There are 7 pillars of wealth and at WealthBuilders we see property as by far the most popular choice amongst our members to generate predictable recurring income. Knowing which strategy is right for you depends on your points of leverage and your interests. This week we revisit some of our favourite clips from previous episodes where guests provide insights on why building wealth through property is such a great strategy. Guests include the Founder of Property Investors Network, Simon Zutshi who shares his thoughts on the best strategies for property investing in the current UK market, Jerry Alexander on his commercial property investment lightbulb moment and Wealth coach, Toby Spanier who shares creative ways of financing your property deals.
There are 7 pillars of wealth and at WealthBuilders we see property as by far the most popular choice amongst our members to generate predictable recurring income. Knowing which strategy is right for you depends on your points of leverage and your interests.
This week we revisit some of our favourite clips from previous episodes where guests provide insights on why building wealth through property is such a great strategy.
Guests include the Founder of Property Investors Network, Simon Zutshi who shares his thoughts on the best strategies for property investing in the current UK market, Jerry Alexander on his commercial property investment lightbulb moment and Wealth coach, Toby Spanier who shares creative ways of financing your property deals.
To help you find the content that is of most interest to you we've also curated some 'pillar specific' playlists which you can subscribe to by visiting www.wealthbuilders.co.uk/wealthtalk
Resources In This Episode:
>> WT164: Best Strategies In The Current UK Property Market w/ Simon Zutshi
>> WT176: How To Get Started In Supported Living Property Investing w/ Lisa Brown
>> WT93: How To Get Started In Commercial Property w/ Jerry Alexander
>> WT90: Adopting A 1000 Property Mindset
>> WT136: Reinventing Retail: How to drive value from marginal retail space w/ Luke Spikes
>> WT171: 5 Creative Ways To Finance Your Property Deals w/ Toby Spanier
Next Steps On Your Wealth Building Journey:
>> Join the WealthBuilders Community
>> Join the WealthBuilders Academy
>> REGISTER HERE FOR ACCESS TO FREE RESOURCES
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Speaker 1 0:01
The purpose of wealth talk is to educate, inform, and hopefully entertain you on the subject of building your wealth. Wealth builders recommends you should always take independent financial tax or legal advice before making any decisions around your finances.
Christian Rodwell 0:16
Welcome to Episode 190 of wealth talk. My name is Christian Rodwell, the membership director for wealth builders. And this week, we are taking a look back of some of our favourite episodes, focusing on the property portfolio pillar, pillar number four of our Seven Pillars of Wealth. And it's been such a tough choice, going back through and pulling out some of the best featured guests over the last four years. But we've done our best for you today. And we kick off with Episode 26, Kevin and myself talking about property.
Speaker 3 0:47
And you know, we're always going to be, I suppose, reminding people of some of the things they've heard before, for a number of reasons, you know, all of this does join up. And of course, it's nice to be reminded if some while ago, you know, you listen to something, you understood it, but you didn't necessarily put it into action, but you definitely need to think very carefully about property, you know, because if, if you're thinking about it, I mean, obviously, properties is such a fascinating asset, isn't it, it's tangible, you can feel it, you can experience it, you can touch it in so many different ways that you can't do with the other big pillar, which is investments. And, and it's, you know, you but of course, there's so much more involved in that. And if you talk about, you know, we could real strategies off our tongue quiz, couldn't we, you know, we could go rent to rent sourcing by to let HMO with all the multitude of types of HMO, students service, special needs lhsaa, service accommodation, lease options, options, commercial Commercial to Residential develop you,
Christian Rodwell 1:54
there's a there's a number
Speaker 3 1:57
going on, I don't know how many that was. And that was just so just straight off. And this probably well over a dozen real property strategies. And what we don't want to do is in this episode, Chris, is we're not going to dive deep into these. There's no point in doing that. We've got so many trusted partners who are experts in fields, but we know enough for wealth builders to know how each of the strategies work, which is critical, because the starting point, for all forms of wealth, Chris, going back to the wheel of wealth is
Christian Rodwell 2:30
education,
Speaker 3 2:33
patient. So there's so many different sources of education. So you know, I don't want this episode to be a just a repeat of other people's education. But it might be useful for new members, just to almost be reminded of some of the principal ones, some of the pros, some of the cons, some of the things they should be thinking about in using their sources of leverage, some of the dangers that you always have to keep in mind when you're looking at property. But you know, the the big advantage of property when it comes to, which is why I think starting with leverage versus a good one is, you know, is the fact that property uniquely, is probably with within all different economies, UK, US and so on, you can just get leverage.
Christian Rodwell 3:26
In Episode 164, we invited Simon zushi, the founder of the property investors network, to share some of his thoughts on the best strategies for property investing in the current UK market.
Speaker 4 3:38
I think that because of the changing legislation, so for example, we have the fact that if you have a rental property by 2025, really, it needs to have an EPC rating of C, so Energy Performance Certificate of C, it's able to rent it out. Now, if it's if it's currently rented tenants in there, you've got till 2028 to do that. But some properties, it's very difficult to upgrade them. So we're going to spend money and we'll be fine. But that was the fact that the government's got rid of or getting rid of section 21. And also, there's the effect of section 24, which is where they change the tax rates that we as property investors pay. There are more and more reasons why many landlords are thinking about you know, maybe I should retire maybe I should sell up the portfolio. There's been massive growth over the last 1012 years and has gone up maybe I could cash out now and and just sit on the money or go do something else. Now that I think is an underlying thought in many investors minds have been doing it a long time. But then with the very recent changes this year and the last couple of months of the Bank of England base rate going up. There are many investors who've had buy to let properties for the last 10 years have been making good money for them, but only making good money question because the interest rates were really low with interest free is going up, those profits are being squeezed. And that's just another reason for more or more landlords thinking about selling up. Now, here's the question. I mean, that kind of makes sense why and all the experts I'm speaking to, we're all seeing the same thing that more and more landlords are looking to retire. And if you think about in any market, you always have some people coming in, who are new who are starting, and some people are exiting and retirees, that always happens, but we're just seeing more and more looking to retire. So the question is, if all of this extra landlord stock comes onto the market, will the underlying demand be enough to soak it up? And prices continue? Or will there be an oversupply? Which means that maybe prices thoughts are correct? Now, I don't know. But my if I had to put money on it, I think they're going to genuinely slow and start to correct. Okay, I don't think we're going to have a big crash. But hey, I just don't know. Okay. But here's the here's the really important thing for me, Chris. And again, if you follow this logic, I think there'll be landlords who are thinking about selling up who remember the crash in 2008 2009. And who remember property prices, because of the global financial crisis came down 20, sometimes even 30%, who might be thinking, well, actually, I'm thinking about retiring, prices are starting to dip, maybe I should sell now, even at a slight discount, because I take 10% off now, it's better than having to sell at 20 or 30%, in a few years time. So I think for that reason, we will see more and more landlords looking to sell, which means actually, if you're looking to get into the game, and start or get more property, as long as you know what you're doing. Now, it's always a good time.
Christian Rodwell 6:44
Yeah, and I know one of your golden rules, Simon is always buying at discount, you know, that's where you make your money.
Speaker 4 6:50
Absolutely, if we can buy at a bit of a discount, we means we've got some equity trapped in the property day one, it gives us a bit of a bit of a safety buffer. And if we want to refinance to get our money out, it's easier to do that quicker. Having said that, Chris, I will sometimes buy things at the full listed price, because sometimes the listed price has already been discounted. And it's slight distinction, I'll give you an all the listeners is that sometimes people think is advertised for 250, I've got to pay less than two, I've got to buy the discount, not recognising that 250 might already be a good price, because it might be worth 272 80. If you imagine someone who's got a built property portfolio for a number of years, if they sold all of those in one go, they would have a lot of capital gains tax to pay. So capital gains tax, just for anyone doesn't know is the tax you pay when you sell an asset that's gone up in value could be stocks could be property. And it's a difference between what you bought it for and what you sell it for less any buying or selling costs or capital improvements. So most landlords who are selling property are going to have some capital gains tax to pay. Now we all get a capital gains tax personal allowance each year, I think it's time recording, I think it's 4300 pounds. If you own a property in joint names with a partner, it's almost 25,000 pounds. So in other words, you could sell some assets and the first almost 25k If you own it in a partnership or with a with a relationship partner. It's tax free, but you only get the allowance once each year. So in an ideal world, a landlord should phase the sales of their portfolio over a number of different years, utilising that maximum allowance each year, thus reducing the amount of tax they pay. So in theory, that makes a lot of sense, right, Christian? Yeah, absolutely. The problem with that is it says, Well, I want to retire, I don't want to be holding on to my last property for another five, seven years, whatever, I want to kind of get rid of them. Now. There's an amazing strategy that we can use called a purchase lease option.
Christian Rodwell 8:53
In Episode 176, a wealth tour we invited Lisa Brown to share how you can get started in developing supportive living properties. What is supportive living? What do we mean by that term?
Speaker 5 9:04
So it's a living arrangement for a tenant with support needs. So as a property investor, you let your property to an organisation who leased your property from you for a period of time, it might be a few years, sort of typically anything between two to seven years, sometimes up to 10 years. And they they take over the management of your property and then they bring in tenants who have support needs. So they can be people from a range of support needs people with learning disabilities, people who have been homeless, people who are fleeing domestic abuse, children in care or teenagers leaving the care system. There's a range of people with support needs. And all of these organisations are looking for properties to lease you know, all of these support organisations and charities. As part of the package that they deliver to support people. They also need a home for people to be in. So as a property investor, it's a great opportunity to let your property to an organisation and create homes for people who really need them.
Christian Rodwell 9:59
Why Should someone listening now perhaps consider this over other strategies that are more well known?
Speaker 5 10:06
Well, I think if, if you've been a landlord for any length of time, if you've been a property investor, you know quite quickly how how voids can eat into your profits on a standard buy to let or an HMO. You know, you even if you at the moment, while the property markets really hot, you'll still have a few weeks in between tenants, if someone gives notice. So in that time, you're still covering the mortgage costs, you're covering probably the council tax any other utility liabilities you have, within that time that there's that void. And then you also have that kind of wear and tear, you know, those little bits and pieces that need to be done, you know, every day, those little kind of, oh, we just need to repaint the hall or replace that bit of carpet here, or all of those things are taken away from you, when you let a property to a supported living provider, they will lease your property, they will pay you money every single month for the length of that lease. So whether that's three years, five years, 10 years, however long the lease is, you're getting that money in every month. So you find out quite quickly, your net better off because you're not covering those voids, you've then also got the wear and tear that you're not covering, it depends on the lease, each lease was slightly different. And each provider will cover different things. But quite often, they'll cover wear and tear damages. They'll cover things like the gas boiler servicing bits and pieces like that. So they take away the cost of those things, but also the time hassle. And I think even if your property is managed by a letting agent, there's still quite a lot of administration you have to do you still have to authorise that repair or look at those quotes and decide which one you want to go with. You know, there's there's quite a lot of bits and pieces to do. And if you self manage, then obviously there's more. So it's about financially or slightly better, you're better off quite often letting go of provider, you're also, you know, time better off, you know, you're not managing all of those bits and pieces. And you're also creating homes for people with support needs, you know, the organisations, I speak to all the time struggle to find landlords who will work with them, which means, you know, there's a homeless organisation that I know well, and they currently have a massive waiting list for Prop for people that you know, who are desperate for it to move into their properties, they don't have enough properties, people are street sleeping on the streets, on their waiting list at the moment. And it's like, actually, we need to get more properties to get these people off the streets or to get people safely housed. So it's like the property investors fake property speak and thinking that way. And the providers speak in a different way. And I felt like actually what we needed to do was try bringing people together and bring people into the same space to build relationships and try and understand each other. So the vision with the network is that actually people connect and collaborate and learn to understand each other and understand each other's issues. And then through that, we've got a whole load of shared training as well. So to share good practice and, and help people to understand how they can work with each other. So we're kind of overcoming that, that those two sort of siloed groups if you like, because I saw lots of sort of deals falling over where people weren't understanding each other. So bringing people together to build those relationships and make it easier to find each other because I speak to the providers who are saying, I can't find any property investors, I'm desperate for this property. And I speak to the property investors are going I can't find any providers anywhere. And I'm like, well, we need to bring everyone into one space and try and build those relationships so people can
Christian Rodwell 13:23
do this. In Episode 93, of wealth talk, Jerry Alexander showed us how commercial property investment could work for those of us who are not from a commercial or professional property background. So he talked about that kind of light bulb moment you realise commercial, there was something going on here, they excited you, you could see some potential. So how did that develop? And what's the main strategy that that led to?
Speaker 6 13:46
Yeah, that's a great question. So. So none of this has really been fully by design. Right? So let's just get that out there. I'm not some genius. But But what happened was, I bought that commercial property without knowing how much influence rental has on the value of property. So over the years, my my primary objective was to increase the cash flow. And I then spotted another building about four or five years later, commercial one, it was half vacant, and had got the bank right, can we let's talk about raising some funds for this. And of course, they wanted to revaluation on the property that we've done originally. That's when the light bulb moment came because we got value in and the value tripled. And the reason the value tripled was because we taken the income from relatively modest level up to three times the amount, that's the net income. So the building hadn't changed. Yeah, we'd have made improvements. The customers some of them had changed for sure. But what had changed dramatically was the income and that totally affected the value of the property. So that was the labour moment for me was like also this isn't just a passive activity, you can actually be quite active in commercial and add value where As residential you, you can add value to an extent you add an extension or, or other parts or gold plate everything. But ultimately your your value is pegged back by the properties around that location. Whereas the commercial is so much more influenced on value based on the cash flow and the net income, you could choose to do the property side, right. So we've got a prop call and a knock call on being a property company, the other being an operations company, you could buy a building, do all the refurbishment and whatever needs to be done effectively the redevelopment and that would be held within a property company, then the operating which there is more on our niche, there is more operating on a day to day and we have an operating company that sits there effectively as the tenant. And we have our staff and their customer contracts or supplier contracts. So everything's ring fenced in a separate entity. And that entity then pays well actually, effectively, it's a management fee up to our property company. So the two of them can sit quite separate. So you could do both, which is what we do, or you could just do the operating company, or you could just do the property company, obviously, the property side is really where you're gonna build your wealth through increasing the value of the property. But the operating business that we have, has a few employees to 200 Odd customers. And you know, there's there's day to day operations, but we've built up a team in there that they run that but if you were doing HMO or serviced accommodation, or all the other residential strategies, it's the same thing, you can either do it yourself, or you get somebody else to do it for it.
Christian Rodwell 16:41
What would you suggest is a good way for someone who perhaps is in residential at the moment, and they're looking to get started in commercial? Okay.
Speaker 6 16:51
So the first thing is, get in swim, find out what's going on speak to people, maybe agents is a good place to start, of course, but find other people that are operating in commercial property. I mean, it can be quite opaque. This industry and when you're standing on the outside looking in, looks like the curtains are always shut, you phone up an agent, they don't return your call, you drive by stabilities got for sale sign you phone them up. Apparently it was sold two years ago, it's quite challenging sometimes. But I personally, I think that's the best opportunity about this market because it is a bit more difficult to penetrate. But I don't think you have to jump in will you know both feet, you can start small. That would be my main suggestion, start small by something that has got less risk, okay, there'll be less upside, but it gets you in the swim teaches you how to find property, how to finance it, how to get tenants in, how the leases work, all that stuff. So you can build up your confidence and your knowledge. But if, if you have your own business, that can often be the first natural way into this as you use your business as the tenant. That might be that you if you have for instance, a pension where you can buy commercial property you would effectively your day to day trading business would be the tenant and your SAS or whatever would buy the property and move your own business into it. So that you're able to collect that rent rather than paying it to someone else. And interestingly, if you wanted to actually look at developing commercial as a strategy for building wealth, then just buy something that's a bit oversized. And then you would be able to potentially get another tenant in to a section of the building that you're that you're not occupying to generate more income. And that's often the way we teach people to get started. Just just if you've got your own business, use that as the main vehicle to get in as a tenant, but oversize the property so you can start leasing subletting effectively.
Christian Rodwell 18:51
Ryan Luke was our guest in Episode 90 of wealth talk. And he talked to us about the 1000 property mindset and the importance of knowing your numbers. What was the catalyst for you, Ryan, because we talked about the beginning of anyone's wealth building journey is to get really clear on the reason why. And I know that there was certainly a kind of turning point for you a few years back, would you mind just sharing that? Yeah, sure.
Speaker 7 19:16
So I have always worked hard and you know, I've always I've always loved money, I'll be honest, you know, a lot of it is about the money and especially in the beginning, but I was I was sat on my couch and I couldn't be bothered to my two year old Sonny would have been then to go to a birthday party I just couldn't be bothered and you know, I wasn't really engaged in too well at home and it wasn't great. Put it that way and then you know, as you do sat in the couch feeling sorry for yourself, scrolling through Facebook and a sponsored ad pops up about you know, you can build a great business but be careful you don't burn your ship whilst you're doing it. And it just like really resonated with me that, you know, I'm putting so much time and effort into building the business. So but what's the point, if you've got no family and you don't spend time with your kids and your wife hates here, and, you know, so it really hit home and I delve into it a bit more, I peered at an old there, and then $300, or whatever it was to get all the videos and watch more and, and that consumed all that that day before they even came back from from the party. And then I bought into their they had a mentorship programme. And that was all about kind of four pillars, which was if I remember them now business, your business, your health, your, your faith, which isn't really my thing, but I kind of went with it, business health faith and, and your wife, get your family show. And it's kind of like having all four of them intact, to be able to thrive and be the best business person you can because we see it so many times where you've got the most successful CEOs, but they're like 25 stone, and they're like, you know, they just haven't taken care of the health at all. Whereas like, your body is your, your biggest asset you're ever gonna own without your body, you can do nothing, you can't build a business if you've got no health, or you're not a long term anyway. And then obviously, it was about you know, you can have all the money in the world. But if you've got no family, you've got no happiness. And you know, if you've got no kids, you've got no relationships. And so it was, I could quite quickly see that my balance was totally off. So that's why I engaged with them and, and really started to balance everything out. And from that naturally, everything then becomes so much better, including the business, I just think numbers can tell you anything about your business health. So I have numbers drilled down to, and people laugh when I say this, but I know how much drive time my deal sources have to spend per week to be able to acquire the number of deals that we need per week. Because I nail it all the way down from you know number of viewings, we need to go on number of offers, we need to make number of hours spent on the viewings, number of hours spent driving around the VLANs. And I've got numbers for like every single department. So you know how many hours we need to spend van stock and to get so many direct bookings, etc, etc. So I just think with your numbers, you can you can what can be measured, can be altered, right? So if you're measuring something and you know, it's not going well you can alter it if you just fly blind, which so many people do I get so many people, you know, clients come on board, and I'd be like, what's, what's your monthly net profit? And I'm like, Oh, I don't know. But I know my bank balance is doing X Y, Zed. It's like, you can't gauge off your bank balance. You know, especially as you grow. There's so many different departments. And quite often, you know, people have maybe five or 10 properties, but they don't know individually how each one's performed. They just know as a whole what the performance is, well, that's all well and good. But what if two of them are absolutely soaking your profit up. And if by just getting rid of them, you could be so much more profitable. What I realised at that point was I acquired loads so quickly, but then I had a real dry spell where we didn't acquire anything for about three months. And I was like, Well, that's because I'm doing all the operations. So I haven't the time to do all viewings. So that made me think, Okay, well, if we are going to get to 1000 properties, from day one, I need to build with that 1000 property mindset. So if if I had 1000 properties today, so say for example, if if someone rang me today and said, Could you by any chance go and do a tenant view? And for one of the HMOs? My answer is just flat out? No, I know that it might generate me some revenue. Like obviously I might get a tenant on and I should really go and do it and this that near that. But my mindset is the 1000 mindset. So if I had 1000 properties right now, could I go and do a tenant view? And no, it would be impossible, because I'd have so many other things to do. Or I would be asked to do probably 15 viewings a day, or whatever it might be. So everyone in my team now we have this 1000 property mindset where I say, could you do that task? If we had 1000 properties right now? And if the answer is no, then we need to then solve the problem and make sure we've got the right person in place the right system in place, the right software, whatever it might be. I believe that by doing that now that will help me get to 1000 properties. And when I get to 1000 properties, I won't then have the operational issues. And I think it's kind of a knockout. It's a kind of chicken and egg scenario that if I didn't do it now, I would never get to 1000 because I would always just be running around these operational issues and solving them rather than actually moving the business forward every week.
Christian Rodwell 24:44
In Episode 136, we invited Luke spikes the founder of Hickey House to talk about how he built his brand and how he was able to see the property market from a different perspective.
Speaker 8 24:55
He has is one of those brands because we put a lot of effort into building a brand and creating awareness in And around what we were doing. A lot of people assume we've been around forever? Well, actually we haven't. What we've accomplished is has been accomplished in a relatively short order. I found myself in the world of property by accident, because I had a property that I didn't know what to do with, like a lot of folk, you know, kids, older children grown up left home, bigger house, and you need what, you know, question like, What do we do with this, and I had just sold my business, I was now working for a large my last business, I was working for a large corporation, now I'd collected some cash. So I'm sort of sitting there and on the one hand, I had this asset, this property, that's the family home that we don't for quite some while that was too big for our needs. On the other hand, I had some capital some cash in there. Well, what do I do next? Once I have done my earn out with this large corporation, thinking to my wife, she, she didn't want to do anything at all, because she was fed up with a whole world of startups and, and all the pain that that brings with it, not just for you, but for everyone else in and around. And I said, why not? I'll do I'll just buy some books. And it was, my natural instinct is to is to intellectually curious, but get to know something about property. So I bought some books. And one of those was Simon's uchis. Book property magic, picked it up, didn't put it down. And so while there's some really interesting ideas in there that have got her started my brain sparking on on what I might do. And in parallel with that, I've had conversations with my children about how difficult it was for them, as young adults, young professionals, young adults, making their way in the world to find good quality accommodation that met their needs, as they perceive their needs to be today. And classic entrepreneur going hang on a minute. There's loads of properties, there's loads, I hear this all the time, there's loads of properties, there's loads of landlords, how come you can't find what you say you want a need? What is it you want a need? So I spent time then listening to them about what they felt they needed a bit of scratching around, it's clear that there was a gap in the market, let's call it that. And, and so so Hickey house was effectively born out of that. And it started out with a brief for our thinking that said, New York loft meets Danish, with a dash of Tokyo for For Inspiration, an application of small space living. So that's what we started with. We said, Oh, well, what does that look like? And after, after a degree of iteration between myself, my sister, a couple of creatives and one or two other members of the team, we ended up defining the look, the has become the Higgy house look, which I would describe as sort of industrial upside called quirky, colourful, because it's a little bit of colourful, but actually designed around the target market, we were seeking to seeking to serve general interest, you know, something instantly Instagrammable, for example, right, so, so very cool. Deemed to stylish by the audience we were seeking to. So that's, that was the original aesthetic. What we then proceeded to do was to define that as systematically as we could, in terms of what does that mean, in terms of the furniture, we put in the place the flooring or the finishes, when executed that and then each time we've executed subsequently, we've stuck to the core principles, but improved or innovated slightly each time, how it looks is important how it feels is important, and how it feels it's not just about the space, but it's also about what you do to foster and create community. So how you get who you have in the house will make a difference. So how you how you go through the process of recruiting your your housemate, we don't call them tenants, by the way, because I think that's abusive, right tenant landlord somehow sets the wrong tone. It's their house mates, they're our customers, they're giving us money each month for a service, we have to deliver that service at a level that meets or exceeds their expectations, very different way of thinking about it. But the community is about who is in the house, but sort of what you do when they're in house, how you and that's partly designed as well. So it's not just how it looks. It's also how you organise the space makes a big difference. The opportunity to to gather to bump into one another as a group of strangers ostensibly when they arrive, and they do end up emerging friends, you know, there's no question about it. So there's a layer of service that often gets missed by most investors, which is a little bit of investment of time and effort, but it produces extraordinary returns in terms of the rates people appear to pay, how quickly you can let the let the unit's rooms how, how long people stay. Whether you have voids or not, your operating costs are lower. There's a whole bunch of real sensible reasons as to why investing a little bit of time and effort into the let's call it the service layer that sits on top of the asset is an important and sensible thing to do. I do get a lot of folks who come to town, do I really need to spend that much money on that? And that much times answer is, well, no, but if on the other hand you want to do Use record rents that 50% higher than market average, you want to void 0%. You want to sell every room without a viewing, and you want 100% conversion, which is what we finally got the last property. If you would like all of those things, yes, do what I'm doing. If you don't want that, then don't do that.
Christian Rodwell 30:16
In episode 171 of wealth talk, we've invited former member turned wealth coach Toby Spania, to share creative ways about financing your property deals,
Speaker 9 30:26
because I was doing a strategy of buying derelict properties, they were derelict. And if they're derelict, then well, you can't live in them. And if you can't live in them, they're not residential, if they're not residential, the residential stamp duty rate doesn't apply. So there's a 3% surcharge for property investors buying residential property. But it doesn't apply if the building is completely uninhabitable. So already, I just found that there's another advantage to buying in cash and buying stuff that was multiple, that's another way of of saving some money. So tax mitigation is just a creative finance strategy that is open to everybody. And all you need to do is understand the rules and then just follow the rules. So that was, that was really helpful. And then brings on to the third creative thing that I did. And again, all these things, I didn't set out with a really clever strategy. I just found them just by turning the wheel. But the third one was using the council to help fund my deals it it sounds a bit amazing. But yeah, it happens. And I operate in camps. But you know, there are councils elsewhere who have similar schemes. But one of the schemes in Kent is if you purchase buildings which are uninhabitable, and you bring them back into use, then the council will give you an interest free loan for three years to to do the works. So it's like having a another bank, but this is a bank that doesn't really care about your your loan to value, whether you're 75 or 85%. They need some kind of security to give you a loan, like any organisation, but I actually found it's incredibly flexible. And I fell into it because the first property I bought within my second portfolio, and it needs to me, I've completed on the day that lockdown was announced and I thought wow, I might not be able to finish this deal. I was going to turn into an HMO but then I realised I didn't really have the time to do that. And I've got the concept of the Council of saying Do you have any emergency housing I could support you with and then from there the discussion just expanded and eventually I found they were happy to give me a loan to do the works which was pretty amazing. Where it started was I did a refurb i i just did the quality that I always do. I then I took a small loan from the council I then and this is what people didn't do or don't do. I invited the council come have a look at it. Normally people just take the loan, spend the money the council doesn't hear about it, but actually invited the council and have a look. And when they came and have a look they were just blown away with the quality what I did I mean I can't do a worse quality I just do a good job. And then they went oh, this is amazing. Oh do you know we also have a skin for do you do commercial property real Scott skin for that old you do new builds. And they just started to open up and that's the thing. Once you've got your foot in the door and you prove to them that you're for real and you're doing what they want, then they become much more amenable and tell you stuff that you normally wouldn't find out about I've got a sourcing agents who's brilliant sends me deals every day doesn't charge me at all. And they are absolutely instant. And he's called right move. Right so I have my right move alerts. And most properties that I buy have been all right move at some points. They may have gone on Rightmove and then come off right move and then they're off markets. And then I followed up when I've noticed that they haven't sold by sending a letter direct to vendor, so I bought a few that way. But you're pretty much everything that is on or off market. At some point someone has tried to sell it through traditional means. And I've got a very visual memory and I can remember properties that have been on Rightmove and haven't sold. You know, I've checked after three, four months has this property sold? No, it hasn't. Right. Let me write to the vendor. So that's the first thing. The other thing I do is I literally just walk around my area and take photos of properties that they're in it. Go home and spend three pounds on land registry, find out who owns them, and write and write to them. And surprisingly, it works very well. People write back and say yeah, they want to sell their properties.
Christian Rodwell 34:26
Well, they have it for this week's episode. I hope you enjoyed listening back to some of those guest interviews from deep in our archives. And if you enjoyed this episode, why not share it with a friend hit the share button on your podcasting app. Let them know what they're missing. Okay, we'll see you same time, same place next week. See ya.
Speaker 1 34:47
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