Many investors looking to build their portfolio will aim to do so by using as little capital as possible and may spend a great deal of their time trying to find deals which fit this category. The reason is because it can be quite tricky to find a genuine deal where you can put very small amounts in and purchase a property in today’s current economic climate.
This strategy isn’t for everyone as there are a few elements of risk, but the thought of being able to buy something with such a small amount of capital is very appealing even to the risk adverse.
If you are determined to get your portfolio started but don’t have much capital, this is probably the way you would choose to go. It’s not necessarily about getting cheap property, but real discounts below market value and using the system to your advantage. There are legal loopholes which exist in borrowing which many companies utilise to their advantage, but we have to be careful here as this is a very hot subject now in the UK. Lenders are extremely diligent when checking each loan application and frown upon the use of any of these legal loopholes.
This is why we avoid any deals like this as we don’t feel that they are a suitable way to build a portfolio and if you can’t get any capital at all, you may not be quite ready to invest yet. We strive to find out all we can about each client and suggest a route which will meet their goals and ensure they are not too exposed.
What we can occasionally find are real opportunities which present themselves in markets where you get a great discount. The income and growth potential are good enough so that you can get a genuine low money down deal where lenders are happy to oblige.
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