16 Feb Tip 1 – Create your property buying criteria
It seems the flavor of the month to be talking about tips and lessons so i thought i would start my own mini tip mail shots / dialog. It gives me something to talk about if anything else !
My first tip is to create a property buying criteria. This will force you to sit down and think about your strategy and direct you towards what you are wanting to achieve in your property business. Once you have defined your very own buying criteria that will lead you towards your goals then stick to it. If a deal does not meet your buying criteria then you can either move on and or package it and move on. No more time wasting trying to make a deal out of a none deal (for you)
Each person will be different. My personal buying criteria is as follows. (its always evolving)
Can i buy it and refinance all of my cash out and have it making me at least £250 / month after all costs ?(less than 1 years cash flow left in is ok with me) I am looking for an infinite return on my money or at least a return into the many hundreds
Can I split it? (into flats or multi – units / micro flats / studios) and sell 1/2/ flats off so I’m left with at least one with no mortgage ? (if title splitting)
Can I do it up and sell it and make 20K or more ?
If it cant work for me can I sell it to an investor based on yield ?
I offer packaged single lets producing +7% yield and HMO’s producing + 12% (Return on capital employed)
And more recently …..can I develop it and pull all the funds out ? My focus this year is to find building plots with development potential.
Its very important to be able to cash out of your deals otherwise you will run out of money. If i cannot cash out the deal then i look to see if it can be sold for profit.
Everyone will have there own take on this and that is healthy……no one method is right or wrong but having a buying criteria will certainly help guide you on your way and help you to stick to your business plan.
What is your buying criteria ? Can i help you define one ?