Dear Peter,

Just thought you might like to know about our experiences in the property market, doing no money down deals.

A few years ago myself and a pal decided to try to make some money by buying a house to renovate and selling it on for a few £k profit. We are both married and owned our own houses with mortgages. Both of our houses had £20-30k equity. We had no money to invest in the property, so we raised the cash by both getting home-owner loans for £16k. We bought the first 3-bed terrace for £27k, and did all of the renovation ourselves. After about 8 weeks work it went on the market for £40k. There was little interest, so we decided to try to rent it out at £90 per week. This went very well. The rent covered the interest payments and left an annual cash bonus of around £2k, which was not bad, since we hadn’t invested a penny.

After about six months we decided to get another house in the same area, so we got an buy-to-let mortgage on the first house. Again, we did all of the renovation to a good standard to make the house attractive, and rented it out easily. We continued this process of buying run-down houses and renovating, and now have 10 houses, the latest one we bought 4 weeks ago and are renovating it now. The houses have recently in value to around £65-70k. Along the way, we both got a further advance on our home mortgages, as this is the cheapest loan you’ll get, so two of the houses do not have mortgages on them.

Since we both still work full-time, it has been a lot of hard work, but very rewarding. I must also state that we are both still married and our wives have worked as hard as we have in achieving this! We’ve enjoy reading your newsletters and it has given us plenty of new property investment ideas.

Our basic rules of thumb have been:

• Specialise in houses in one area; this way you get to know the best streets, the going rate for rent, and value of houses.
• Do a quality job of renovating to reduce future repair bills and time.
• Be responsive to your tenants; make any repairs promptly. l Treat tenants as customers.
• React immediately to non-payment of rent; be sympathetic at first, then firm, if necessary.
• Don’t buy the cheapest houses in the most run down areas, as on paper they may provide the best return but you are more likely to get tenant hassles and non-payment of rent.

Chris and Paul