Buying Properties for Less Than £30K in Cash

Buying Properties

Table of Contents

Reading Time: 6 minutes

Morning all!

(he says to his imaginary audience lol)

Being Indian, I’m pretty tight-fisted when it comes to where I spend and where I don’t spend.

In fact, let me rephrase.

Like most business owner’s – I love getting value for my money.

In October of 2019, I properly decided to get into the property business.

Now in Jan 2021, I own 5 properties at the moment and am trying to buy a bunch more.

It might sound fast but it isn’t.

It (with Covid) is a god-awful slow process – but seemingly there’s not a lot I can do at the moment.

Everything’s locked down!

(Even when it wasn’t these people take forever)

With all of that being said – I currently have two properties – both of which I purchased outright in cash for less than £30,000.

Yes. I’m not lying.

I’ve had them for around 3-6 months now, and both have been renting each month without big issues.

I think there have been some repairs which have wiped some of my projected profit, but hey – there’s no mortgage and it’s great to be making a monthly income without having to worry about a mortgage, or the bank or my credit or all of the other problems associated with such a setup.

So I wanted to take this time to walk you through my rationale and my plans for property in 2021 and beyond.

It should (I guess) begin with explaining how in the hell you can get properties at such a price point – and whether or not they’re just pieces of absolute dog turd or what exactly.

I started my journey like anybody else, on Zoopla and the like.

I had an assistant (Alex) also help me with searches to shortlist properties.

It soon got too involved for me though – the process of trying to search for a place, figure out whether the valuation was accurate, check the local amenities and all of the other stuff I’d read in the various property books I’d poked my nose into.

I need an alternative solution.

I wanted someone else to do all of the research for me and just tell me what to buy.

That’s when I discovered the world of property sourcers.

Basically, what these folks do is make it their job to identify properties that are below market value, run due diligence on them to understand if they’re a good opportunity for prospective investors – and then offer them up for sale.

Whilst taking a hefty fee, naturally.

If you have the time, and inclination to look for your own deals, I’m certain you can go and find them without involving a sourcer whatsoever.

Personally – I can’t be arsed.

I guess we can all make times for things that are important – so it’s evident that I didn’t have the inclination then to make such a search – and so my journey into property sourcing began.

And this is where I discovered the world of ‘properties that you can’t get mortgages on’.

This is anything that is <50k.

I tried, in the beginning, to get mortgages on everything but my broker soon told me that the banks won’t lend at less than 50k because it’s just too small a value to be meaningful.

However, me putting down £42,000 (this was the price of a place I was looking at) seemed to big a price to pay for just one place. That was a mortgage on a higher valued place.

So I would ultimately pull out of that deal.

That was when my sourcer identified properties that were literally less than £30,000.

I was shocked when I heard this. That couldn’t be true.

When I found out that it was – I was now (for me) in a much more comfortable buying window.

I didn’t mind ponying up £30,000 on a property that I’d own, without the mortgage brokers involved (that meant banks, underwriters, applications, upfront and ongoing fees).

Seemed like worth a punt.

Although – before I paint an ‘oh-so-rosy picture’ – it’s worth knowing this:

The problems associated with a property valued at less than £50,000 are as follows:

  • You can’t employ any leverage because there’s no mortgage (i.e you’re not using someone else’s money to acquire a place)
  • You need the money in cash to buy the place
  • These properties tend to have little to no capital appreciation
  • The properties (by popular opinion) are run-down/shoddy

With all of this in mind then – why DID I buy 2-properties at a sub 30k price point?

Here are the reasons ‘for’ buying such properties:

  • It’s (very) cheap
  • No stamp duty
  • You get an instant cashflow (£300-350 – we’ll go into the numbers at a high level in just a little bit)
  • There’s no mortgage
  • You can ‘repay’ the entire mortgage in around 15 years I’d say (I’ll break down this number as well)
  • It’s quick to acquire multiple more
  • It feels great not having a mortgage (this is important) (so broker fees, no complications)


Technically it’s more profitable to acquire properties with a mortgage (don’t get me wrong I have those as well), but it’s faster to build your monopoly board with properties at the cheap end of the market.

Now let’s dive into the numbers a little bit to give you a sense of how this works:

So here’s one of the places that I own:

As you can see it’s a £30k property (after all fees around £35k) that has a £375 rental income.

[convertful id=”197358″]

£35,000/£375 = 93.3 (months of rent to pay off the entire mortgage).

Assuming it rents for 9 months per year it’ll take 10.36 years to pay off the entire investment.

After that, it’s all profit.

Here are the finder’s fees I paid.

So there you have it.

I’ve factored in a very liberal assumption into my calculations that it’ll only rent 9 months of the year which should also factor in fees for damages and the like over the course of the 10 year period.

And that’s it – there you have it.

When you look at the numbers from this perspective – it’s an investment that’s projected to pay itself off in 10.36 years (you can even assume 12 to build in the ‘unknown’ into the equation – i.e unforeseen complications)

It’s something that I don’t need to manage/look over day to day – and once it’s up and running – it just works.

As you can see from what I’ve sent over – it’s also 2 bedrooms (3 if I did some renovation) – so it’s an actual house that I’ve bought.

The sourcing fees make up more than 10% of the fee – but that’s the prices of sourcers these days – and a space I’m now moving into if you head over to my property investment website to get in touch.

This property is up north, in Durham specifically and is an area I would know nothing about had I not gone through a sourcing company.

What’s more, and this is the part that might surprise/scare some people.

I’ve never seen the property.

Yep, I’ll say it again.

I’ve never seen the property.

My approach for buying it then is based upon the following principles:

  • It needs to be a property with tenants in situ (i.e already in and renting so I can collect an income from day 1)
  • Preferably the tenants AREN’T the owners (because this means an estate agency will have come in to check the place out and rent it)
  • The solicitor needs to get surveyors/valuations done furthermore
  • The sourcer also needs to sign off
  • I request a ‘video walkaround’ to see the property via video

Between all of these pieces – I’m able to move on these properties pretty rapidly to make purchasing decisions.

As the logic dictates above – these aren’t properties I’m emotionally attached to – they are literally investment vehicles to build a pension plan.

My idea over the next few years is to buy 1-3 per year.

I’m actually already awaiting the purchase of two more where I’ve reserved them and await progress from my lawyers.

In this way, by the time I hit 40 (I’ll be 35 this year) I expect to have 15+ properties paying out maybe £4-6k per month – if things go badly and I don’t grow my businesses.

So there you have it.

Welcome to my retirement plan 101 😛

Interestingly – whilst I was here I was checking out why I’ve been up for 3 hours and have only listened to 32 minutes of audio and have written just 1.4k words.

Here’s why:

I’ve also sent 19 emails lol 😛