As Chief Underwriter at DJF Asset Management, Mark Dalton has overseen the lending on money through our bridging company for the last two years now. Not only have we been able to successfully fund numerous projects during that time, we’ve also been able to pay close to a million pounds back to our investors, and receive the best part of £147,000 in interest so far this year. We spoke to him to understand how he ensures that not only do we lend our investors’ money out safely, with as close to guaranteed results as possible. His advice not only provides an insight into our operations, but also shares how to make a success out of property investing by taking into consideration these simple steps.

“Doing your due diligence is vital, and a very, very clear exit strategy is number one. Before the investor even buys the deal, we know how we’re going to get out, we know the property will be sold, refinanced or the investor is qualified.” By doing your due diligence, this means researching the purchase thoroughly at every step. This means at times forgetting what your personal wants are, and focusing instead on what is going to bring you returns. “There is a healthy demand for baby buy-to-lets up and down the country, but when we start doing multi-lets or the HMO side of things, I want to make sure we’ve got seriously strong project management in place.”

We discussed the kind of steps you need to consider when looking at area in our recent article about advice for property investors. When looking at a prospective area, it’s important you get to know the local area. You don’t need to know the area inside-out, but knowing where the local amenities are such as good schools, the supermarkets etc. will be helpful. Talk to as many lettings agents as possible, don’t just speak to one and take their advice as gospel. Talk to as many as you can so that you can get a bigger picture of what’s going on out there in the market. For example, one agent may not deal with social housing, but others will, so make sure to speak to at least half a dozen in an area to see an overall view. You need to find out where the local schools are, to find out where families will usually reside, where students mostly live, and any areas to specifically avoid. During this process you may also find an agent who you would trust to look after your property and manage it effectively. 

“Ideally, I want people that are already operating in the area and they’re just scaling up – although that’s not 100% necessary. We want to know the deal stacks up. I can usually see what they’re going to get out of it, and see that they’re going to get cash flow.” Building a portfolio can be daunting if done incorrectly. It can be tempting when first starting out to purchase a property that requires considerable renovation, or even a listed building – as a ‘juicy’ project to sink your teeth into. However, starting small is the best way to make safer investments that you will enjoy, and be able to establish connections in the area with local tradesmen you trust with future projects as well. In a previous interview with Mark, he emphasised the need for the ‘basics’. “When it comes to starting out in property investment, it happens time and time again that people deviate from the basics and end up losing money.” Having a clear plan of action and direction that you’re heading in, will make property investing that little bit safer for you. “We don’t want people investing in areas that are depopulating or where jobs are disappearing, that’s not an ideal type of deal.” In these types of areas, investing in social housing may be a better way to go if you’re considering still purchasing in one of these areas. “Guaranteed returns by handing the property out to a housing association or charity, that is tied down for five years – this might be something to consider.”

Mark’s approach is exceptionally clear cut when it comes to getting solid returns for investors. “Everything has to be done for income, that’s what my specialism is.” Once you have a safe stream of income coming in, “management is the hard bit”, he insists. “It’s seriously easy to buy houses, the hard bit is managing them and making those assets work year-in year-out for the rest of your life. So how do you make sure that your management can be watertight? When you’re starting out in property investment, you’ve got to rely on professionals to educate you. Learn about landlord and tenant law piece by piece as you go. “One of the best ways to really learn is to have a bad tenant in the first instance, you’ll soon learn how to manage these properties!” But in general, it’s all about education and knowledge – having a mentor or someone that you know who can educate you in their experiences of property investment can be incredibly useful in learning the ins and outs of the trade.

If you’re looking to invest with us here at DJF Asset Management, all prospective projects with us undergo rigorous due-diligence checks at board and credit committee level. Funding applicants undergo two rounds of checks, as well as valuation from an independent chartered surveyor, and solicitor legal checks before being successful. Any applications will then require a unanimous sign-off before the application is approved and any funds are released. If you would like to learn more about investing with us, or applying for bridging finance through DJF Asset Management, please do get in touch! We can be reached by email at info@djfam.co.uk, or by calling us on: 07483837803 or 0207199648. Don’t forget to share this article if someone you know is considering investment opportunities or looking for bridging finance.