Having started investing in 2008, I pretty soon lost all my money – and all the banks money! It took a few years to pay back the credit cards and save up some money.
When I started again, I had £20k saved up. Enough to get started but not enough to build an empire. for that, I would need Angels. And a lot of them!
Dashboard
The first tab on the property dashboard lists all your properties, their refence number, what they are, when you bought them, what you paid, etc.
The next tab is your Angels. Above the line is active Angels and below the line is Angel loans you have paid back. It is good to keep a record of historic loans. It was also scary to see how much I have paid Angels over the years – enough to have bought 2 houses basically!
Having these key details in one place will make managing your portfolio so much easier.
Payment terms
I like to pay Angel monthly. It gave me a reason to touch them and say interest paid.
Where interest is just rolled up it can by the end of the term, amount to a lot more than was originally borrowed. Paying monthly prevents this happening.
Systemise!
I always paid my Angels on the 1st of each calendar month.
When running with multiple Angels, this was easy to remember and administer. It also was just after I got paid my salary and was when I was at my richest! You don’t want to forget about paying an Angel!
Aligning
Where I borrowed money between the 1st and say the 14th of the month, I would make a payment on the 1st of the following month. The Angel would thus get between 15-30 days interest paid.
If I borrowed money between say the 15th and the 31st then the 1-15 days interest would get added to the first full months payment. Their first payment they receive is thus for between 31-45 days.
Once this first period transition has been dealt with, the Angel will then fit nicely into the monthly cycle.
Settling up with your Angel
This is dealt with much like the aligning and Angel when they first come onboard.
For the last period, they will just get the days in that month apportioned from the 1st to the month to date paid back.
Herding Angels
I had probably 12-odd Angels on the go when I was tyring to buy property like my life depended on it. This system took a bit of time to set up and when they needed to be refunded, but otherwise it was incredibly easy and very time efficient to manage as it all happened at month end.
I didn’t set up direct debits although you could if you wished.
It also made cash flow management a lot easier as there was one significant hit each month for this (and another one for mortgages – see the separate blog post on cash flow management).
Your company is borrowing from Individuals
Where your company is borrowing from individuals, this falls into the CT61 net.
Please see our specific guidance on that.
Angels from Hell
Do NOT pay Angels a month after you first get the funds. With a mere 4 Angels you will have 4 different days in the month to make payment. The chance for error has gone up. You’ll also have less control over managing your cash flow.
Double that to 8 Angels – and you’ll likely be in hell!
