Starting our own cleaning product subscription business helped us buy £180,000 three-bed first home
WHEN first-time buyers Leanne Holder and Jacob Leaver, both 27, lost their jobs on the same day around Easter three years ago, their dreams of owning a home almost disappeared.
They’d been head-hunted for their roles training athletes - but suddenly the contracts were pulled when the business ran out of cash.
Without any savings in the bank the couple were in a dire financial situation. They ended up selling their clothes and a car in order to pay the rent, while trying to work out how to make money.
After a few months of rejected job applications, in June 2017, the couple decided to start their own business - a subscription box with car cleaning products, called BecauseRacecarBox.
The business took off and the couple now has more than 1,500 monthly subscribers, all paying from £14.99 a month.
When starting the business, they were luckily able to live rent-free and cut down on their outgoings as much as possible.
This meant they could also start saving at least £1,000 a month towards buying a house.
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After three years of hard saving the couple finally put down a deposit of £32,700, working out as almost 20%.
Leanne told The Sun: We thought getting a new job would be easy, but we just couldn’t get one. We applied for everything going and there just seemed to be no offers.
“We had to afford our rent and the food on our plate and so we decided to create our own jobs and start a business.”
Three years on, Leanne and Jacob have just moved into a £179,995 newly built three-bed house.
Here Leanne shares their experiences of getting on the property ladder for The Sun’s My First Home series.
What’s your new home like?
It’s a newly built detached house with three bedrooms.
It’s spread over two floors with the kitchen, dining room and the lounge downstairs.
Upstairs is the main bathroom with an ensuite, and then there’s a family bathroom with a bath and then the two other rooms as well. It also comes with a garage.
How much did you pay for it?
We paid £179,995 for the property and put down a roughly 20% deposit of £32,700.
We took out a mortgage over 35 years, and now our repayments are £480 a month.
How did you save up for the deposit?
We pretty much didn’t have any savings when we lost our jobs, we were flat.
Once we started the business and money started coming in again, we paid for the basic amenities and the rest would go into savings.
We probably saved around £1,000-£1,300 a month, but it’d vary each time.
To help us save, we could down on things like clothes shopping and were generally just being sensible.
We didn’t deprive ourselves of anything such as takeaways, but we were fairly sensible about luxuries.
When we started the business, we moved in with mine and Jacob’s parents over different time periods, where we could live rent-free.
But we still paid business rent for our warehouse, which was £670 a month.
We were earning around £17,000-£20,000 a year in our self-employed roles, and now pay ourselves £20,000 a year each from the business.
The rest of the money we make in the company goes back into the business because we want to grow it.
Why did you start a business?
When we lost our jobs, we started applying for jobs in our industry - sports science - as well as any job we knew we were suitable for, but we didn’t get anything coming through.
We both have two degrees each, but we couldn’t get through the door for jobs that we were overqualified for. It was frustrating.
We were in a desperate situation and had to sell one of our two cars to be able to pay rent.
We also sold clothes and other things we didn’t need in the flat to have some money coming in.
Eventually, we started to think of other ways to make money and came up with the idea of starting a business on a walk.
We decided to go for a subscription model so consumers make recurring payments each month, giving us a guaranteed income.
Both of us have a really strong interest in cars and motorsports and knew of the Glossybox and Birchbox subscription boxes for makeup, so we decided to do a monthly one for car cleaning, or detailing as it’s known in the industry.
We decided to make everything sample size to let consumers try out different brands and products.
What help is out there for first-time buyers?
GETTING on the property ladder can feel like a daunting task but there are schemes out there to help first-time buyers have their own home.
Help to Buy Isa - It's a tax-free savings account where for every £200 you save, the Government will add an extra £50. But there's a maximum limit of £3,000 which is paid to your solicitor when you move. These accounts have now closed to new applicants but those who already hold one have until November 2029 to use it.
Help to Buy equity loan - The Government will lend you up to 20% of the home's value - or 40% in London - after you've put down a 5% deposit. The loan is on top of a normal mortgage but it can only be used to buy a new build property.
Lifetime Isa - This is another Government scheme that gives anyone aged 18 to 39 the chance to save tax-free and get a bonus of up to £32,000 towards their first home. You can save up to £4,000 a year and the Government will add 25% on top.
Shared ownership - Co-owning with a housing association means you can buy a part of the property and pay rent on the remaining amount. You can buy anything from 25% to 75% of the property but you're restricted to specific ones.
Mortgage guarantee scheme - The scheme opens to new 95% mortgages from April 19 2021. Applicants can buy their first home with a 5% deposit, it's eligible for homes up to £600,000.
We started a website and kind of just sat down and worked out how to do this.
We also started social media channels and started to get sales through. It’s just blown up from there and we’ve kind of been doing it ever since.
We now have roughly 1,500 monthly subscribers but it’s growing each month, and we sell one-off boxes and other products online too.
Our yearly turnover is now around £300,000, but we expect it to keep rising.
How did you decide on the area?
We needed to base our living location around our warehouse.
We decided to come over to Wales because the warehouses are cheaper over here than in England.
Because it’s more rural, there are a lot more opportunities here that are cheaper.
We've capitalized on that for the business, but also for our living as well and have been able to buy something here that you would buy in England for a lot more money.
I’m originally from West Sussex and Jacob is from Essex.
My parents moved over to Wales about six years ago, so they're already here but all of our friends are still in England.
It’s hard because if you want to meet up, you have to plan ahead and make it a weekend to stay over. But it was a business sacrifice that we were willing to make essentially.
The house isn’t going to be our forever home, because we want to have a bit more space eventually. But for the minute, it’s perfect size for the two of us.
Potentially in the next five years, we could look to expand but it depends on our business too and how that goes.
If that keeps growing, then we’re going to be in an even better financial position soon.
Did you encounter any problems with the purchase?
It was all pretty straightforward actually, which was nice.
I think that probably comes with buying a new build, because you haven’t got a chain.
I know a lot of problems come with chains and them falling through, but it was quite an easy experience for us.
How did you afford to furnish it?
We did have some furniture already, but we wanted to start fresh and get everything matching and coordinating.
So we put down a lower deposit than necessary to keep money for furniture.
Our furniture took a while to come, so we initially slept on a blow-up bed and had a few desks.
We’ve also ordered things like a sofa, but we haven't had it yet so we sit on the floor.
We also put down a lower deposit as we’re looking to do a property investment, like a buy-to-let.
It’s difficult at the minute with the pandemic because the housing market is a bit all over the place, so at the minute we're going to hold fire.
But we'd like to be in a position to buy a second property within the next year.
What advice would you give to other first-time buyers and budding entrepreneurs?
Our biggest advice to anyone is to be willing to sacrifice.
For example, we’ve moved away from friends and we’re kind of in the middle of nowhere.
To make a business work, you also need to work really hard. If you’re able to, hustle in the evenings and make money because you need to be determined.
Not only will you be able to save more, but if you’re also looking to build a business, you’ll be able to grow quicker and scale up.
Also consider not taking time off, work in the evenings and wake up early and you’ll succeed eventually.
Three years ago, we never thought we’d be able to buy a house because we were in such a hard situation, but we managed to.
Starting a business seems a bit silly to do at the minute because everything's unstable, but it’s possible.
If you’ve lost your job and even if you don’t have a degree, you can still start something completely new from scratch.
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