Buying a property with no (little) money

house of moneyBefore we get to the real meat of this article here’s a little brain-teaser that I used to pose to people at property investment seminars:

Q: If you buy a property without investing any money into it and then sell it for a profit, what is your return on investment?

Hint: The amount of profit is irrelevant

I’ll put the answer at the end of this post.

People still pay hundreds, even thousands of pounds for the information I’m going to give you here. Granted this is a very condensed version of what you would (hopefully!) get at one of these seminars.

It’s also worth mentioning that this article was written in the current climate, it’s not a trip down memory lane with out-dated methods of how people used to invest in properties when times were different/better/good.


Things you will need if you have no money; JV [Joint Venture] partner(s), friend(s) or relative(s), willing to lend you money for free, at interest or for a slice of the profit. Otherwise known as OPM or Other Peoples Money.

Things you really REALLY REALLY should have before considering this; Experience. I’m not going to try to quantify exactly how much you should have but if you don’t understand the acronyms used in this article without reading the explanations then you probably don’t have enough.

1. Find a property that is below market value [BMV] – That is, a property that is being marketed for significantly less than what a similar property in the same area would normally be expected to sell for [open market value or OMV]. Why would someone sell a property BMV? For various reasons, I won’t go into them all, but the one you are looking for is because the property is sub-standard e.g. water damaged from a burst pipe, broken/missing kitchen and/or bathroom, no central heating, etc. In short, there must be an obvious reason why the property is BMV (Note – the property MUST be structurally sound). How? Auctions are a favourite but just from keeping your eyes and ears open or befriending a local estate agent can help greatly. There are also companies that ‘source’ properties being sold BMV for a fee (called a ‘finders fee’).

How far below market value does the property need to be? There’s no hard and fast rule here but the minimum I would consider is 20% but it depends on whether I intend to re-sell the property or let it out.

2. View the property. View it again with a couple of different contractors and get quotes for having all the remedial work done to bring it up to OMV. How much work do you do to it/get quoted for? To bring it up to a habitable standard, that means so that someone could move in and live there immediately without having to do anything to it. Get a full structural survey by a RICS surveyor, this is the most detailed survey you can get and although it’s expensive it could save you a fortune if something not immediately obvious is flagged up that could cost far more than you’ve budgeted for to fix. Do the sums, that means add the costs of buying the property, the costs of getting the work done and the costs of selling the property, then subtract this from your anticipated sale price (be realistic, very few people actually sell for the price they initially market the property for), then add another 20% (you may want to run several scenarios from say, 10-50%) to the costs so far for contingencies and see if you’re happy with the projected profit for the amount of time and effort the project will take. If you are still interested…

3. Buy the property with a bridging loan based against the current value of the property (which may be higher than the actual price you end up paying for it meaning you don’t need as big a deposit!) and then get out the OPM to make up the remainder of the deposit, pay fees and get the remedial work done to the property.

4. Sell the property, or remortgage it (for the full OMV releasing equity and repaying all/sum of the OPM) and let it out for a monthly income.

As said earlier this is an extremely condensed run-down of all the steps involved in buying and selling/letting property with none of your own money, this is not for everyone and there are significant pitfalls for the inexperienced and the unlucky.

The good news is, we can help you with every single step involved and we have the experience. From buying, financing, selling or letting, we can do the lot.

To find out more, contact us via our main website –

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