When you've got less cash to invest, you'll have to put in more effort and accept more risk

to get the same result.

Option 1:
Strategy
Focus on ONLY rental income (capital gain, if any, is just a bonus)

OPTION 2: Refinancing
Strategy
Focus on ONLY rental income (capital gain, if any, is just a bonus)
- Bridging finance
- Buy poor condition house
- Refurb
- Refinancing: Replace bridging finance by mortgage
Financial Model

Poor condition After refurb, refinancing:

House price 55,000 80,000
Equity 16,500
Debt 38,500 60,000

Initial investment 1
Deposit 16,500
Stamp duty 1,650
Refurb cost 10,000
Finance cost 3,850
Purchase cost 1,500
33,500

Cash-in from debt 60,000

Repay bridging finance 38,500
Leftover 21,500

Initial investment 2 12,000

Monthy saving 1,000 ==> Buy 1 property/year

Risks/Checklist investment
1. Finding the opportunity in the 1st place
2. Accurately judging the refurb cost --> how much you can afford to pay for the property and still
3. Successfully negotiating the purchase at that price
4. Conducting the refurbishment on time and on budget.
 5. Convincing the mortgage leader's valuer that the property is, mere months later, worth significa

OPTION 3: Invest a lump sum

ore risk to get the same result.

Bridging finance
Interest rate
- per month 1.00%
- per year 12.00%
Duration
- months 8
- years
Additional fee (fixed) 2.00%
Maximum A's value 70.00%

, refinancing:

21,500

Monthly P&L Annual 4 years

Rental income 577
Mortgage interest 250
Building insurance 20
Management fee 57.7
Repairs allowance 57.7
192 2,203.40 ###

ROI 18.36%

rd to pay for the property and still get the margin you need
mere months later, worth significantly more than you paid for it.
Mortgage
Interest rate
- per month 0.42%
- per year 5.00%
Duration
- months
- years 20
Additional fee (fixed) 0.00%
Maximum A's value 75.00%