The Problem with Money Down

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Welcome to the NC Podcast and I am the founder of NC Real Estate which include some incredible resources and documents for you. Hope she invested I’ve got a really really really great flow chart that you need to get your hands on. It’s called the Property Expansion Success Formula. A lot of words, but what it’s designed to do is show you the process from the start the property investment Journey all the way down to the end and then recycling the system.

[00:00:44] It’s what I use when I work on property portfolios with small-time investors and large-scale portfolios. So if you want your hand or your hands on that you need to go to https://ncrealestate.co.uk/flowchart. That’s https://ncrealestate.co.uk/flowchart. And that is yours for free because I want to make sure that you know where you’re starting that way when you go through the flow chart and you get stuck on something you can then think.

[00:01:16] Okay. Well, I need to know more about this. Oh fabulous. You’ve then got direction. The worst thing in property investment is when you’re hey. What do I do next and you haven’t got any direction. So this flow chart on one a four piece of paper that you can print out and hang on the wall behind your computer or whatever you’re going to look at so that you know, what steps to take next is what you need.

[00:01:43] So again, https://ncrealestate.co.uk/flowchart go and get yours now. So, how are you doing this week? I’m sat in the studio today on a Friday, which is abnormal for me. It’s been a really long week full of new strategies. Speaking to my team about how we’re going to go forward for Autumn because even though some has not yet already over we always very much looking at what content were putting out for the next couple of months as well as how we can make sure that you’re getting access to things that you may have missed.

[00:02:25] So if you are a part of the property investment Mastery Facebook group, or you follow me on Instagram at Natasha C Collins, or even your friend of mine… A friend? Maybe just like a connection on LinkedIn. I don’t know how friendly people are meant to be on LinkedIn nowadays. But hey you my friend on LinkedIn all of those platforms.

[00:02:45] I’m going to be putting out some great content. So if you are not following me yet, make sure that you’re doing that again. It’s the property investment Mastery Facebook group. It’s my Instagram, which is Natasha C Collins or it’s LinkedIn and it’s Natasha Collins. MRICS, but you’ll see my picture you’ll know who I am and click and follow me come and be a part of my community because it’s a really exciting place to be right now as well as that I’m just finishing off the last semester with my Master’s student switch.

[00:03:19] Seems like we started the semester ages ago in March. We started March the 5th, I think and we have just finished marking for the exams which has been great and then it we’re kind of in a two-week period where we turn around ready for the next semester in this this coming semester. The Autumn semester is always when I’ve got a post graduates and Masters students and undergraduate students as well.

[00:03:44] So it’s really lovely to see where people are coming from and what their. What their backgrounds are and what they get inspired by in the property industry. I find new terms and the start of new beginnings very very very kind of like fresh you get to start again you get to really see what people are doing and also for all of you who are super excited about it brexit is finally around the corner we can see what happens there, and I’m excited actually to put that into some of my learning materials.

[00:04:17] Add my content again. I’ve stopped talking about it or even trying to guesstimate the situation because I can’t I don’t have a crystal ball. I have to admit that I find Boris Johnson extremely annoying because I think he’s just made a tactical play for the top. I’m not saying it in any. Political way left right and Center.

[00:04:48] I’m just extremely frustrated by the whole situation as I can imagine you are but once we get some direction on it, we can start planning for what’s gonna happen. Hooray uncertainty me. No be the buzz word because I get it every single time. I hit the market. Someone says to me it’s not moving at the moment because of brexit.

[00:05:12] Aha. I really don’t want to listen to that anymore. It’s just rubbish. It’s just an excuse and. Really there is a market that is going on underneath. Hopefully you’re taking full advantage of the situation right now and you are buying up deals that have been on the market for the last 364 days and the seller is ready to pull their hair out and give it to you at 50% off.

[00:05:39] I really hope that’s what’s happening for you because we’re in a August. We’re in a slow month and it can be exceptionally frustrating when you’re in a slow month and you get. Told that you cut the markets not moving or this isn’t a good idea or about that. But so hopefully calm this Autumn season.

[00:06:01] We are going to know so much more. I’m very excited for this time in three months time where we can actually start having meaningful conversations about where the property Market is heading now something I did see in the Press today. And the guardian was that a bank in Denmark and now offering negative rate mortgages.

[00:06:29] So they’re offering – naught point five percent on their mortgage lending as a sign of the times as an economy who actually Banks need to pay people Hood depositing money. Instead of a is getting other people to hold money for them, but not be nice. If for a little bit that could happen in the UK will be getting these awesome interests and awesome mortgages.

[00:06:56] I don’t know something’s going to have to give to get people moving again because I think as far as mortgage interest rates UK being exceptionally low and still being low. Well, I think the government and the bank of England were hoping is that it was going to make people move a bit more and think oh I can afford this mortgage.

[00:07:20] So I’m going to buy more but the reality of it is is that we have such stringent checks on what we can borrow and what we can actually get a mortgage on out. I mean I used for the first time ever. I’m struggling with a remortgage on a property that’s got over a hundred thousand pounds of equity in it.

[00:07:43] I mean that’s unheard of that is absolutely unheard of in the 10 years that I’ve been investing. I’ve never had this problem and it’s because they want to see. Accounts after accounts after accounts, they want to go through my expenditure on a step by step by step basis the fact that I’ve got a young company means that they’re going to me.

[00:08:05] Well Natasha, you know, you have a lot of things that you need to prop up with your income. Do you want a bigger mortgage or can you handle the bigger mortgage and I’m saying well, yes. I do take very very calculated decisions and. Look at whether I can afford it myself or not, but it’s just taking longer than it ever has done.

[00:08:28] And so even though interest rates are far more affordable than they ever have been again. We’re seeing it that first time buyers can’t even get on the property ladder and we’re seeing it in the stress test that we have to jump through when we are trying to get when we’re trying to. Get buy-to-let mortgages, which is why you need to be thinking of more ingenious Solutions such as maybe not hmos if that’s not your thing because they can be quite complicated to manage.

[00:09:01] But maybe you’re looking at mixed-use or multiple users within one building. So maybe you’ve got a block of three or four flats. Maybe you’ve got commercial Investments get a bit more creative because that’s going to be what’s helping you with the stress test this one that I’m working on in service accommodation.

[00:09:18] And service accommodation is notoriously difficult to get a mortgage on because they’re saying well hold on. I want years and years and years and years of evidence that this service accommodation works. I have got three years three years. Maybe we’re going into 4, January 2016. Oh, yeah 3… 2016 2017 2018 2019.

[00:09:45] Oh, no, this will be the end of the fourth year, but we’re going based upon my 2018-2019 tax returns, right? Okay. Got it. So. The needs to be something else coming into the market which drives it forward and makes it a little bit more of an optimistic place to be because the minute the optimism comes back.

[00:10:10] We will start seeing prices move again, which is a nice way to ride. We are apparently coming to the end of and. Economic cycle which I’m not surprised that it’s been whole prices have been holding really high for a while and I would just be aware of that risk, of course be aware of that risk that at some point the market has to rebalance itself.

[00:10:34] But if you could hold your properties long term and you can make sure that you can manage it that is making your properties less risky, so. If we do go back to that optimistic Market where we actually know what’s going on and we can start dealing with situations. I think we’ll start seeing the property Market move a little bit more which back to my original point is why I’m very very excited for awesome to come around and already I’m seeing I’m seeing that come through already and I’m very I’m looking forward to it.

[00:11:08] It’s basically what I’m saying. So the topic of today’s podcast is no money down did that just instill fear and you did it install annoyance in you are um raged by that.  No money down has been a buzzword in property investment for very long time now. In the US where I am at the moment. Yes. Various ways in which you can get a hundred percent mortgages or even I think it was 97.5 percent more loan-to-value on mortgages which great fabulous that is almost no money down.

[00:11:56] There’s taxes that you have to pay on top of that those insurances that you have to pay on top of that and if you’re going to be doing any Renovations, that’s completely at your cost.  In the UK no money down has been going around as a buzzword. Really to try and get people to seminars and events. I think and whilst those people who preach no money down as a strategy and people end would be or want to be property investors.

[00:12:27] Come to me and they say Natasha. Do you preach no money down. Can you tell me how to get into property investment with no money? I find it really hard to keep a straight face if I’m honest because I hate the word it grates on me. It grates. What’s three words it grates or me? No money down. Let me give you some home truths about this if you’ve been thinking that you can get into property with zero pounds.

[00:12:59] you can’t. You cannot are you telling me that me sat here right now? I’ve got nothing around me or I’ve got my iced coffee nice and and just me here right now would be able to go out and buy a property. Hell no.  Hell no, that’s not going to happen, right? If you want to buy a property here is what you are going to have to do.

[00:13:26] Number one you I’ve got to have money in the bank so that you can buy property to in your name. So you have the deposit and you have all the money saved up number two, you get an investor to invest in you and you borrow the money, but again you’re going to be paying interest on that. Are you going to be very skeptical that anybody with no property experience whatsoever could go to an investor and say hey, I’ve got this property.

[00:13:59] Could you lend me however much it is the say 200,000 pounds on it and I will pay you back. However much interest a year, but hey, I’ve got no experience. I’m just going to give it a go. Unless you are speaking to some kind of drug dealer or someone who’s trying to get money offshore or I don’t know.

[00:14:20] Maybe they pull out a bright brown envelope. They’re like, oh here’s my briefcase. Yeah, I carry this around and they give it to you. I’d be so skeptical of that happening because even when I lend my money and I’ll end quite a bit of money to property investors. I want to see that the poverty is viable that.

[00:14:41] It is a deal and that I am going to get the interest back that I say. I’m going to be getting back and that there’s a plan a there’s a plan B and there’s a plan C and you can pitch that to me and be very certain. That’s what’s going to happen. And I want to know about you. I want to know that when the shit hits the fan.

[00:15:00] An excuse my bad language you are going to go out of your way to make sure I’m repaid you’re not just going to disappear when things go wrong. Now. I completely understand the risks associated with this and I completely understand that maybe the market completely crashes and you lose all of. Money on your on the deal and you can’t afford to repay me.

[00:15:22] Well, that was my risk. I know that there is an element of doing that but what I do wouldn’t ever want to see is that you’re the sort of person who would just go man didn’t work and off you walk. There’s got to be an element of guilt associated with it. Really that means that you service my depth first.

[00:15:43] Rather than your own personal profit because it affect essentially I’m allowing you to be able to do what you want to do and I’m trusting you because right now hey, I don’t have the time to go out and find a property and do that instead and saying here’s my money you give me a return on investment.

[00:16:00] I’m trusting that you will do the best. You possibly can based upon the information you provide. So if you haven’t got any experience, you don’t know about property deals. You can’t give me the analysis of the deal and you can’t tell me how this deal Stacks up. Why on Earth. Am I going to lend to you based upon some random project you found on right move.

[00:16:22] So just have a think about that for a second. So what but what I am saying, so let’s flip this. Say you had gone out and you had got so much information on a property deal. Right? You’d come to me you’d said Natasha. I have found this property for a hundred thousand pounds. I reckon if we put 50,000 pounds of a develop of development costs into this and you give me a schedule of work.

[00:16:51] Plus a quote of a contractor who’s going to do that and then you’ve gone out and you’ve got comparable evidence which shows that I can then sell on that finished product or you can sell on that finished product. The 250,000 pounds worst case scenario, but in excess of that and you could quite comfortably do it and you’re going to be paying me either percentage of the profit where you’re going to be giving me a good amount of interest.

[00:17:14] I’m going to go. Yes, I’m really really interested in that I would get involved with you. Then. I’m going to say well what happens if that doesn’t work and you’re going to go well if that doesn’t work. I’m going to rent this out for x amount of time and then I’m going to do this and I’m like, yes that investor has thought about Plan B.

[00:17:33] And then you might impress me even more and you might go and the tattered, you know, what plan B doesn’t work. I’m going to do plan C. I don’t know. I like tick tick tick tick tick. Yes your property investor. I’d invest in in which case fabulous you’ve done the hard work. You’ve gone out. You’ve analyzed the deal you have made me feel so comfortable and I’m excited about the deal with you fan-freaking-tastic.

[00:17:59] I am in that I’m going to be lending you money and going hell. Yes. This is for you. But take a little bit of a step back. Okay, that might be no money down. But how much money have you spent already getting the training getting the knowledge becoming competent in deal analysis now? That’s not to say you shout out loads on mentorship or what have you that’s to say you shout out in the time that you could be spending elsewhere doing something else and you have sat and you have worked out how to analyze these deals and you have worked out how to negotiate the best possible price on a property and you have figured out exactly how to use lending so you can recycle that and you’ve made the network contractors.

[00:18:50] Come and do the works of they’ve already been out. They’ve given you the schedule of condition. They’ve sorted that out of you.  It’s not an overnight thing. That doesn’t just happen. I didn’t just one day decide to become a property investor has like all the knowledge just arrived in my head doesn’t happen you go out and you have you do practice and you analyze 20 deals you analyze 40 deals you analyze a hundred deals you analyze 200 deal.

[00:19:19] Because in a market like this one, that’s what it takes. You keep going until you find the one that works. And here’s the thing you might have to offer on it and you might have to say what I’ll pay you. I don’t know a hundred fifty Grand and it’s actually a 200 background asking you have to also put your foot out and you have to start stepping on the past so that you can then go and find an investor who will invest with you.

[00:19:44] But here’s the other thing you have to be building trust you do I don’t invest in people who have not met before. That would have to be an element of a couple of contact times just so I can see how you are and I am and whether you invest the same way that I would because of after all different people offer.

[00:20:04] Different people and I don’t get on with everybody or I don’t see eye-to-eye with everybody. I’m always respectful of people but you know, I might not invest in the same way that you do or I might not quite see what’s going on in your deal analysis, or I might give you other suggestions and say well, I’d feel more comfortable with in this if this happens and maybe you don’t agree with me in which case we move our separate ways.

[00:20:25] That’s fine, but you have to be. Honest and you have to be aware and you have to be getting the knowledge getting the experience even if you don’t go as far as by the property so you could do everything up until by the property. If you’re don’t have the money in your bank right now. You can search for the deal.

[00:20:48] You can Network you can find the contractors you can put in an offer and see what price you can get at. You can get the contractor around and you can. Get a quote for works and you put together a schedule of condition and you can start mapping out the ab&c and if you get to that place and you think wow, I actually do have an amazing deal fabulous.

[00:21:07] Okay, great. I’m off to back to networking to find someone to do this with me.  Fabulous great. Like that’s awesome. If you can do that, then you know what? You’re so nearly there. The final 10% is just finding the money. If you cannot find the money my car is you’ve got a hundred percent of the property investment tied up amazing.

[00:21:33] But again, I would not say that that’s no money down. That is I must go and get the knowledge the experience. I must spend my time wisely learning how to do this and money is time. No. Time is money time is money. And that’s you not spending your time doing something else that you might be able to do that’s valuable.

[00:22:00] Essentially you’re going out and getting the knowledge and that can take months and that can take years. You’ve got to be patient, but you’ve got to be determined.  So hear me when I say that’s not no money down that’s spending your time. The third option that you might have been told about is taking out huge amounts of credit card debt or not percent interest which is available for 36 months and buying a property out right now.

[00:22:29] Of course that is a possibility if that’s what you want to do. But here’s the other thing you need if you can even get your hands on 70,000 pounds worth of credit cards. At cash I guess for not percent and you can get that transferred into your bank for thing. It’s through percent charge on that and then you could buy a hundred percent of of a property using that method without putting any of your own money down fabulous, but you’re not going to be able to get out any long term lending until you have paid off that credit card bill hear me again.

[00:23:09] Lenders will not lands you if you have that much credit card debt because you have to service that credit card debt, and they will not allow you to borrow to service that credit card debt. So just remember that if you’re going to do that.  You need to have someone on standby for the remortgage where you pay off all of those credit cards, so you’ll have to find that money from somewhere and then remortgage out.

[00:23:39] So again, that’s not no money down. That’s okay. Well, I found 70 grand worth of not percent on a credit card. You would have had to have had great. I mean a great credit score for that to be able to happen and then you’ve got to find almost that short-term lending for the interim until you flip out onto a mortgage.

[00:23:58] That’s not no money down. That’s just playing with money cleverly.  So just be aware that if someone comes to you. And says you can get into property no money down and you and your mind think that it’s going to be super easy and that you’re going to be able to sit there and go. Yeah. Alright. I’m just going to sit here lean back in my chair go and sit around the pool and do that.

[00:24:25] It doesn’t happen like that. I’m sorry. It doesn’t happen like that. It requires an awful lot of work to get to the place where you want to be. Now, if you enjoy that work and that work lights you up and like it lights me up. I love it. I love investing in property in finding new little things that I can do a little bit of money from places or a new investors or New Deals amazing.

[00:24:51] That’s fabulous. Keep going keep going because you can find the property and you can speak to investors and then you can kind of match the pair up. You could earn a little bit of something from it. And then you keep going and then you’ve got deposit then you can buy your own. Oh before you know it years of past but you’ve got a property portfolio.

[00:25:10] But don’t expect that to be easy or simple there’s the learning that comes in from behind it and there’s so much trial and error you would not believe. But if you decide that you’re not going to fail and every time you don’t get what you want is just a learning curve then over time you’ll get there.

[00:25:30] But as I said, you have to spend the time if you don’t spend the money.  Because that’s the way that you’re going to grow. So I hope that’s open your eyes a bit to no money down and I hate hearing those words hate hearing those words because it sets a fear of god in me where I’m like, oh, what are these people being told?

[00:25:53] Like, they probably paid thousands of pounds, which they could have actually spent on a property.  Or something to do with the property, you know the legal fees or getting an architect out or whatever it is. And they’ve been told that they can get into property with no money. It doesn’t work like that.

[00:26:10] It’s a buy-to-let investor or a property investor. It doesn’t you need capital and capital takes time. Or Capital needs time. So just bear that in mind, but I’m hoping that I’ve given you some strategies and I told you what I would lend money based on and if I would lend money based on that there’s bound to be other investors that would lend money based upon that as well.

[00:26:30] So use it use it wisely and go out. I do want to sleep believe in you. I just don’t want you to think that this is an easy ride and then the minutes and then goes wrong you fall off the train and you go and do something else to ejected. Oh pick yourself back up. Remember that if it was easy, everybody would be doing it.

[00:26:50] So you need to focus on you just moving forward and getting experience. And here’s a side note. It’s okay to be in full-time work whilst you do this because so many people say to me in that they’ve given up their jobs to be a full-time property investor, but they have nothing to bring to the table learn around your job.

[00:27:15] Make sure that you’re looking after you and you can afford to live throw yourself out first and then go and learn. I have always always always done this. My master’s degree in surveying. I did alongside working full time getting my Charter ship. I did alongside working full time getting my qualification to become a lecturer.

[00:27:37] I did a long work alongside working full-time. You can do it in your free time. You’ve just got to make moves to change your diary around so that even if at 10 p.m. At night you are that’s your time. That’s your time to do all the property investment stuff. So be it but you’ve got to commit you’ve got to be dedicated and you’ve got to keep going and even if 10 p.m.

[00:28:02] At night. I can go to networking events and 10 p.m. At night getting out working online. It’s easier than ever to be able to do that but you have to keep working through it because as I said if it was easy, everybody would do it and it is tough. So you’ve got to persevere you have to keep going because the other thing is the longer you keep going for your competitors drop away because they can’t stomach it.

[00:28:29] You need to keep moving forward keep being determined. Keep taking that action. Hey things go wrong for everybody all of the time but you don’t need to think wow. I was told it was going to be really easy. And all I had to do was get a little bit of knowledge and sell it on because people who lend money on stupid they can see right through you if you’re not confident in what you’re doing.

[00:28:53] So you need to go out there and get that education get that knowledge show the passion be the person be that property investor that you really want to be. And then from that starts to build and it’s a lot of fun, but don’t think I don’t think that no money down means nothing needed because there is always things that you can keep growing on and you need to go out and get that experience.

[00:29:21] So I hope that’s opened your eyes, but also giving you some great tips now. As I said at the beginning, I have a free flow chart for you that you do definitely need to get and again, it’s https://ncrealestate.co.uk/flowchart. So once you find that property it goes through all of the steps, you need to take to find the money.

[00:29:45] They’re manage it then go through the cycle of maybe you want to develop it or making that decision of what to do. Next. You go back around to the start and it will show you how to expand your property portfolio. And it starts with you finding the property first. You definitely need it. It’s for you.

[00:30:01] If you are at the start of your journey at the middle of your journey and hang that up somewhere that you can see it. So you constantly know how to take action. So I’ll put the link below in the show notes to make sure you go and get it. Now if you’ve enjoyed this podcast, I want you to push like And subscribe so that you get this every Tuesday morning at 7 a.m.

[00:30:24] And also I love to support the more people that support this podcast the more people that support me and I am so grateful for that. Please make sure you do share your support. It means the absolute world to me. Thank you so much for listening to this podcast day. I cannot wait to catch up with you.