How to build a property portfolio from nothing: 3 ways to do it FAST!

Want to know how to build a property portfolio from nothing?

Turn off your phone, close Facebook, and grab a cup of tea.  

Because that’s exactly what you’re about to learn. 

First, I’ll lay out exactly how I built my own portfolio from nothing...

And then I’ll walk you through a couple other ways how to build a property portfolio from nothing. 

So then you’ll be spoiled for choice, and you’ll be able to choose the way that suits you best. 

Ready?

Let’s do this. 

When I first started my portfolio back in 2003, I was a bit clueless. 

How to build a property portfolio from nothingWhen I started my portfolio, I ran out of money fast and was left wondering what to do next...

I bought a few buy to let’s in the traditional way, by saving up deposits etc. 

But I ran out of money fast, and was left looking a bit silly. 

I had to take a part time job in a letting agency while I regrouped, and figured out what to do. 

But it wasn’t until a few years later, when I met an old acquaintance at a property networking event, that I finally hit on the formula I needed. 

Way #1 — BMV

He told me that they’d been buying below market value (BMV) properties using bridging finance...

Then remortgaging immediately after purchase...

And pulling out a big chunk of cash to repay the bridging finance (and even sometimes have a bit left over to go back in your pocket).

This kind of portfolio building is still possible today, albeit in a slightly different form. 

Bridging is still possible for the deposit, either in the form of a commercial loan, or a private joint venture

Although you now need to wait six months to pull your deposit out, there’s nothing stopping you from doing several of these at the same time. 

Way #2 — Rent to Rent

Another way to build a property portfolio from nothing is to use the rent to rent strategy. 

With this strategy, you don’t even need mortgages. You simply rent a property from someone else, and then rent out the rooms on an individual basis. 

I go into rent to rent in much more detail elsewhere, but suffice to say it’s a wonderful strategy for these reasons and more:

  • No need for mortgages, deposits, bank qualifying, waiting around for finance.
  • Giant cashflow due to ability to add an extra room, and rent out rooms individually.
  • It’s great for the landlord too because they get guaranteed rent and repairs done for them, and that’s basically of a landlord’s wet dream.

So it’s really a win-win situation for both parties.

The main challenge then is finding the deals, which is a little specialised, but there is loads of opportunity out there, if you know where to look!

Use lease options to build a property portfolioLease options are a great way to help home sellers who are "underwater", with negative equity...

Way #3 — Lease Options

The final way how to build a property portfolio from nothing, is with lease options.

Options have been used in property since time immemorial. 

They’ve traditionally been more popular in the commercial property world, but in the past decade or so have become more and more prevalent in the residential world, due to their amazing flexibility.

An option gives you the option, but not the obligation, to buy a property within a given timeframe, for a specified price.

Options are especially useful when there is little equity in a property, or even negative equity.

If a seller in that sort of position cannot sell, and just wants out of their mortgage obligation, then an investor can use an option to assist. 

They can essentially “babysit” the seller’s mortgage and make payments on it, allowing the seller to make their move, and get on with their life.

Once the seller has moved on, the investor has the option to either rent the place out -- possibly as an HMO, to maximise profits -- or sell the house on to a “tenant buyer” on a lease option. The latter is also known as a sandwich option.

Now you know how to build a property portfolio from nothing, which way will you choose?

Well, now you have the low-down on the methods, which one sounds good to you?

In reality, many portfolios will be built using a combination of these methods, because none of them is a “one size fits all” strategy.

You’ll normally select the method based on the circumstances.

I know it can sound a bit technical to start with but it’s totally doable...

The only question is: are you prepared to put the work in?

If you’re pushed for time -- let’s face it, who isn’t?!

Then you can join our property deals alerts service, and have experts find the deals for you instead.

Whatever option you choose, I wish you all the best, and I’d love if you’d let me know how you get on!


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John Wilson

Your Host, John Wilson -Investing In Property Since 2003, Amazon #1 Bestselling Author.





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