What I want to talk about this week is property investment strategies that work, specifically three property investment strategies that work. I want to look at one property investment strategy for beginners, one for what you might call intermediate investors, and one for more advanced investors. Simple, entry level property strategy, make money with none of your own money. How does that sound?
The first one I want to talk about is deal packaging. So simple. What you do is you book yourself in to do 10 viewings a week. So get in a good relationship with a local estate agent and be nice to them. Tell them that you’d like to go and view some properties and you’d like to view a number of properties every week, please, because you represent a number of property investors. If they can help you find the right deals, you can help them get a lot of sales. Listen, estate agents, they’re typically remunerated for two things. They get money for two things. They get money for sales and money for viewings, and you need to put offers in. Here’s the next thing. I’m going to say that from the 10 ones that you view, choose your favorite four and put in offers on the top four. Now here’s the thing, you’re not actually going to buy these properties, you’re going to source them on, you’re going to package them for other investors ’cause if you can find a right, good deal below market value, there’s a really simple set of templates and formulas that we can give you, and if you come along to one of our Six Figure Summits, we’ll actually give you this for free, we’ll actually help you for free, we’ll work with you for, like, three hours, like, half a day almost, showing you how to find good properties, showing you how to analyze the deals, and showing you how to write that up so that you can offer ’em on to other people, and by the way, typical deal packaging fees, two, three, even £4,000 per deal because if you can help an investor get a property for, I don’t know, 10, 20, 30 grand worth less than its market value, then what you’re doing is worthwhile, isn’t it?
And they’ll pay you for that because you’re doing the leg work so they don’t have to. So, go and view 10 properties, make offers on four of them, and that should get one offer a week accepted.
Now think about this, if you’re new to property and you haven’t got any money and you don’t want to take the risk operationally ’cause you don’t know anything about property and you’re just learning, what could be better, making three grand a week, but not actually owning any property? You need to comply, you need to do a few registrations, property ombudsman, whatever, 99 quid a year and whatever, but that, all of this you can learn really simply. All of it. So, your entry level strategy, deal sourcing, deal packaging, people call it different things. Learn how to do it, learn how to understand where the deals are, solve people’s problems for them, and make three grand a week. Now if that’s what you did, there’s 50 weeks in a year. Hey, take some time off. Chill out in Lanzarote, get yourself down in Rushes, do what you want. I’m going to say you’re going to work 40 weeks of the year, and you’re going to do 10 viewings a week. 10 viewings a week should take you a morning or an afternoon, so four hours a week, whatever, and another four hours a week writing ’em up, making a few phone calls. I want you to work one day a week. 40 deals a year, three grand a pop, £120,000 a year. Does that sound all right? It sounds all right to me. So that’s one of the things that I used to do.
Now, I don’t do it so much now, the team does it. Let’s move on to an intermediate strategy where you’re actually going to not own, but you’re going to operate the property. What we’re going to talk about now is we’re going to talk about rent to rent. So what that means is you’re actually not going to buy the property, you’re going to rent it, and then you’re going to rent it on for more money than you’re paying. So here’s your intermediate strategy. Learn how to obtain properties on a rental basis in a completely legal, compliant way with full knowledge, full disclosure to everybody, and I’m going to say you’re going to take, well I don’t know, a three bedroom house, and a three bedroom house might cost you 700 pound a month in Doncaster, a nice detached one with a garage and a drive and a garden and everything. 700 pound a month to rent. Now what you’re going to do is you’re going to learn about the basics of service accommodation and you can put it on Airbnb, booking.com and everything else like that, and you’re going to rent it out for 100 pound a night. Whoa. 100 pound a night, 30 nights in a month, £3,000. FP Day’s 3,000 pound income, but only 700 pound in rent. Is that legal? Yeah, if you do it right. Can pretty much anything in life be illegal? Yeah, if you do it wrong. Is driving legal? Yeah. Okay, is it legal to drive a car the wrong way down the M6, on the hard shoulder, at night, without the lights on, with no insurance, no MOT, at 147 miles an hour, in reverse? No. ‘Cause there’s plenty of people out there that will try and convince you that rent to rent’s illegal. It’s not. Doing it wrong is illegal.
I’ll tell you what should be illegal but isn’t, being stupid, that should be illegal. But if being stupid was illegal, half the population in the UK would get locked up. Everything, everything can be done legally. So, learn how to do it. And that will make you, roundabout, 1,000 pound per property per month and if you want to learn how to do that, make profit from properties that you don’t own, then go check out the book, well, that’s the title of the book, by Abi and Gordie, Abbi Hookway, Gordie Dutfield, and that’s a fantastic way to learn.
Now, let’s take a more advanced strategy. How can you make money from a more advanced property strategy? And in some ways it is and some ways isn’t. I’m going to talk about commercial property, one of my absolute favorites. Take an empty shop or office, dirt cheap, because it’s empty. Before you buy it, agree a lease with a company, slightly more complex because they don’t value it on a bricks and mortar basis, they value it on the investment value of the lease, so, I’d need to spend a couple of days with you to explain that and how it all works, but essentially, buy an empty box, but don’t actually buy it, agree a lease with somebody, and on the day that you’re going to buy it, put the tenent into it or get ’em to sign the lease, the commercial lease. You don’t get any value from the bricks and mortar, that’s not what they lend the money on, that’s not what the banks lend the money on, this is commercial financing, a more advanced strategy. The thing that’s got value is the lease. So on the day that you buy it, you create the value by putting the lease in place. It’s a piece of paper. That is what the bank lends on. So at the moment, we’ve made an offer on a bank, I actually don’t know as I’m sitting here talking to you whether I’m going to get it or not. So this is Santander Bank.
They’ve moved out last month. I’ve offered £265,000 for it empty. If I get it, I’m going to put a Starbucks in it. Starbucks will pay me 35 grand a year, 5% yield, don’t bore you with the details, it’ll suddenly be worth £700,000. I can borrow 60, 70% of the 700,000, I could borrow half a million if I want, but I’m only buying the building for 265. So I can easily borrow the entire cost of the building based on the lease. That’s a more advanced property strategy. So I hope you’ve enjoyed that.
Three property strategies that work. Any one of those strategies and many more strategies, I’d be delighted to talk to you about, the Touchstone team would be delighted to talk to you about, so please feel free to, you know, carry on watching these Money Matters videos every Wednesday, keep your eye out. If you want to go along to our Touchstone website, touchstoneeducation.co.uk, and just sign up to our mailing list, at least twice a month, normally three times a month, we do completely free webinars on a whole range of property subjects. If Money Matters is of interest to you, please like it, share it, subscribe to it, and just spread the message, get that message out there ’cause I want to make as many people financially free as I can and I need your help to do it. And I know you’re not one of the stupid ones ’cause you’re watching this. Any time someone’s telling you it’s illegal, just think about it, why are they telling you that? Oh, it sounds too good to be true. For such a good idea, how come not everybody’s doing it? Hold in your mind forever, make this commitment to yourself now. Only 5% of the people in the UK invest in property. 5% of the population of the UK are millionaires. I aren’t stupid. Learning how to invest in property is one of the best decisions you’re ever going to make. [Click here to watch full episode]