The easiest way to explain it is “You become the bank for somebody else.”

For property investors who need quick financing for auction purchasers or for a renovation,
private finance or hard money can be a great source of funds.

You see, most private lenders get between 1% and 3% a month on their money, depending on the term of the loan.
With loans of six months or more 1% to 1.5% is easily achievable and relatively low risk.

You can secure your loan on the property in question, and your investment is likely to be almost as safe as if it was in the bank, except you'd be making 5 to 10 times the return.

Many investors who become successful in property and make big lumps of cash, often lend money to other property investors as another stream of their multiple [property] income strategy.

It's also a great way to 'buy in' great contacts and learn how to invest from people who are already doing it very well.

You can use some cash to partner with an experienced investor, shadow them, and learn exactly how they did it, whilst making money on your money.

You should very realistically and with low risk be able to make 12% a year using this strategy.

Here are the top reasons why we like private lending as an alternative income stream:

1) Property is a VERY secure investment.
You take a first charge on a property and have the ability to take the property back (in a worst case scenario). Plus the title deeds and the lenders interest is recorded on land registry so there is no misunderstanding.

2) Property is a tangible asset that has inherent value.
A company can go bankrupt with an ownership interest of zero.
A property will never do that. It’s always nice to have the ability to touch, see, smell
(well, maybe not smell) exactly what your money is invested in.

3) It's ideal for investors who don’t want the hands-on-approach, headache and liability associated with owning a property. It offers a more passive option and an attractive alternative.

4) Private lending offers a much higher return than traditional investments and can add up to an annual yield of well over 15%.

5) Unlike traditional bank finance, private finance is typically only around 6 months or so.
This means it’s a great way to park your money, earn a great yield/ROI,
AND yet have the ability to pull out the funds for a different project after a fairly short term.

We realised early on that private lending would be an excellent alternative investment strategy, particularly as owning property is not for everybody.

It allows an additional investment strategy in a diversified property investment portfolio.

Gill Alton has been both money lender and recipient of funds in the Progressive community. She loaned out a deposit to another Progressive community member at 8% per year, and borrowed from her parents at 5% per year.

As have Francis and Jane Dolley, whose £9,500 net cashflow per month has been leveraged by the funds they have borrowed and loaned within the community.

We often ‘bridge’ money to friends and business associates, and sometimes even act as money lenders to ourselves.

Perhaps, we’ll see You in The Sunday Times Rich List ?

What are your thoughts on private lending? Share below!

Want to know the key tips to craft a property offer that stands out from the crowd?

Then read on…

Best deals go quickly. You know that.

Your job? To make your offers stick.

But a word of warning. Each house on the market has a story. Each seller is different. Each will have their own motivations. You must know & appeal to their problem.

Structuring your offers the same way each time will mean you miss out on a lot of sexy deals.

Yes you may feel like a detective at times, hunting down the key information from the estate agent/or the seller.

But the more information you have, the more perceived power you will hold.

Follow the below tips before your next offer. They may be the most basic — but most useful — offering tactic you’ll ever employ.

Tip#1 Offering Higher than the Asking Price

Yes you read right. A small minority of properties enter the open market already competitively priced.

Offering 70% of the asking price will insult the vendor, upset the agent and get you ‘binned’.

Offering slightly above the asking price can make plenty of sense and help secure the deal fast, especially if there is offer from another buyer.

Spotting how a property can be turned around & what needs to be done to realise its true potential is an invaluable quality when investing.

Tip #2 The Man with the Cash Wins

If you can buy with cash, put it in. Whether this is your cash, a JV’s or a bridging facility.

You see, from the estate agents and seller’s perspective, the will view you as not subject to financing. This will help you with lower offers and make your offer extra appealing as you can move fast, especially if they have previously been dealing with offers that involved bank financing.

Tip #3 Stop Talking and Start Listening

Yes it’s one of the most difficult maneuvers to keep silent during negotiations, but this is why you should practise to ensure those silent periods occur.

You have two ears and one mouth. Always listen first. You see, being uncomfortable during those silent periods will mean the person you’re negotiating will be uncomfortable too. The common result? One party will make a concession to break the awkward silence.

Next time you’re negotiating to a vendor, and the vendor suggests an offer, say nothing (‘Flinching’ will help too)

Let the silence drag out. Whether its 10 seconds or 10 minutes, make the other person break the silence. They will often interpret your silence as anger or disappointment – and will break the silence by revising their offer.

Smart investors will use this tactic to get less experienced negotiators to make lower offers without ever having to throw out a counter offer themselves – leaving you with a new lower negotiation starting point.

Tip #4 Say You can Complete in 3 Weeks or Less

We all know that it might be very rare to complete in a few weeks especially if you’re using bank finance. But when estate agents and sellers see you can complete in 3 weeks or less, it makes your offer stand out.

A word of caution. Only say this IF you can complete in short space of time, otherwise you will lose all credibility. If you think the deal might be lost because finance is taking longer than expected, offer to pay the sellers legal fees to sweeten the deal.

Tip #5 Know the Situation of the Seller

Identify who you are working with and really understand the situation from the sellers point of view.

You see, most investors tend to assume that negotiation is always about money. It’s not.

Switched on negotiators realise that in many cases, it’s more important to solve a problem than to offer the most money.

Imagine two investors place an offer on a property. The first investor offers more money, but needs 2 months to get his finance in order. The second investor asks the vendor why he is selling, and answers that he needs to move in the next three to four weeks.

The second investor offers £15,000 less, but agrees to complete in the next 4 weeks. While the first investor offered more, the second investor solved a problem that was more important than the price. All because he gathered some information from the seller before making an offer.

This is one of the most important tips we can provide. You are working with people, even when you are dealing with an asset management company. There is always another person at the end of the phone reviewing your offer.

What can you do to make the vendor [or estate agent] excited about your offer? How will You make your offer stand out?

Conclusion

Remember these nuggets are really just the tip of the iceberg. Start as you mean to go on.

Expect to succeed, but don’t become discouraged if you miss out on a few deals. Don’t ever let your emotions get the best of you. Every ‘No’ gets you a step closer to yes. Enjoy your property journey.

What are some of your tips to making offers stick?

Or have an empty property with no tenants and you are on the verge of repossession. Sure. Why not?

We don’t want to lose a lot of money but we sure want to know how it’s possible so that we can avoid doing it. After all, making a mistake is one of the biggest fears that keep people from getting started right?

From the past 7 years we’ve been in the property game, we’ve endured many expenses with running our property portfolio. In fact, Mark has a spreadsheet, pie chart and Excel formulas to determine the reality of the running costs we are likely to incur..

(I don’t say anything, as I know he enjoys it

Investors who use the ‘rent vs mortgage’ to determine cash flow are oblivious with the reality of running a property business. That’s not property investment. That’s gambling.

You see, whether it’s deferred maintenance , general-wear-and-tear, or void related costs, the reality of holding a rental property is not cheap.

Of course, we would all like to paint a rosey image where we never hear from our tenants and the portfolio is running on auto-pilot…

But stick around for the longer term…and you will have a month where all hell breaks loose.

So how does this relate to You and your portfolio?

Simple.

Failing to hold a sufficient amount of liquid reserves can easily wipe out your portfolio.

Get this right and you’ll end up with a solid, recession proof income.

Get this wrong and you could be joining the other overseas, off plan, new build junkies one month away from bankruptcy (or worse)

I know you’re smart to have liquid cash reserves which are essential to keeping a healthy rental portfolio…

But…. ‘How much liquid reserves should I have for my portfolio’, I hear you ask.

Great question.

Because so many do get it wrong, there's more contrarian opportunity and income for you when you do the opposite of the masses and protect yourself

So, let’s make this interesting and consider three scenarios:

THE GAMBLER wants to escape the rat race. He’s tired of his job and feels trapped. He knows more than all of his bosses, yet he makes less than them. He doesn’t feel like he has a way to grow or experience more.

So he decides to invest in property but has no additional cash reserves. He bought a low yielding property which was just ‘washing its face’, so he couldn’t reinvest any cashflow back into the business.

The ‘Gambler’ has all of his reserves in the equity line. The big downside is fairly self explanatory, but a change in interest rate rises, a big maintenance bill and the investor is heading for trouble.

Can you relate?

Then you have AVERAGE JOE– he loves figures, numbers and formulas to determine the amount of cash reserves he should have on hand for his rental business.

Such as:
• 5 months of mortgage payments, per property
• Maintains £2-4k in cash, per property
• Maintains £7k in cash, if he own less than four single lets
• Maintains between £15-£20k in cash, if he has have more than 5 but less than 10 single lets

The big advantage which Joe has, is he has built up his cash reserves in a separate bank account specifically for his rental business.

Although this seems like an obvious point, many new investors get stung by never having separate accounts to track their rental profit and loss. They co-mingle their personal accounts with their business, which causes more hassle and headaches later down the line.

Then you have..

THE SMART INVESTOR: He does all of what Average Joe does, but has an additional £25,000 in liquid cash deposited in the bank.

The goal for the smart investor is to always maintain this lump sum for a rainy day. He will use excess cashflow to reduce his loan to value, and divert surplus amounts to different ventures within the property business – such as direct to vendor marketing and new acquisitions.

Perhaps you can relate to this last strategy?

Although it maximises security without tying up too much capital, it’s important to know the reality and not to dismiss it as something which may ‘never happen’

You see, Mark has analysed our last 6 years tax returns (I get bored of reading a post-it note, so someone needs to keep an eye on the detail) and as an average across all of our properties, our running costs are about a third of the gross rent (management, maintenance, voids, safety checks, insurance etc).

Yes… it’s more stringent than the lenders 125%, but he likes the reality. He then works the long term cost of finance out, which is around 6%. An 8.5%-9% gross yield with a third taken off for cost covers the finance, guess what gross yield we look for!

You guessed it, 8.5% or better.

Now, don’t get us wrong. Owning rental property is one of the best ways to build up long term wealth, but we’ve been doing it long enough to know what works and what the REAL expenses associated with running the business entails.

It’s not sexy or glamorous, but it’s real and important.

Having sufficient cash reserves to weather a downturn is more important than adding to your portfolio. If the boiler goes on the blink, you must have cash or credit to get that working. Or have the failures of the tenant leaving at any time.

Remember, capital appreciation is a fact, not a ‘strategy’. You need to concentrate on achieving monthly profits in order to keep your business liquid. Your aim should be to buy investments “as if prices will never go up again” then you will be forced to only buy properties which give you great cashflow.

Having extra cashflow and a safety buffer will also cover potential rises in interest rates in the future and for any unexpected costs you may incur in case of an emergency

If you can’t cope with having cash reserves, then your property portfolio will crater WHEN this happens.

And if you’re just starting out, spend some time and money investing in advice and mentoring from experts. Whether it’s us or someone else, because the best risk reducer is knowledge.

How do You determine the amount of cash reserves you have on hand? Do you have any other strategy? Leave a comment below!

Trying to walk, falling, getting up, trying again, and falling..

Perhaps you bumped your head, cried and tried to be more careful.

Imagine You decided to give up walking altogether?

“This walking thing just isn’t gonna work, it hurts, it’s waaaay too painful. I better quit while I’m ahead’

How would that have worked out?

You see, making mistakes isn’t fun. It hurts. But it’s part of Your cycle to massive property success.

We still make plenty (big sin apparently..)

But the good news is, You can leverage our mistakes. So You don’t have to.

(Remember Attrition wins)

You see, over the last few years Mark and I have talked to 1,000’s of people who have started investing in property but have made mistakes which have cost them a huge amount of emotional and financial pain

Now although we’ve met many ‘experienced’ or ‘seasoned’ investors at networking events who on paper looked like they were doing well, this has mostly been in a rising market, where mistakes can be disguised, rather than solid property investing strategies – absolutely vital in this market

Property is a fantastic wealth creation vehicle, and it can give you long term financial independence if you can successfully get to grips and overcome some of the challenges that many investors face

This article will highlight some of the main reasons why investors fail and give you some solutions you can implement right away to succeed in your property business:

Mistake # 1 – Not Buying Under Market Value

Ok tell us something that isn’t new…Well sticking to the basics is often sooooo easy to forget that it is sometimes important to refresh our minds with the fundamentals. Warren Buffett has stuck to them for 50 years

You are in the business of finding motivated or desperate sellers who want to sell quickly at a discount and where you can help them with their problems. Where price is NOT their most pressing concern

Buying UMV will you give instant equity and a buffer if property prices were to fall further. It also allows you to remortgage and remove your initial deposit as soon as circumstances allow, thereby significantly reducing the risk of losing money in the short term, as you will have left none of your own money in. 0% risk on finds, infinite ROI

With this concept (which works in any market) you do not need property prices to increase in value as you are making money straight away from the discount and locked in profit

Nice eh?

Mistake #2 – Underestimating the importance of cash flow

Not treating your property acquisitions as a business is a recipe for disaster. We know the old adage that cash flow is king and without a healthy flow of cash your property business will fail

Now, we are not only talking about having good cash flow properties which is essential but also having a buffer of mortgages payments and an extra for expenses, to counter interest rate rises which can put a dent in your monthly profits or if the tenant leaves and you have to fund the void periods.

What if you have an unexpected cost such as having to replace a boiler?

If you are starting out, this can be tough, we know that. However, without having cash reserves building a successful property business can prove extremely difficult

However, all is not lost. If you do not have cash reserves set aside, then perhaps you could find a JV partner who has a cash sitting in the bank [getting no interest], who can have an equity share in the property

You can become very wealthy by utilising and reinvesting using other people's money [OPM]. Have a read of our blog post on raising JV & PI finance: http://tinyurl.com/3a44svr

Remember the 'number of properties you own is vanity, the cash flow you make is sanity and the cash you got in the bank is reality'.

Mistake #3 – Buying for Capital Appreciation [Growth] and not Yield

Many investors base their entire business model on capital appreciation and underestimate funding the shortfall in running their property portfolio. This is a very big mistake and a very high risk strategy to be avoided at all cost.

It was the strategy that financially ruined many people 2001 – 2007

All things being equal, we buy our stock on the basis that property prices will never rise, meaning our model is based on instant profitability: income from rent NOT just growth. This mentality helps us make sensible decisions that the figures and the investment will provide a positive income. Capital appreciation is seen as bonus

Sure, we all know property prices virtually double every 10 years, but as portfolios grow shortfalls can become out of control if they are bought on a growth only model

Never ever buy with emotions. Remember, an asset is something that puts money in your pocket and a liability is something that takes money out of your pocket. You should be turning away more deals than you buy, making sure the yield is good, and factoring in ALL of your costs

Something to think about…

Mistake #4 – Not doing enough research

It is imperative that you do enough research and due diligence before you buy so that you reduce and minimise the risk you are about to make

Most novice investors create the supply without the demand. There is absolutely no point (if your strategy is buy to hold, see mistake #5) buying a property that you cannot rent out.

Your local post code district within your goldmine area must be fully researched in terms of the rental market and the amount of current stock within the area. The bridge between supply and demand must be closed

Buying purely because there is a big discount is a mistake, because you will be left paying the mortgage and the operating expenses that come with holding the property.

Buying property with apparent discounts without understanding comparables can give you unrealistic perceptions of actual value

Other research you should do along the way:

Is the property mortgageable?

Is there any structural damage? Find compatible sold prices, instructing independent valuations, obtain recent sales and letting demand confirmation from agents, check both the Land Registry and current value prices, check LHA rates, have a schedule of any refurbishment costs that will require works, a summary of the locality of the area, transport links, demographics from government and council stats, crime rates, proximity to schools etc

Mistake #5 – Not having an Effective Investment Strategy

Investing in property is a personal strategy based on your personal financial situation, your attitude to risk, the level of funds you have to invest etc

Preparing and understanding your own motivation, goals and aims will help you with your first step and give you a structure about your strategy

For example, if you have a £50,000 worth of capital or less to start off with, then investing in HMO’s will be a pretty tough business because you probably need more upfront cash, but that does not mean you cannot invest in single let properties adopting our model of buying, refurbishing and remortgaging your fees back out

Buying a Property is easy. It’s easy to do, but it’s also easy not to do

However, buying a property that will meet and deliver on your personal strategy and your financial objectives is more of a science and one that you should familiarise yourself with

Other things to think about are how much time you can afford to put into your property business.

Many people are unrealistic about the time they can afford: they think they have more or less than they do in reality. If you don’t have much time, perhaps you may need help. If you have lots of time then you probably don’t need the same seed/start up capital.

Mistake #6 – Over killing on the Refurb

If the property requires some sort of renovation, do the bare minimum. Do not get drawn in by those magical makeover TV programmes such as Property Ladder or Homes Under The Hammer, where the selling price is largely overestimated, and the time and cost of the project are both underestimated.

Always over estimate 90% of anticipated selling price which is a good calculation to work on.

Factor in your profit and loss AND account to see if the project is really worth your time. Remember, it's anticipated, it could be more or it could be less!

Mistake #7 – Getting emotional about the numbers

The numbers never lie. Do not get emotional over property as this will cost you money. And cause you pain. Don’t chase the deals; let them come back to you. Play the long game – we had a deal that we recently exchanged that we have been negotiating on for 2 years that fell out of bed 3 times! This is not uncommon, and far better than trying to tie a price up too early and getting too emotionally involved and ‘wanting to get the deal done.’

Beginners are especially susceptible to this.

Have a strict set of rules and do not deviate from them. If the numbers do not work for you, don't think they won't for another investor. Consider selling the lead on/packaging the deal up. Maximise your revenue streams!

Mistake #8 – Always Selling your Property

If you have read our first book, ‘The 44 Most Closely Guarded Property Secrets’ you will know we bang on quite a bit about you make your money when you buy…
and not when you sell.

The main reason we believe selling is a mistake is because you are transferring your wealth to someone else. You are slaying the goose that is laying the Golden eggs.

Now, we do believe that IF your property is not performing well, or you have bought a property out of area or you can flip a low yielding property on a quick turnaround, then selling the property to reinvest in another better performing property project or to get out is a viable strategy.

The mistake we often see is investors not investing for the long term. If we go by past property cycles, and property prices increasing in value over time, then continually selling your properties reduces your asset base and long term wealth

Mistake #9 – Buying Overseas, off plan & out of area

This is probably the biggest one and why we have saved it until last. We learned this the hard way in our earlier investing days when Mark bought his flat in Bulgaria which rents out for 2 weeks per year!
Many investors are often hypnotised with the fancy artist impression of some beautiful luxury apartments by the sea: somewhere in an idyllic holiday location 3 years off plan

You can read about this mistake here

Mistake #10 – Buying Next Door to Bad Neighbours

Play a significant role in the end buyers decision, regardless of whether you bought it BMV.

Plan ahead. Think “what would an end buyer see?”.

If someone does buy it they are taking on a problem and You will ultimately have to pay when You exit (reduced value, limited ability to sell, )

Mistake #11 – Hiring Cowboy’s

This is always a recipe for disaster.

You would be wise to think how cowboy builders get away with their bad practices?

It happens more often than first seems. And this is a big mistake many investors make.

Here’s what many naive green and keen investors don’t do:

-Ask for & verify references by visiting past clients
-Obtain 3 detailed quotes before instructing the refurb
-Appoint approved contractors & go for the cheaper option often paying in cash

A word of caution. These guys are smart. They will seem enthusiastic at the start. They will always return your calls.

“Trust me I’ll take care of you”. It’s amazing the majority of investors still fall for these magic words.

But You’re smarter. Alarm bells should ring especially if:

-Quotes are handwritten & you don’t get a full breakdown
-Offers quick cash discount for money upfront
-Doesn’t offer a contract or sign the one you give them or
- Claims to work for a big firm even producing a fake ID.

This will result in wasted time, overrun of costs and more problems than You think.

Mistake #12 – Investing in Property With Title Defects

Now, don’t get us wrong.

Many investors we know buy problematic properties. These are great.

There is a big opportunity in doing so, but only if you know what you’re doing.

We wouldn’t advise buying a property with title issues if you are just starting out in your journey.

The overwhelm & confusion can really hurt. It can distort and you can make big mistakes.

To avoid this mistake, speak to a specialist conveyancer before-hand or stay away, as it could take years and lots of capital to fix.

If you do venture down this road and want to speak to us before-hand, then get in touch and we would gladly help you.

Mistake #13 – Buying on Emotion

“I love this place! It has so much…potential!”

How we, and many hundreds of thousands starting out, got suckered right in by those big, colourful, lifestyleee brochures, new build and dreamy holiday homes.

No. Not anymore. This, as we learned the hard way, is vanity. It’s emotional buying. Perhaps you can relate?

You see, talk like the above can get you in financial trouble quickly.

We know, it’s easy to get carried away.

I’ve done it. Mark done it. We’ve all done it. It’s not hard to do it.

Yes, you will miss a few ‘deals’ on the way up, the more detached you are which is fine.

But the more you stick to your buying rules and the fundamentals, the better cashflowing investor you will be.

And if you can’t get the deal, at the price you want, then move on. There will be other deals.

It’s a skill to think with logic…not your emotions 

Mistake #14 – “Faking It”

You’ve heard the phrase, ‘Fake it till you make it’ right?

Well, this one’s for new investors, and Yes we know, it’ sooo tempting to do.

Early on, when we used to ‘Pimp’ Mark out for his personal mentorships, he took a couple to visit a few estate agents…

They were asked how many properties they had, for which they replied ‘over one-hundred’.

The look on Marks face ‘..if Mastercard did..’

Suffice to say, we never heard back from that agent.

Anyway, the moral of the story..don’t be too tempted to stretch the truth – especially if you’re just starting out.

It’s better to be honest (but remember, perception is reality..)

Yes, it’s less glamorous.
You may lose a few deals
Yes, it may even be counter initiative

But in the long run, you will attract more JV partners, more property deals, more trust, more credibility because you were honest.

People by and large want to help You. It’s human nature.

In many cases, you will get ‘banker status’ within the estate agency, and have the ‘Wheeler Dealer/Diva’ take you under their wing, just by doing what you said you were going to do.

Better still, find a good property coach and ride his coattails to Your property deals.

Either way, don’t “fake it” to the extent you lose all credibility. Be up front and honest.

Mistake #15 Breaking Promises…and Breaking Trust

You just have to look on the property forums to know the property investing community is tight knit.

You’re probably aware that word travels fast, and anyone who is dishonest and untrustworthy will be exposed.

And Google will cache that for many many years baby!

So how does it relate to you?

Well the quickest way to make a bad name for yourself is to cheat, and make promises You choose not to keep.

Many of the ‘Get Rich Quick’ scammers are out of business, or in prison.

Reputation is EVERYTHING. ‘It’s hard to earn…but easy to lose’

Sad but true. You don’t want a reputation as someone who cannot be trusted. Word spreads like wild fire!

Now, we know that doesn’t relate to you, but it’s good to have this conversation, isn’t it?

So what can You do?

The following principles will stop You falling prey:
- Always be open, transparent and fair
- Never take advantage of people
- Under promise and over deliver
- Always be reliable
- Treat others as you would like to be treated
- Don’t ever go back on your word. A handshake is a handshake

Mistake #15.5 – A Few Others…

- Paying a deposit of more than 10% for a property that isn’t even built
- Buying off plan without a cast-iron compensation, termination or refund clause
- Trusting all solicitors. Do your diligence on them. We’ve heard stories of solicitors handing big sums of money to developers for units that didn’t even exist.
- Assuming a vendor has the right to sell the property – check and double check.

This is the ONLY way of being sure what you are being sold actually belongs to the person selling it to you.

How about You?

Let’s get the conversation flowing about how You overcame your biggest property mistakes.

Rob Moore & Mark Homer
Co-Founders of the Progressive Companies
Full Time Property Investors
Double Best Selling Property Authors
Over 350 Properties Bought & Sold

© Progressive Property Education LLP 2013

When investing, what’s your end game?

What’s the bottom line you want, when all is said and done?

Ask 100 investors and you will get a varied response.

Which one is better, single lets or multi-lets?

OK, that was a trick question.

You see, that’s akin to ‘Which is better, a fastball or an off speed pitch?’

If you need immediate income, you know cash flow is a yield on a pile of gold.

And, the one with the most and biggest piles of gold wins, right?

But not all of us can unanimously agree as to which strategy will help best accomplish our objective.

Some investors are die hard single let investors, whilst others focus intently on multi-lets.

Both viable strategies and each has its advantages and disadvantages which will be discussed below.

1- Ease of Purchase – Bread & butter or ‘vanilla’ single lets are bar far the easiest & most reasonably priced and easiest to finance, which makes them very popular and accessible to the majority of investors.

Although smaller multi-lets are also relatively easy to finance, you will find difficulty financing larger units where the property needs mandatory licensing.

They will either need to be financed for cash or through specialist commercial arms.

The bigger buildings will also carry a higher price tag, which will require a higher deposit, but with knowledge, experience and joint venture cash, they will also have the highest cash upsides.

2- Consistency of Income – If you’re lucky to land a 5 star tenant who renews their AST every 6-12 months, with no issues, no voids, no rent arrears, then you can ignore this section and you can comfortably rest on that high horse of yours looking down upon the rest of us mere mortals…..

If you want the reality then read on.

This is the part where you can lose your shirt, and a vacancy can take months to fill, costing you a boatload of mortgage costs.

You see, with single lets, most tenants [especially at the lower end] tend to stay longer term, making recurring income on auto-pilot.

But, when vacant, they can seriously take a bite out of the cashflow, as there will be zero income, but the mortgage will still need to be met.

With multi-lets, you are diversifying the income which clearly isn’t possible with single lets.

This can offset potential higher vacancy rates.

3-Income Diversification – A genuine question:

Going into war, is it better to have one soldier on your side, or four?

Of course you would have four –if one goes down, you still have three others to get the job done.

You with me?

This is one of the advantages multi-lets have over single lets.

4- Ease of Tenant Management/Maintenance - This is another area where the burden, up-keep and maintenance of tenants of single lets can outshine multi-lets.

Perhaps you’ve also tried HMO’ing.

You hated it.

You tried to self manage, you got too involved, you didn’t vet the tenants properly, put the wrong types of tenants together, in the wrong location, to the wrong living standard.

Never again, I’ll stick with single let thanks.

But consider this also.

Needing 100 single lets in order to achieve your investment objectives [but scattered] compared to 5/6-twenty multi-lets in a tight geographical location?

The multi-lets would make more sense right? There is a lot of efficiency in this model too.

But there might be another reason to own smaller single lets which brings us on to the next point..

5-Ease of Sale – The simple reality is single lets are much easier to liquidate should you ever want to exit.

The potential pool of buyers is much larger along with generous financing & mortgage options.

Given smaller multi-lets are also easier to finance, the problems arise with larger licensed buildings which often have many drawbacks with the availability of finance, and larger deposits needed.

Naturally, there are a few commercial players who could offer niche finance for this market, but this would require the buyer to have deep pockets and some past business borrowings.

Conclusion – while both strategies and financing options are different, which one is more better depends on the investors strategy.

Cash flow vs. Capital appreciation? Multi-lets will deliver mammoth returns, whilst single-lets will likely break even after all costs are factored in. This is of course based on the assumption you have recycled your capital after the ‘title has seasoned’

Yes, each strategy has its own benefits and drawbacks, but remember, which ever strategy you choose, your priority should be not to lose!

So, let’s talk about it!

What’s your preference? Single or multi-Lets? Leave a comment below.

Rob Moore & Mark Homer
Co-Founders of the Progressive Companies
Full Time Property Investors
Double Best Selling Property Authors
Over 350 Properties Bought & Sold

© Progressive Property Education LLP 2013

I know You can get in a pickle and barely have a penny to get by.

I know this because when I started my property journey I was in £30,000 credit card debt.

You see, I hardly had any money and the credit card debt was compounding (not that you care)

So what did I do?

I thought about giving up.

‘I can’t invest in property’. Expensive word that.

I know You’re a successful property investor in the making and if you’ve had any challenges and You can relate then stay with me. Or don’t and humour me.

Within 3 months of meeting my business partner Mark Homer and within the first year, we bought 20 properties and I was out of debt.

All from that one joint venture partnership.

And I am certainly nothing ‘special’, I was certainly no expert at the time, and Mark had most of the knowledge back then

Anyone who doesn’t know us might say that was all because of the boom years.

Actually Mark and I bought our first 20 properties pre crash and they are the worst 20, and not because we didn’t buy well. The crash that hurt so many people was the biggest guardian angel we could have hoped for.

But we were ready.

So what can You do? (I know you’re smart and decisive, but may have challenges which are temporarily holding You back)

Get out there. Network and meet people. Because once You come across a deal, and the figures work, You’ll be able to get the money. I promise you this.

You will get challenges. You won’t get rich quick – sit-on-a-Beach-drinking-Pina-Colada-in-Marbella-and-come-back-a-millionaire instant results.

I know you know this too.

You see, it's survival of the fittest right now, and for those without the stomach for it, it's hard.

But for You with courage who can make decisions and take action, the money that the helpless masses are losing is up for grabs, and there's more of it than ever.

Are you game?

The solution?

Building Your On & Off-line Network [net-worth]

You see, there are SPECIFIC rules, which if You follow will guarantee You success:

1. Add Value.

Regularly answer people’s questions on forums, offer suggestions, recommend someone even if You can’t directly help them.
Visibility is credibility my friend.

2. Ensure You don’t make your first post a request for money – You will come across as desperate.

Requesting money at the point when you need it, where you don’t build a relationship, don’t have a profile picture, you don’t let the JV partner know, with proof (see below..) what is in it for them, and how they can securitise their investment…will not result in a JV (no matter how much you beg..)

3.Subtely (without the big ‘I’am’) help people build their knowledge.

You will be perceived as a property expert

4. Share Your property deals, learning’s and successes.

It will attract potential JV’s as they will want the same

5. Trying to get to first base or hitting a home run won’t work [unless You’re in Peterborough] – don’t go for the kill too soon.

You will lose all credibility. You with me?

6. Joint Ventures can be done in many ways.

Don’t assume JV’s means a partner offering you finance.

7.Overcome any objections upfront and be prepared to offer security to the JV partner

8.Ensure you show as much real proof about your property deals [Mark Homer-spreadsheet-style!]

Evidenced discount, achievable rent, cashflow, graphs, returns [ROI], exit, spreadsheet data etc

9.Be REALISTIC about the returns .

Under promise and over deliver and you will have a JV partner for life

10. Continually, subtly, conversationally ask the JV partner:

"What's most important to you in [investing, a partner, returns, etc]"

Listen.

Don't sell him.

Listen.

Take time to get all the information out while letting them talk at least 2/3 of the time.

11. When attending networking events, build lasting friendships first.

Look for trust.

You wouldn’t jump into bed with someone you didn’t know, would You? 

So, if you’re worried things aren’t going fast enough or You happen to be short on funds right now, then don't sweat the small stuff.

You’re great and right where you need to be.

Be patient.

And if You hit a hurdle, then there’s something in your control that you need to tweak.

You never stop learning, do you?

The more value you give [to people], the more money you’ll make. Find the best people, and you’ll develop the best systems.

You haven’t given up, because you are still here. The most successful investors I know keep going, constantly learning, testing, adapting and evolving with new trends and markets.

The next person you [e] – Meet could open the door for you and introduce you into a seriously wealthy and powerful network

Just keep on keeping on. You only fail when you stop; so just don’t stop.

“Sweat beats regret”

Rob Moore & Mark Homer
Co-Founders of the Progressive Companies
Full Time Property Investors
Double Best Selling Property Authors
Over 350 Properties Bought & Sold

© Progressive Property Education LLP 2013

The British love affair with property is as passionate and as painful as ever, simple questions of whether to buy, hold or sell are interlinked with life-changing decisions on funding, careers, employment, affordability and pensions.

But there are a few things You need to be aware of. They are important. So pay close attention.

If you know in advance what’s coming, You can be fully equipped as to what to expect.

You see, from the locked up finance markets where you still need a big deposit, to the big news of the Help To Buy Scheme, and everything in between from the FTSE breaking the 6000 mark, and Government intervention for the Funding for Lending Scheme..

What does the current state of the property market mean to You? And how can you take advantage?

For the 20% of contrarian investors, it means opportunity.

Opportunity to show ingenuity and resourcefulness like never before. To load up on cheap property before the dreaded breed of first time buyers enter the property markets.

It’s not surprising that contrarian investors haven’t been waiting around for finance to get easier. It’s not surprising they have gone against the herd, continued to invest, often utilising private funding.

The contrarian investors have been taking the current state of the property market full on the chin.

It’s still bargain city out there my friend. It may not last long but the key to not just surviving but thriving in uncertain financial times is to “be greedy when others are fearful and fearful when others are greedy” (Thanks Warren )

Secondly, due to the backdrop and the recent chaos in Cyprus, wealthy professionals, investors and millionaires are leveraging cash finance and throwing their pink lobsters into property because they still see it as one of the few investments which they can make money from in uncertain financial times.

So what does that mean to you? Opportunity to leverage finance. They see putting money in the bank as risky. Inflation is still [relatively] high, cash is being depleted year on year, stocks and shares look like the two ugly sisters, leaving [you guessed it] property as the Cinderella of the investment world.

Thirdly, home –ownership remains out of the reach of many would be buyers – especially in London, where foreign buyers have out priced the average Joe [or Jo]

This is combined with the fact many lenders are still requiring large deposits, which has sparked strong demand in the rental sector, along with a shortage of available properties, has pushed yields higher.
This has effectively created a raging rental market!

But despite the obvious mass brain washing that landlords will be hit by high rental arrears and unaffordable rents, the continued downbeat media coverage has not deterred the contrarian investors, who’ve been cleaning up, while the unprepared have been worrying about some other aspect of property investment which can easily be managed or leveraged.

Fourthly, the latest profit centre strategies in the current market place which are flourishing are deal packaging, sourcing, trading and particularly office to residential conversions without the need for ‘sticky red tape’. This has led to a great opportunity for HMO or flat conversions projects creating really good income and multiple profit streams.

So what do you do as an informed [and contrarian] investor?

Find the market and feed it.

How do you do that?

Especially trading options, finding the right strategies, learning about the implications of new regulation, doing ‘corporate lets’, office to residential conversions, and monetising deals, earning more passively with a greater degree of opportunities and portfolio building by piggy-backing on the owner’s existing finance..?

The answer is HERE:

You see, over the next 6 months I see some great opportunities.

And contrarians will always get better than average results, just be doing the opposite to the majority.

So congratulations in being one of many, one of the quickest, yet one of the few who take action.

And every step, no matter how small or insignificant it may seem, like reading this, or going on a viewing, speaking directly to vendors, or making that offer, gets you one step closer to where you want to be. The compounded effect of those small decisions you take grow into life changing results, in every minute of every day.

And that sad statistic of being one of the few will always play in your favour – a contrarian will always get better than average results, just be doing the opposite to the majority.

We’ve come to accept, over time, that the majority of those living a quiet life of desperation will make their own choices in life. And we need them. As James Caan said as a guest speaker at our Property Super Conference – “Observe the Masses, do the Opposite.”

“To know and not to do is not to know.” And you did

Rob Moore & Mark Homer
Co-Founders of the Progressive Companies
Full Time Property Investors
Double Best Selling Property Authors
Over 350 Properties Bought & Sold

© Progressive Property Education LLP 2013

Property Investment is about Stepping Stones!

There's a journey that a successful property investor takes that seems to work the best. You see, it’s not just about the strategy, it is about the right strategy for YOU and the TIMING of the right strategy for YOU

Step 1 – Get educated

Step 2 – Learn foundations/fundamentals [B2L, BRR, JV's, Flipping perhaps]

Step 3 - Systemise foundation strategies

Step 4 – Intermediate strategies [Deal Packaging/property biz, HMO's, Options IC's etc]

Step 5 – Systemise intermediate strategies

Step 6 – Advanced strategies [Assisted selling, Title splitting, Commercial (Low end retail, office space, small Pub conversions, change of use)]

Step 7 – Systemise advanced strategies

Step 8 – Expert strategies [Super Commercial (High end retail, Trophy, Hotels, Casinos)

Step 9 - Systemise Expert strategies

To get to each level, experience in the previous level, and especially the systemisation, is important. To make each level work, results in the previous level need to have been achieved.

And the common thing I see is people trying to jump in at level 4 or worse at level 6 without the necessary grounding or experience.

To get the level of income you want per property you are in levels 4 & 6. Do you feel like you have experienced enough of levels 1 to 3 yet [a genuine question not an assumption]?

To move through each level takes a small step into the unknown, and we don't grow or progress unless we move somewhat uncomfortably into the unknown.

But to jump more than one level usually ends in wasted years and money and pain, or back tracking back down a level and 'starting again.'

Of course everyone wants the bigger chunks of cash.

But…

1. Have they gone through the levels and earned the right?

And

2. Are they prepared for the sacrifice? When people say 'it takes as much time to do a deal for £100 cashflow as it does £700 cashflow' they have no idea.
It is higher risk, more variables, more research, more time, more specialist knowledge – more risk more reward. It only takes less time when they master it because they have done it many times [by which time it's often time to step up to the next level].

There's nothing wrong with smaller deals – they are easier and when you get good at them you can, for the most part, systemise and repeat.

£700 – £1000 net profit [I guess per month] on £30 – £50K is between a 15% and 40% return – definitely at the high end of the 'returns' spectrum. Especially passive. Often the best way to get £700pcm is to get 7 good single lets at £100pcm, because you have all the other benefits, lower risk and future rewards.

Often… getting bored means getting good(!), or chasing much bigger things comes from other people's marketing.

I know many VC's who lose 100% of 8.5 out of 10 investments. But 1.5 win BIG. High risk/high reward.

You may well be at the right stage, in which case great.

Also, it is irrelevant what others are doing.

Remember it is the "strategy + YOU + timing" that equals the results.

Other people are at different TIMING stages and are not YOU. Diligence should be as much about timing and YOU as it should be other people and strategy.

What stage are you at? Have you made any mistake by skipping steps in the past?!….. Let us know…….

Rob Moore & Mark Homer
Co-Founders of the Progressive Companies
Full Time Property Investors
Double Best Selling Property Authors
Over 350 Properties Bought & Sold

© Progressive Property Education LLP 2013

L1. M2. DL: this leverage model could change your life.

Use it with caution, because your results will change very fast for the better, in all areas, not just property.

Are you ready for that?

L1. – Leverage 1st

You probably have a task list or to do list, whether in old fashioned pen and ink, or on a computer, app or on software.

If you’re smart, and you’ve read all the time management books, then you probably ensure you only have 5 to 7 rather than 507 things on that list, because everything else is probably not important.

You do that, right?

And if you’re a real student of time management, you probably order that list in importance. If you’re an expert in time management, you probably order it in importance and urgency, even categorising it as such in a numerical system, and you NEVER move to the second task until you’ve completely finished the first.

No matter how many distractions or urgencies or people or emails or Facebook or anything interrupting you every waking minute, you shut off the world to all those distractions and systematically go down the list in order.

You do that right?

What you certainly DON’T do, just like I NEVER did, is jump around ticking off the easy [translate: unimportant] tasks first.

What you definitely DON’T do, just like I NEVER did, is remember things you did yesterday, write them on the list, and then cross them straight off, just to make sure you feel like you’re making progress.

And I bet you NEVER ended the day with more things on the list than when you started, and all the urgent ones were still there.

Because that NEVER happened to me either.

So here’s the magic: take your list of 5-7 things and leverage as many of them as possible, FIRST: ‘Who can I get to do that?’

Leverage, outsource and delegate as many of those tasks as you can. Perhaps that might be 3 of the 7. Even if it’s only 2, it’s around 1/3 less tasks YOU have to do. That’s 1/3 of your time back to do the things you love, or to fill that time productively on IGA’s.

“But Rob, it’s not that simple”

Reserve judgement for a minute, and stick with me here. Or pretend that it works and humour me.

Leverage as much of the tasks as you can off your list, consistently and with discipline. Don’t get sucked back in. Don’t D.I.Y because you think no one can do the task as well as you. Don’t D.I.Y because you think it’ll be quicker. Don’t D.I.Y because you haven’t got time to train people. All these reasons are the things that keep people small and overw o r k e d, and the very reasons they should actually DO it.

M2. – Manage 2nd

So once you’ve leveraged half your task list, the task comes back the next morning all wrapped in a bow and smelling of perfume and perfectly done right? No, it comes back better than you expected right?

No.

It often gets done wrong, or not at all, or late, or worse you have to wade in and help and you end up doing what you paid them for. Know a song about that?

‘Rob, I’ve tried hiring people, it didn’t work. Rob, I had a big team once and it was so stressful, I don’t want employees anymore. Rob, no one can do my specialist job as well as me. Rob I hire people and they just can’t do the job’

A smart businessman, who pi**ed me off at first, once told me, when I was having a rant about things like this, that my team would only be as good as I let them or as I trained them to be.

Who’s this guy? Telling me that I’m getting in their way. Telling me it’s my fault that they aren’t getting the results doing a job I could do standing on my head.

Well of course, because he was smart and I was naive, he was right.

So, once you have L1.’d first, you need to M2 2nd. You need to manage those tasks and projects and people that You leveraged. You need to see them through to completion: help them, train them, nurture them, support them, watch them, deadline them and remind them [yes all 17 times!].

Sound like a lot of work? Rather D.I.Y?

Well if you have a manager in place, all you have to do is manage the manager managing the tasks, and you’ve compounded leverage and reduced your personal time input further.

This might take a little more time than L1.

But it won’t take anywhere near as much doing as doing, once set up.

DL. – Do LAST!

ONLY ONLY ONLY ONLY ONLY do the task, if you have thoroughly assessed if you can’t L 1st or D 2nd.

Never get sucked in to doing unless it’s a last resort [or you simply love doing it].

Or, if the task has a high IGA, by all means D.I.Y, as it will bring a greater, more leveraged return on Your time invested.

If you don’t do any of this, it doesn’t work. And I know I’ve skim read many books and not done much/anything with them. I can’t blame the author for that. It’s better to read less and do more than it is to read everything and do nothing.

How do you leverage your tasks? Amazed at the VALUE it adds to your day? Discussions, opinions and comments welcomed.

Rob Moore & Mark Homer
Co-Founders of the Progressive Companies
Full Time Property Investors
Double Best Selling Property Authors
Over 350 Properties Bought & Sold

© Progressive Property Education LLP 2013

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