We’re new to investing. We have 5 BTL but they’ve all been bought locally at market value. We have had these properties for nearly a year.
Our plan is to start flipping properties and we have a pot of £115k to invest. However, properties in our area are really expensive. I’ve explored auction, but we’re not ready for this yet. We will be using bridging finance.
My question is;
The plan is to flip to build more equity and then our aim is flip one a year and buy one BTL a year.
‘How do we even compete against other investors that have millions?’ Your perception here is misplaced, there are certainly people who have millions in the property game, but you won’t be completing with them. Why? Simple, they have much bigger fish to fry than the value of properties you will be after. Someone with a few million in the bank is not going to be piddling about buying properties sub £500k; they are going to be doing £1m+ deals.
Your question should be ' how do we even compete with other investors who can buy with cash?' You have already given yourself the answer - bridging finance - that's how!
Why is bridging the answer? Two reasons:
You may have read that famous quote by Henry Ford -
'Whether you think you can, or you think you can't--you're right.'
The inability to compete is in your own head - change your mind-set, change your reality. You absolutely can compete.
No, you are not running before you can walk - you have bought five properties (albeit it not in the smartest way) you have proved you can walk. You are very much ready to run.
There are a whole bunch of people that have done exactly what I have said above - competed and won! Against others with much more money than them, and from a lower starting point than you i.e. from zero properties.
‘We’ve brought in our local area all at MV’ - this is another mind-set shift required here. This has got you where you are, but it is now holding you back from progressing. Unless you buy properties, not necessarily below MV (nice if you can), that you can add value to, building a profitable investment business is going to be a slow process. Buying properties that have added value potential is absolutely critical and your mind-set needs to alter to embrace this.
There are no 'best areas' either. All areas have added value potential properties. The difference is, in some areas they cost more. With £115k cash to play with, you can certainly be looking for problem properties up to the £400k mark.
Here is a video on my YouTube Channel discussing this topic.