Written by Lewis Ridley
Updated over a week ago
This article will provide a step-by-step method you can start your investment journey and build an impressive property portfolio with just £50,000. Let’s jump straight in.
When you first start out, you’ll be a little newbie to the world of property investing. Even with £50K, you’ll still be seen as a risky investor to lenders and banks, who you’re ultimately going to rely on to help you cover the rest of your first property purchase.
Therefore, the first step in all of this is starting small with a simple buy-to-let property. Ideally one that is need of refurbishment.
You can find properties in need of a refurb using our platform.
Starting with a simple refurb project helps to establish you in the property investment market, understand what it takes to manage a small-scale project, and start to build your reputation as a reliable investor to banks/lenders.
Going for a refurb project also enables you to utilise the £50K effectively. Properties in need of refurb are cheaper and can even be purchased with unique finance options, such as bridging finance. Banks may even be willing to cover the refurb cost as well.
At the start, you can save costs by doing the refurb yourself. This also helps you understand the process behind a refurb so when you do start outsourcing the work, you’ll have an appreciation for what’s being done.
With something like the BRRR strategy (buy, refurbish, refinance, rent), you can pull money back out of your initial investment and then rent for steady cashflow. This helps you compound your efforts and speed up your portfolio development.
Once you’ve completed your first buy-to-let refurb project and have pulled out a good sum of cash when refinancing, it’s time to move on to your next project.
With the first project now complete with the property renting out, you’ll have another deposit pot to invest in a refurb project and you’ll start making steady cashflow.
With the increased experience and reputation, banks and lenders will look more favourably on you as well. This can provide you access to better financing options and deals, as you now have evidence you can successfully manage and deliver on a property project. This also means you may be able to start applying for HMO mortgages, which are harder to get if you haven’t got a good reputation in the property market.
With these, you’ll be able to start refurbing and converting homes into HMOs (house in multiple occupation). Giving you greater cashflow from your portfolio.
With greater lending options and experience under your belt, it’s just a case of rinse and repeat. Find another refurb project, fix it up, refinance, and rent out. Simples.
As you move on to more projects, you’re inevitably going to run into scaling problems. To keep the ball rolling smoothly, creating a team can help you take on multiple projects at a time, speeding up the portfolio development.
This might start off with the outsourcing of a refurb project to a builder. This will allow to tackle multiple houses at once and focus solely on finding opportunities.
Next, you’ll likely start to outsource the sourcing process. This will involve hiring someone to find the opportunities for you, including viewing properties and doing due diligence.
With a well-developed team under your management, scaling becomes streamlined, and you can begin picking up projects around the country.
With your property projects scaling up and a team under your belt, you can start to pull yourself out of the process and start narrowing down your ideal strategy.
If you’ve been using BRRR as the main strategy, it can be good idea to start setting out criteria for what you want in your portfolio. This will help focus your business and filter out opportunities which don’t align with your portfolio goals.
However, completely removing potentially profitable deals from your proximity is leaving money on the table. You could always start diversifying your income stream by sourcing deals for other investors.
After all, some investors might see gold where you see silver.
Start bundling up the opportunities you or your team have researched and decided they’re not for you. Take these to the open market and find investors who would be willing to buy these deals off you
Sourcers can charge up to £5,000 for a good deal as it saves investors a ton of time with sourcing, viewings, and due diligence
If you’re looking to start diversifying into other strategies, consider property sourcing for the deal that don’t fit the bill.
With your portfolio starting to take off and your reputation building, it might be time to start moving to larger projects.
This could include development projects or large-scale refurbs on things like old commercial units. These require a lot of capital to leap into as well as strong relationships with lenders and builders.
Property development is beyond the scope of this article. However, it’s important to know where you can go once you’ve started to scale your initial buy-to-let portfolio.
The sky is the limit, even with a small starting pot of £50K.
Above you’ll discover the steps to building a property portfolio with just £50K. obviously, the information has been simplified so you can skim over the basic steps.
We have a ton of more in-depth information that breaks down the specific steps in more details on our website.
This includes topics around financing and deposits, refurb advice, and so much more.
Additionally, to simplify the sourcing of properties and reduce the time it takes to start making money with property, try our platform for free now. It’ll help you find your first property faster.