Episode #15

Doing creative deals using instalment contracts, with Thor Portess

Can you do creative property deals in London, buying with very little cash, even when the market is buoyant? Thor Portess does regularly, so I invited him onto the podcast to share how he does it.

His tool of choice is instalment contracts: a type of vendor financing that allows him to create good outcomes for all parties, make cashflow instantly with very little investment, and have multiple routes to another payoff in the future.

Not a clue what vendor financing or an instalment contract is? Don't worry – I've never done this type of deal before, so I made sure Thor clarified everything with a real-life example.

In this interview, you'll learn:

Thor's example of buying a property in neutral/negative equity with an instalment contract

Enfield, North London

Debt: £296,000
Value: £270,000
List price: £305,000

Mortgage payments: £650pcm (interest only)
Rent: £1,600

So Thor's exit strategy is to refinance or sell the house in the future. In the meantime he's making a monthly profit of nearly £1,000.

When he does sell the property, he has a side agreement with the vendor to pay him an extra £10,000. If the vendor had sold conventionally he'd have ended up with no profit, so he's happy to wait.

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