Hey folks, Dr Ro hope you’re well.
I wanted to do a quick post before I leave my office this evening and it’s on a subject I think is really topical at the moment, as many of you know I have been in the property game for nearly 20 years.
Over that time I’ve been lucky bought properties, some better than others, I’ve made more mistakes at the beginning when I started without really knowing what I was doing and along the way often the mistakes that were made have been linked with poor partnerships.
The portfolio grew a lot at the beginning.
Then I changed the size of it and sold properties off to buy bigger properties and have less of the larger numbers and I’ve been privileged to train people that have gone on to buy a heck lot more properties that I’ve done.
The idea of building a portfolio which I continue to do is really to provide that long-term security. I’ve had two valuations done this week actually on properties that I bought back in 2004, 2005 and pleasantly surprised that both cases the values came up in one about 20,000 more than I thought it would be and the other one about 80, 60, 80,000 more that I’d thought it would at this moment in time.
That’s the beauty of buying assets over the long term as both produce a cash flow one of them about a 400-month net and the other one about a thousand month net, both southern-based properties.
We picked up two deals last week for long-term guaranteed rent and this is in the middle of Covid probably net around £700 each per month. Looking at another one which has the potential to let about 14, £1500 a month and then a larger project which offers gone in, but a block of apartments that has the potential if it all goes through, of course, about three to three and half thousand pounds per month.
Different strategies and we’re looking at a lot of deals and those deals we might have five or six on the go, and one or two come through. It’s about evaluating and this comes back to the question which is, is now a good time to get into property and should I train myself?
This side is Covid, a lot going on. Should I wait? That could weigh down one side so what can we stack on the other side to make sure that we win? I’ve got four things to consider, number one. I think it’s important to know this, that in a recession, there are massive opportunities. In fact, history shows this.
There are often more opportunities in the recession than there are outside recession, because there’s less people looking. The great quote from Warren Buffett when people are fearful, be greedy and when they’re greedy be fearful, meaning when people are backing off that’s an opportunity to grab opportunities.
There is a quote somewhere and I’ve read some statistics that there are more millionaires made for recession at any time. Whether you want to be a millionaire or not is entirely up to you, it’s a question of whether you want to create security?
Because the reality is there is no frigging security in a job right now.
I would say yes, absolutely massive opportunities. The government now is really crying out for professional landlords. The other question I’ve got is do you have security?
I think anyone that says to me they’re in a job and 100% secure that is BS. There’s no security in a job and if you’ve got a business and self-employed sadly there is no security there as well, particularly in the current climate, and what’s going to happen at the end of March when we see furlough stop and companies cannot afford to pay people there will be a lot of people dropping off the cliff.
What I’m saying to people now is get into property because actually what’s going to happen I think six to 12 months from now when we the real stranglehold from recession is that banks will be very reluctant to lend to very first time brand-new property investors. So get in now and get your first buy to lets under your belt you’ll be classified as an experienced landlord six months down the line.
Do you have security in your job, profession your business and if not, start looking at this as a vehicle that works.
It works, it works, it works.
You’ve just got to get the right strategy, it’s not a race you don’t have to get up to get hundreds of properties it’s just putting the right ones in place. If one produces 100 here, £200 there, 300 there, 500 there. If you had £1,000 per month coming in on a monthly basis that still provides you with extra security. Are you prepared to put some work in? I am not going to stand here and say this is going to be an easy ride, it’s not a frigging easy rider.
It will take work, discipline, put the hours in doing the research, running the numbers and there’s an eight-step process. I say to people there are eight very specific steps when you build a property business you get those right and it just falls into place. You’ve got to be prepared to put some time in could be four hours, eight hours. What you’ll find is as you build your portfolio time goes to buy the properties and then they produce an income for life.
People spend way more time watching TV so give up some time and then what is your value? You can go read books, go to the library, you may have friends on property, and they dabble in it or they’ve been in it for quite a while and maybe they give you time. There’s nothing more valuable than investing in yourself.
A free training course will give you a certain amount of information, but the challenge is and I’ve done this in the past. I’ve gone to events where someone was given a free ticket to an event when they got to the event they were there for part of it, they weren’t fully engaged in it.
So by paying for something, of course, you attach a lot more meaning to it, a lot more value to it. If you pay a pound, you’ll have a different experience if you paid £1000 or £5000. It starts by finding out that this is where free presentations help give an indication of is this something I want to do.
You are going to have to make the investment yourself, don’t think for one minute that you go and do a day or so, a couple of workshops and become a millionaire. There’s a lot of free shit out there on the Internet on property investing. A lot of it is just noise and it doesn’t give you the key things you need to learn. Be prepared to invest time in yourself and my answer to that is absolutely, but don’t try and do it all yourself.
Training yourself is one thing reading books but being guided by someone who has done it is a completely different thing. I think this stage is to find out a bit more and then you decide on the steps after that on your journey and choose carefully and value yourself.
A lot of these things become tax deductible expenses if you’ve got the right accountant and you continue professional development built into your business model. Right now, yes, the answer is there’s lots of opportunity. Do not wait, don’t wait till the back end of this year.
Don’t be one of those people who says everything has to line up just perfectly and then I will do it.
Now is the time.
Interest rates are incredibly low, incredibly low. I think whilst the banks are prepared to lend to us property investors and there are great strategies you can implement if you don’t have a lot of money to start with there are strategies for that, we control the asset under a contract without physically having to own it.
There are probably five or six ways you can make money from property without physically having to own them and just be mindful of that as well.
That doesn’t mean you can’t own them in the future, but it’s just at the moment you may not be in a position to get a mortgage, but there’s still a way to make money.
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