A Simple investment strategy
Growing Passive cash flow
Hi, my name is Darren. In 2007 I was able to stop working after achieving a passive income through music and property. I now work with individuals and investors, helping them to buy and manage property using a very profitable room let strategy.
Practically all newbie investors make mistakes that cost money. With so many variables to consider when buying a property, it's no wonder most people will change and fine tune their investment model over time.
I tried a lot of investment models to find (what I believe) is the safest and most profitable strategy. What I settled on incorporates some very unusual and cutting edge ideas but is very simple to execute and manage.
Getting over the first hurdle
Lots of would-be-investors simply do not have enough money saved for a deposit and those that do may not have good credit. It can seem hopeless for a lot of people but there is always a way to invest.
For example, we are currently in the final stage of completing on a property with a musician who had no savings. In a month or two he will own 50% of a large townhouse property in an affluent coastal town which will provide a passive income for life.
How does it work?
We use investor capital to find, buy and manage high yielding properties which generate long term passive (and secure) incomes. We don't own any of the property and there are no fees. In fact, we don't get a penny until we've been able to return all of the money back to the investor.
Once the investor has all of their money back, we then co-own the property (50/50), yet we continue to manage every aspect, such as the rentals, utilities, maintenance, accounting and so on for the lifetime of the investment.
Everything is done in a transparent way using independent solicitors and the investor is in control of when to sell the property. If you're after complete stress free investing then read on...
How do we get super high yields?
We rent to professionals (working people) on a room by room basis. Our properties are "serviced", meaning our tenants get a cleaner every fortnight, free Wi-Fi, all bills paid etc. We are able to charge a premium rent and ensure quality tenants by providing a quality service.
We only buy three bed properties which can be converted to five beds. This further increases yield whilst allowing us to invest in salable three bed properties. Yields are typically 12% and upwards with void periods being rare and isolated to just one room at a time (rather than a whole property being empty).
We currently only invest in the Eastbourne area, which has transformed in the last 10 years to what is widely considered, “little Brighton”.
There is a huge demand for professional room lets in Eastbourne which is fueled by many factors, including mortgage lending restrictions, a rapidly growing work force in the area, the overspill from Brighton and a growing population.
Changing trends in living arrangements is another important factor. Many couples, for example, will now choose to save money by living with other professionals. In August 2013 we refurbished two properties and both properties were filled within just four days.
Are investments secure?
Yes. Us Brits live on a small Island, there is only so much land available so property will always go up in price. So if we know that properties will increase in value year on year, then so too will the challenges of getting on the property ladder. New generations of workers will need to rent whilst they save for a mortgage, which makes the UK rental market a great long term investment, especially investments in the South East.
Our investors benefit directly from our knowledge of the industry and local area. From the countless small details such as installing light fixtures which only house energy saving bulbs (to reduce energy bills) to the more fundamental skills like knowing how to pull your money back out of a deal.
For example, choosing the right tenancy agreement is vital. Most landlords use an Assured shorthold tenancy agreement, but these types of contract don't protect if a tenant decides not to pay rent. Instead, we opt for a special contract designed for professional room lets. The benefit being that we have complete control over evicting non paying or troublesome tenants within 24 hours.
Knowing when to refinance is another important factor and is a skill in itself. If you are on an 80% LTV mortgage, for example and you feel your property has increased in value, you may find your borrowings actually only represent 75% of it's current market value. If that is the case, you can switch to a 75% LTV for free and benefit from those favorable rates.
There are lots of subtle decisions that we make to ensure our investments are secure and profitable. The people we work with, including our lettings agents, builders and brokers are a vital part of our success also.
There are different types of investor, from those with hardly any money or experience through those who are cash rich and time poor. We've worked with both ends of the spectrum. Take a look at some examples;
Chris, from London invested £30,000
2 Bed in London, £150,000 profit!
Deago, a musician from London borrowed £19,000 (coming soon)
Invest in property
If you are in a position to invest in property, why not do it with us. We'd be happy to talk about your investment goals and answer any questions you may have, simply contact us for a chat.