3 ways to do the property without your own money |  Money matters | Touchstone Education
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3 ways to do the property without your own money | Money matters | Touchstone Education

– Hello, I’m Paul Smith,
I hope you’re very well. And welcome to this week’s
edition of Money Matters because after all money does matter. So, what are we looking at this week? I’ve been set a challenge by the team, and they want me to share with you over the next 15 minutes or so three ways in which you can
become a property investor with no money. Literally no money. Okay, that’s quite a
big challenge, isn’t it? Because everybody knows
to get into property, you need money. Well, you do, but it doesn’t
have to be your money. (upbeat music) So, let’s give you a little known but very simply accessible, I wouldn’t even call it a secret, it’s just something you could do. Did you know you can get a 100% mortgage? How does that sound? The banks will give you 100% mortgages under certain conditions. Don’t think they give it to anybody. But let me give you a practical example. I’ve got three sons, three daughters. My middle daughter is 18 years old. She’s called Lidia. She’s at university. Did you know that one of
the things that you can do to get a 100% mortgage is you can, your son or daughter that’s at university can get 100% student loan for a property and you as a parent just
have to act as a guarantor. Did you know that? So, let me give you Lidia’s figures. Lidia’s now in her second year. In her first year, she lived
in the halls of residence, and she used to pay 490
something pounds a month, I think it was 496 pounds a
month for a halls of residence. And that’s not too unusual as a student, 500 quid a month for a room
in a halls of residence. So what she can now do because her university
is the West of Scotland, which is a place called Paisley, she can buy a very nice
virtually new build, so two, three-year-old type property, a couple of parking
spaces, that sort of thing, three-bedroom flat, for 60,000 pounds. That’s a sort of property. Obviously it’s gonna be city dependent and I’m just talking about
what my daughter can do and what she is doing ’cause that’s what I know about. So, let’s say your daughter or son bought a 60,000-pound flat. Let’s say the 100% mortgage rate was an interest of say 3%. Well, 3% on 60,000 pounds, 1% will be 600 quid, so 3% is 1,800 pounds, which is exactly
150-quid-a-month mortgage. Do the numbers in your own time, but I can promise you
it’s 150 pounds a month. So she lives in it, and then she lets out the other two rooms to two of her mates. How good is that? And those mates are used to paying 496 pounds in the halls of residence, so they pay the 496 pounds to Lidia, so suddenly she’s got an income, (mumbles) of a 1,000 pounds a month from letting out the two spare rooms. Little top tip for you again. Look up rent-a-room allowance
and see what you find. Just Google it, rent-a-room allowance. Don’t spend time on it, just Google it. So, her mortgage is 150 quid and her income from her two
tenants in the other two rooms is near 1,000 pounds a month. Even after she’s paid her
bills and this and that and paid for her groceries and council tax and everything else, she should be left with a good
few hundred pounds a month. So, instead of paying for a
room in the halls of residence, suddenly she can have a free flat, no money in, and she can earn hundreds
of pounds a month. So never mind leaving
university with student debt, she can leave university
with an investment property and a good chunk of savings. Which sounds better, student debt or a free
property and a lot of savings? Life’s as hard as you make it, often. Task for you. Go and speak to a mortgage advisor and ask them under what circumstances can you get a 100% mortgage. Okay, that’s number one. Number two. Let’s have a look at this a different way. Let’s say you’ve got no money and you want to make some
profit from property. Okay. How about deal sourcing? What’s deal sourcing? Okay, well, deal sourcing involves looking at a load of investment property and discovering where the deals are. The good deals. And a good deal could be anything, it doesn’t have to be, most people think, oh, deal sourcing, it’s got to be below market value. It doesn’t have to be. For example, friend of mine, sourced a bungalow and
it was at market value. It was a 200,000-pound bungalow and it was available for purchase at 200,000 pounds. Well, how the hell is that a deal? It’s a fantastic deal. A fantastic deal. I’ll give you the detail in a second. But imagine you’ve got a bungalow, it’s available for 200,000 pounds, and you’ve agreed to purchase
price of 200,000 pounds, that’s not hard to do
with a vendor, is it? It’s on the market for 200,000 pounds and you offered them 200,000 pounds. Where’s the catch? How do I earn money out of this? Okay, write this down. You purchase the bungalow
on an assignable contract. Now, an assignable contract means you can assign that
contract to somebody else without you actually buying it. So you’re agreeing to buy the property but you then pass it on to somebody else on completion day and they buy it. Assignable contract. Write it down. The alternative would be, on completion day you buy it, legal fees and stamp duty, you then sell it to somebody else, legal fees and stamp duty. So you’ve got two lots of legal fees and two lots of stamp duty, and stamp duty is pretty stingy these day. So, why was this 200,000-pound bungalow such a fantastic deal? Well, this bungalow had a nice garden. It’s a corner plot. You’re with me yet? Building plot. So, between agreeing to buy the bungalow on an assignable contract and selling it to somebody else, this friend of mine
got planning permission for another bungalow. And that plot, just the building plot
with planning permission, which is part of that bungalow’s garden, 60,000 pounds. Does that sound like a deal now? 200,000 pounds for a
200,000-pound bungalow and a free 60,000-pound building plot. Is this sounding more like a deal now? So, how much do you think you could sell that to somebody else for? 210? 220? What do you think? So, just by going to look at a bungalow that’s got a building plot in its garden. Oh but Paul you can’t do that because you can’t apply
for planning permission if you don’t own the property, can you? Or can’t you? Well, you can, actually. You can apply for planning
permission on any property in the whole of the United Kingdom without having to own it. Did you know that? Many people say to me, “Oh, Paul, education’s expensive.” It’s not. I’ll tell you what’s expensive. Ignorance. Ignorance is bloody expensive. So, would you agree I’ve given you two ways in which you could buy
property for no money? I hope you would. So, now, let’s have a look at a third way in which you can buy
property for no money. Or virtually no money. Is it okay if it costs you a pound? A pound all right? Virtually no money? Okay, let’s go with a pound. I’m gonna take that silence from the other side of the camera as permission to invest a pound. How do you buy property for a pound? It’s called a lease option. You don’t run into
somebody’s house and say, “Would you do a lease option?” ‘Cause they won’t know
what we’re talking about. If you start rabbiting on, “Oh, I saw this video and it’s great “and Paul knows what he’s talking about,” and you start foaming at the mouth, they won’t give you a lease option, they’ll call the police. So, how and what is a lease option? Scenario. Live scenario. Locally to here, locally to Doncaster, one of the villages about Doncaster, there’s a farmer. And he bought a property for one of his relatives to live in. The relative wasn’t local. I should be careful with names and things so I won’t, no names, no (mumbles). The relative came and
lived in the property and, wait for it, younger person, parties, trashed it. Farmer, not very happy. Relative, bit scared, runs away. Farmer is now the proud
owner of a trashed property. Farmer didn’t want to
be a vital let investor. Farmer wanted to provide a nice safe place for his relative to live but his relative has now let him down and smashed the property up. Farmer doesn’t wanna be a
vital let investor anymore. Farmer wants shot off property. So, 60,000-pound property. Farmer is quite happy to
let it go for 50,000 pounds. So here’s how it could work. And this, by the way, it’s
got no mortgage on it. I don’t know if you know this or not but 40% of the properties in the UK have got no mortgages on. So farmer doesn’t really need the money, just wants certainty that someone’s gonna take
this property off him and take responsibility away. So, the lease means I take over responsibility
for farmer’s property, I guarantee him that whatever
any future tenant does, he won’t have to fix it up and he won’t have to manage the tenants ’cause I’ll do all that for him, and I’ll pay him a certain
amount of money per month. Now, it’s a 400-pound-a-month property, so I give him 400 pounds
a month for it, okay? I then put a tenant in. Now, the tenant that’s going in there is called a tenant buyer. So I’m putting a tenant in there that’s actually giving me 450
pounds a month with a top-up. And over the next seven years, they’re gonna save up the
deposit so they can buy it. I hope you’re following me. So, this tenant buyer is
buying the property off me and I’ve got the option
to buy it from the farmer. So I’ve agreed a purchase
price with the farmer of 50,000 pounds, and the tenant buyer has
agreed a future purchase price in seven years time with
me of 60,000 pounds, ’cause that’s the current market value, plus 3% a year. So, if you do 3% a year for
seven years times 60,000 pounds, if you just do 60,000 pounds times 1.03 times 1.03
times 1.03 seven times, it comes to 72,000 pounds. So they’re agreeing now to buy
it from me for 72,000 pounds, and I’m agreeing to buy it from the farmer for 50,000 pounds. So that means in seven years time I make, on top of the
profit from the rent, I make another 22,000 pounds. Did you like that one? That’s the lease option
blended with a tenant buyer. So, what I’d like to do on
this edition of Money Matters is I’d like to engage your
support and your brains. What I’d like below is I’d like
you to list additional ways in which you know or you think you can buy property with no money. And who knows, whoever
puts the most there, we might even give him a little price. So, make a list of all
the ways that you know you can buy property without
using any of your own money. So, good luck with that one. Okay, we’re coming to the end
of this week’s Money Matters. So, tune in next week
for next week’s edition and see what we’ve got in store for you. As always, if you’ve got any questions
that you want answered, once a month we do a special
Your Questions Money Matters, so just pop your questions about anything into the comments below any of the videos, and the team goes through, they pick out the most
interesting questions, and they give them to me
to answer once a month. So your questions answered by me, just put them in the comments below. Please like Money Matters, please subscribe to the channel if you’re not already a subscriber, please recommend it to your friends. Now, if you’ve had value, my ambition is that as
many people as possible will get value from these
Money Matters videos, so just share it as widely
as you possibly can. And I wanna thank you for your
time invested in watching me talking about money and why it matters. You’ve been wonderful, I’ve been Paul, and I look forward to
speaking to you next time. Bye bye. (soft music)


  • Shaun Hennessy

    What happens when the planning notice goes up outside the bungalow and the seller sees it and decides to pull out of the sale?
    They now have building plot and you are out of pocket for architects plans etc?

    How do you stop this happening?

  • Jon Hart

    Adverse Possession – formerly known as "squatter's rights". See http://www.right-of-way.co.uk/unregistered-land/what-is-adverse-possession for more info.

  • Passive Money Project

    I traded a lawn mower for a boat, then a boat for two boats, then the two boats for a downpayment on my first house! (I made a vid on it). I did it over 8 months but I feel like a never would have been able to save up enough money for a down payment just working my job! Opportunities are all around us. I wanted to be able to provide for my family!

  • lil pump

    Hey I have been watching your videos for a while now I think their great I have a question what would say those people who think that rent to service accommodations is not a sustainable business?

  • My Castle Property— Financial Freedom Vlog

    Hi Paul — Re: Buying Property with none of your own money.
    In addition to: 100% student mortgage / Deal packaging / Option Agreement
    You could:
    – Raise Private Finance (I'm doing this at the moment)
    – Get a big brand tenant to sign a lease for a vacant Commercial property before you complete
    George & Sarah https://mycastleproperty.co.uk

  • Rainbowgirl144

    Hi Paul,
    Those are very useful tips and very inspirational. Thank you for sharing your knowledge. Have a great day!

  • Andre De Oliveira

    Been on Paul Smith Six Figure in London last week and I've got to be honest, I've heard some people reviews describe this man as the best in the business, but I can confirm he's damn good at what he does. He's a great communicator and a very humble and a down to earth guy. We're going compliant this week and are going to start implementing what we've learnt. Thanks, Paul for showing us what's possible. 👏👏👏

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