In this episode of WealthTalk, Christian Rodwell, Membership Director at WealthBuilders, is joined by Toby Spanier — a WealthBuilders member turned wealth coach. Toby shares his journey of using his SSAS pension as a funding tool to acquire commercial properties. The discussion explores how a SSAS can provide unique advantages in property investment, such as purchasing properties that banks won’t finance, identifying hidden value, and collaborating on larger deals. Toby also shares real-world case studies showing how he transformed overlooked buildings into income-generating assets and secured properties at discounted prices by acting as a cash buyer through his SSAS.
In this episode, Christian is joined by WealthBuilders member and wealth coach Toby Spanier, who shares three powerful case studies of commercial properties he purchased using his SSAS pension.
Toby reveals how he found and structured each deal, why a SSAS gave him a unique advantage over traditional financing, and how he created both income and tax-free capital growth within his pension.
If you’ve ever wondered how a SSAS can be used to fund commercial property — even when banks won’t lend — this episode will give you clear, practical insights to apply on your own wealth-building journey.
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Speaker 1 (00:00.078)
can only learn up to 50 % of the net value of your SSAS. So what do you do with the other 50 %? And that's when I thought a SSAS you can actually buy commercial property, you can't buy commercial property directly in a sit or in any other pension. So let's do that as a strategy. I wanted to buy this, but I'm a cash buyer because I'm buying my SSAS. And so I agreed to buy it, but I'm not at 350. So I bought this for 250,000 pounds.
That is the advantage of being a cash buyer. I buy in the SSAS when it's something the bank doesn't count like, I can do simple things to it and then I've got the option of either trying to finance within the SSAS or selling that point and exiting and obviously all that game is tax free.
Hello and welcome to this week's episode of WealthTalk. My name is Christian Rodwell and I am the Membership Director for WealthBuilders. Now today we are joined by WealthBuilders member turned wealth coach, Toby Spanier. And this is a story you will want to hear if you've ever wondered how to unlock real opportunities with your pension. Now this is extracted from one of our monthly live clinics for our members where Toby was sharing his screen to show some slides with images and details about these deals.
So head to wealthbuilders.co.uk forward slash podcast if you want to watch along as he explains things. And we host these live sessions every month for our members covering all areas from property to pensions, investments and business. And to find out more about becoming a member, visit wealthbuilders.co.uk forward slash membership. Okay, so Toby has used his SSAS pension, not just as a tax wrapper, but as a powerful funding tool to acquire three very different
commercial properties. And what's fascinating is how each deal shows a different way that SSAS creates an advantage, whether it's buying something that banks won't touch, spotting hidden value that others have missed, or collaborating with partners to go after bigger deals. So in this episode, you'll hear how Toby turned overlooked or hard to finance buildings into cash flowing assets, how he secured properties at deep discounts simply by being a cash buyer through his SSAS.
Speaker 2 (02:05.74)
and how he created significant tax-free uplifts through planning and smart structuring. Now, this isn't just theory. It's practical, real-world case study that will help you see exactly how SSAS can accelerate your wealth-building journey, especially if property is your passion. So let's dive in and hear how Toby did it.
Okay, so I'm going to talk about funding commercial property within your SSAS. This is a two-parter really. So as you can see, there's a number of properties on the screen and I'm going give you some real life case studies. The top three properties, you can tell they've gotten common, can't you? They're all commercial properties, right? So that's what I'm going be focusing on today. So these are properties that my wife and I have bought within our SSAS. Some of them still got, some of them we have sold. The bottom three are properties that we purchased
using loan back from our SSAS. So that is going to be part two next month. But today I'm just going to focus on buying commercial properties within a SSAS and why I think it is such a good idea. So first thing I want to say is with your SSAS, of course, I my strategy when I got my SSAS was I got a SSAS because I was a property person and I wanted to do do loan back. But of course, you can only loan up to 50 % of the net value of your SSAS.
So what do you do with the other %? And that's when I thought, as SSAS, you can actually buy commercial property. You can't buy commercial property directly in a SIP or in any other pension. So let's do that as a strategy. And what I want to talk about today is why I bought stuff within the SSAS and why I think commercial property and SSAS work really well together. And perhaps a bit of where I think commercial property and SSAS don't work so well together.
So my journey started with this property here, the one in the middle. And this is a property in Folkestone. This was back in 2019, I think. So I set my SSAS up in 2018 and this was in 2019. So it's the first commercial property that I bought within my SSAS. And as is typical and not these sort of coastal towns, as is typical in these coastal towns, you've got like a landowner who owns a lot of lands and then these property, these, places get developed. So.
Speaker 1 (04:18.036)
Same with pretty much all coast towns. So the Earl of Radnor, who's basically the aristocrat who owned the land in Folkestone, basically when these things were built, he's the kind of freeholder. And these things were built as whole blocks. So what's happened is you've got a shop on the ground floor in the basement, and that shop has got this very long-term lease that lasts for like decades and decades. So they're renting the upper stories, but they're not using the upper stories. But they have to rent the upper stories because
their only option is to rent the whole building. So Johnson's and previously Sketchly's going back 30, 40 years are renting the whole building and the floors one, two, three and four they're not using. But every five years they have to go around and repaint them all magnolia because that's what the lease says. So you've got this huge underutilized asset of a commercial property making money and then stuff upstairs just doing nothing at all. And so this was on Rightmove where I find all my properties.
And what I noticed about this was that the guy selling it was just selling the upper stories. So he was going to basically create a lease out the freehold to just sell the upper stories. And he was selling, as you can see, for development purposes because was empty, ideal to convert into residential. The issue is, which I noticed, was that no one's going to buy the upper stories of a property to convert if they don't have the right to connect toilets and bathrooms and utilities to it.
And unless you buy the freeholds, you don't really want to buy a leasehold where you don't know if you can get pipes in and pipes out. So I thought this was like a mis-marketed property because unless you've got the freeholds, you don't know whether you can actually do this deal. So I wasn't really interested in buying this in. The other problem was if you're buying this as a development to convert into residential, it can't stay within your SSAS. So it didn't really work. So I wasn't.
massively interested in this property. But what I was interested in doing is building a relationship with a commercial agent. And I knew that if I went to see this property, I would meet the commercial agent. And commercial agents are totally different to estate agents. A estate agent, might turn up and an 18 year old shows you around and they don't know anything about property. With a commercial agent, they've gone and they've done geography at university, they've got a degree, they've then got their RICS qualification. They know a lot about serving, they know a lot about property. And you can have a really sensible conversation with them.
Speaker 1 (06:40.354)
So I went to see this property, not because I was interested in buying it, but because I knew if I went to see it, I'll be shown around by the Rick Surveyor, the commercial agent. And I could have a conversation about him about buying the area. And I took my tape measure to measure the rooms. I wasn't interested in measuring the rooms at all. All I wanted to do was go as slow as possible to maximize the amount of time I could build a relationship with this commercial agent and to quiz him saying, what's the area like, what the yields like, what's the demand like? Because I did want to buy commercial property within this area because it's not very far from where.
It's about an hour away from where I live. And at the very end, I asked the Colombo question, which is, I'm not really interested in buying a lease, but I know it's not been marketed as such, but would the vendor be willing to sell the whole freehold, the shop and these upper stories? And the commercial agent said, I have no idea. I will ask. And within three weeks, I had sale agreed. So was this on market? Yes. But was this off market? Yes. Because what I ended up buying was something that wasn't being advertised.
What was being advertised, no was really interested in because no developer wants to buy a bit of a building when they don't know whether they can actually develop it. So obviously this was on the market for about 100K. I bought the whole thing, including the Johnson's dry cleaners for 250K. So I was getting a revenue from day one, about 14K a year revenue from Johnson. So it's good. So it's now in my SSAS. It's making money from day one. Also, you know,
Even at 250k, these things are kind of hard to finance. So if I bought it outside my SSAS, I wouldn't have had enough money to have bought it. So I would need to have gone to the bank and the bank would say, well, what are you doing with these type of stories? Or, you know, eventually I'm going to convert them into residential. They go, well, no, you've to get bridging because you can't convert, you know, on a term. And also they're empty. So it would be difficult to buy this property, is what I'm saying, be difficult to buy this property outside of a SSAS with a mortgage because
clearly it's a development. And so therefore you need bridging and then bridging would make it really expensive and then it wouldn't be worth doing because it wouldn't make enough money. So that's the first thing I'd say about this. It worked well to buy in my SSAS because I own it, I haven't given anyone a first charge. I don't need bridging, I don't need term finance. I can just go ahead and buy this thing. And it would be more difficult to buy outside of, with a mortgage because you've got rental income downstairs, but you've got zero income upstairs. So I bought it.
Speaker 1 (09:05.868)
And then I want to ask a question, which is, what is the most valuable property of these three? There's one on the left, one in the middle, and one on the right. So what is the most valuable?
Answer. Most people would say one on the left, one on the right, because it's end of terrace and it's a bit more private. But I would say the one in the middle. And the reason why I like the one in the middle is, as you can see from the architects drawings, you get more roof space. Now, on the left and the right, these properties have been developed. There was a flat on the first floor, flat on the second floor, and then a duplex flat on the third and the fourth floor. That attic room became a second bedroom. In this, the middle one.
were just empty uppers. So I knew that on the left and the right had been converted to residential, so you know, very likely to be able to convert these to residential. But what I also realized was it might be possible to get a fourth flat in that attic space, which is, know, obviously makes the deal so much better. Four flats is better than the three. So this is the floor plan. So they're all about 40 square meters, but that top flat was really small because as in the eaves, it was 26 square meters. Now to have a new property,
to create a new property, you need full planning permission or you need to miss developments, but you need to provide at least 37 square meters. So everyone look at this goes that top floor is not big enough for a flat. So I can only get three flats out of this building. So therefore it's not worth so much to me as something which makes four, but I was able to magically grow that top flats from 26 square meters to over 40 without building anything. How was I able to grow something?
from 26 to over 37. I was able to do it the following way. Business rates, when they measure stuff, they don't measure the staircase, they just measure the actual usable rooms. So I got another 3.5 meters by putting the entrance a level below, because it's still a one story if you enter downstairs and go up some stairs. So long as there's no rooms or anything usable, you can add that to your floor space. Then I've got all that landing, another 9.1 square meters, and there's other rules about if you create storage,
Speaker 1 (11:10.798)
Even when you're under 1.5 meters high, you can still include it as part of your floor space. If it's a cupboard, if it's not a cupboard, you're not allowed to include it at all. So I was able to add some more. So that got me to my 40 square meters. And then I was able to use a permittive of a called Class MA to basically say, this is an empty building. I'd like permission to convert it to residential. And that came through. So fantastic. I've still got the shop making me money, but now I've got planned permission to convert the uppers into flats.
Now, if I wanted myself to convert the uppers into flats, I would have to get this out of my SSAS. I would have to create separate leases, sell the upper stories. They're still commercial, so I wouldn't pay any stamp duty up to 150 grand of value, but I would need to sell that to my limited company. I could use loanback. So there's some clever things I could do to sell it to my limited company without me needing any cash. So loanback would be one idea, because I could give my SSAS, which is the owner.
I could then sell it from the SAS to my limited company and my limited company could give the first child security to the SAS of these upper floors. So there's way of moving this stuff around if I want to develop it. But actually I've decided I want to sell it. And if I sell it with this plan commission, all that gain is tax free. Now you can't do trading within your SAS, but I have owned this thing since 2019 and only now at the point of selling these upper stories. So I wanted to share
This is my first example because you can see planning gain. Now, why is SSAS a good place for planning gain? Because all that planning gain is tax free. If I bought this in a limited company at 250 grand and then I get this planning gain and then I sell it, I'm going to pay tax on, know, corporation tax on that uplift. But because it's all within my SSAS and I sell it with the planning, that uplift is tax free. So that's good. The other thing is this would have been a very difficult property to have bought with a mortgage.
probably need bridging, which would have made it financially a lot less viable. again, it is kind of quite hard to get commercial finance. Typically, it's not worth the commercial lenders while to do all the underwriting, unless you're borrowing at least 150 grand. To borrow 150 grand at 70%, you need to be buying buildings at least 220 grand. So this is just a little bit above that. So I might have been able to get a mortgage on it, but I think it would have limited me.
Speaker 1 (13:36.43)
And of course, I'm then tied into a mortgage and I can't sell the property without incurring some early redemption charges. Whereas I just own this property outright. There's no debt on it. It's producing a nice sort of 8 % yield within the SSAS from day one. And I know I've got this planning game that is coming shortly, which is fantastic. So that's the first one I bought. You may not have 250,000 pounds in your SSAS, or you may have 250,000 pounds in your SSAS, but you don't want to go all in.
on just one asset. I don't think it makes sense to take all of your SSAS pension and stick it in any single one asset. I kind of like to think of, you know, ideally around a third, perhaps in commercial property, a third to 50%, but probably not more than that. I want to have some different strategies. So if you haven't got 250 grand, why not buy something that is less than 250 grand? This was on the market for 125,000 pounds. It was a shop where the shopkeeper was retiring. Right. So there was a tenant there, but that tenant is retiring.
And because the tenant owned the shop, the tenant didn't pay, the tenant was the owner, so they didn't pay rent. So there wasn't a rental now. So this is a hard property to value because typically commercial properties are valued on the basis of a yield off their rental income. So if the income is 12 grand a year and the yield in the area is 8%, then the value of the building is 150 grand. Simple. But because this was a business that been there for 40 years and they owned the building,
there was no previous rental income. So there's no real way of adding that and they were closing down. So this is a really difficult property to buy outside of a SSAS because A, the price is quite low. As I said, if you're borrowing less than 150 grand, then most commercial lenders aren't interested. Now there's a certain amount of underwriting they need to do and it's just not worth their while to do all this work when they're not lending very much money. They're not going to make very much profit. So it's hard to sell these properties.
that are below 220K, because they're hard to finance. Unless you're walking around with like, you know, 220 grand of cash in your pocket, you're unlikely to be able to buy one of these. Now, if you did buy one of these with a mortgage, it's got no tenants. Had a tenant until I bought it. So that means there's no income. Because there's no income, you can't get a term lender to lend you on it. You could only get a bridging company to lend you on it. Now, bridging is about 14%. Again,
Speaker 1 (16:02.306)
then you've got no money coming in and you're paying 14 % interest on whatever you're borrowing. That's going to kill the deal. So again, this is an ideal thing to buy within a SSAS because within the SSAS, you don't need to get a mortgage. You've already got cash. Okay, you're not getting an income, but you're buying something. You're getting capital appreciation from day one. But because you're a cash buyer, because people can't mortgage this and because it's not economically viable to bridge it, you get a discount. And so this was on the market, £125,000.
What discount did I get? Quite a reasonable discount. I bought it for 100k. Nice round figure, which is what the vendor wanted because they wanted a six-finger sum and I got 25 grand off. I mean, it's hard to know what the real value is. I definitely got a discount on the purchase of that property. And just going backwards, this property here, I've just had this valued. The upper stories have been valued at 225,000 pounds in their current states. So they've got planning, but nothing's happened. I bought the whole thing for 250 grand.
So clearly, I've created some value there. I think the shop's probably worth 175 to 200. So yeah, so I think a good place to buy is within the SSAS. You get this massive discount because you're a cash buyer. The vendor likes it because they know you can transact with someone with saying they're going to get mortgage. They probably can't, or if they do, it's not going to be in great terms. They might pull out. So there was certainly the deal when I made the offer. I was able to send in a statement from my SSAS saying,
This is how much money is there. I'm a cash buyer. Therefore, I want a good deal. And so we will good deal. So this is the photo of the outside. Why did I want to buy this property? Well, firstly, quite cheap and I've got a discount. Secondly, I want you to tell me what do you notice in the following photos. So these are the photos of the entirety of this premise. There's a little store at the back, which there isn't a photo of. So what do you notice the difference between this property here on the outside?
and this proctome inside. What don't you see?
Speaker 1 (18:04.322)
What would you expect to see that you can't see in these photos?
And this is the first thing I noticed when I saw this on Rightmove. What can you see here that you can't see here?
Any answers? like a couple of people are dropping notes in the chat, Toby. Seems like windows is a common answer. Someone's put... can't see windows. Windows. No, no, the person's got this one right. Simon Walton, well done. Stairs. There are no stairs. You notice there are no stairs on this ground floor. That's the first thing I notice. What you can notice, I don't know if you can see my cursor. Can you see my cursor? There's a little hatch, tiny little hatch about...
A3 size. So what's happened is there were stairs, the stairs have been taken out for two reasons. Firstly, it maximizes the floor space, which if you've got a shop, that is, you you want the floor space on the ground floor where you have customers. Secondly, if you have no stairs, then when the council come around to work out what business rates you need to pay, they know there is a floor above you because they can see from the outside, but they're not allowed to assess you for business rates.
if they can't get to the upstairs and they don't come with ladders. Right. So one of the reasons that happens a lot in folks in Dover, people take out stairs so that when the council comes around, they can't be assessed for business rates. Not that the business rates are huge on the Apple stories, but they're making a saving. So they're actually incentivized to devalue the building. So I thought, hang on, I'm buying this property for a hundred K, which is kind of the value of a shop, but I'm getting a free something above it.
Speaker 1 (19:44.302)
what is above it. So I turned up with my telescopic ladder and I went through that little hatch. But before I did that, other thing I noticed when I looked at Rightmove, so I'm showing you what I saw when I saw this on Rightmove before I went to visit the property, I had a look at the street view on Rightmove and you can see something. What you can see is this is right in the center of town. The town hall is just on the far right. The second thing you can see is this isn't a great commercial area. It's not the best shops ever.
The third thing you can see is there's loads of flats. So if you work along, there's definitely a flat above the Eastern Place. There's a flat above the Express. There's then something which was a fish and chips, which is why it has a little icon of a restaurant. But it's a flat upstairs, and they've converted the downstairs to a flat. Then there's a restaurant in the flat above. Then there's a hairdresser's with the flat above. And then there's this pet shop with nothing above. So clearly, there's a flat. There's space for a flat above. The second thing I've noticed is this is kind of dying as a commercial area.
So I might even be able to get planning to create a flat on the ground floor, because this isn't really core to the town. It's just outside of where the town hall is. This is not the main strip on the other side of the road. That's where people go to shops. I went upstairs and so here are photos I took when I first went to see it. First I went to the back of it and you can see there's, I don't know if you can see my cursor, there's flats next door, right? And then there's no windows for this building. It's the gray thing with the dodgy looking roof, a bit lower. Then I noticed the opposite.
is how commercial properties have been converted into like these little muse cottages. So ignore the bins that are bit messy, but you can see they kind of look like nice little muse cottages. So I thought, well, I could convert to that. The third photo I can see there's lots of windows being blocked up. So there's a window on the first floor, it's been blocked up. There's a window in the attic, it's been blocked up. That window on the first floor you can see on the next picture, which is on the bottom row on the far left, massive window, really easy just to open up an existing window, get a whole lot of light in. Once you've got a window, you've now got another room.
No one had been up on this floor since 1980 because I found a newspaper up there. So no one had been up there since 1980. What a waste of resources. But there was then a staircase straight up to the attic floor. And I quite like these original staircases. They're much tighter than what you could build nowadays. But because they're an existing staircase, if you just keep them, it's allowed. If you were to take them out, you then have to put a new staircase in that comprises building racks, which needs to be a lot wider. It would take up lot more room. But if you keep what's already there,
Speaker 1 (22:09.166)
you actually have a really efficient way of getting from one story to the next. So I had a look at this and thought, do you know what? There is definitely enough room to create another flat up here. So I had a look. This is the floor plan. There's a store room at the back. There's about 30 square meters downstairs to the shop. And there's 24 square meters on the first floor and 10 square meters on the second floor. Now, you need 37 square meters to create a flat. But an attic room, which is for storage, can be considered part of your one story.
And as you said, said earlier, the stairs to the first floor can also be considered part of the space. So there we are here. Here's a plan I came up with 40 square meters. So I've taken a 24 square meter first floor and I've made it into a 40 square meter flat by adding stairs from the downstairs up to it and adding the attic room as a storage room, which obviously will end up being a bedroom. But at the time of the plan application, we'll just say storage and that still, so I've got a building across three levels, but it's still under case law.
considered to be a single story flat, which has its square meterage over three floors, adding up to more than 37. So now I know I've got enough room for a flat. I've got enough room for a shop on the ground floor, or I might apply to make that into another flat. And I've got enough room in the rear store building to create a third flat. So I'm spending 100 grand, I'm buying something that is appreciated all the time and could either convert into a shop and two flats or three flats.
So I think it's not a bad deal. So that was the second one I bought. Now, perhaps you don't have 250 grand, perhaps you don't have 100 grand, perhaps you have less money. So let's look at the next building that I bought within my SSAS for less money. And here it is. This is the Halifax Bank in Dover on the high street, right in the heart of Dover, next to Boots and the sort pedestrianized precinct. Nice, nice building.
This is how much it sold for back in, when was this? This was 2006. It sold for 1.25 million. That is a huge amount of money. Why did it sell for so much money? Well, it sold for that much money because it had an income of 68 grand and a 20 year lease, a large part of which was remaining. So the value of commercial buildings is essentially just the value of the rent.
Speaker 1 (24:33.218)
You take the rent, there is a yield in the area. In this area, it's about 8%. You divide the rent by the yield, and it gives you a valuation. And so that's why they sold at 1.25 million. But it was then bought by these guys you can see at the bottom of the page, these guys, Churton Commercial Properties. And it was bought for under a million. Why? Because there was less years left on the lease. And so it's a depreciating asset, because when that lease comes to an end, you're not guaranteed
certain amount of rent, you've got to go find another tenant and there may be a void. And so therefore it's worth less as time goes on. But what was this property bought for? What was this property worth when it didn't have a tenant? And I did a bit of digging and there we are, found in 1997, it was bought when it was empty for £355,000. These guys within a year, you can see September 1998, they signed a 20 year lease with Halifax. So they bought the building for
£355,000, an empty building. And then they got a tenant within a year, exactly within a year, took them slightly under a year to get a tenant at 68 grand a year. And that made the property then worth 1.25 million. So now you can see the value of the reason of buying a commercial property. If you buy something without a tenant, which you can do in a SSAS because you don't need a mortgage, you can buy in cash. You don't need bridging, you don't need term lending. So it's easy to buy because you've got an amount of cash.
So you buy something that's empty, you're not paying any interest because you just bought it in cash. You can't lose the property because you own it, you don't have a mortgage, no one's got a first charge on it. So you're in a secure position. You then find a tenant within a year. Suddenly you create this huge amount of value. And when these guys sold the property, if they had bought it in a SSAS, the guys who bought it in 1997, and then they sold it in 2006 for 1.25 million, that gain would be tax free to the SSAS.
Fantastic. They're not really trading because they've held it for nine years. So hard for HMRC to claim that they were trading the building. They were just selling it on after nine years of enjoying some income from it. So they've got some good income of 68 grand a year for almost 10 years. They've made almost twice the purchase price from 1997. And then they sell it for a massive uplift. Very, very nice. So I know this building was worth £355,000. Back in 1997, we had no tenants.
Speaker 1 (26:59.822)
When it had a tenant paying 68 grand, it was worth 1.25 million with X amount of years left. And then it was worth 1 million when there was Y amount of years left. So I'm getting quite a lot of data just by going onto houseprices.io, just having a look around EIG, finding out what prices it sold. So this is giving me some information and give me some confidence. So what is this property now worth? It was worth 355,000 pounds when it was empty. This is what it looks like today. Halifax had moved out. So clearly the property is not worth 1.25 million.
It's not worth a million. It's worth a lot less. Now it was sold for £355,000 back in 1997 when it had no tenants. So what's its value today now it has no tenant? Well, it should be about the same amount of money with capital growth. And this is what it was marketed for £350,000. So it was marketed for less than it sold back 20 years ago in 1997 when it was in the same kind of condition. I think that's probably a good price, isn't it? If it sold for £355,000,
when it was empty 20 years ago, and it's now on the market at 350, that's not a bad, not a bad deal. So again, I wanted to buy this, but I'm a cash buyer because I'm buying my SSAS. And so I agreed to buy it, but I'm not at 350. Again, to buy this is difficult. You can't get a term mortgage because there's no rental income. So you have to get bridging. Bridging is expensive. So not many people are able to buy this. And it's clearly a development opportunity. The upper stories are empty.
because banks aren't allowed to rent out upstories. So they just basically end up being empty. So I bought this for 250,000 pounds. So clearly, that is the advantage of being a cash buyer. But I didn't have 250,000 pounds. So why this one was different was that I only bought a third of this building. I bought a third of this building with my SSAS, and you're allowed to have four owners listed at Land Registry.
I bought this building with another two mates and each of my mates has a SSAS. So the three of us bought this building. It was a building on the market for 350. We bought it for 250 and we each bought a third of it. So this is how you can acquire quite large buildings with a relatively small pot of money. And it's what I like. It's an empty building town center. It's got potential. It's got potential for the shop, but it's also got potential for development on the upper stories.
Speaker 1 (29:23.832)
So this is what it looked like, absolutely huge, 510 square meters. And like every bank, you've got the ground floor with all the little rooms to meet customers at the rear. And then you've got the upper stories that were once used as offices, but have been derelict for 20 years. Again, part of the lease for the whole building says those upper stories need to be maintained even if they're not used. So here are some photos, obviously a dead bank, so you've got all your cashiers.
You then got weird things that go on. Remember when I said they take stairs out, the council come around and can't do, the valuation office can't measure the floor. They know the floor's there. They know the size of the floor. It's the same size as the floor below. But because they can't get there, they're not allowed to include it within business rates. So you've got this funny corridor here, which I went, what's going on here? This looks like this was a staircase to a door here that's been blocked up. And this is light to go onto the landing, but we can't see the stairs anymore.
So that's from the ground to the first floor, stairs have disappeared. Then from the first floor to second floor, no stairs, but a little ladder, which is put away when the council come around to measure for business rates. And then when they leave, the ladder can be pulled down. Obviously you've got lots of kit, all the electrical stuff, and then you've got basically a upper storage that hasn't been used for 20 years, but every five years or so they go around and repaint it. But it clearly looks like it's been more than five years that top story has not been maintained.
So, you know, the building's deteriorating, but it's got a lot of assets, it's got a lot of capital allowances potentially. There's a lot of space that's just underutilized. So the first thing I go and do is if I'm buying a property, even if I'm getting a hundred grand off the asking price, to buy the property, I've got to pay more than anyone in the universe thinks the property is worth. Because if someone in the universe thinks the property is worth more, they would pay more money than me. So buyers curse as soon as I bought this building, yes, I may have got a great discount, but actually I pay more money than anyone thinks it's worth.
So what do I know about this building that no one else knows about this building that makes this building that I paid more money for than anyone else in the universe worth more to me than anyone else? I need to know more about this building than anyone else in the universe so I can create value from this building. So I started to like dig around and I went through all the planning portal history, know, it's like 30 year history. And I found this photo like hidden away in correspondence. And you can see that where there is currently an ATM, there was a front door.
Speaker 1 (31:47.106)
there were stairs going up to the first floor. So that's where the stairs were. And the cheapest way to convert the property is to put it back the way it was designed. The best thing I think to do with the property is work out what was this originally designed for? How did it operate? What is the modern equivalent? So back at this time, there was a shop on the ground floor, and then there were stairs to a different shop on the first floor. I think it was a hairdresser's, know, about 40 years ago. So the cheapest thing for me to do is to put back
what was there. Otherwise, I'm fighting the building by tramping stairs where stairs have never been. So that meant I now know something about this building that no one else knows. Asians don't know about this. It's just been lost. Like 30 years ago, there was something upstairs no one can remember. No one's around anymore. So the strategy for this building was to reinstate the building's original stairs and to unlock its residential potential. So as soon as we get stairs in the right place, which is down here,
All of a sudden, all these windows along the sides can be used for rooms, whereas currently Halifax put in a massive staircase on that wall where the windows are. So you don't have any windows. The windows got blocked up. So you can't use it for residential because you need to have a window for every habitable room, a bedroom, a dining room, a living room. These are habitable rooms, kitchens and bathrooms you don't live in. So you don't need windows for them. So putting the stairs back where they were, which is on that party wall with boots,
is the right place for them. That's where the stairs were originally designed and that's how the building used to work. And Halifax, you know, for their own reasons, put the stairs elsewhere, blocked up the windows for security and it basically ends up not working at all. So what I like about this is probably these upper stories were originally residential, so we're just putting back the way they were. So it's quite simple. You do research, you find out how the building was originally used and then you think what is the modern equivalent of that? Well, probably originally people used to live upstairs. It was probably residential.
and they probably had rooms where the windows were. And so the simplest thing to do is to put the staircase back where it originally was. And all of a sudden you've now got access to five flats. At the time there was gaming, a business down the road that wanted to expand and they wanted two shops and they wanted no windows. So we designed this to be a small shop at the front where they could sell their games and stuff. And then another shop with another entrance at the rear or the middle of the building with no windows where people could go and actually do their gaming.
Speaker 1 (34:14.442)
and we still managed to fit another flat at the rear. So we're getting two shops and five flats. It's good to split a shop because the business rates are huge. Once you're over 12 and a half grand, you have to start paying business rate tax. But if you're under 12 and a half grand and it's your only business and your only premises, you get small business rates relief. So this building had business rates of 40 grand, which meant you pay 20 grand a year in business rates tax. But once you take the upper stories off,
They're not included in your business rates anymore. And once you split your shop into two, now you've reduced your business rates down to a level where a shop owner, a business owner can come and they get business relief. So now they're saving 20 grand or 10 grand of business rates. So now it's easier to rent the property. You can rent the property for more money and you can get two income streams rather than one income stream. So that's another advantage of buying an empty property. It gives you the ability to do that sort of cutting up and
increasing your cash flow and revenue. But you need to be able to afford to do that. And you'd never be able to do that on bridging when you don't know how long it's going to take to get a tenant. But it doesn't matter. We buy it in a SSAS. It doesn't matter. It's got no rental income because of development potential and because we're not paying any debt. So how did this one work? Bought it for 250, found this tenants, it was all looking good. And then the tenant pulled out at the last moment. And so that point you thought, well, now we don't have a tenant. Now we're going to start to incur business rates. It's not great.
And at the same time, someone approached us and said, we'd like to buy the building. So weren't intending to sell the building. you know, things changed. And when things changed, we thought, actually, it's quite a good deal. We can get a 50 grand uplift. We've done nothing to the building other than a few plans. We haven't got planned admission. We've just done a few plans to show what is possible with the building. We've only owned it for just over six months. We made a 37 % return on the cash we put in. And I and my wife only had to put in
Speaker 1 (36:11.958)
£86,573 to do this entire deal, to buy the property, to pay all the stamp, the legal, the taxes, because it all got split three ways. it wasn't what I expected was going to happen, but the outcome was not bad. I've got experience of buying a bigger building. I've got experience of working with other people. We each owned a third, so we each had a third share. We each had a third voting rights, but we were able to acquire a much larger building.
by collaborating. And this is a repeatable model where these empty buildings with no tenant, with potentially quite high business rates, hard to get into, hardly able to buy because the business that would rent them will not buy them. They're a business and you don't know who's going to rent them. So I quite like this example because it just shows what you can do when you start to collaborate with people. So those were my three examples that I wanted to show. All slightly different, know, but all of them involving buying in cash.
and not needing a mortgage and not needing bridging. The only thing I want to say is when should you buy outside? So I think you should buy in the SAS when you're buying something that banks hate, right? And then I think you should sell when you've got something that banks love or you should refinance when banks love it. So banks want there to be a rental income on day one in order to give you term finance. Otherwise, all they will give you is bridging. And bridging is going to kill these deals because you've got the uncertainty of no rental income.
but definite amount of interest you're paying out about 14 % is the average when you include all the fees. So I send the banks that want an empty building, right in an area where you're pretty certain you are gonna get a tenants. Now remember with that last one, it was bought for 355 in 1997. And in 1998, the people who bought it had a 68 grand of income coming in from Halifax. It took them a year. So a year is quite a long period of time, but after a year, they got all this cashflow coming in.
That's what I like using the SSAS for. What I prefer to buy outside the SSAS is if there's a building and it's already got rental income, then it's entirely mortgageable. And then for me, it makes more sense to buy outside of the SSAS because I can go to a bank and get a mortgage for it. And you can get finance within a SSAS, but there's less lenders. There's more lenders when it's just more, more traditional, know lenders understands limited companies more than they understand SSAS. So I buy outside of the SSAS when
Speaker 1 (38:35.584)
I can borrow the money because there's rental income. I buy in the SSAS when it's something the bank doesn't currently like, but I can do simple things to it. And then once those things are done, I've got the option of either trying to finance within the SSAS or selling that point and exiting. And obviously all that gain is tax free.
Speaker 3 (38:55.63)
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