Secrets Nobody Tells You About Being In Property

 

After a few years in property, I have discovered a couple of secrets about the Buy-To-Let property industry... I wish I’d known about them sooner! 

For some reason, nobody ever tells you about these things at the start of your property career... which would make life much easier for you if you knew them!

Luckily for any property newcomers, I’m going to share these secrets... 🤫

Secret Number 1 that nobody tells you about being in property: The £25,000 salary affordability issue. 

Sometimes people new to property investing get a bit keen, quit their job, leave themselves with no salary with the intention of making it big in property. 

This is a bad idea! 

The reason for this is that a lot of mortgage lenders don’t like to provide mortgages for people who have an income of less than £25,000. 

Some lenders do; some have no minimum income requirements... but your chances of getting a decent mortgage are much better if you have a salary to begin with.

So rather than suddenly jacking your job in and plunging your salary to zero immediately, a better way to get into property would be this: 

Gradually build up your income from property over a couple of years, and gradually decrease in the amount of days you work in your normal job, so your property income and your job income eventually balance out together into a decent overall salary.

Then one day, your income will solely come from property, as it will surpass your job salary, and you will no longer be exchanging your time working for somebody else!

Secret Number 2 that nobody tells you about being in property: help by utilising credit cards and building up lines of credit.

Property is expensive. Most projects cost more than you anticipate, and the cost of refurbishment is what puts a lot of people off doing them.

However, you can get some help to pay for them by utilising credit cards. 

Use a low cost credit card to purchase materials: boilers, kitchens, bathrooms and so on. Yes, they might end up costing you a little more over the long run, but it’s better than never doing a project. 

Obviously pay down the credit cards as soon as you are able, usually out of the property rental income once it’s up and running.

Build up a couple of lines of credit, with various suppliers too, and this will also help spread the cost.

I always chuckle about this next bit, but how good would it be if you could pay your contractors using a credit card too?!

Most of them want cold hard cash transferring!

But remember: all materials can be bought using credit. 👍

Secret Number 3 that nobody tells you about being in property: looking after your credit score. 

This is something I’d never even thought about before being in property - but luckily, because I’m of that organised OCD do-things-correctly mindset, I’ve never done things like miss payments or default on bills.

And here’s another fallacy: why should your personal credit record matter if you’re buying property in a limited company? 🤔

Because it does, and that’s all there is to it! 

Mortgage lenders want personal guarantees that they’re going to get paid, and as limited company directors, that guarantee falls to you - so keep your nose (and credit record!) clean!

Makes sure you pay at least minimum pay amounts every month for bills and credit card payments, in full if you can - and here’s the crucial bit: pay them on time; late payments have a detrimental effect on your credit score.

And we want to keep that perfect payment record and score as high as possible - because if lenders think your credit record looks dodgy and you look unreliable, they simply won’t lend you money for mortgages!

I check my credit files a couple of times a month just to ensure all is well - beware other people taking out credit in your name... 😱

I use all three of the Equifax, Experian and Credit Karma credit scoring systems, so get yourselves signed up to one or more of these. The added benefit is they also tell you how to repair and improve your rating. 

And everybody loves a high rating - especially mortgage lenders! 😁🙌

Secret Number 4 that nobody tells you about being in property: investor difficulties!

A lot of people in property, myself included, leverage funds from private investors to purchase property. 

Investors get a great return on their loan investment, and you get help building your portfolio.

Now here’s the secret: raising finance is hard. And what makes it harder is that the majority of people who reckon they want to invest funds... simply don’t.

Sadly, there’s a lot of talkers not walkers, when it comes to investors. I’ve found people who clearly stated they wanted to lend money out, and then when it came to the crunch... they didn’t.

This is for a myriad of reasons, genuine or otherwise: 

🤷🏻‍♀️ they’ve already lent their money out elsewhere

🤷🏻‍♀️ they’ve changed their mind 

🤷🏻‍♀️ they’re nervous and scared of the investment process

🤷🏻‍♀️ they’ve bought property themselves with their funds. 

Or it could be that they simply don’t like you and don’t want to work with you, or they don’t trust you or the deal! 😫

Sometimes, perhaps even they never had the money to begin with and were simply time-wasting tyre kickers. 😤

Asking for proof of funds here helps weed out the hot-air braggers full of bluster!

The point is this: some people are all talk and no action - so don’t just rely on one investor, in case they back out or let you down. 

Have a list of “potential investors” lined up who are ready to invest.  

Because people only become “investors” if they actually lend you money! 

So build those relationships with genuine investors who genuinely want to work with you!

👦🏻 💷 🏚 👩🏻 💷 🏚 👦🏼 💷 🏚

So there you have it... a few inside secrets shared, which hopefully will make your property career much easier for knowing them! 

Best wishes, and happy, safe investing,

Kellyann x x x

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Kellyann is a property investment strategist from Leeds. 

In her work she creates wealth for private investors through refurbishing properties. 

Visit her website for more details:

https://kellyannmartin.co.uk/investment/

DAY FROM HELL

 

DAY FROM HELL…

Do you know when you have those days where everything goes wrong?!

Today was one of those days.

A planned day at the refurbishment project; I was looking forward to burning lots of trash wood outside in my incinerator  

Woke up… Pissing it down. 

Didn’t even bother taking the incinerator. 

Picked up the handyman, drove down to the project; today’s task was for him to rip out the rotten old cellar door and attached window and fit the new door.

It was going well, he set off on his task, and I set off for Toolstation to get the dampproofing course materials he needed before the new doorframe went in. 

However, within a couple of hundred yards of Toolstation Cross Green, whilst on the A63 dual carriageway, the gearbox in my car dangerously decided that it wouldn’t work anymore! 

Delightful! 

I managed to freewheel it safely off the dual carriageway and round into the industrial estate where it was discovered that the gearbox wouldn’t work at all. 

The gearstick could go in the little slots but the gears just wouldn’t engage so therefore the car wouldn’t move. 

Deep joy. 

So now I am stranded several miles away with a broken car. Bear in mind I have a handyman trapped at my project with no car, and a large hole in the side of my house which needs to be filled and secured before daylight ends.

I rang Green Flag, where Susan faffed about wasting half an hour of my time asking 1500 pointless questions that she already knew the answer to. Thus, not really very productive or speedy, and we all know that time is of the essence. It’s not like the gaping hole could have been left overnight!

Eventually a recovery driver was dispatched to pick up me and my piece of shit car. 

Meanwhile a friend came and met me whilst I was abandoned in this industrial park, to do some sort of product swap – like some sort of bizarre DIY drug dealer… whereby I gave him the goods, ie the dampproofing course material. This was so that he could get it to the handyman – who was being held up with the giant-hole-fill-fixing because he couldn’t put the doorframe in without the damp course and obviously it was in my hand in my broken car. So thankfully, needs must, he took that to the project for me, courier-style, bless him!

Meanwhile poor Jack of KD Bros recovery, having gladly allowed me a few more minutes for my “dealer” to turn up, then took both me and my Hearsemobile back to Morley, and dropped us at the garage, which thankfully is within walking distance of my home. 

So I got back home to get… luckily, my new car… First world problems eh?!

Here’s the next issue… My new car is not my battered old trashed car I use for work. It is a very lovely car, the nicest I’ve ever had, and has just been detail cleaned – and I don’t actually know how to drive it properly yet. So it’s been sat on my drive for three weeks whilst I stop being a scaredy-cat.

However, needs must. So I covered every possible surface in the car that I could with mats and blankets, knowing that my dirty dusty muddy handyman would have to get back in it – and then I very slowly and cautiously set off back to my project, pressing various buttons to stop off-putting things happening, like some crazy screen randomly popping up. 

I called at Selco on the way, couldn’t find two of the door products I needed, and the one that I did get was overpriced and very expensive, but needs must.

Back up my project, the handyman told me he was desperate for two lengths of slate lat wood, to board up some of the gap that had been made today. 

Now here is a dilemma… The slate lat needed is 2.1 m long, and I’m not at all keen on throwing long bits of wood through my delightful new car. 

But you guessed it: needs must. 

I needed that wood. 

So off I set walking to Kirkstall Timber, a good 15 minute walk through Holbeck, and joy of joys, through Britain’s first legalised red light sex worker zone. 

Now it is notorious for women being accosted by kerb crawlers in this bit – and because I look rough as shit today, I was dubious about being taken for a drug-riddled prostitute as I walked through. Lovely. 

Glamorous lifestyle I lead in my property work, you know?!!

Luckily, the day’s events so far meant that I was wearing such a face of utter pissed-off fury, which helpfully doubled as a scare tactic, and nobody dared approach me. That’s my story anyway, and I’m sticking to it!

At this point whilst walking, I thought: perhaps I should dictate this story into my phone, ready for you all to chuckle at as a blog later, so that’s how you’ve ended up reading this!

At the timber merchants, I got my long bits of lat, and then decided, what with knowing I would have to carry it all back, that I would also get the door weather rail whilst I was there. 

Why not?! 

Life must not have seemed hard enough at that particular point! 

And obviously with my gormless weak pathetic female frame, I’m built for being a mule for schlepping things about; what’s one more item to traipse?!?

And here is where I made another poor decision… he asked: did I want all three long bits of wood tied together to make it easier to carry? 

“Nay lad”, I said, “I’ll put this weather rail in my back pocket.”

Because that’s obviously the most logical thing to do with a 3-foot chunk of wood you’ve got to walk a mile with, isn’t it?!?  

So I walked back to my project, laden with wood, like a modern-day ropy female Jesus the Carpenter.

Got back, only to find that not only had a cement mixer randomly appeared in my kitchen, but also to be told he meant TWO lots of 2 x slate lat – BUT HE NEVER BLOODY SAID THAT!! 

Anyway, fast forward a while, the job was mostly finished, hole in house secured for the night, and then I drove home gingerly in my good car, wincing every time the handyman moved his mucky feet 

Walked back to the garage to pick up my not-good car, luckily, it turned out to be a very minor fix, thankfully. Bless those boys Christian and Danny at Motion Autos Morley, for looking after me and the Hearsemobile again!

And then I immediately drove to Morrisons, bought a load of junk food, and came home and ate my feelings. As you do. 

Phew! 

Bad day, but we got through it – and as Winston Churchill famously said “If you’re going through hell, keep going!”

Anyway, now that I’ve cathartically unburdened the events of the day, here’s a couple of pointers of reflection…

 First world problems. Things are a lot worse for a lot of people. And I’m grateful for my own mindset, resilience, tenacity, health, and refusal to give up.

 Property isn’t easy. Anyone who says it is, is bullshitting you. If it was that easy, everyone would do it, wouldn’t they?

 Despite your best efforts and targets, property is very rarely passive either. Sometimes you’ve got to get involved! 

 Don’t dwell on problems, find solutions. 

 Do whatever it takes to make that solution happen. Because…

 Nobody is coming to save you. Everything that happens to you in life and business is because of the actions you choose to take.

And yes, I know how hard it is when you see other people on social media, reckoning on that they’re doing awesomely well, being really successful, smashing it, yada yada, blah blah blah…

We all know that one guy locally who continuously brags about how much money he’s making.#yawn

And that can be quite demoralising on the days when you’re struggling.

But we all struggle, even me, as you’ve just read! 

So don’t let comparison be the thief of joy. 

These people will have their own private issues to deal with, probably to do with self-importance and esteem.

Focus on what you’re doing. 

Never mind what other folk are supposedly up to.

Be the type of person who, when the chips are down, and needs must, would walk a mile through a ropy area to carry wood home to fix an urgent problem.

And remember: even the worst days are only 24 hours long! 

Thanks to all my Heroes of the Day 

• Moz the handyman
• Richard the “dealer / courier”
• KD Bros recovery
• Motion Autos Ltd
• Finally, the style of Snoop Dogg… I wanna thank Me! …For being tenacious and gerrinonwi’it and finding solutions instead of being a whiny little victim! (Even if many colourful f-bombs were expleted whilst doing so…  )