How to Build a Property Portfolio Using Other People’s Money

In this article, I’ll tell you how you can start investing in property even if you have no capital of your own to invest. 

And it doesn’t involve spending years exploring ‘no money down’ strategies or deal packaging to build an investment pot because that would take you years.

So follow these steps, and you’ll soon have a property portfolio despite having no capital of your own. This is how you can build a property portfolio using other people’s money instead of your own.

Build a property roadmap

The first step is to know exactly where you want to go and what you want to be doing in your property business; next month, year, five years, etc.

So think about ten years from now;

  • What does your property business look like?
  • What are you doing in that property business day to day? 
  • Are you doing projects? 
  • Are you managing tenants? 
  • Are you looking at bigger deals, new build developments, buying lands?

 However big you want your property journey to be, you need to be clear on where you’re going.

Once you’ve built your roadmap and know where you want to be and what you want to do, you need to break that down into smaller goals.

Set 12-month property goals

So, you’ve built your roadmap, and you now need to map out the following 12-month goals.

This 12-month goal will be around revenue, property, and the strategy you want to be doing. When you’re planning this, plan it as if money was no object. For example, you might want to be flipping, re-financing and holding, single buy-to-lets or HMOs. Whatever it is, get a clear idea of what you will achieve in the next twelve months.

And a word of advice, don’t get distracted by rent to rent, lease options, assisted sales and deal packaging. So effectively, step one is all about knowing where you’re going, building the foundations, and understanding the strategy, you will focus on for the next twelve months.

Do your research

If you want an agent or direct vendor to think of you when they think of flips in Leeds, you need to become the authority for that strategy and that area. You want to become the go-to person for agents, direct vendors, builders, financial advisors, etc. To do this, you need to know what good looks like in your area.

So make sure you research property types and the done up values. You need to know rental if it’s an exit that you will have to rent that property out and get a clear idea of what the numbers look like.

It will take time to become the authority in your area for your strategy, but the more focus and effort you put into this, the less time it will take. And that focus means that everyone you speak to will know exactly what you do, exactly how you do it, and they’ll know that you’re the person they’re going to contact when a lead comes through.

Find it

So with that focus comes your lead generation, which is effectively the “find it” stage. When you find and speak with agents, remember that you’re offering a solution for the properties they struggle to sell or achieve the values for.

Think of yourself as a solution provider, a service provider; a property investor, and approach agents with that attitude.

If you go in all guns blazing trying to find any projects, looking for the stuff below market value or any deals that you can get, you’ll be ignored and laughed out of the office, even if they make out they’re going to find something for you; they won’t. 

Don’t ask for deals that don’t exist.

And because you’ve done the area research, you’ll know whether you can add value to the property or not, and this is the clarity you need when you go into agents. And remember, you’re not going to get massively below the asking price because the property market is buoyant.

The lead generation, direct to vendor and agents, should happen simultaneously. And while building up your brand authority as an investor, you’ll build relationships with your network and find investors who have the capital to invest in your projects on short term returns.

Short term returns

The right type of investor for someone who has no capital (i.e You) is one who is looking for a return over a short period. They’re not looking to invest long term or put it into bricks and mortar; they want a return within 12-18 months maximum, which means you can give them a better interest rate than they would get anywhere else. They’re looking for security, confidence and knowledge that you will give them the returns by doing the property projects that you’ve promised them in the first place.

So if you want the investor to be happy, return and invest again; find the investment, find the deals, pair the two, and then give them their return within the timescales.

Making offers.

Unfortunately, your offers are not likely to be accepted straight away; that’s just the nature of the beast, but don’t get into bidding wars of offering multiple times. Instead, stick to a “two offer process”. First, offer, leave it and follow it up. Because ultimately, in property investing, the money is more often in the follow up than the first initial offer.

Make sure you record your offers in a spreadsheet or a CRM. However you’re going to operate in the short term; make sure that you have a follow-up process where you’re chasing until that property either sells or comes off the market. Even if it comes off the market, keep an eye on it to see if it comes back. 

If you do all of these things simultaneously, consistently and persistently, you’ll find the lead pipeline turns into a fully funded deal pipeline with other people’s money.

And you’ll have built that property portfolio for yourself in no time.