Query re: Brandon Turner's No Money Down Strategy

[Andre Tyler]

Hi everyone

I'm new here and I've been listening to Bigger Pockets podcasts for a few months and I have one investment property in the UK and looking to buy my second one over the next few months.

I wanted to ask how Brandon Turner's idea on "The Book on Investing In Real Estate with No (and Low) Money Down" can be applied to the UK property market. Also just to give you some insight into my situation I have several friends who are landlords, some own 10 properties in the UK, some own over 30 and one friend owns over 400 properties. All of them, without exception funded their deposits with their own money (usually 25% deposits and they borrow the rest from banks). I have enough funds to invest in a second investment property but I need a faster way to find money for deposits and Brandon's strategy below seems great.

On Brandon's book he talks about finding "Bobs" who will invest 100% of the deposit needed and Brandon finds the deals and keeps 50% of the profits and 50% of the ownership of the property (in return for his time and knowledge finding the deal and managing the property). Because of my relationships with landlords I'm able to find very good deals (ie: 9% yields in markets where most people get 3% to 6% yeilds and 13% cash on cash return with rental income plus the usual appreciation in London. I wanted to ask a few things that I think will differ between the US and the UK:

-To invest with someone else in the UK, I will need to set up an LTD company to buy and hold real estate and then the "Bobs" I find will have to be directors and provide director loans to the LTD Company - Is this correct? Is this the most tax effective way to invest with someone else in the UK while having a mortgage? I asked my mortgage adviser and he mentioned that UK lenders only accept cash for deposits from director loans if the investors are not family members. I also checked with several accountants and buying and holding property in the UK via an LTD company is the most tax effective way to do it (we did tax projections over a 10 year period).

-How would refinancing work if the property was owned by the Ltd company (the mortgage would be with the Ltd company) and the Deed was owned 50% by Bob and 50% by myself (ie: if the property cost £300k in 2020 and appreciated £50k over a 5 year period and was then valued at £350k in 2025, and if I wanted to take the £50k out to invest in another property, would the £50k have to be split between me and Bob or would the £50k go to the the Ltd (who Bob has no ownership of)? I think maybe a cleaner way to handle this would be to offer "Bob" a fixed return on their investment every year without them having any ownership of the properties.

Not sure if anyone in here has invested with someone else in the UK but I'd be be very grateful if anyone has experience of doing the above and would be happy to share.

Thanks in advance for your help.

Andre