Is there a way of avoiding the full 25% deposit or any tips and tricks to speed the process up?

Here’s another great question. Seeing as last weeks went down so well, I thought I’d share again:

I have 1 rental property, but looking to buy the next. I feel my progress is so slow due to saving 25% deposit. Is there a way of avoiding the full 25% deposit or any tricks to speed up the process?

Great question… here is the answer in it’s full glory.

  1. Reinvest your net rental profit (or save it). I have a stocks and shares ISA that I use and it builds up pretty quickly
  2. Get a savings plan for your own income. Aim to save £500 per month… from both 1 and 2 you should be saving around £800 per month / £9,600 per year – after year two plus some capital appreciation on property one you should have deposit two
  3. Want to speed up the process? Get networking and find likeminded investors or JVs who you trust… use this to buy a property whereby you give them a monthly return plus after two years you pay them back at remortgage or sale
  4. If number 2 is too slow you could use the riskier method of peer to peer lending + potential interest free cash from credit cards. To do this you would have to buy a property at a rock bottom price, do it up and remortgage in 6 months time for an increased value of 25% – 30% more so that on remortgage you can pay back your lender + credit cards – you can click this link to see a property where a Member is doing exactly that.

(Be wary for point 4 it’s not easy. You must have experience in development and be able to complete the project on time and under budget!)

Can I be really honest with you?

I’m going to be anyway…

Every time you double your portfolio it’s slow going i.e 1 to 2. BUT once you’ve got number 2, number 3 comes quicker because you’re building your network and getting access to more finance resources as well as building equity + cashflow.

Consistency is key.

Oh and yes, some lenders are offering 80%-85% LTV, but these interest rates are high, which doesn’t help the stress test and you definitely need to be getting the LTV down ASAP… so it’s better to aim for a 25% deposit!

I hope that was useful for you!!

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Natasha