DIY2 Deal - Want TWO Houses. Have money for ONE?

The DIY2 Deal helps property buyers buy more property with less money. If you want to buy another house in the future, we help you with deal discounts of 8% of property price (of first house) per year, that builds up and helps you buy the second house easily.  So you can get two houses in stages and Do It Yourself, without taking any loans. You do not get any rent on first house until you buy the second, and need to have ability to save more in the future. Our deal discounts and your savings mean that overall, it works out better  and can also help you build a property portfolio in a tax efficent way.

Who is DIY2 deal suitable for?

It is suitable for investors who wish to purchase more properties in the next 1 to 10 years or to build a portfolio of multiple houses over time. They get discounts and future properties cheaper, but do not get rent now. Overall it works out better as 8% deal discount is far better than long-term net rent at 5% or 6%. They end up with more property for less money. Follow the flow chart below.

Basis of DIY2 Deal

The deal is an agreement where you agree to these 2 things:-

• Buy two houses, one now, and another in 1 to 10 years. (If you already own a house, the deal is called a DIY1 deal and has the same terms.)
• Not to take any rent on the first house until the second is purchased. You do this by giving us a rent-free period. So we keep the rent from our tenants and we pay the tax on it.

We agree to 

• To give you a Deal Discount that increases over time- so that at some point when you have enough funds, together with your savings, you can buy the second house. That discount is 8% of the price of the first house for each year of the deal. This discount builds up, and is then applied to any second house, when you purchase.

Examples

Example1:  if you buy our best selling type H3 large 2-bed house for £79,999, then you get no rent, but you build up £6,400 discount for each year you own it. At the same time you keep saving. After 5 years you have built up over £32K discount which can be applied to any second house which you can then buy together with your savings. So, if your second house was a semi-detached house which had a price of £110,000 in 5 years, then you would get that second house £32,000 cheaper and pay just £78,000

Example 2: If you buy a large 3-bed semi-detached house for £116,000 now. Then you build up a massive discount of £9,280 for each year. If you then buy a house after just 2.5 years you get a discount of  £23,200 which can be applied to a second house you buy. So, if you buy a 2-bed house that costs £80,000 in 2.5 years then that house will be £23,200 cheaper at only £56,800.

After you buy the second house, you start getting rent on both as per our standard system but at the full higher prices for both houses at that time. You can also extend the DIY deals for both houses if you wish and continue to build your portfolio at your own pace.

Benefits for you

• The deal gives overall better returns than a 50% buy-to-let mortgage or our standard method to buy 2 houses.
• You get higher rent in the future for 3 reasons as explained in the video
• You may also benefit from income tax savings if you are a UK tax payer.
• It helps you save effectively towards your second house, and have great flexibility regarding when, and what you buy
• And it is a very good way to build a property portfolio without using mortgages. Deal discount of 8% is far better than rent of 5% or 6%.
• Maximum flexibility as you decide when to buy and which type of property to buy depending on your savings. You can also combine the deal discounts if you have multiple DIY deals set up and use on any one property. You can also cancel a DIY deal after 3 years and not have to buy the second house. Your built-up deal discount is never lost as you can always use it against any future property purchase or to upgrade existing property.
• Full management control as you rent the property directly to us. You can decide to cancel the rental agreement and cancel the obligation to purchase the second house after the required notice period.

STEPS in the process

1. Make a reservation for any house and agree to buy another in the future.
2. After reservation we get your documents ready and then you can select your first house about 4 to 6 weeks later like the normal process.
3. You purchase House A like normal process, and get full legal ownership at Land Registry. You rent it directly to us, as per the rent and sublet agreement, and you retain management control. You give us a rent-free period until House B is purchased. We maintain your house at our costs and keep it in a good condition, as per our agreement. You have no costs.
4. Our agreements mean you rent your property directly to us without managing agents and so you retain full day to day management control and can thus cancel the deal and the rental agreement with us at any time after the required notice period and will not have to buy House B. After cancellation, and after the required notice period, you have all the options available to you regarding your House A, including using it yourself and renting it back to us under our standard terms and getting standard net rent.
5. You build-up a deal discount at rate of 8% of House A price per year. This can be used towards House B.
6. At any time between 1 to 10 years you can buy House B – again as per the normal process and get legal ownership at the land registry. The maximum discount that can be applied to House B is 40% of the House B price. Any surplus Deal Discount can be held in full and applied to any other property purchase by the Buyer in the future. The buyer can also use the accumulated discount from other DIY deals towards purchase of House B in any deal and the accumulated discount in any DIY deal can also be applied to the House B in any other DIY deal set up by the Buyer.
7. 1 month after completion of House B, You start to get rent on both houses at the higher standard property prices as per our standard net rent system. At this point, instead of taking rent you also have the option of setting up further DIY1 deals for House A, or House B, or both.
8. We rent to long-term subtenants and aim to give 3 years security to our subtenants and partner companies. Thus, if cancellation notice is given within the first 2.5 years after completion, the required notice period is the time to 3 years after completion. So you get possession at 3 years. If cancellation is after 2.5 years then the required notice period is 6 months. These are agreed when you rent your property to us.
9. The deal ends after 10 years and is cancelled automatically. You can purchase House B within 1 to 10 years after purchase completion of House A. When deal is cancelled due to any reason, any built-up deal discount is frozen at the full level and can be used on any other property in the future and can also be used on property purchases by family and freinds. Even if you have no money to buy the second house, you can resell your first property and use the money from the sale to buy the second house and benefit from the frozen deal discount. Thus the built-up deal discount is never lost. It remains there for you to use either to buy addtional houses in future or to sell existing house and use money from sale to buy another with the discount.

Comparisons of 3 methods to buy TWO houses

If you have funds just for one property right now and can save more, then there are 3 ways you get two houses. The table below compares all 3 methods to buy two H1 houses over a period of 5 years. It is explained in the video and shows DIY2 deal to be better than using buy-to-let mortgage or the standard method for this purpose. The assumptions are listed below and we have assumed capital growth at rate of 5% per year. This is not guaranteed and can be lower or higher.

Thus in summary, if you have enough funds for one property and can invest more in the future, it is most cost-effective to use the DIY2 deal compared to mortgages or using the standard method.

Questions and Answers

Who is this deal for?

The deal is for clients who have enough money to buy one property but want to get two. They buy one now and save to get the second in the future. The deal helps by giving them discount that builds up at 8% of first house price per year. They may also benefit in other ways such as lower income tax and higher future rent.

What is the buying process?

The buying process is identical to our standard buying process as per the UK buying process page. You just get discount on the second house

Is there a limit on how many DIY2 deals I can set-up

No. If you have more money (e.g. for 3 houses) and you can earn more in the next 10 years to pay for 3 more, then you can set up 3 DIY deals and end up getting 6 houses after all the deals are completed. You can also combine the deal discounts if you have multiple DIY deals set up and use on any one property. You can also cancel a DIY deal after 3 years and not have to buy the second house. Your built-up deal discount is never lost as you can always use it against any future property purchase or to upgrade existing property.

Can I select any two houses for the purchase?

Yes. you select the houses you want at each property selection point. The deals are amended after each property selection- irrespective of what the original reservation was. When you select your second house, it can be different from the first house

When do I start getting rent?

You give us a rent-free period until the second property is purchased. You start getting rent 1 months after second property completion and the rent is at the rate of higher property prices and increase each year after the first year. The rental increases will be as per the rental agreement and in line with average rent increases in the market and we take into account the figures from the office of national statistics.

Can I do whatever I want with my houses?

Yes. These are standard freehold commodity properties suitable for any residential use. After purchase of each property you have day to day management control as you rent the properties directly to Find UK Property. There are no middle managing agents. You can give notice at any time to cancel the rental agreement but you need to give us the Required Notice Period (notice period is 6 months – after the first 2.5 years)– so we can deal fairly with our subtenants and then hand the property to you. We do not expect clients to cancel but if your circumstances change and you can not buy the second house, then you can do this.

Can I cancel the deal after purchase?

We advise clients not to buy if they do not intend to keep property for at least 3 years. You can cancel after 2.5 years giving 6 months notice and not have to buy the second house. Your built-up deal discount is never lost as you can always use it against any future property purchase or to upgrade existing property.

Can I sell my properties back to you?

Yes. You can sell to anyone. When we offer to buy, we do so at the prevailing market price – the price that any independent agent would sell at. However, you are not obliged to sell back to us and can resell to anyone.

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