I’ve seen lots of successful partnerships in the UK (now I’m in Brisbane looking to partner and looking to invest). Generally they’ve been successful because each person is bringing something to the table the other wants or needs. For example, one person has money but no time or knowledge on finding deals… another example, a builder and investor… one has skills and the other has business acumen.

Understanding and confirming the intention of the partnership and the exit strategy are key.

Corey makes some good points but in my opinion problem partnerships are a result of poor up front planning and communication. Find the right person/ people, get your documentation squared away and go for it.

Walking to run,

One approach would be to look for a PPOR that you were both happy to live in and offered the opportunity to add value. This could kill two birds with one stone… 3 actually…

In your original post you mention “2. Rent a granny flat at the new property”. Finding a property that offered you the opportunity to build the granny flat (or an extension) would allow you to create equity that you could increase your borrowings against for new IP(s) as well as provide an income stream.

So you get your PPOR, an income stream to alleviate the cash flow burden & increased equity to borrow against.

Hi Richard,

Thanks for coming back to me.

I’m not disputing in any way that it can be done. Just very interested in how you structure the deals and finance for such purchases?

Perhaps you could give the breakdown at a very high level of how you would do this?

I’ll give you an example of my most recent project to give you an idea of what I’m Looking for.

Clapham Common 1 Bedroom Flat – Renovation
– On The Market Value £285k
– Purchase Price £265 (motivated seller, retiring and disposing of portfolio)
– Renovation Mortgage requiring 25% deposit, with immediate remortgage on completion of works
– Renovation Cost £25k
– Total Money in deal £106k
(25% Deposit £66k)
(Purchasing Costs £15k (ouch – I know!))
(Renovation £25k)
– New Valuation Post Renovation £365k
– Refinance @ 75% LTV (£273k Mortgage)
– Cash out clear £76K
– Cash left in the deal £30k

I’ve whipped through the numbers quickly off the top of my head. But essentially in 2 months I’ve created £60k of profit with a basic strategy of buying well, adding value and refinancing. Because the rents are so high in London this 1br flat creates £392 cashflow per month also. I can now recycle the majority of my initial deposit in another deal.

I’d like to do something similar to this in Australia :-)

Thanks

Mike

• This reply was modified 10 years, 1 month ago by  Mike. Reason: Formatting screwed up
• This reply was modified 10 years, 1 month ago by  Mike. Reason: More formatting

Hi Richard,

Would you mind elaborating on a client scenario that you mention in your post?

I’m an Aussie based in the UK and have a portfolio or properties in London but considering diversifying with some property back home.

Also, what do you consider to be rapid development. For me, starting out in London was difficult because of the high cost of entry into the market but I have found it’s very much a hockey-stick in terms of growth.

Thanks

Mike

I look forward to Steve's comments on this.  Go on Steve!

Hi,

I recommend you take a look at http://www.unlockthegame.com.  There is a lot of bs and hype (similar to this site) but there are some really good concepts. 

cheers
Mike