Join Christian Rodwell, Kevin Whelan, and guest Ruban Selvanayagam on WealthTalk as they share insights on the fast-paced world of property auctions. Discover the allure of quick transactions, unique opportunities, and the importance of diligent research in maximising returns. Tune in to stay ahead in the competitive market of auctioned properties.
In this episode of WealthTalk, Christian Rodwell and Kevin Whelan discuss the strategy of buying properties at auctions with guest Ruban Selvanayagam.
They explore the benefits of purchasing properties at auctions, such as finding unique opportunities and the ability to complete sales quickly.
The discussion covers the shift towards online auctions and emphasises the importance of due diligence.
Investors will gain valuable insights on maximising returns, understanding the market, and being prepared with financing to complete sales within the specified timeframe.
Resources Mentioned In This Episode:
>> Ruban Selvanayagam [LinkedIn]
Next Steps On Your Wealth Building Journey:
>> Join the WealthBuilders Facebook Community
>> Become a member of WealthBuilders
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Christian Rodwell (00:00.046)
You're finding opportunities there that you wouldn't necessarily be able to see on the open market. You know, if we put a property on for sale, we get an offer. Within a month, we're completing on the sale. There's no limit to how much you can bid up to. In the past, we've seen prices go way, way, way above their global prices.
Christian Rodwell (00:20.846)
Welcome to this week's episode of Wealth Talk. My name is Christian Rodwell, the membership director for Wealth Builders, joined today by our founder, Mr. Kevin Whelan. Hello, Kevin. Hi, Claire. It's good to be with you again on a fascinating subject this week. The number of podcasts that we've done, Kevin, many of them have been around property, but never have we touched on the strategy around auctions, which is what we're talking about today. And we've got a fantastic guest who is Ruben Selv via Niagam, who has been doing this for some time, certainly been in property for 20 years now.
Like many people in property, Kevin, the last few years, it's become a bit tougher. So those traditional methods, legislation changes, COVID, market conditions, people have had to start thinking a bit more creatively. And that's certainly what Ruben's been doing. Yeah. Do you want to get that out? Okay. I'll edit that out. Don't worry.
Anyway, you're absolutely right, Chris, in any event, you have to be more creative and continually keep the creative juices flowing because what worked before doesn't work again. In so many examples, so many businesses have been affected by economic events that are unpredictable and COVID being probably the most devastating one, the Black Swan event, nobody could predict.
nobody predicted and of course there'll be another one. We've got a government change coming up so there'll be a need to pay attention to things that over which you have no control to then see how it reflects and changes the things that you can control which are always going to be around your leverage, how you spend your finances, where you apply your intellect, who were the relationships you seek out to build.
What software systems, you know, something new that's coming out and how do you focus your time and how do you give yourself time for that creativity to flourish? And we're fortunate and wealth builders, we all we do, right? So I'm constantly fascinated with what people do. And that's how I discovered Rubin. It's like, that's clever. You know, he's got a whole bunch of businesses like a sausage roll wrapped up in an auction. You know, he's like,
Christian Rodwell (02:42.222)
This is clever stuff. There's property selling, there's auctions, there's buying in cash, there's investors, you know, there's probably more layers. So it's probably a Swiss role, right? It's not an economic Swiss role on the go here. And I always admire creativity when it comes from a place of genuine entrepreneurialism, genuine integrity, and willing to share it. And the fact that he's come on the podcast and...
willing to share to me is an interesting thing. Yeah, and it's actually Ruben's first podcast interview, so he's done a great job. I ask him all the questions from someone perhaps who's brand new to the auction experience. We're focusing on this episode on how to maximize your returns from buying from auctions, but actually we've recorded a separate episode which will come out in the next couple of weeks, which focuses on how to maximize your returns when selling at auction. So today, focusing on the buying.
And probably time for us to head on and hear what Ruben's got to say.
Ruben, welcome to Wealth Talk today. How are you? Yeah, I'm good, thanks, Christian. How are you? I'm fantastic. And where in the world are you today? I'm based in South London. So I don't think we're too far from each other, right? Ruben, it's great to have you on. And it's a topic that we have never discussed before in Wealth Talk. So you are the privileged guest to tell us all about auctions. And we're going to actually split this into two podcast episodes. And today we'll be focusing on how you can really maximize your returns when buying an auction.
And then we'll do a separate podcast in the next couple of weeks about how to maximize when selling. Does that sound all right? Sounds good. Okay, great. So let's kick off and find out a bit more about where did your intro to property begin? Okay. So I've been involved in property since around 2006. I originally studied law, finished that in the early 2000s and was doing various different jobs. And I kind of fell into property through
Christian Rodwell (04:41.998)
who James, who's now my business partner, he was doing a lot of kind of residential buy -to -let and I started tapping into that as a bit of a side hustle. I'm not sure if that's the right way of calling it. It was always, it wasn't meant to be my kind of full -time occupation. And then it ended up just gradually taking over. And then I moved again into buy -to -let mainly in the East Midlands. So I was doing that for quite a few years, you know, the kind of traditional model of buying, refurbishing.
refinancing onto long -term buy -to -let. And then I did a bit of traveling, came back. This was at the height of the recession, really. I thought, all right, I'm just going to leave the country for a little while and then come back again. When I got back, the market had changed quite a lot. It wasn't as easy to do buy -to -let. And I'm quite glad I took that step because a few years later, the market starts to change.
quite dramatically in the form of section 24. So another piece of legislation which meant that being a landlord has become a lot more tougher. So over the last seven, eight years, I've really been more focused on flipping properties. So buying properties, refurbishing them, selling them, or trading them for auction, which I'm sure we'll come to talk about. So that's where I am today, really. We set up property solvers back in 2005, but we didn't actually do too much with it.
It was only since 2017 that we really kind of revved the engine again and then did a lot of kind of direct to vendor marketing. And then during the pandemic is when we all launched our auction house as well. So we offer both cash purchases, so cash buying effectively the ability for sellers to complete in seven to 28 days with no estate agency fees or no legal fees. Or if the offer that we make for cash is unacceptable.
we introduced the auction option to them. So we've kind of introduced that over the last four years into the business really as a kind of side to help people that are looking for a fast disposal, you know, and still want, you know, a level of security of sale that you can't get through the open market. Of course, we're going to focus on the
Christian Rodwell (07:00.078)
auctions today, but I am keen because when I first started in property, I was sourcing deals. I'd love to just pick your brain, Ruben. For anyone who's in the early stages of property, perhaps they don't have the money to buy property, but they're looking to source and find deals. What are some of the ways that you go about that? Are you very much online leads or are you putting leaflets through doors or a combination of all of these things? I've tried it all, to be honest. When I first started out, it was the days when you could put
I mean, I know there's some companies out there and buyers that are doing it. You can put adverts in the back of newspapers. I'm not sure how well that works now, but it used to generate a lot of inquiries, you know, and it was quite easy to set up, you know. These days, it's not so easy to kind of set yourself up as a property source. You've got to go through quite a few legislative hoops. We spoke to a lady called Tina Walsh recently from the National Association of Property Sources. And one thing you've got to realize when you're a saucer is that
You're actually an estate agent and you've got to comply with a range of different rules and regulations that a lot of sources don't realize they have to. Not only do you have to kind of jump through all of these kind of administrative hoops, but you've also then got to go out and look out and look for deals. And it's not that easy. I mean, yeah, you might be lucky and you might meet an estate agent that's willing to kind of pass on a deal to you that's below market value or, you know,
there's something in there where you can, you know, you've got a bit of juice or you've got some equity in there. But really an estate agent's job is to maximize the price that they achieve for the seller. So the best way to do it really is to go out there and network. Leaflets is a really good one. You've got to be quite committed to it. I think if you go out and deliver 10 ,000 leaflets and expect the lease to flow in, that's not really a realistic approach. You've got to be quite consistent. When we were doing it in London, actually, we would send out leaflets and then
repeat the cycle maybe every five or six weeks. So then the message gets out there a little bit more. I mean, we mainly do online marketing. So SEO, pay -per -click, Facebook marketing, and that's how the industry has changed. But the problem there is that it's very expensive. It costs a lot of money to, if you're building a website.
Christian Rodwell (09:23.022)
you know, and putting that content, that kind of thing, you know yourself Christian, it's not easy and it's a lot of hard work to kind of get it going. Paper click, it's great, it can be really good source of leads, but then you've got a lot of competition as well and that pushes up the prices, you know, of kind of clicking. There's things like Facebook as well, which is not bad, it's just that the quality of the inquiries you get is not as good. But yeah, it's really a mixture of online and offline that we do nowadays, but.
If I was starting out, I would probably go to as many networking events as possible because you can kind of meet people there, you know, who might be doing it and we'll give you some ideas. Maybe start small, you know, do some small scale leaflet campaigns in your local area. Get to be known, you know, in the area as the kind of local property buyer who's, you know, active. It's a case of just kind of seeing more opportunities coming your way. I think the more you put yourself out there.
the more likely you are to attract the right kind of opportunities, I think. And sitting at home behind a computer screen is probably the best way to go. Now, that's a good tip. Thank you. And of course, you've been doing this for a long time. So you've now, you are attracting, I'm sure, a good number of leads. And of course, one of your promises is that you can turn these around and you can sell these pretty quickly, right? So sometimes within as short as seven days or 28 days? Yeah, I mean, that's the main benefit of
of people using us for the quick cash sale option. We are able to turn around sales because we use cash funds to purchase properties. So we're effectively bypassing a lot of the hassles and stresses that come with an open market sale or even an auction sale to be fair, because we can make an offer and genuinely compete complete on that sale, which is not always possible. It means we take a few risks because we're not able to investigate the ins and outs of the property. And the seller
does have to make a bit of a trade off because they're accepting an offer that's genuinely below the market value. So yeah, there's kind of pros and cons with that. But yeah, we are able to complete a lot quicker than what is normal out there, quite considerably to be honest. But then, we've got that second option, which is the auctions, which is kind of a halfway between an estate agency sale and a quick cash sale.
Christian Rodwell (11:45.39)
So the way we always approach it is we have a conversation with the seller and just say, look, when do you actually need to sell this property by? What are your objectives? And then we can kind of build a solution around that rather than just kind of say, okay, we'll start cash off or take it or leave it. If we feel that they've got more time to be able to sell the property, we'll say, well, why don't we put it up for auction? Because we can get a number of investors involved. We can really drive up the price. And sometimes if we see these prices going way above the market value, you know, so it ends up being a really good result for sellers.
Yeah. Let's look at the auctions then in a bit more detail now then Ruben and memories of auctions, right? Big room, lots of people sat there, you know, raising their card in their hand. Are things still like that or is the online world taken over now? The online world is pretty much taken over. I wouldn't say it's 100 % but I would say it's a good proportion of the online, sorry, the auction market at the moment. That's changed quite a lot since COVID. I think auctioneers were kind of forced to
go online during COVID and they've just kind of stuck in their ways. And a lot of buyers are now more accustomed to online bidding. Before it was a little bit kind of, almost crazy, kind of like, right, I'm about to bid on a 500 ,000 pound house and just on a click of a button, like I'm buying something on eBay. But now people are just a bit more accustomed to it. And then you've also got live stream auctions as well, which is kind of, you've got the auctioneer on the rostrum, you know, and then you've got people just bidding online.
So it kind of gives that auction room feel to a degree, but you're still sat behind your computer screen. And I think that's just the way the industry's changed. I think COVID fast -tracked that. And it just meant that people were just like, right, okay, this is just the way it is now. And for an auctioneer, the amount of savings that they're making by moving it all online is quite a lot. Before they had to hire a room in central London.
They have to get all their staff down there. They have to kind of, a lot of overheads to kind of, to deal with, to kind of run these auctions. So it's meant that everything is kind of consolidated to a degree and buyers seem to be happy with it. There is something about the room, there's networking opportunities and also there's that ability to kind of, I guess it feels a little bit more daunting in the room.
Christian Rodwell (14:10.894)
behind a computer screen, it's very easy to just click a button, which is great for sellers, by the way. But in the room, you're maybe a little bit more tense and you feel a little bit, maybe a little bit more scared to bid, maybe. But yeah, it's definitely evolved. I wouldn't say in the room auctions are over because they're happening all the time. But I think more people are accustomed to buying online. And in the in the room auctions, a lot of people are doing proxy bids and things like that. So it's still...
It's still kind of active there, but nowhere as much as it was. Many of our listeners, Ruben, will be investing in property right now. Some perhaps have got experience of buying at auction and some haven't. What would you say are some of the benefits of purchasing property at auction? And of course, then we want to look at how to maximise those purchases as well. Sure. I mean, the benefits, there's quite a few, obviously. You're finding opportunities there that you wouldn't
necessarily be able to see on the open market. So, provided you do your due diligence, you can really find some good deals. It does take a little bit of experience and a little bit of knowledge to really kind of discover what these opportunities are. But they're certainly out there, especially at auctions. And in the current market, you know, we are still in a buyer's market for a range of reasons, which I'm sure we'll talk about. There are probably more opportunities than there have been for quite a long time.
A lot of landlords, for example, are selling up because of a range of reasons, really. It's just no longer easy to be a landlord. You've got rising interest rates. You've got the impact of Section 24. I think I had a statistic that 95 % of all tenanted properties are owned by owning a personal name, which effectively means that if you have got a mortgage on your property, your tax bill is probably going to be quite hefty at the moment. So a lot of landlords are just throwing in the towel and saying, right,
I'm just going to sell the property. They may have not done a lot of work on the property over the last 15, 20 years they've owned it, but still got a decent amount of equity. So they don't mind maybe taking a little bit of a hit. And often they're putting it up at auction because they think to themselves, well, I can just dispose of this property in a relatively short timeframe and get a decent price for it without having to do all the work. So there's a lot of those kind of properties going on the market.
Christian Rodwell (16:32.686)
I know you spoke to Kirsty Dawkins recently about commercial property. Yeah, I think there's a real flood of commercial property going onto the auction market, which obviously has its own risks. It's almost a separate world to residential, but if you know what you're doing and you really understand the ins and outs of commercial property, most commercial property sellers are going to be looking at auctions rather than private treaty.
It's a very popular place for commercial properties to be sold. We've sold quite a few in our time. So yeah, the opportunities are generally there at the moment. Are there certain types of property that simply you can't sell through an estate agent, they have to go through auction? I would say most properties you can sell through an estate agent. The problem you have with estate agency sales, or private treaty as they're called, is that
The buyers tend to not be as sophisticated. So, you know, we've sold properties that need work and things like that through our estate agent. What happens is that you often get buyers turning up and just kind of combing around the property with a magnifying glass, just picking at holes and just saying, you know, well, I don't know if I'll buy this house anymore. Whereas with auction, you're kind of holding the buyer's feet to the fire and just kind of saying, look, we're able to get you a pretty good discount on this property because it needs the work that you require.
So we need you to commit to the sale. Generally at auctions, you're going to be finding properties that need work. As I mentioned, a lot of landlords, they've let out the property for, let's say, 10, 15 years. They haven't really done that much work to it. To refurb a property at the moment is quite expensive. So they're thinking to themselves, well, I'll just get rid of this property, rather than refurb it and put it on the open market. Because that is the way to maximize the price. If you have got the time, the effort, and the funds.
It can be a wiser idea to kind of, right, I'm going to fully refurbish this property, put it in your kitchen, your bathroom, and then maximize the value you get from it. But you've sometimes got to balance it out and think to yourself, okay, how much time is it going to take me to do this? Am I going to be able to manage all the trades and afford everything? And what is the difference in the price really? So if I'm going to spend like 40 ,000 pounds on a refurb, am I actually going to genuinely add more value to this property or not?
Christian Rodwell (18:57.87)
So we often have that conversation with sellers because they're kind of humming and -ing about what to do. And we just say, look, we're doing refurbs ourselves and we've seen over the last few years how much costs have increased. It's often a bit of a balancing act to kind of figure out whether it's actually just worth just selling the property at auction or taking it off the market and just refurbing it and then putting it back on the market to sell.
I guess that's a combination of thinking about whether you want the capital and how to deploy that or whether you want the cash flow. We focus a lot on recurring income at wealth builders. I guess rents are at all time high at the moment, aren't they? As you say, if you can refurbish to a high standard, then perhaps you can get some really good cash flow. Yeah, rents are definitely increasing. I think that comes down to this whole supply issue. The problem that a lot of landlords have is that if they own the properties in their personal lanes,
it just makes it very difficult to, even if you are increasing your rents, you're limited to the amount of mortgage costs that you can offset against tax at the moment as a result of section 24. So even if you are increasing your rents, if your mortgage costs have gone up, you're still going to be struggling because your taxable is going to be so high. So you get all this money and then suddenly it's just disappearing in tax. So really, if you're buying a fresh, you're buying buy -to -let, 100 % buy for a limited company.
Anyone that tells you anything different doesn't know what they're talking about. Would you mind walking us through the process then of buying our auction? So first step, I guess you've got to register with an auction house. So with Property Solvers Auctions, what's the process for someone to be able to purchase a property that's in auction? Yeah, so we obviously have our own property portal, but we would market properties on Rightmove, Zoopla. We've got the UK's largest LinkedIn group as well.
So our properties kind of go across the web, but a lot of people visit our website as well and find out about the stock they're selling. Essentially what will happen is they will register their interest. Typically most people want to see the property first. They want to organize a viewing, which absolutely we can do. We can do viewing seven days a week. So that's usually the first stage is go and see the property, see if there's genuine interest. I mean, this is a process that most auctioneers would follow as well. So it applies not just to us, to any kind of auction property.
Christian Rodwell (21:22.35)
You go and see the property, if it's something that you like. There should be an inquiry line. So we've got our own 24 -hour inquiry line where people can get in touch, ask as many questions as they've got with regards to the property, find out more about the auction dates, what's going to happen. So there's a process that we go through with the seller, which we'll talk about probably on the next podcast. But really, we aim to prepare the property in the best possible way because ultimately our client is the seller.
But we also have to kind of make sure that all buyer inquiries are dealt with in the right way. So with the seller, we would already have organized an auction legal pack. So because the buyer is committing to the sale, they really need to understand all the ins and outs of the property before the hammer falls. So if they're going to bid, they need to kind of know, right, okay, are there any issues with this property, legally speaking? Are there any physical issues that I may need to deal with once I've purchased this property?
So you need to make sure that you know everything that you're getting into. The slight risk with auctions is that you don't know sometimes. There's sometimes a few gray areas that you're not sure about. But that's the whole reason why you're buying an auction because typically you're going to be buying a healthy price. So you're kind of factoring in these risks that come with buying at that kind of level. Does a buyer have the opportunity to carry out a survey if they want to before?
Yeah, we wouldn't object to that and most sellers are fine with it. The problem is that there's no guarantee that you're going to win the auction. So you could end up spending a fortune on surveys and not actually buy anything. It depends on the property. I mean, you can generally, there's a lot of telltale signs with properties. For example, if you walk around, you see some kind of suspicious cracks or you see some Japanese knotweed.
or you can see some signs that make you believe that something's not right with this property. You don't really need a surveyor to come around and tell you that. And then there's obviously a lot of online checks that you can do. You can check things like flood risk. You can check things like, a number of different things you can check online. These days, the ability to do online due diligence has never been better. So there's a lot you can research in addition to sifting through the legal pack. A surveyor might be needed if...
Christian Rodwell (23:47.982)
For example, you've got a property and you're thinking to yourself, okay, well maybe I can convert it or maybe it's a commercial with a residential. You're thinking to yourself, okay, is there a committee development opportunity here? What would I be able to do with extending it and things like that? So you might want to get a surveyor to just kind of make sure that you can do it. But especially if it's a property that's going to be popular at auction, you can end up spending the money and then not winning an auction. But that's a risk you take to be part of the game, I guess.
Yeah. And again, just asking as a novice really in this area, do you have any as a buyer, do you have any indication how popular this property might be until you actually begin? Yeah, I mean, you can I mean, basically, because it's all online, you can see how many people are watching the property. That doesn't necessarily mean they've registered to bid. Usually when someone's registered to bid, they'll be watching the property, which means that we'll be sending them out email alerts.
with regards to when the auction is coming up and also once the auction started, what other bids are happening. It's almost like the traditional auction room. You kind of see how many people are raising their hands. It's a similar kind of thing. It's all digital these days and you can't actually see their faces. So yeah, you do have a rough idea. And usually we would advise buyers and just say, look, we've had a lot of interest in this because...
What often happens is a buyer will call us and say, well, you know, I'm really interested in this property. Can I make a pre -auction offer? And we're obliged to pass that on to the seller. So, you know, if a buyer comes up to us and says, okay, well, I want to offer 100 ,000 on this property that's got a guy price of 105, we can kind of say, well, we'll put it to the seller. But by and large, we're going to say to the seller, look, take it to auction because we've got quite a few people interested here. And I think we can drive the price up a little bit more. And still the buyer is getting a good deal.
the end of the day, the buyers kind of thinking to themselves, maybe I can try and have this one for a little bit lower than the guide. Sometimes sellers accept it because it does mean that they can get going with the sale. If we put a property up for sale in week one and we get an offer, within a month we're completing on the sale. So for the seller it's great. They've got prices they're happy with, buyers happy. So kind of a win -win.
Christian Rodwell (26:06.83)
With the auction software, Ruben, if I was perhaps, you know, I'd registered, I'm logging in, there's a couple of properties that I know I want to bid on. With buying stocks online, you can put stops in, so you can say maximum price, you know, and do you have that ability as well? So you could almost have the software to go up and automatically bid until a certain price? Yeah, it's called proxy bidding. It's a similar kind of thing to the stock market. That's the thing with auctions.
There's no limit to how much you can bid up to. And the property is sold once it's hit its reserve price. But we've seen not so much over the last couple of years, but in the past, we've seen prices go way, way, way above their guy prices. And we're quite realistic with our pricing as well. We don't tend to price really low in order to attract a lot of interest and things like that. We kind of say that this is what we feel we're going to sell this property for. And often that's what buyers and sellers
both agree on and then we can try and push the price up as much as we can. But often it comes down to how much demand there is for that particular property, how much opportunity there is. So if it's a property that's in a really good location, there's potential to add value in different ways, then you're going to get a lot of buyers coming in and probably a bit of a bidding war happening. But there's no actual limit to how much people can
can get up to. So say, for example, you said, okay, the most I'm willing to pay for my property is, to use an example, the £400 ,000, then that's it. You can say, right, that's going to be my top. That's it. I'm going to sit back and just see if it goes above that amount. You can do that. And when that virtual hammer comes down, what's the commitment then on the buyer side? Okay, so we've got two different types of options. The first one is the 28 -day unconditional sale.
And that's the traditional auction. So the hammer falls and you've effectively exchanged contracts. So you have to pay as a buyer, you have to pay a 10 % deposit, a reservation fee, and then you have 28 days to complete on the sale. So that effectively means that you have to get the sale done. You know, sometimes buyers delay things once they've exchanged on the completion, but then there are financial penalties. So
Christian Rodwell (28:30.894)
For Estella, it's good because even though they're probably taking a bit of a hit on the price, it just means that the sale is going to get done. There's not going to be this faffing around or to -ing and fro -ing between solicitors and buyers, kind of gazundering and all that kind of stuff. It's going to be a firm commitment to purchase. It's very, very, very rare that the sale falls through after an unconditional exchange.
And so just a question there, if the buyer does default and doesn't end up purchasing, who gets that 10 % deposit? It has to go through some legal shenanigans, but effectively the seller can keep it. Yeah, effectively. Long and short story. But, you know, often if you go up to a buyer and just say, well, you're about to lose quite a hefty sum of money here, the buyer will find a way. In most cases, it comes down to the buyer.
trying to organize mortgage finance in 28 days, which by and large is going to be, I wouldn't say impossible, but very, very difficult. So often it comes down to the buyer organizing bridging finance or finding the money somehow to be able to complete on the sale. We've only had it once where the buyer was just said, I don't want to complete anymore. And then we ended up taking the buyer, well, we ended up taking legal action and effectively the buyer paid a penalty.
So it wasn't good for the buyer that pulled out basically. So if you are buying, realize that you are genuinely committed to purchasing. If you're exchanging contracts, it doesn't get more secure than that. So looking at our sort of checklist of how you can maximize your returns when buying. So doing your due diligence is definitely the first part. Would you say making sure you got your finance sorted is another key part then? Absolutely. Yeah. I mean, so
When the hammer falls, you need to have the 10 % ready to pay. That's 100%. You can't avoid that. We give buyers 24 hours to organize it, but most are paying us on the day of the auction. There is a bit of a window to sort that out, but you need to definitely have that money in place because if not, then you're in breach of contract. So these are all in the terms and conditions that you would need to sign before you're able to bid.
Christian Rodwell (30:48.43)
So you need to commit to these terms and conditions. And these are, most auctioneers use Rick's common auction conditions. And then also prior to being able to bid, you need to go through some anti -money laundering checks and a few other kind of legal verifications to make sure that you are a legitimate buyer. Auctions, because there's so much money going through the system, there is a lot more regulation that's coming into play in our industry.
We've had to go through quite a few checks and balances over the last year or so just to kind of make sure that we're compliant because it's kind of an industry that's quite ripe for a bit of corruption, I guess, you know, so yeah, as auctioneers, we need to really check the credentials of the buyer before moving forward. So yeah, you need to have that 10 % in place and then the ability to complete on the sale. So the remaining 90%.
within the 28 days. And most auction buyers who are seasoned, they know the story, they know what they need to do. So very rarely we have problems, but they can crop up. And what happens is if that 28 day time period is missed and the buyer isn't able to complete, the seller can impose certain penalties. So that's in the terms and conditions as well. So there will be late penalties as well if the buyer doesn't complete.
Okay, and what are some of the other tips and tricks, if I can put it that way, of buying? So is there anything that we've not discussed that you might recommend to someone to really get the most out of their purchase? I would say just really get out there, go and visit the property, understand the industry that you're working in. So if you're going to networking events and understanding the different angles that you can find with
buying property, then you're going to be ahead of a lot of other buyers. There's plenty of opportunities out there in commercial, for example, to convert them into residential. But you've got to understand the rules of the game in order to be able to do that effectively. So if you can see a planning angle that others can't see, they're going to be sitting back wondering, why is this guy bidding on this property? And what am I missing here? So really educate yourself and understand, OK, well, what
Christian Rodwell (33:15.374)
What can I bring to the table here that others aren't seeing? There's plenty of opportunities to have a look at land, commercial property, committee development, all those kinds of things. So really, yeah, as I say, get to know the type of property that you're looking to buy and see where you can get the edge. Fantastic. Well, it's been fascinating discussing this with you, Ruben. And of course, we're going to come back with a...
a second episode where we focus more on the seller side. If anyone would like to check out online a bit more about what you do and your auction house Rubin, where's the best place for them to head? I would just say Google Property Solvers Auctions. I'm on LinkedIn. It's Rubin, Solver and Iguem. We also run the largest LinkedIn group for property investors. If you just look up UK property investors on LinkedIn, you'll find us. Feel free to join us there.
And yeah, contact me DM me happy to have a little bit of discussion with regards to, you know, what your own objectives are. We do also deal with private investment as well. So if you are looking to invest in the properties that we're buying, we are actively looking for investor partners as well. So if that's something that you're interested in, feel free to strongly align. We can have a conversation about that.
Great, I'll pop all of those links in the show notes of today's episode. So thanks again, Ruben. Yeah, likewise.
Christian Rodwell (34:45.518)
Lots of information from Ruben there. We will pull out some of the wealth lessons as we like to do, Kevin. Before we do that, we've had a new review come in and I'm going to read this out because we appreciate everyone who takes time to put some words online for us. This one's from Alan. Alan says, I've been in touch with Kevin and his team for over two years without actually doing business yet. However,
Kevin has always found time to answer my messages and hold informative initial video calls to clearly explain the SAS process without pressure, but complete professionalism. I would be recommending Kevin and his team at every opportunity. That's nice. I mean, I think we've had a similar theme in recent episodes, haven't we, where people have given testimony to how relaxed we are. We're focused. You know, we want people to.
to build their wealth and of course commercially we want to attract as many members as possible so that we can serve more people and help them become financially independent. SAS is one of those tricky things that takes a while to get your head round. So we know that sometimes can take, how long has it been? Two years, you say. We'd certainly expect the wheels of circumstance to have changed in two years. As a two is unusual, a year is not uncommon. But if you think about two years ago,
Well, three years ago was COVID, right? So two years ago, you know, all sorts of things can change, job changes, property changes, tax changes. You know, so many different things can conspire to hold people into a place where they just can't give themselves time to do that. And there's a time for everyone because you can't build wealth unless you give it time. You have to give yourself the freedom to be able to explore new things. And it's interesting that
Auctions are not new. They've been around, well, forever, haven't they really? But the way they're being done now is fascinatingly different. I bought a property at auction, Chris. I remember I was in the room, you know, with the auction going, all said and done, and the gavel comes down and off you go. And I remember buying a property and the auction was a relatively small one, but I enjoyed the experience. I thought, wow.
Christian Rodwell (37:07.342)
I've been to some big ones as well, just for the experience of them to see what happens. And I can definitely see that in some cases. The energy in the room, in the FOMO in the room, can artificially inflate the value. So the whole auction process is like any method of finding problems. You remember the 7 EPS? We don't need to repeat that. You can put a link to the 7 EPS, I'm sure.
But certainly finding property for the seven F's of property is the number one thing. So unless you find things, you know, you can't go on to fund them, fix them, fill them, flow them and get freedom from them. You know, I'm sure I missed one out, but that doesn't matter. The point is the creativity of finding property and then funding property becomes a flow that if you get it right,
Constantly finding constantly funding constantly finding it's a bit like a dance. It's quite entrancing It's like infinity, you know just keeps going in an elegant way but you have to find and with so many people who've entered the property market Finding is getting harder. So you're tapping into things like auctions and many other ways the creativity I think you mentioned on sourcing Chris. There's that's a way of finding I know you gave that a go
Initially, I know you found it wasn't for you, but there's some skill there, right? You know, skill and creativity of doing whatever you need to do to discover people who are motivated to sell. And then you can become the buyer. So auctions are just a way to do that. And it's an interesting adjunct to his business, isn't it? That he finds properties that people want to sell, but says, Hey, we can either buy them off you in cash and you get a quick sale or.
You could get more and you could do it in auction. And in auctions, you've got 28 days to complete. And we're now seeing some of our SaaS clients buying an auction, Chris. So who would have thought you could turn your pension into something that you could apply and immediately, well, not immediately, within 28 days, use as a source of funding. But all of these are predicated on the idea you must do your due diligence ahead. If you're going to buy an auction, you must
Christian Rodwell (39:35.47)
prepare. You must visit the property in my view. You must check the legal pack undoubtedly. You must get your comparables and set yourself a absolute financial limit that you will not go beyond and don't get sucked in to, you know, the feeling whether it's in the room, on a Zoom, streaming, whatever it would be. It's important to stick to your due diligence process.
and not get emotional about it, not get FOMO about anything, but keep to good solid financial principles. That was a really interesting, I guess, share from Rubin. And yeah, it's interesting. And maybe we'll get a lawyer in along the line Chris to talk about some of the legalities and how to protect yourself at auctions as well. So we give a good balance to the selling and the buying.
and the eagles and the rigor that all of us must employ when we embark on building wealth in areas where perhaps we're relatively new. It's interesting, Chris, that I've been also once with my father -in -law, he's unfortunately died now. We went to a number of car auctions. He fancied himself as a bit of a dabbler. And we bid on some cars. And now I follow...
The British car auctions, the BCA as they're known, they don't have any live auctions anymore. Yeah. Thousands and thousands and thousands of cars are now sold online. And it's fun. I don't know if you've ever, you know, I've got access to that and I listen to it. And sometimes if I'm looking to buy a car or just looking to get something extremely good value, you can buy a car at auction. And it's just fascinating.
to see the speed at which cars are sold. They're done and gone within a minute. All the bidding's online and you pre -bid and it just, it was a bit like eBay, if you have all golf clubs on eBay or whatever it is, you put in your bid and it just, the system recognizes exactly where your bid is. Again, that makes it easy because you can say, I'm gonna cap out if I wanna buy a certain car at that price and then you don't go above it. But the principles still apply here.
Christian Rodwell (42:01.422)
I think this whole idea is becoming increasingly more frequent. So I would encourage anybody to participate just to learn, get the experience, not necessarily to bid, but just to get the experience of, I see, I see how this feels, how this flows, and whether that then encourages you to look at that as a genuine source of finding in the future. But you have to have your money ready, right? So, you know, you...
You can't be messing about with now bought property. I need to go get a mortgage. You can't do that. The money must be ready. You need to have a good, ready available source of funds, whether it's cash, investors, your pension, whatever it is. But it needs to be nailed down. Otherwise, if you miss out on an auction, you'll lose your deposit. So to summarize there, I guess, be prepared, make sure you know what your limit is.
Rubin said it is a buyer's market. There's plenty of landlords now that are getting tired. They're selling off. They're taking that capital appreciation. So there are some deals to be had and access to perhaps a wider range of properties, auctions as well than you might find traditionally and a slightly more risk, of course. However, that's in exchange for the opportunity to get a better deal. Well, there's risk in everything. There's no risk -free investment, doesn't matter how you frame it. Everything carries risk.
But as Mr. Buffett would say, risk is when you don't know what you are doing. So the risk is always in you as the investor. So if you don't know what you're doing, you turn up to an auction and just go waggling your finger or waggling your digit on a mouse, you're in trouble. So we hope you enjoyed listening to today's episode. Don't forget, we will be back with Ruben in a couple of weeks or so, and we'll be focusing on the selling side. So how to maximize your returns from selling at auction. So tune in.
And if you know someone who might enjoy listening to today's episode, then do share, hit the share button on your podcasting app. And Kevin and I would appreciate that as we build the wealth builds community, even wider, further reaching than it already is. Yeah, I look forward to people commenting on what are the things that, you know, we didn't cover this for a long time.
Christian Rodwell (44:19.438)
How long has it been since we've been doing the podcast now? Five years? 2019, yeah. Five years now, it's only just come up. So maybe there's something else and somebody's curious about that we could share that just somehow has escaped our radar. I think we've covered most areas of wealth, most areas of property for sure. But is there something that you would like us to cover and get an expert or a guest to talk about the pros, the cons, the risks and the rewards?
If you've got something you want to share, then where would people send a note to that, Chris? Send an email to hello at wealthbuilders .co .uk or reach us on the socials, drop us a DM and yeah, we'd love to hear from you. All right, a DM indeed, right? We'll be back same time, same place next week. We'll be until then my friend. I will see you.