OVERCOMING PROPERTY CHALLENGES I manage to get 2 people over the 1 said he could do it Monday and it was currently Friday evening and the other I said if you can do it tomorrow I’ll give you an extra £150/£200 as tomorrow this will cost me £1200 again to relocate guests. He agreed to go ahead with it. By Saturday lunch time it was all re plastered/ painted/ new beams were put in the ceiling and on the Friday evening I got another plumber out which carries out all the work on the building originally so he knew it inside out, he went under the shower to find out the waste pipe had been popped off from the force of the plunge which caused the water to leak so quickly, it was nothing to do with the shower seal. It cost me a total of £4K within 3 days and a lot of hassle, it then took me another 6 months to claim the money back from there insurance calling/ emailing them at least 3 times a week. However it was eventually sorted in the end and it had made me a much stronger person to over come any challenges like this I knew I could face in the future. It gave me the confidence to keep going and not let anything get in your way, as initially when it happened I did debate whether this business was the right decision and should I give it up as it had only been a month but I kept going!! Josh Guest Guest Homes [email protected] Page 50
OVERCOMING PROPERTY CHALLENGES What challenge have you encountered on your property journey? I always had to be creative when buying houses had structural movement, with financing them. From memory we didn't have ‘bridging’ back then as far as I can remember or certainly any bank that I knew wouldn't lend on them before I had a track record in developing them. I always seemed to be at my limit with remortgage monies I’d pulled out of other properties when a little peach came up with a fairly straight forward fix. Nothing more satisfying than buying something unmortgageable which could easily have the front or side elevation taken down, piled to bedrock/underpinned, and rebuilt and getting it revalued at twice what you paid for it plus a bit more. Paul Million Real Property (UK) Ltd [email protected] Page 51
OVERCOMING PROPERTY CHALLENGES How has the challenge been overcome? I did this in two ways. 1. I ‘Remortgaged my Granny’. Basically borrowed her savings where she was getting a rubbish return and gave her 6%. If she ever did a ‘Royal Visit’ to site she would nearly feint at the extent of the works! Loved showing her and my Grampa the befores and afters. Them stood amongst the debris with their Sunday Best on. ‘ Its like a Dolls House with the whole front missing’ she would say while my Grampa generally just gasped and shook his head at the task in hand. Then id get them revalued and pay them back or rinse & repeat. 2. Once with a house and once with a piece of land I borrowed the cash off the actual vendor on a personal loan to buy their property outright. Took a bit of trust. The closest strategy to that now would be a ‘Completion with Delayed Consideration’. It worked great at the time. The land cost me £80k and with planning uplift I then went to the bank with the ‘unencumbered’ piece of land ( put the charges elsewhere ) and borrowed the cash to build some industrial units with the land as deposit. Happy Days! Paul Million Real Property (UK) Ltd [email protected] Page 52
OVERCOMING PROPERTY CHALLENGES What challenge have you encountered on your property journey? Not Having Any Money In my view this is the problem affecting more people than anything else, myself included when I first started my property journey, I didn’t realise it at the time but it’s actually a very good problem to have because it makes you work harder and be more creative along the way. Derek Pape D P Property [email protected] Page 53
OVERCOMING PROPERTY CHALLENGES How has the challenge been overcome? In my early days of property I had no money so I would go to networking events, I also helped out at 2 local monthly events so I got in for free and became visible as part of the team. I would do any free or very low cost training days with the view of I'll learn something and meet people who may be able to help me along the way, some of these same people have become very good friends over the years. I started delivering my own leaflets looking for BMV deals to sell to investors, bear in mind I didn't have any investors so I would get other people to sell my deals to their investors and we would split the fee, after all half a fee is better than no fee. During 2012/2013 I looked at every year long training program because I know I learn much better this way instead of 2 or 3 days in the classroom and then on your own, I picked a well known property training company and started my education by paying monthly for the course. Derek Pape D P Property [email protected] Page 54
OVERCOMING PROPERTY CHALLENGES This actually gave me the pain point to work and move away from, I volunteered for everything I could and managed to get 18 months for the same price as 12. As I went along I learnt many of the no money down strategies which helped me to grow my portfolio. As I started to sell my deals to my own investors, this started to grow a deposit pot for me to buy property for myself. Doing the management of the tenants, some of the refurb work, the cleaning, in other words I did everything. Then I learnt leverage, this was a game changer !!! Get people to do what they are good at while I do what I'm good at. Looking back now having no money massively did me good because I had to learn and work very hard to build and grow my business into what it is today, also I appreciate what I have more because of the struggles and hard work, so do not let money hold you back. Derek Pape D P Property [email protected] Page 55
OVERCOMING PROPERTY CHALLENGES What challenge have you encountered on your property journey? We bought a flat and completed a week or so before Christmas 2018. My husband was decorating the flat up to and including Christmas Eve - he then locked up to celebrate Christmas with the family. On 28th December he returned to the flat to continue decorating as we planned to let it from January 2019 and were only giving it a light decoration. However, he discovered the flat with the front door boarded up by police and had no idea what had occurred! I called the local police to discover that there had been \"a massive water leak\" at the property on Boxing Day resulting in the power company having to turn off power to the entire block while the police broke an entry into the flat to turn off the water supply! The hot water tank had burst and pumped mains pressure water out until the neighbour spotted water seeping under the door and across the landing and thankfully called the police, as she did not know whether the flat was occupied and if someone was inside and injured. Louise Righton Black Pug Properties Ltd [email protected] Page 56
OVERCOMING PROPERTY CHALLENGES We managed to get into the flat with the help of the property manager, to find it ankle deep in water, and all flooring, curtains and decor ruined. In addition, the flat below, which was also unoccupied, was water damaged, too. We thought we faced a huge bill to put right our own flat and that of the downstairs neighbour! How has the challenge been overcome? By working positively and proactively with both the buildings management company and our neighbour downstairs, we were able to make a claim on the buildings insurance for the damage to the neighbour's flat, and some of the damage to our flat. We took legal advice and settled professionally with our neighbour to cover the items that were not covered by insurance, as we wanted to ensure a full and final settlement. By working positively with all parties we were able to minimise financial damage to our business and make the maximum insurance claim as well as remaining on good terms with the building manager and our neighbours. Louise Righton Black Pug Properties Ltd [email protected] Page 57
OVERCOMING PROPERTY CHALLENGES One key learning is that because we had only completed on the flat the week before, the buildings management company had not updated their records, such that when the tank burst and the flood happened, nobody was able to contact us. The shock of finding our flat flooded and boarded up by police was pretty awful! If we'd contacted the management company to inform them we now owned the flat, rather than leaving this to our solicitor via the lease documents, we would have found out about the issue sooner. We were delayed by around two months sorting the insurance and getting our flat ready to rent out. However, we kept everyone on good terms, and I'm now a director of the property management company. All owners have been asked to replace their water tanks to avoid more leaks! Louise Righton Black Pug Properties Ltd [email protected] Page 58
OVERCOMING PROPERTY CHALLENGES What challenge have you encountered on your property journey? Purchase of a semi-detached house. What could possibly go wrong....? Two semi-detached houses came up for sale together - they were joined. They were both very standard, looked the same, slightly different decor but apart from that they were the same. Standard as in they had a kitchen, lounge, 3 bedrooms etc. This'll be easy I thought - that was my first mistake! I purchased one of them and the conveyancing process began. The properties were being sold by a charity who were liquidating some assets, nothing odd so I had estimated an 8-10 week turnaround, and I thought I was being generous with my timings. Julie Game Key2One Ltd [email protected] Page 59
OVERCOMING PROPERTY CHALLENGES Fifty one weeks later the sale went through... We found out during the conveyancing process that the one that I was buying (not the other one!) had previously had its class of use changed from residential property to office. I am not sure why this had been done, the only thing I can think was that maybe the charity used this one for its office when the properties were being allocated to people whilst they were being built - not sure! What I do know is that the Vendor came back saying, \"Well that's OK we'll go ahead with the sale/purchase and then you can change the class of use\". My solicitor was not having any of this, and quite rightly so in my opinion, sent them packing. Having changed the class of use before on a commercial property I was well aware that things don't always go smoothly in property and that there could be some unforeseen issues ahead. Julie Game Key2One Ltd [email protected] Page 60
OVERCOMING PROPERTY CHALLENGES How has the challenge been overcome? We insisted on the change being performed before the purchase was completed. After much communication back and forwards, and lots of chasing up, as I say, fifty one weeks later the sale eventually went through. It was imperative to keep in contact with many people during this process, the mortgage companies can get a bit twitchy when things take as long and it is vital to update them so that they fully understand the delay and do not retract their offer. This is vital as you don't want to be restarting the mortgage process. Moral of the story, there are some unexpected things which happen in property. Don't over leverage yourself, keep an open mind and know that there will be things which do crop up which will change (usually extend!) your plans. Julie Game Key2One Ltd [email protected] Page 61
OVERCOMING PROPERTY CHALLENGES What challenge have you encountered on your property journey? For me, the biggest challenge I have faced in my journey to date was an HMO refurbishment which went tits up. The builders who we had employed were not to the standard we were led to believe (a recommendation from a family member who isn't \"in\" property...), so this led to delays, mistakes, shoddy workmanship, and ultimately them and us falling out and them leaving the job half finished. We had to unpick a lot of what had already been done to check is it had been done correctly (which it hadn't), so we had twice the materials costs in certain areas, plus the labour expenses of re-doing certain elements of the refurbishment. This was a back to brick refurb too, so there should not have been any problems when putting the property back together. We were starting afresh. Anthony Boyce Diversify Property Solutions, Rocket Architectural Design, The Property Thing... anthony@ rocketarchitecturaldesign.com Page 62
OVERCOMING PROPERTY CHALLENGES At the time this project was happening I was still working 4-5 days a week at a day job, so the physical & mental strain of having to work a full week whilst dealing with project that wasn't going to plan was massive. Every time I'd go to site (which I'd fit in before work, lunchtimes or by sneaking away on the way to meetings) the atmosphere was painful. None of trades were getting on with these builders - which isn't great for site productivity, and I was constantly being undermined by the builders when asking why materials were being installed in the wrong places, or why something had been done incorrectly. One day the builders had gone home at 3pm, knowing that a delivery of 50 sound, fire & insulated plasterboards was arriving that afternoon. I had to leave work to carry them all into the property on my own. Their response \"it's not our job to carry materials in\"!! Anthony Boyce Diversify Property Solutions, Rocket Architectural Design, The Property Thing... anthony@ rocketarchitecturaldesign.com Page 63
OVERCOMING PROPERTY CHALLENGES How has the challenge been overcome? Perseverance and determination to get the project finished. We were using investors funds to purchase and refurbish the property, so we had to get it finished one way or another to satisfy our obligations to them under our loan agreements, and importantly, provide them with the returns we had promised them. We maxed out credit cards & overdrafts to get finished, but we kept going and get it done. Everyone was paid back on time, but we had to leave a lot more of our money in the deal than we'd hoped when we started. The thing that kept me going was that the pain of refurb & dealing with a bad site relationship was temporary, the income the property will provide to us going forward will last a lifetime. Although at the time it didn't feel like it, but it was just a small bump in the road on the way to financial freedom. I'm pretty sure everyone will experience a project that tests you, like this one did me, on their own property journeys. Anthony Boyce Diversify Property Solutions, Rocket Architectural Design, The Property Thing... anthony@ rocketarchitecturaldesign.com Page 64
OVERCOMING PROPERTY CHALLENGES What challenge have you encountered on your property journey? Lack of knowledge Lack of time Lack of funds Lack of self belief Deal desperation Buyers remorse Shiny penny syndrome Imposter syndrome Project schedule overruns Project budgets blown Joint venture with a friend Using private investors funds for the first time Obtaining a BTL mortgage for a auction purchase Auction purchase with serious structural issues Balancing a day job, property & family life Frustration at not growing at a pace I desired A fear of networking Trying to do everything alone for far too long Luke Brindley www.growyourpropertyportfolio.co.uk info@ growyourpropertyportfolio.co.uk Page 65
OVERCOMING PROPERTY CHALLENGES How has the challenge been overcome? Property was my chosen path to achieving long term wealth. Way before I could afford the deposit for my own property, let alone an investment property. Once my mind was set on the idea, I did all I could to make it become a reality. Therefore all of the challenges encountered along the way have been looked upon as ways of making continual improvement. As I had very little funds to get started, by default I fell into the strategy of Buy, Refurbish & Refinance. I bought the most expensive property I could afford the deposit for, in the area I wanted to invest. Which also happened to be the cheapest on the market at the time in that area. As that is all I could afford. I had researched the market enough to know you make money when you buy & I knew this repossession property was a sound investment. At the time I still was not aware that I could refinance the property to release equity, it took me a two years before I purchased my next investment property. Luke Brindley www.GrowYourPropertyPortfolio.co.uk info@ growyourpropertyportfolio.co.uk Page 66
OVERCOMING PROPERTY CHALLENGES As time passed I realised that you have to treat property like a business. As such I immersed myself in all things property related. The positive being I was expanding my knowledge of property, the negative being that the number of property strategies out there distracted my attention from building upon the foundations of experience I had already gained in single let Buy To Let properties. It was my default strategy, simply as it was all I could afford but it didn’t stop me researching other strategies. Only when I truly became focused on a single strategy was I able to grow at a rate I was content with. I have been naïve at times & made plenty of mistakes along the way, some expensive ones too. But it is how you react to the challenges you face that determines how you will move forward from them. Each time I have made a mistake, I have learned from that & put actions in place to ensure history is not repeated. I didn’t give up when things got tough. We are all responsible for our own destiny. Take ownership of the actions & decisions you make along the way. Luke Brindley www.GrowYourPropertyPortfolio.co.uk info@ growyourpropertyportfolio.co.uk Page 66
OVERCOMING PROPERTY CHALLENGES Thanks For Reading Let’s Keep Lewis Smiling www.gofundme.com/f/let039s-keep-lewis-smiling Page 67
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