Lessons For Investing In UK Property

Friends,

Above is a slide from a talk I’ve been sharing in recent weeks, the properties have all been funded through a mix of own funds (I started out with £10K), the first 3 projects were topped up with angel finance, and everything since has been a mix of portfolio profits, angel and mortgage finance. Talk about stretching £10K! 

My first purchase was in June 2017, some 5 years ago. Thankfully I was able to remain close to wise men and women who had walked this road before me, teaching me the value of multiple income streams, what they are for, and not interrupting compounding. 

Marks-ism: Have two incomes

1. Earned income, used to invest 

2. Portfolio income, left to compound

The ability to continue to buy and scale came from my investment strategy (Buy it, fix it, fill it, refinance it) which enabled me to turn angel funds quicker, often refinancing at 6 months. 

I knew my brief, I was looking for truly distressed properties, that could not be bought with a mortgage. Reducing my pool of competition from those with funds of deposit and refurb, to those who had mastered the skill of raising angel finance, would utilise Bridging finance, or had full cash available. Being able to negotiate on this level provided access to many projects that were agreed subject to contract, and subsequently fell out. 

The critical part here is to continue to follow up on properties sold subject to contract.

Early on the ambition was to replace my salary with my income, I distinctly remember being in the office early one morning at Morie Street catching up with Mark about what I’d been viewing, he encouraged me to set myself a target of £10K per month after mortgages, management and other fees.

‘Theres not much you can’t do with £10K a month after costs’ he said. 

It made me wonder, how many projects would need repeating to conclude to reach that goal, it would be 40 buy to lets earning £250.00 a month, or 15 HMO’s of 4-6 rooms. Being a little lazy I thought about how it could be made easier, how could I continue to buy with portfolio profits that fund the deposits and renovations without the need of other finance, the portfolio was on its way from zero to one. 

This made me think about the power of “zero to one” in other regards, having an introducer of distressed properties in the local area was another factor that helped us scale our portfolio. Hunting Brief, Business Card, Thank you Drink, the methods worked. Both the portfolio profits, and network effects we had built were our ‘flywheel’, and growth was getting easier.

ACTION:

If you aren’t utilising these methods set yourself a very simple objective, introduce yourself to 4 people on the streets you own properties, hand out a brief for what you’re looking for, and include your business card. It might be the first step to building your own team of people will introduce to to Vendors. 

Let us know how you get on, we’re keen to hear!

Kindest regards,

Dan & the Team