Pssst, so you ready? Really excited to be sharing my Simple path to Financial Independence, using Buy Refurbish Refinance (BRR). Use this guide to help you create £4,000 per month through property investing in 5 years 🙂
Now *disclaimer,* although this is a simple path to Financial Independence, this does not mean this path requires absolutely no work during this 5 years period. I’d love to think I am a magician!… But I’m not.
However, what I can say, is that this path is very ‘light touch’ compared to other wealth creation strategies.
Once set you up it will look after you nicely, without much stress. Like a cup of tea.
WHAT THIS PATH USING BRR WILL GIVE YOU…
A life 
without major stress, (so you can enjoy more of the simple stuff,) and…Allow you to quit your job as I did.
I believe if you follow this process you will genuinely be able to enjoy the simple life where you’re no longer trading your time for money…
So you can do what you want, when you want, on your own terms.
As mentioned in my previous blog, although there are other strategies that can create £4,000 net per month quicker, singles lets are dependable, are reliable and do what they say they are going to the tin.
In fact, if this path was a physical person, I would name it after my late ‘Grandad Joe’, you see he was dependable, consistent and traditional, granted he was slower than most, but like the tortoise and the hare, he always came out on top.
This strategy will get you to Financial Independence faster than 98% of the population.
Ok so let’s get cooking with the numbers and check the ingredients to get us to 8k gross 4k net in 5 years, shall we?
THE INGREDIENTS FOR SUCCESSFUL USE OF BRR.
- A Good Credit Score.
- 40-80K if you don’t have that there are multiple ways to get around it, check out my ‘WHY MONEY IS NEVER A PROBLEM VIDEO’
- Time. To either do the work yourself. Or find work with a property sourcing company that can do the work for you.
WHAT ARE YA GONNA BUY?
You’re buying 2 Properties for £85,000 each in areas offering good capital growth prospects. (Will share about areas I’m investing in, in upcoming blogs and why.)
Then you’ll put down a 25% deposit. (21,250k)
Therefore you will be borrowing a Mortgage amount of 75% at £63750
You’ll also have Stamp duty tax £2550.00
Legals £700
Survey £500
So total to pick up keys = £25,000
So in order to pick up 2 of these bad boys…
You’ll need = £25,000 x 2 £50,000 🙂
THEN WHAT?
You then spend 15k on refurbishing each property.
The general rule of thumb in the property world is that for every £1.00 spent you add £4.00 in value.
So £15,000 x 4 = £60,000
So that should increase the value from £85,000 to £145,000. (£85,000 +£60,000)
However, I like to be conservative (always a good thing) and say for everyone £1.00 spent we’ll add £3.00 in value.
So £15,000 x 3 = £45,000
£45,000+ £85,000 = £130,000.
So each property now costs £25,000 + 15,000 = £40,000.
Therefore you would have spent a total of £80,000 (£40,000 x2) and you’d now be the proud owner of two gorgeous refurbished properties.
TIME TO BOOMERANG YOUR MONEY BACK AND REPLENISH YOUR POT! Also known as ‘BRR.’ Buy Refurbish Refinance.
You then go back to the bank and ask for 80% mortgage on the new value £130,000.
£130000 x 80%= £104000
You then pay off the existing mortgage of £63750 = and that leaves you with £40250.00
As you’re going to do this on both properties, multiply this by 2 … And guess what?
WHOA LA!
Your £80,000 is replenished! Woo hoo.
Ready to buy another 2? THOUGHT SO 🙂
So you wanna aim for 4 a year, two during the month the first 6 months of the year and 2 during the 2nd 6 months of the year.
THE PASSIVE INCOME BABY
So you rent each one out for £625 per month.
You then have to deduct your costs.
The Costs.
So now you have a new mortgage of £130,000 x 80% = £104,000
£104,000 x 3.50% = £3941.60/ 12= £303.33
£50.00pm for maintenance & voids
£15.00pm insurance
Total =£368.33
£625-£368.33 =£256.67
Approx 20% TAX = £51.33
Net Profit = £205.34
Buy 4 a year for 5 years with by rinsing and repeating the process
= £200×4 = £800.00pm
£800×5 = £4000 pm per month net!
So in 5 years
IN 5 YEARS TIME…
(£130,000 x 4) x 5 = 20 Properties valued at £2.6 Million
Half a Million pounds of equity= £130,000- £104,000= £26,000 x 20 = £520,000 (probably more as haven’t factored in growth)
Cash Flow of £4,000 net..
NICE EH?
_____________________
All you need is £80,000 🙂
Simples 🙂
To find out how you can do this in your area leave a message below
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