General (main property discussion here) - Learning The Property Game

Hi

Just a couple of questions, i just need some advice/direction.

Im 22 in a month, i want to get on the property ladder now-ish, so that i can secure a future for my family, so that when i am 45 or so, i will have money for things etc, ive been looking into property for 2 years now, watching all the programs, 6 months ago i joined some forums, met people etc, so that i can learn as much as possible, it seems quite easy to "mess up" in property, so theres no point rushing anything.

What advice would you give to a 22 year old, with too much debt to pay off right now, i work full time, i have bad credit, i have a partner who also has agreed to be on the mortgage applications etc, also bad credit (from a few years back, haunting us now!!).

We need to get on the ladder, build trust with the lender, so i can have a good size portfolio when im alot older, but right now its going nowhere,

1, Is there a home course you can recommend to learn property?

2, With no deposit, how on earth do i somehow get on the property ladder? Even if i buy in another country (as the UK market is looking bleek).

I feel i know a bit about this now, (i said a bit before you reply lol), ive researched homes i could buy that are very cheap, here and in the USA, but noone would look twice with my credit file, is there any hope at all?

No, family cannot help, unfortunatly ;o)

Thanks for your time, you have all been great!

Matthew

It's always hard when you start out. Unfortunately, with the current market I think you are going to need some sort of deposit.

If you borrow this, the take out a mortgage, you'll have to pay back both at once of course.

I did see a ew lending service was launched yesterday called ZOPA. It's a bit like ebay for loans. You could try borrowing off individuals? www.zopa.com.

Good luck

Phil

Hello Matt, You obviously don't play for Charlton then??!! Before wasting money on any courses, I would read Rich Dad, Poor Dad if you haven't already. If you have, then you will relaise that you have bad debt you need to get rid off i.e credit cards, loans etc. Set yourself a target for clearing this and devise a strategy and timescale i.e do a balance transfer to a 0% card and aim to pay it off in the interest free period. Once you have done this, you can then plan to build a portfolio depending on your attitude to risk, money available etc. You can get access to no money down deals which may be a way to get on the ladder. With regards your bad credit, lenders will lend to discharged bankrupts, so don't worry about it too much. If you would like more specific advice on what you can borrow based on your circumstances, get in touch and I will discuss with you in detail. Regards,

Zubair zubair@ip3.co.uk

Thanks to both of you for your replies, im going to email you this evening Zubair, thankyou!

And im just at the zopa site now, seems like a good site, and idea!! It does say "creditworthy" people though, so im not sure how far i will get there.

Even if a mortgage company lent me £20,000. I could still buy somewhere, and get on the ladder! Im not after anything expensive and unrealistic.

Oh, no i dont play for charlton lol, i wish i did ;o)

good luck matthew on the property quest!

tom

Listen to the above wise advice.

Firstly get rid of all the debt. You will make more money instantly by not paying interest on your loans, overdraughts etc.. (i'm assuming you have them) Don't overstretch yourself too soon.

Assuming you will get your own property first then this is the best idea. Next after time, when your property rises in value and so do your wages then you will be able to remortgage your property and get a deposit for your first investment. Sometimes it takes time. It took me several years, as I took out a big career development loan of about £40k when I was about your age and now, the house has gone up in value and I've released some capital, I've now had one BTL place for a while and now just buying 2 more off plan. (took me 10 years to get started though). So you have got to be patient but it will happen.

Good Luck.

Thanks Funky Me,

This is all good advice, if im learning from people in the position i want to be in, i cant go wrong.

Hope all my questions are ok.

Matt

He is right. get rid of all and any debts and try to start saving.

Matthew....you need to consider whether it's a mistake to be so anxious to "get on the ladder" in the first place. Getting "on the ladder" with bad credit and little or no deposit will, without a *doubt*, lead to a negative cash flow. That's potentially a LOT worse than not being on the ladder at all.

First of all, you'll be paying above-market interest rates, and BTL is difficult enough at LOW rates...but add 1% to the rate and it's REALLY difficult.

Are you able to subsidise the payment every month? Are you able to keep making the mortgage if you get a vacancy? If the answer is "no", you're not ready yet.

The best advice I can give you is to NOT try for a normal buy-to-let at this stage. You'll be losing money every month that you probably can't afford (assuming...and this is a BIG assumption...that you can find a lender willing to make a 100% mortgage to someone with bad credit). Talk about the frying pan into the fire.

There's no formula for getting started from scratch, or else everyone would be rich. Everyone has to make their own way in the beginning, unless they have rich parents. I didn't...I bought a dump for 10,000 with a 1,000 I borrowed under the threat of death. I risked my life in a VERY dodgy neighborhood, fixing the place up for a couple of months. Eventually, I sold the place for a 10,000 profit, which was the money I used to start my next deal.

Don't expect anyone to tell you exactly how to proceed. You have to find your own way...and it's NEVER easy.....but it's not impossible. Be creative. Find a source of money to use as a deposit...no lender, to be realistic, is going to make you a 100% loan without some of your money on the table. Where to look for your share of the money? Maybe it's a relative...maybe a cash advance on a credit card.....who knows...

And you'd better become a bloody expert on the local market you plan to work in. You can't afford to screw up the first one. You'll have enough troubles in the early days without overpaying...or buying a dog.

Don't be discouraged by all of this.....just take it as your right of passage. The start is SUPPOSED to be tough. That's what keeps most people out of it. They'd rather watch game shows on TV than put themselves at risk.

Be different. Take chances...but not stupid chances. Educated risks.

That was great reading, and great advice, thanks John.

I wont rush into anything, i have been researching this hard for over a year now, and ive not even gone for a mortgage application yet.

I like what you said about how you started, i also thought about a cheap place for £10,000, which you can buy for that price in scotland, 3 bedrooms too, as you can imagin, its in hell, but it would be to get me on the ladder, learning, and most importantly, i need the experiance of it.

Im going to save a deposit up before i buy anywhere.

Does anyone have any work going where i can actually learn about property? That would be the day ;o)

Thanks again,

Matthew