Why Buying with a Mortgage Day One Can Beat the Cash and Refinance Strategy

For years, the go-to approach for many property investors has been the buy-in-cash, refurb, refinance model. While that might work well for deep refurb or heavy uplift projects, it’s often not the most efficient strategy when buying buy-to-let (BTL) properties in Liverpool to lease to social housing providers.

In fact, based on our experience sourcing dozens of these deals, buying with a mortgage from day one almost always stacks better for smaller refurb projects. Here’s why.

1. You Start Cash Flowing Sooner

When you buy in cash and wait for a refinance, you’re not earning rental income during that waiting period — often 6 to 9 months or more. With a mortgage day one, you can complete a light refurb in 2–4 weeks, pass the property to a social housing provider, and start collecting rent quickly.

2. You Avoid Costly Holding Costs

Cash buyers often forget about the hidden costs:

• Council tax on an empty property

• Utilities

• Insurance premiums

• Lost income from voids

• Bridging or investor interest payments

These costs add up — and eat directly into your return.

3. The Numbers Tell the Real Story

Let’s say you buy a house for £100,000.

If you’re using cash, you’ll need to add at least £20,000 in value just to match the same net cash flow of someone who bought that same property with a mortgage, did a light refurb, and rented it at £850/month on a 5-year lease to a social housing provider.

In other words, unless you’re getting a deep discount or doing major structural works, the cash-plus-refinance strategy may actually leave you behind.

4. Lower Risk, Less Stress

Financing a deal correctly from day one simplifies the entire journey:

• You reduce admin and paperwork

• You eliminate the stress of refinancing

• You limit your capital exposure

• You get to test the investment strategy on a smaller scale first

Most importantly, you’re in and out faster — and making money sooner.

Conclusion: Right Tool for the Right Job

We’re not saying one strategy is better than the other in all cases. But for small refurb BTLs leased to social housing providers — particularly in Liverpool — buying with a mortgage from day one is often the smarter play.

At Manchester Sourcing, we don’t just find properties — we match the strategy to the client. And we help you build a power team, including mortgage brokers who understand the nuances of social housing leases.

Want to learn more about this strategy or see example deals?