So I show you the numbers. So I bought this in place in Salford. Salford is a town that is just outside Manchester that we live together as one town. So because Manchester a good place for my son if you ask me. end of June, Does that ring a bell in terms of the date? end of June?

What's happened to end of June? Brexit? Yes, exactly. So, even before Brexit, I focused on UK after Brexit is even better because of the low pound. So I bought this place in Salford, end of June. Then the completion of the legal paperwork and all that happened On the fifth of August, approximately six months before that, you can see that this house here is duplex or semi detached, whatever you want to call it.

So it's two houses together. The right side where this van was parked at a time of taking the picture is mine, the other half belongs to somebody else. The open market value and what the other half actually paid at a time was 220,000 pounds UK British pounds. The mortgage ran out for this owner of this house and he was kind of old and he wanted to retire some just sell his house. So I got it at hundred 75 Thousand 300 pounds, which is about 21% below market value. The majesty got 6.3 thousand for me.

So this is up to 1005 so my total acquisition costs was hundred 83,900 pounds. I then transformed this place from a single family home into one of these strategies I will show you later called age and old house of multiple occupancy in Singapore and my full fledged sharing. It simply means that you don't have one single tenant but rent out rooms individually to individual tenants. In order to do that I needed to renovate majorly, to have like seven. I put seven on sweet bedrooms in so seven bedrooms His own attached bathroom shower and all that. So they independently from each other.

That cost me about 50 plus thousand pounds. So now we have one in 30,000 investment, right? county iPhone seven bedrooms because of that, I mean some license I'll do it next year. But actually the agent now this is the old slide told me they would be able to fetch 4550 to 575 pounds higher than I anticipated. But nevermind let's stick to what I anticipate at a time. Right now the rental is happening.

So if you multiply this number of bedrooms, my income would be around 4000 pounds a month. Sports 7000 Singapore along my running costs about 10% that go away for electricity Whatever you will insurance, net leftover would be somewhere between three and a half and 400,000 pounds that positive cash flow a month which is a yield of about 20 to 25% depending on how much extra rent I get conservative he at least 20% yield which is approximately 20 times more than the bank pays me for money. And within four to five years, I will have therefore more money back that page if I just leave it as it is and don't finance it. I stare for people to learn these calculations in finance is about 20% range also. Okay, So far, so good. Yeah, great.

Just so I'm clear, sorry, the the HMO this this duplex the half of this duplex is nine bedrooms. I'm currently seven. There's potential of two more I can do in the basement, which I will do next year. So far I've done seven right but so you're creating basically seven bedroom on with bedrooms with on suites inside this house. No longer a normal house. The rooms are rented out individually is there still a kitchen and a living room and all of that or is the kitchen and a lounge area like a living room is common for the tenants are the rooms they are individual, all of them on suite and in order to acquire this house.

I've used precisely that strategy that you mentioned just now, Adrian, I just paid up cash first. So I can get it quickly. And I'll show you what I'll do next. Once we have done this slide Okay, okay, so what these are numbers so now it gets better. As I mentioned, my best friend is called leverage so I will leverage it. The open market valuable six months before I purchased and now it's already four months down the road or five semble in six.

So it's almost a year with that number. I have recently got a beneficial valuation from a from an app that gave me 240 bucks I will get a proper valuation for certified value in January to get the actual real value which the bank needs to finance it. But assuming it has not increased to 240 and it's still at 220, like a year ago, which like I said, I'm not dependent on market value. So I'll stick to what I said. For calculation. If I get 75 of 75% loan, that means other get hundred 65,000 pounds out of this deal that the bank will pay you back cash.

Can you remember how much I paid for it? 175 so 10,000 still left in? Well, I got this house for 10,000 basically. And then I've interest cost. I will try to get an interest only mortgage. So I don't have to pay back Capital, which we'll learn in the finance module about what that would cost me interest about 500 pounds a month.

At a three and a half percent interest rate. British citizens can get a load and net 2.5. As a foreigner, you have to pay a bit more sweet in half, perhaps 4%. Even around that range in the UK specifically, at this time specifically, of course, if you watch this A year later, it might be totally different. Anyways, this is just to demonstrate a real life example here. So after my interest cost left over, now net cash flow that comes out of this deal is some doing three to 4000 pounds a month, which is about 4007 to five, or 6000, almost Singapore dollars or let's say 3008 to 4000 And something US dollars equivalent.

That comes out of the deal because of renovation, I pay 10 for the property and 50 for the renovation. So all money are used for 68,000. So that's one of the mistakes actually a lot of investors make is not to include the incidental costs into the calculation. But I do have to pay the stamp duty and lawyers fee and so on and so forth. So it was not only the 10 not paid by the 68. That's my being cashed out.

But if you look at if you look at the 68 I paid and I get three to 4000 pounds back every month. Within a year and a half. I got all my money back out of this property, then I really have it for free and I keep the 3000 profit positive cash flow forever. And that's enough to retire in Thailand, Philippines, Vietnam or any place on earth that has relatively low living costs already. That one deal. Holy cow.

This so this is I mean, it's a it's a it's a beautiful strategy. I really love this one. It obviously depends on the local laws about whether or not you're allowed to do renovations like that and have multiple people dwelling and so on doesn't know. Absolutely right. When we look at the legal aspects later, that's one thing you need to be concerned about. Yes.

And that's also the reason why I only did the seven bedrooms first because I can do it without a license. But above that, I need a license. So I will apply for license next year and then went away two more bedrooms and then I get the more cash flow. All of this If you look at the ROI because of the leverage here, my ROI for the entire investment was about 20% range. But if you look at in property, we need to consider a second ROI, which is my cash on cash. That's the see or see that you see in a red frame here.

Cash on cash ROI means how much is my return on investment on my own cash that I've invested not the total purchase value of the property, but my own cash to 68,000 basically, right. So with a 68,000 pounds investment, I made 12 times three to 436 to 48,000 a year, which is brilliant. Wow. And once I got These hundred 65,000 in the bank What will I do? Do it again loss. You got it right.

And if the market is 240 now I got more than really about almost for free. So let's see what actually happens. And in order to get my full money back that I absolutely didn't use any money at all to buy this property All I need is the market value to be 300,000 cars they never forget. Also, hundred 65 plus 68 230 years old mortgage, then I call up my entire cost for this thing and I still got positive cash flow speech lesson Well, to be honest, it's no mind bending that you can do this when most people are out there buying houses and renting them with a negative cash flow, renting them out with a negative cash flow. Yeah, that's why you as my students know things now that they don't. And you can do things that I don't are afraid to do.

And it's easy. And he and the later we'll discuss HMOs, the strategy, how it works, per se, the more detail. I have moved, I started off this by two let's like single occupant pants for many years. But now I move on to this HMO strategy because it's way higher returns. It has also, I guess, a little bit higher risk and higher complications with the banks because the loans for vitals are very easy for HMOs it's a bit more hassle to get it, but it's as you seen the numbers it's worth the hassle. Yeah, I mean, even before finance, this is attractive compared to what the vast majority of people do in property, but then refinancing it and taking the capital out makes it was so compelling.

Yeah. I like this one. Okay. Great. A lot of people do. And so you can do this by yourself.

Or as my students in case you don't want to you want to, you know, do together with either myself or some other students, we can also do co investments, as I call it. Somebody still has to find the own capital first to get the schooling. So someone has to find a little to get this going. Yeah, the 173 was the second guess. Guess where I got the one seven V from E paper. Yeah.

Okay, guess where I got the hundred 70,000 from where for someone else from remortgaging another property? Yeah, so this is concrete live example of what I demonstrated in the slides just now, you can do this as fines up front and refinance later or you can just do that, as you also mentioned it, I do want to just pay cash and then refinance it afterwards. But the key is to refinance you have to do your numbers in such a way that you are able to basically pull back either all your money, or at least almost all your money back out of the deal again, so we can do the next one and that's the secret that a lot of people also The know no matter how much money you have, eventually is going to run out. What if you do deals that give you your money back, you can do another one another one, not one, not one, not one.

And you don't get stuck. You can do unlimited deals or longer period of time. Maybe such a deal takes one year, but after one year, I do an excellent enough to an hour to maybe I do two more than a four and to another year later I have eight right and this is how we multiply