Let me share with you three specific ways in which you can get the property below market value. Even the very idea that you can get property for less than it's worth is kind of confusing to people, because they're used to buying properties from an estate agent and he says £100,000, and they might go in there and they might offer £98,500, and they think they've got a really good deal, when they get a below market value property at £99,700. I'm not talking about that.
So here's the first way, and this is going to sound so obvious, but it's so true. Meet people. On a regular basis, I do viewings. I've given up, I've stopped doing many things, but I do viewings for the simple reason I love them. I'm a talker, I love talking to people, I love meeting people, I love understanding their issues, I love having a chat, I love trying to help them, I love solving their problems.
So let me give you an example, this one that I'm thinking of, probably around about 10 years ago, and here's how it went down. I was doing some deal packaging at the time, so these were properties up north, which meant I was dealing predominantly London based investors. And what they would do, is they'd make an appointment to come and see me, I would get their budget, I would find out what they wanted to buy, and I would then look for properties, and we'd maybe go and see eight properties, and we'd maybe offer on two of them, something like that.
So this guy came up from London, he's an electrician, so it's kind of in the trade, do all the refurbs himself, get his mates to help, that kind of stuff. So he wanted deals, up he came. And we were on the last property of the day, and he had already got two, so I was six grand better off, because every deal he bought, I was getting three grand. In the last deal of the day, he wasn't really in it, because he'd finished shopping, he'd spent his money. So we were going along to see it because we'd made an appointment. But because it was quite late in the day, there was no agent there, so we were just seeing the vendor, we were seeing the person that was selling it. So he went in, looked around for about four seconds and said, 'hmm all right okay see you later Paul, bye', because he wanted to beat the traffic and get back down to London, which was fine. So I'm now left, I'm thinking slightly awkward, because I've agreed to see this property, and he’s done a runner, and I'm left and I can't not see the property.
So I go in. Walk around, it's only a one bedroom flat. Now it's been valued at £60,000, for this one bedroom flat. So in we go, and I'll tell you what, it takes like one minute to walk around the place. So what am I clocking? Structurally it's okay, it's got double glazing, it's only actually got two windows, at the front, the lounge has got a window, the bedroom's got a window, the kitchen is internal to the building, it's a terrace of flats, bathroom. Kitchen, probably needs, the carcasses of the units are okay, probably needs some new kitchen doors. The bathroom is okay, I wouldn't put the suite in, but I aren’t going to change it. The only thing that's a bit weird in the whole apartment is there's actually a suspended ceiling, with like tiles like you'd see in an office. There's a stepladder there, one of the tiles is missing, because for some weird reason, they've decided to put the electricity prepay metre above the suspended ceiling, and which is why there's a set of bloody stepladders in the hallway, which is a bit weird. So I'm thinking hmm, better fix that. How do I fix that? I tell them to come and take away the prepay metre and install a regular metre. And your man says to me, "do you want to chat?" And when somebody says to you, do you want to chat, you need a chat.
I'm sat there with him. And he says, "Appreciate you taking the time. I'm told you're a property investor”
“I am, who told you that?” And they said, "well, to be honest, I know you Paul, because you're local, so I've driven you around." I'm like really? Turns out they're a taxi driver. Says "thing is, "I'm overweight I know that, "I've done my knee in, "I'm in my sixties now, "I can't get up and downstairs.” So I need some money for the house, "because I need to put on an extension, "because I've got a bedroom downstairs, "I need to build like a bathroom downstairs." “So this place is valued at 60, but to be honest I've had it for years, "I've got the mortgage paid off, "if you made me an offer I'd take it." And he said, "but, I actually need the money next week." I was like what? And he said, "I need the money next week." So I realise you won't be able to pay me top dollar." I said but if you want it next week, I can only give you what I've got in my bank account. And he said, "well that's fine, just make me an offer." I said well I've got like 30 grand. And he said, "fine, done." And shook my hand. And I bought a £60,000 flat for 30 because he needed the money the next week. Make a friend, make a deal. That's number one.
Number two. Strongly recommend you look at commercial property. I bought a four story solicitors office that had previously been four flats. And I bought it, the whole thing, for £66,000. And when it came, I got a year’s rent arrears, which is £9000, so I bought it for £57,000, for four flats! Now when I'd finished tarting them up, it got revalued at £320,000. How the hell did I do that? Well, what I did, is I bought it from the distressed assets division of a bank. The solicitors were still in there, paying me 9 grand a year for a few years until they moved out, I turned it into flats. But did you even know that banks had distressed assets divisions? So there was nothing wrong with the business, it was the landlord that had gone bust because he was getting divorced.
And the third way that I'm going to give you, right up to date a few weeks ago, Gumtree. Increasingly, landlords are direct advertising on Gumtree, to sell their properties. So what we do is we get a VA, virtual assistant, they write down all the landlords numbers, all the contact details, just the name, and the phone number. And we text them. So people used to in the old days do like leaflets and shove them through the door, we buy houses, any condition. So we do the same thing, but we do it by text. So VA, two pounds an hour, load up, 100 houses in Doncaster, £5 or something. Text marketing software, six pence a text, send out 100 texts, six pounds. So for like 11 quid, we're contacting 100 landlords, and from that, we normally get one or two leads, we'll go and see them. We're buying several houses a month on the basis of spending like £40, £50 on VAs and text marketing. We buy houses, any condition, reply to this text to see if you qualify, cash within seven days, because that's what we do, cash within seven days. So using that exact same model, we got a £72,000 house, that's what it's been valued at, we're getting a £52,000 mortgage, we only paid £40,000 for it. And that's one that we did a few weeks ago. So to recap, viewings, make a friend, make a deal. Distressed assets divisions of banks, talk to them, commercial properties. Gumtree, get a VA to take the data from Gumtree, put it on text marketing software, send out a text message.