242. Is it a scam?
I started watching a TedX talk yesterday about passive income and the speaker basically said something along the lines of…
…I used credit cards and my student loans to learn about property. I started with nothing and 2 years later I had 24 properties and had paid off all of my investors.
It sounds totally unrealistic.
As of July 2016 the average house price in the UK is £232,885. Let’s assume that this guy bought houses in cheap areas at £100,000 each.
Maybe he was able to get mortgages with only a 5% downpayment — meaning that he required £5,000 per house.
£5,000 x 24 houses = £120,000 just for the deposits, not including legal fees etc.
Of course, he mentioned that he had investors, but he also mentioned that he’d paid them off.
This means that in 2 years he managed to buy some houses using investor money, sell them, return his investors their money plus some interest, and still keep at least £120,000 for himself to invest in his own properties.
Initially I thought it was a scam, but now I think about it, maybe it’s possible.
Maybe he got lucky with his investors properties and was able to make £20,000 profit on each of them. After all house prices in the UK can increase tremendously at times.
If he had 15 investors and they split the profits evenly then he would have the money required to buy his 24 houses. It would take a lot of hard work and an element of luck but maybe, just maybe he did it.
Could you or I do it? Yes, probably, if we learnt the tricks of the trade first.
