The 3 Ninja Investor Strategies

If you read my last blog post you’re probably wondering what those Ninja Investor Strategies I mentioned are:

• Strategy 1: 50% Below Market Value (BMV) strategy
• Strategy 2: 100% refurb strategy
• Strategy 3: 90% flip strategy

They’re all possible using bridging finance with the right lenders to turn you into an investor who can operate like a cash buyer.

Here’s a brief overview of each one:

50% Below Market Value (BMV) strategy

This is based on finding properties that are really cash-buyer only territory.  This is usually because the vendor either wants a quick sale for some reason or because they are considered unmortgageable by buy-to-let lenders.

When a mortgage-dependent investor finds a property that clearly can’t be mortgaged they walk away.  This leaves the field clear for the few investors that have the knowledge of how to buy this type of property.  Generally, these are cash buyers, but with the right strategy you can operate as a cash buyer.

Bear in mind that vendors with an unmortgageable property usually know it’s unmortgageable – and that means they can only sell to a cash buyer, at a much lower price than the property’s full value.  Because that’s how cash buyers operate.

There are many reasons that properties are unmortgageable and most, but not all, have profit hidden in them if you know how to release it.  Don’t jump in until you’ve got clarity on why this property is unmortgageable and are sure you can turn that into a profit.

When you’ve assessed the property and answered those four critical questions I mentioned in my last post, it’s time to make your move.

Now you can make your offer – and don’t by shy of starting low.  50% BMV is a good place to start.

100% refurb strategy

This one is about buying properties with a minimal deposit, leaving your cash for the refurb, by delaying completion.

This is the Cash Buyer Mind-set at work – and it’s a technique very few investors use.  Most of them wouldn’t even consider this kind of negotiation – leaving the field free for the Ninja Investors who have the knowledge and know when and how to use it.

The objective is to have no money left in on the day you complete – or at least a lot less than the 25% deposit plus your refurb money.

Here’s the strategy in a nutshell:

• Find a vacant property that needs a refurb
• Exchange quickly
• Get the keys on exchange
• Do the required refurb between exchange and completion
• Get the lender to lend on the post-refurb value, rather than the purchase price.

90% flip strategy

This strategy will show you how to use techniques to turn around a property quickly – and make your profit fast.  Not only does this reduce the deposit you’re investing, but allows you to get your money out quickly too – even more so when you’re buying-to-sell as you can get the property back on the market at the point of purchase.

This strategy blows apart the preconception that a 25% deposit is required to buy an investment property.  Better still it works in a variety of situations. 

• It works great for smartly presented houses where no refurb is required, but the owners are motivated to sell.
• It also works if you want to buy a repossession.
• It also works if you want to buy at auction.
• Interestingly, it works if you want to sell at auction too.
• Lastly it will work if the vendor won’t go for the 100% refurb strategy

Step 1:  Complete the purchase – using bridging finance rather than a BTL mortgage.  Some properties won’t be mortgageable.

Step 2: A quick exchange of contracts.  This can be done as soon as your loan is approved and as soon as your solicitor is able to arrange it.  We should be talking days here, rather than weeks and certainly not months.

Step 3: Quick completion.  Again, that will be as fast as your solicitor is able to do it. Often this will be in 28 days or even quicker.

Step 4: Execute your exit strategy from the day of purchase.  This means if you’re planning to sell, put it on the market.  If you’re planning to hold it, you can begin the remortgaging process, with the right choice of lender.

This is just the tip of the iceberg

Clearly there’s a lot more to know about how these strategies work and, if you’d like to develop the Ninja Investor skills I share these in detail on the Ninja Investor Programme.

You can learn more here:

• Contact Kevin Wright over on his Facebook page.
• Browse the Recycle Your Cash online training library by clicking here.
• Attend an upcoming 1-Day Property Finance Masterclass event - Book in here.