Become a property millionaire, buy a property, refurbish it, refinance it, pull all your money out and buy another one. Fantastic and we're going to show you how to do it. Wrong, I think there are problems with this strategy and I'm going to tell you now why. Hi, it's Pioneer from Nisha Vice. Hope you're well. Please do like and subscribe as always. Right, we're going to talk about buy, refurbish and refinance strategies. This is a very popular topic right now on YouTube with a lot of very prominent property people advocating for this type of strategy. And yes, there are people that have made good money out of this and it is a viable strategy. It is a strategy that people have done very well. But it's a strategy that I think is a very dangerous one in this current climate. Now, the reason for that is when it's not with trend, you can buy cheap, you can add value and you can pull out your assets, pull out your equity story. But the point that they're missing, you know, the point that in the heading it's buy, refurbish, refinance, take on more debt. That's what it means, take on more debt. Okay, now the problem is with that is if you are not experienced or you don't have the assets behind you or the income behind you, you're loading yourself up. Okay, you are. So it is a viable strategy long term as long as you can back it up when things go wrong, as long as you can back it up when the tenants stop paying, as long as back it up when if down valuation happens, a lot of people that are looking to pull that money out, a lot of down valuations happening on remogages at the moment. So that's causing them problems. But and also it really depends on where you're looking to buy these properties. Okay, now the phenomenon around these types of transactions that are happening, a lot of them are happening with lower value properties in the millions or up north. Okay, so you're buying a property maybe for 70k, you're doing other spending, 16 grand on it, it's now valued 120 and then you're looking to refinance that, call all your money out. Okay, so it does work, you know, there's hundreds of people on YouTube that are doing this very successfully and I'm not against the strategy. Don't get me wrong. What I'm against is not giving all the facts around the strategy. Now, there are a couple of issues around this. One, as you are loading up and taking your money out, you're becoming more and more indebted. Okay, that's a fact. Okay, now I know there are people that will say it's this good debt, this bad debt, you know, and essentially your, your debt is backed up by rent. Okay, the rent or income that you're going to receive for cash flow and you know, you're getting a lot more income rather than, rather than mortgage payment. So it makes sense and that does make sense if you're going to carry on receiving that income long term. Okay, so it really comes down to, you know, we are going through a huge, huge change in the next three to four years. Okay, or fundamental way of working and society is going to change. The way people are employed is changing. Okay, the way people have taken on debt has changed. Everything's relaxed cheap money. Everywhere's cheap. Now that's for you as landlords, but also for the tenants. Okay, now we're talking, let's look ahead in a year's time. I'm talking about right now with the government, furlough schemes and the playmen all the days and you know, you can't kick tenants out and you can't do this and you can't do that. And those things are probably going to be gone by then. Okay, so you're probably sitting on assets that are maybe you've had to take a five year fixed mortgage form to get the right rental calculation to get that money out. Okay, and you've got these tenants that you're relying for them to pay you money. Now a lot of those people that are advocating these type of strategies, they're pretty young. Which is good on them because they've made good money out of it. They've got a lot of properties out there and they've done very, very well. They haven't gone through that crash. They haven't owned assets or they haven't seen people that own assets maybe even being very close to it. That have actually those assets have gone pop. So, you know, that's why I say it's a very good strategy to take on debt. You know, back in before the last crash in 2007, eight, you know, I was doing mortgages and people were doing taking on all sorts of debts. Okay, because you can get a mortgage like this very, very easily. Okay, and a lot of people that got more, just shouldn't have got mortgages. The difference is they did very well out of it because the property prices stayed stable. So, although the whole wire market went mad and the mortgage market went bad and recession happened and all sorts of things, property stayed stable. Okay, and a lot of the activity that was happening was very much central London focus. So, a lot of London, a lot of people around London were buying properties. And those assets have gone up in value dramatically, I hugely. Okay, so they did very, very well because property prices stayed stable. People relatively stayed in their jobs and there was a lot of demand in London. Everybody wanted to live in London. Okay, so that's fine. But it's the same thing going to happen in, you know, when the market happens and the tenants stop paying and there's problems, you know, are you going to get that type of demand in blackpool in other places? Okay, so you've got to look at that. Right now it makes sense. Right now you're pulling your money out. Right now the property's value is what it's valued. But if you look at the historical, what was that property value eight years ago? Okay, what was that property value? At the end of the day you bought it for 70K six months ago. Okay, so let's say what was it valued a year ago or two years ago? And what happens if he's telling stop drawing out the, you know, they lose their jobs? How are you going to go in the DSS sector? Is that what you're going to deal with? So, what I'm saying is the strategy itself is not the problem. The problem is the people that are taking that strategy and gearing themselves up without adequate advice, without a balanced approach of, you know, look guys, you know, you're taking this step on. Why you fixed everything for five years? Why don't you keep some liquid cash on this? So if you want to remorgage, maybe a remorgage two years, you have some access to money. You may want to sell one, you may want to have so don't get yourself tied up in a five years just because you want to pull all your money out. Okay, in regards to HM, I think, you know, there are, there are definitely sectors that are going to do well. Okay, and don't get me wrong. Like I said, this strategy, there are people that are going to buy in good locations that are going to do well. Okay, but I would be cautious around loading up on a load of debt in not so desirable areas, not so desirable tendencies because the potential problem is around the corner. Okay, mix it up. Maybe buy some decent assets, buy some ones that are lower end, and you know, if they're lower end ones, you know, the so cheap, the mortgages are affordable. If you've got good income, if you're getting decent income from other properties, then you may, you can afford that. Okay, but don't load up on everything. Okay, don't, you know, what the worst thing I want to hear is, you know, I had no properties last year. I've now bought 15. Okay, because what you've done is essentially you've loaded that up. Okay, and if there is a blip, and then when we're not talking about a blip, we're talking about a monster problem coming down. Yes, the government incentives and all of that. That will finish, you know, whether it's the standard, you can start. There is a recession coming. So what they're not telling you with these people is, there is a recession coming. It's out there. Everybody, everybody knows it's coming. Okay, and at the moment, the property market is going against it, and it's done very, very well. But be cautious guys. You know, I'm a mortgage broker. I want to, you know, help you guys get loans. Okay, but I also want you to be out there and doing remorages in the future. So that's why two pennies worth it. If you do like and enjoy these videos, do subscribe to the channel. I do really appreciate it. Let me know what you think. If you think I'm talking absolute nonsense, and I'm being negative and I'm talking down the market, let me know. If you think that the people that are advocating these, they've got the right strategies and, you know, you're full of them and you think you're going to be okay. Let me know. If you agree with me, let me know. Just, you know, comment. Let me know, basically, because what I want to do is revisit this topic really. And I, here's a promise, I suppose, shall we say this time next year? I'll do a video about how, how things have went and where, where we, where we are at that time. Thank you so much. Really appreciate it, guys. Take care. The content of this video does not constitute giving advice. It's purely for information purposes. All cases should be discussed with the professional mortgage broker. As a mortgage is secured against your home, all property, it could be repossessed if you do not keep up mortgage payments. Niche advice is authorised and regulated by the financial Conduct Authority. You