  6. buy big house for £2m and invest rest in fixed rate bonds at 5% = £25,000 per month passively.

Live a life of luxury where you are time and money rich.  Can you see it?  Do you believe it?  Want to make it happen?  Talk to us.

Ajay

 


Posted on: 18th Feb 2009




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