Kevin Wright
What is a Ninja Investor? How to be a Ninja Investor Ninja Investors are property investors just like you, except that they have acquired the knowledge to legally break the rules that the majority of investors think apply to how you finance property deals or projects. They have learned that you can: Buy just like a cash buyer, but without needing a massive six figure bank balance Complete on properties that are impossible to mortgage Buy property even though you have a low income, poor credit or small cash pile Negotiate with estate agents and vendors to close exceptional deals, knowing that you have the back-up for your negotiating position Invest without giving away typically 50% of your profits Borrow up to 100% of the purchase price on the right deals Learn all this in just days not years If you are looking for some of these gems, keep reading. Getting started If you re just starting out in property or thinking about it you ve probably heard about people who are making a fortune and also people who have lost a bundle on property too. It s risky! Even if you ve already started building your property investment, it can be a slow business you have to be careful not to make a wrong step and end up losing more money than you make. But every business involves risk and investing in property is a business. The secret is to know how to make it work and where the pitfalls are so you can steer well clear of them. There are a number of issues that successful property investors know they have to focus on: 2
Cash Buyer Mind-set Fast Fluid Finance Inspired Funding Max. Return on Investment Powerful Positioning Let me explain why each of these areas is important Inspired Funding: Unless you learn how to be more creative than most investors you are going to be severely limited on the amount of properties you can buy before your cash pile runs out. You are stuck in the position of having to put down 25% deposit, mortgage the rest then wait months before you can try getting your cash back out to move onto the next deal, You may also have beliefs right now that you cannot buy property because your income is too low, your credit score too low or your cash pile too small. Too many investors disconnect from funding altogether because they have a limiting belief that too little income or poor credit means they can t buy property. Inspired funding is the understanding that all of the above issues can be overcome by acquiring the right knowledge. Powerful Positioning: The ability to negotiate successfully, with both credibility and authority. If you use the same language patterns every other investor uses, you will get the results every other investor gets. Unless you can build great rapport with estate agents, you won t be getting too many deals to negotiate on. To get noticed, to be different, to achieve superior results, you have to structure your language differently. 3
Max. Return on your investment: If you are giving too much of your profit way on every property you buy i.e. to a Joint Venture partner, the progress you make towards the property objectives you have set for yourself will be considerably slower. If you ve got the deal, got the experience, but don t have the cash you could use someone else s cash in the deal but they want 50% of the profits so you re giving away 50% of the profit. If you are going to JV, there are rules that you must abide by and getting this wrong could lead to you committing a criminal offence. BUT there is a simple solution to keeping all of your profits intelligent bridging. Fast Fluid Finance: Leaving too much cash trapped in a property due to the refinance valuation being lower than you expected it to be derails many an investor. Unless you learn to put yourself in in the surveyor s shoes, begin to understand how they think, this cycle of down valuations will continue. The solution is a simple stepby-step process to get the valuations you want and need. Cash Buyer Mind-set: If you think cash buyers get the best deals, make the biggest profits and that it will take you several years and numerous deals to build a cash pile big enough to become a cash buyer, you are probably thinking with your Mortgage Buyer mind-set. That s OK; it s the way almost all investors think. But you can think, act and profit like cash buyer, without needing all that cash. Here are some Ninja facts about smart property investing Did you realise that mortgage lenders ALWAYS lend the LOWER of purchase price or value, at point of purchase, but a few bridging lenders will lend on value and ignore purchase price? How do you work out the maximum price you should offer on a property? Start with the ceiling price of this type of property in this road, then deduct all costs: The cost of refurbing it to the ceiling value The cost of buying the property The cost of selling the property on or the cost of refinancing if you re holding onto it The cost of the finance you are borrowing The profit you need to walk away with to make all the effort worthwhile The sum total of these costs, deducted from the ceiling value, equals the max price you can offer for this property. 4
You have found that property; it looks good but is it a deal? To really know you need to ask yourself these 4 questions 1. What is the problem with the property that means you can buy it below its ceiling price? 2. Can you solve the problem? 3. How much will it cost to solve the problem? 4. How much will you add to the value by solving the problem? Did you know that for every property that you make an offer on there are only two possible outcomes 1. The vendor finds another buyer willing to pay more than your maximum offer or 2. The vendor eventually realises yours is the best offer they are going to get? You must follow up every offer you make until either 1 or 2 occurs Ninja Investors have learned all of these facts, plus a whole lot more Strategies that address these Ninja Facts Cash Buyer Mindset Ninja Investor Strategies TM Fast Fluid Finance Rapid Cash Recycler TM Inspired Funding Fast Funding Formula TM Max. Return on Investment JV Pro-Fit Retainer TM Powerful Positioning Negotiation Transformer TM To support your Inspired Funding you ll need the Fast Funding Formula module to help you to achieve that positive position where Napoleon Hill s quote is true: Anything the mind can conceive and belief, it can achieve. 5
Powerful Positioning is learned with the Negotiation Transformer so you get the best possible deals by being confident that you can negotiate with credibility and authority. To ensure you get a good Maximum Return on investment you ll need to master the JV profit retainer to learn how you can borrow money for your deals without giving away too much of your profits Fast Fluid Finance is essential to keep your property portfolio developing and the Rapid Cash Recycler helps you to avoid the block of trapping too much cash in a property, which is the big killer in growing a portfolio. Achieving that Cash Buyer Mind-set is all part of the Ninja Investor Strategies 3 strategies that will change forever how you think about buying property. You ll find you can achieve the same levels of success as many other Ninja Investors enjoy. The foundation of Ninja Investing There are only two ways to really succeed as a Ninja Investor: 1. A huge bank balance and plenty of available capital to invest 2. Bridging finance. Very, very few people have fluid cash, so the alternative is Bridging Finance and this is the point where many potential investors stop. Bridging Finance is in their Scary Box! Their belief system has taught them that Bridging Finance is expensive. Compared to what? Yes, the interest rate is higher than a mortgage, BUT You can buy properties that are unmortgageable and deliver high profits. You pay less for your property because you can negotiate like a cash buyer and close quickly. You don t have to rely on joint venture partners and you don t have to give anyone 50% of your profit. Plus you can: Buy properties much faster Buy from auction Refurb properties before you buy them Buy with very small deposits. Know the kind of property you want to buy Are you aiming to rent the property to students, families, multiple occupancy, long term or short term? One-bedroom apartments for professionals, three-bedroom family homes or multi-let HMO s? Find out what you can expect in rent before you start looking at properties. 6
Whilst there are plenty of stories of impulse purchases that have worked out well, there are far more instances of people who have bought a property that looked too good to be true and discovered they have bought a lemon. Research which locations and areas will give you the best return on your investment You can buy properties in some places for a song, but there is almost always a reason whether the property is in poor condition and needs a lot spending on it to make it suitable for lease or it s in an area that people just aren t buying (or renting). An empty property doesn t make you any money. Do your sums! Firstly, you need to know: Who might lend to finance your property purchase How much they are likely to lend Whether you fit their profile of someone they re willing to lend to. For instance, lenders like BTL investors to: Have a full time job unrelated to property with good earnings to cover their mortgage payment in the event of any rental voids. With most BTL lenders, such earnings will need to be in excess of 25,000 per annum. Have a few, but not too many properties. Each lender will have a view on what too many is. Lenders fear that the more properties a landlord has to look after, the worse job they do and their properties value can suffer. Have a nice wedge of their own (not anyone else s) cash that can be put down as a deposit. They know that investors look after a property more diligently when they have their own cash tied up in the property. Conversely, most of the problems have arisen where the borrower has refinanced all his cash out of the property and is ambivalent to making the mortgage payments on time, maintaining the property properly etc. It is getting more common to ask for not only proof of deposit, but an audit trail of where that deposit has come from in the preceding 12 months. This has now been extended to post-completion random audits one or two years down the line, instructing the borrower to provide the audit trail of the deposit. Commercial lenders embrace full-time landlords, or at least they embrace those that are experienced, profitable, organised and professional about their business. A massive portfolio is not necessary; neither is a portfolio of just commercial property. 7
The 3 Core Ninja Strategies 1. 100% refurbs. Refurb a vacant property before you buy it, but borrow based on the post refurb value, ignoring the purchase price. A killer of a strategy that uses delayed completion bridging finance to borrow up to 100% of the purchase price and sometimes the refurb costs too. Works for buy to hold as well as buy to sell. 2. 90% Flips. Buy below market value, using as little of your own money as possible by using a bridging lender that lends on the asking price/market value, ignoring the purchase price. Sell on to make your profit, sometimes without even needing to do the refurb yourself - referred to as the buy/don t refurb/sell model and that is certainly way less work for you than the usual buy/refurb/sell model 3. 50% Below Market Value (BMV) purchases make outrageously low offers on properties normally the preserve of cash buyers only and complete within 7 days, if you need to move really fast to secure the deal. Blow normal investors away with how you can buy properties like this. These are all legal and transparent strategies so you can be confident there are no dodgy deals required! The next steps to becoming a Ninja Investor Get expert help with your finance If you want to discuss how best to creatively finance any deal, you can email inspireme@thinkpositively.co.uk call 01206 586586 or visit www.positivepropertyfinance.co.uk for investor exclusive brokerage Learn how to buy like a cash buyer To find out more about how easy it is for you to learn all aspects of how to become a Ninja Investor, go to www.ninjainvestorprogramme.co.uk. It s probably the UK s only property education course that offers you a double guarantee: You can get a full refund if you decide the programme is not for you by lunch on the first day no quibbles. You ll get your course fees back AFTER you have got the learning when you bring your first bridging deal to Positive Property Finance. Kevin Wright is an expert in property finance. With more than 15 years of experience as a financial advisor, specialising in property, he now specialises in both brokering bridging finance and teaching property investors how to grow their property portfolio faster, with less cash and higher profits. 8