How this client released equity and built a property portfolio from scratch......
A great case this week where we helped a client structure a remortgage on his own home to release equity and then helped him fund three buy to let purchases.
The end result was fantastic with almost ￡1,000 per month income generated for this client.
RAISING THE CASH TO INVEST
Our client this week was not an investment banker, or a lawyer....he was a carpenter. He had worked hard, earned decent money, but after a couple of injuries and illnesses realised his days of working with his hands and being self employed were both finite, and dependent on good health.
He was keen to generate some passive cash-flow and invest in assets he felt would increase in value over time. An asset class he understood and had some confidence in was property and that was what he wanted to invest in. With little savings the question was how?
After a consultation with the client we spotted two immediate things. First, he was on an expensive mortgage rate as he hadn't realised he could get a cheaper deal elsewhere as a self employed tradesman. Secondly over time his residential property had risen significantly in value meaning he had substantial equity.
So what we proposed was the following.....
What we managed to do was raise the client ￡80,000 to invest in property, at an additional cost over his existing mortgage of just ￡183 per month. He was now ready to get investing.
WHAT DID HE DO WITH THE ￡80,000
Our advice to the client was to maximise what he could do with the money, and that meant investing in multiple properties using buy to let mortgages. This would mean multiple income streams, multiple properties to gain growth from and also a spread of risk across multiple assets rather than just one.
With this in mind, the client who lived in South Essex set about finding properties with good rental yields at relatively low price points......
***WE SECURED BUY TO LET MORTGAGES ON ALL OF THESE PURCHASES AT 75% LOAN TO VALUE! ALL OF THE MORTGAGES WERE ON AN INTEREST ONLY BASIS AND AT FANTASTIC RATES***
Here is what he bought!!
Overall this client has generated himself an additional income stream of almost ￡1,000 a month at a cost of releasing the equity of just over ￡180....not a bad trade off.
The money he released hasn't gone anywhere its invested in the properties and he now has a portfolio valued at ￡370,000 which over time should appreciate in value significantly!