You see, many of our experiences stem from trying to use our local housing allowance [LHA] model, which we use on single let properties in a HMO environment.

Unlike family’s claiming housing benefit, the single person room model just doesn’t seem to work with tenants claiming benefits.

Let me show you the difference on 2 properties we own that are opposite each other on the same street, of exactly the same size and type, but managed by 2 different letting agents. One letting to LHA tenants claiming benefit and the other to working professionals.

Property 1:

Property 2:

The difference between the two properties is stunning!

One agent clearly does a better job than the other [even managing to provide such amazing things as monthly rental statements!], but most of this is down to the fact that single benefits claimants attracted to HMO accommodation appear to have a higher propensity for being in and out of prison, involved with drugs [we took 130 needles out of one we cleared after sacking a terrible agent!] and theft.

These factors mean that other tenants in the building move out a lot more often, creating huge voids and non payment of rent for the tenants who end up in prison.
Of course, the agents involved in both of these models told us up front how much each investment strategy would work, so the question arises, how do you decide which route/letting agent to go with when making the decision on which strategy to follow?

Testing IS the ONLY way…

An early mistake we made investing in property was to rely on what we had been told by people and market participants about expected returns…

We would often find a model that we believed worked, and quickly purchase a large number of units, outlaying capital on
refurbs without first securing the income stream.

These days we frequently try new things, but if we want to try a new model we will often do the following things:

1. Test the market and tenants for the property type as above
2. or buy a few properties at any one time

AND then test the return from the LHA tenant and one with a private tenant with different managing agents.

We will then assess the results after around 6 months and start to move in the direction which seems to be working.

Due diligence is all good, but it can only take you so far: you then need to just jump in at the shallow end, and make sure you watch like a hawk, keeping track of the financials on a monthly basis, with a view to scaling later.

“If you go as far as you can see, you will then see enough to go even farther” — John Wooden

Invest for Freedom, Choice & Profit

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 2011

Then read on, you'll enjoy this!

It is commonly the case in this country that flats and apartments are leasehold, meaning you own the internal fabric but not the collective external fabric or land; which means dealing with freeholders who control that aspect of a flat or apartment

Leasehold advice: We generally avoid new build flats as these often have the highest ground rent and service charges – frequently £1000+ and sometimes up to £4000+ per year, often eroding most of your net Cashflow, and way over the cost of the same services in a freehold house.

You often find London style management companies behind the buildings with the highest charges, which is why we prefer to buy buildings where the freeholder is the local authority or council. These 'institutions' to behave much more reasonably, with lower charges and less 'surprises.'

Whilst many private freeholders are perfectly reasonable, there are a good number who see YOU as a good investment, and put often frequent, unnecessarily big bills in when they are looking to boost their returns.

Service charges of over £500 a year that include building insurance rarely feel like good value, but many can be much more. I have seen examples in London at £20k a year. Even more distressing is when you get a bill from a freeholder for 'repairs' and 'maintenance.'

A grey area that is commonly used to inflate real costs of works is roofing (a favourite), external works/windows, landscaping and so on.

Often unnecessary or bumped up, playing on your fear of a lack of control or understanding of the law.

A recent example Rob and I encountered is on a flat which we purchased in March 2011. Within 2 months we had a bill – actually a 'demand' for £6000. This represented a quarter share in a bill for works to the externals and roof of the building which houses 4 flats.

When I asked for a schedule of proposed works, I got a list of costs without any explanation or proper breakdown of what they related to. After viewing the property and talking to other residents, I found they had pulled a similar stunt 3 years ago and extorted over £4000 per flat for works that the residents could not see.

Like last time, the residents all paid up when they received the latest demand -they just assume that there is nothing they can do about it (thats not to say that they weren’t seething). The conveyancing solicitors who are not specialised in this area, (that they often turn to) advised them to pay it following threats of county court action.

People often assume that the freeholder will automatically win, and their credit record will suffer. Even if the county court does find against you, as long as you pay what the judge has decided you owe within a month, it won’t show on your credit file, so it’s worth NOT backing down at the threat of legal action.

I can’t emphasise the importance enough of finding a solicitor with the specific knowledge in this area who is able to challenge the other side. Forget standard 'sausage machine' conveyancers, you need a commercial property/lease specialist. You can find one with many other really useful information on this area here:

http://www.lease-advice.org

The first thing to check in a situation like this is whether the correct consultation process has been followed in accordance with section 20.

Within this the freeholder will make their list of proposed works, and the leaseholders have a right to challenge this by insisting on quotes from other contractors.

If you can be bothered (and you should) to do this, you should be able to find eye watering differences in the estimates that come back.

We make it our business practice to get a variety of quotes, and it pays off almost every time.

The next step if this fails (for us) was to set up a 'right to manage' company. You need to get 50% of the leaseholders in the building to agree to this (in our case 1 other) and if the works haven’t commenced, you shouldn’t really have to pay the freeholder very much apart from survey fees.

You can then collectively manage the process of insuring and maintaining the building, reducing ongoing service charges, insurance and maintenance costs.

You can also take the freeholder to the 'Leasehold Valuation Tribunal' who also deal with disputes over the cost of lease extensions (among other disagreements). The tribunal chairmen are often sympathetic towards the leaseholder anyway, and if you can prove that costs are exorbitant, you are likely to win. In our case a £6k bill is going down to around £1000 and we are now managing the property ourselves through a RTM company….

Definitely worth our time – and yours!

Invest for Freedom, Choice & Profit

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 2011

Disclaimer Alert – though we've been practicing (daily) seeing the future, it's a skill still in 'beta' phase

Here they are:

1. Getting traditional mortgage finance will not get any easier

2. Getting private & JV finance will

3. A bigger gap will grow between the 'helpless' masses & the proactive, self-responsible Property Entrepreneur

4. Bob Geldof will shock, surprise but inspire the serious Property Investors at the 2012 Property SuperConference

5. Your Property results will not change any faster than you do

6. No Deposit Down Multi-Let will be the new 'nothing down' income producing strategy of 2012 – watch out for: 'Multi-Let Without the Sweat'

7. Motivated Sellers will increase, & good discounts will hold

8. Rental demand will increase

9. Your Personal Branding & Relationships will be your most valuable asset of 2012

10. Mark's spreadsheets will take on a whole new level of anal-ysis

Please add your own thoughts and predictions, and at the end of the year we'll look back together and evaluate your results

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 2011

“I hesitate to make a list, of all the countless deals I’ve missed;
Bonanzas that were in my grip, I watched them through my fingers slip;

The windfalls which I should have bought, were lost because I over thought
I thought of this, I thought of that, I could have sworn I smelled a rat;

And while I thought things over twice, another grabbed them at the price;
It seems I always hesitate, then make up my mind when it’s much too late;

A very cautious man am I, and that is why I never buy;

When Tucson was cheap desert land, I could’ve had a heap of sand;

When Phoenix was the place to buy, I thought the climate was much too dry;

“Invest in Dallas – That’s the spot!” But my sixth sense warned me I should not.

The golden chances I had then, are lost and will not come again.

Today I cannot be enticed, for in 1977 everything is so overpriced.
The deals of yesteryear are dead, the market’s soft and so’s my head.

At times a teardrop drowns my eye, for the deals I had but did not buy;
And now life’s saddest words I pen, If only I’d invested then!"

Invest for Freedom, Choice & Profit

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 2011

I get updates from the letting agents regarding big repairs that need doing and some of the quotes I get for the work I could do a whole property renovation for!

..A good example would be boilers which most of the plumbers love charging £2k a go for.

1. It’s worth always getting a second plumber in when the call/email comes in.

2. Instruct your letting agent/refurb manager NOT TO TELL THE SECOND PLUMBER WHAT THE FIRST ONE SAID. The results will be quite amusing because at least 50% of the time they will come back with a different answer. If the boiler has stopped working lots of plumbers like to say that the parts have been “discontinued”, mysteriously when the second plumber comes in they often fix the problem or find parts

There are a couple of plumbers locally who have replaced boilers for me for £1k!– this is especially possible where they can take a boiler out and replace without doing a load of pipe work.

3. Be aware that plumbers love putting Worcester Bosch units in that cost £2k fitted, why bother when a glow-worm is half the cost?!

4. Also resist putting new boilers in right till you have nowhere else to go as you may as well have a £100 bill on average every year in repairs for an old boiler rather than pay £2k now (equivalent of 20 years repairs!) with all the implications of inflation and the money coming from your pocket rather that the property growth.

5. Older boilers usually last longer too and I am yet to be convinced that our newer properties have smaller call out/boiler bills that our older properties with 20 year old boilers.

6. I’m careful to get at least 2 quotes on almost all significant work that needs to be done at a property as this is the best way to save money.

Quotes/costs/solutions/ideas vary widely between contractors.

7. Electrical safety checks are not always mandatory, you should take care as to which electrician does them for you as many electricians will almost without fail find various things wrong and create work before they will pass it.

The favourite is re wring the property which can be upwards of £2k-£3k often a heinous waste of cash.

8. It’s good to make a noise about maintenance bills as a matter of course every now and again for 2 reasons, it creates some pain with the letting agents/contractors so they won’t want to submit big ones again and get time taken up dealing with it and it shows you are looking (even if you aren’t all of the time). These are just a few tips to help you become an educated property investor!

Invest for Freedom, Choice & Profit

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 2011

The steps to buying a property can be maze of legal work, negotiations, dealing with estate agents, surveyors and solicitors, finding a good mortgage deal and
worrying about your deal falling through…

On top of actually hunting down the home of your dreams, is enough to make anyone's hair stand on end.

Buying a house is one of the biggest financial decisions that you'll ever make. It can lengthy, complicated and expensive if done wrong, and exciting though buying a property is, it's all too often fraught with stress and worry.

Here's how to make simple, stress free and profitable for you. Here's the buying steps to your next property purchase:

After finding a home you like, which can take anything from a few days to many months, the process from having your offer accepted to completion of the sale takes about 12 weeks.

It is important to have a good understanding of the process as it will help you to avoid some of the most common hazards of buying residential and investment property.

Step1: Arranging your mortgage

Before you begin your property search, it is advisable to arrange your finances and, if required, have a mortgage 'agreed in principle.' known as AIP or DIP (Decision in Principle).

This will confirm how much money you will have to fund the purchase , which will ultimately influence yourproperty search. If you need a good broker, we have a few who are part of the Progressive Property Community, so let us know

Step 2: Register your interest

To find the right property, it is vital you register your interest with the estate agent face-to-face, where you can build up your relationship and discuss your property requirements with one of the 'negotiators.'

Step 3: Finding the right property

Once the agent has a clear understanding of your requirements they will select a list of properties which match your criteria & where you will also have a chance to view them. If you are wondering how to become a property investor and find those 30% BMV properties then contact one of our team

Step 4: Viewings

In order to secure the property, it is vital you view it at the earliest opportunity. If the property is not for you, be upfront and explain to the agent why, and book some more viewings.

The viewings will be a great time for you to ask any questions and the agent will be at hand to assist you ‘off the record’

Step 5: Instructing a solicitor

The successful purchase of a property can be reliant on the instruction of an efficient and experienced solicitor.

It is a good idea to use a solicitor who knows the area that you're moving to and specialises in conveyancing.

Step 6: Making an offer

Once you have identified a suitable property the agent will put your offer forward to the seller both verbally and in writing, stating any special conditions of the offer.

You may need to demonstrate, if requested, that you are able to proceed (e.g. provide evidence of your mortgage agreed in principle).

Remember: there are no legal obligations on either side until contracts are signed.

Step 7: Offer agreed

Once your offer is accepted the agent will do the following:

• Prepare a memorandum of sale
• Write to all parties to confirm the agreed price
• Ask you to confirm your solicitor's and mortgage broker's details

You will now need to instruct your solicitor to proceed with the conveyancing process and your mortgage broker to proceed with your application.

Step 8: Conveyancing

As part of the conveyancing process your solicitor will do the following:

• Raise any enquiries on receipt of the draft contract from the seller's solicitor
• Request their own local searches
• Agree on a date for exchange of contracts

The agent will assist your solicitor and negotiate throughout the process, keeping you informed every step of the way.

Step 9: Survey and mortgage offer

A survey of the property will be booked by a surveyor on behalf of the mortgage lender to identify any structural problems and advise on the property's value.

After the mortgage valuation report is received, a formal mortgage offer will be sent to you and your solicitor which you will need to sign before it is returned.

There are no legal obligations until contracts are signed.

Step 10: Exchange of contracts

Exchange of contracts occurs when all enquiries have been confirmed and agreed.

Once the contract has been signed by both parties the deposit (usually 10% of the purchase price) will be telegraphically transferred or paid in the form of a banker's draft from your solicitor to the seller's solicitor.

The completion date is then set by mutual agreement.

Step 11: Completion

Completion is when the residual monies (usually 90%) are transferred from your solicitor to the seller's solicitor's account.

The agent will release the keys once the money has cleared in the seller's account.

Congratulations, you are now the legal owner of your new home!

For more information on how to invest in property, download our latest report and receive all the latest property techniques here.

Invest for Freedom, Choice & Profit

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 2011

It backs up a theory we have been testing for around 5 years training over 100,000 how to become Property Investors, teaching ALL ages, experiences, demographics and sexes.

It's called:

"Bounce: The Myth of Talent and The Power of Practice" – by Matthew Syed

It's all about how top performers in any and every field aren't especially 'talented' or gifted, or born with skills, but in fact are the people who have practiced the most.

Examples across many different sports and industries are shown to back up the theory with fact.

The author believes it's definitely not talent that drives success…but practice

[Don't get me wrong, to be the best takes lots of practice].

About 10,000 hours in fact. As Malcolm Gladwell agrees in his book 'Outliers'. Another great book.

Anyway, Mark and I recently looked back at some of the early Property deals we did back in 2005…
One word: LEMONS!

We certainly prove the theory that we weren't born Property Investors .

Of that, we are sure…

You only need to look at Mark's deal he bought in Bulgaria in 2003 or an early over priced new build mistake we bought in 2005 to see that.

Not great.

But we've practiced a lot since then.

We've bought a lot.

And read a lot.

I don't say this to impress you, we'd have to be idiots not to get the lessons because by our best estimates, we've 'practiced' for a combined total of 17,000 hours.

So according to Gladwell and Syed, we're now experts in our field.

We believe some people do have some foundational talent that varies from person to person. There's no doubt that Tiger Woods has 'foundational' talent to play Golf [and other things] that's higher than average.

But maybe not by as much as you'd think.

So what's the point…as it applies to you?

You might think you're not cut out, good enough or born to become a Property Investor.

But we think you're probably wrong

Practice.

Read.

Learn.

Do.

Do Again.

Make Mistakes.

And experience.

Try just one hour a day.

You can quickly get to 'intermediate' level.

Then 'advanced'.

Then 'Expert'

And maybe even Master, or Artist.

Shoot for those 10,000 hours.

The payoff is compoundedly [a word?] huge.

It's disproportionately huge to the little amount of time you will spend once you get to 10,000 hours but continue to reap the rewards for many, many years to come

"You have to work hard enough to earn the right to not have to work hard"

Invest for Freedom, Choice & Profit

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 2011

A couple of weeks ago we had a meeting in London with Andreas Panayiotou.

Google him if you've not heard of him before: he was the UK's biggest buy to let investor pre crash.

He had £1.2bn [8,000 properties] of residential Property and is worth over £500m.

We went to his Oxford street offices and he showed us his latest hotel developments: most producing over £5m net income per year. He has also just finished the largest house build in the UK: dubbed as "Britain's most expensive house" on the market for £100 million.

He is a man who makes making money seem so down to earth and you're left with the thought that his sheer force of personality has made him such a success, it is hard not to be inspired by others’ successes.

The London-born son of Greek Cypriots, his achievements are extraordinary. He owns a £40million Gulfstream G450 jet, a £12million Mangusta 130 yacht, and two Cessna Citation jets.

Here is his latest new venture: how the main lobby is looking at the Waldorf Syon Park, which will open next month…

It’s a common story of successful investors. Mark and I earned more in our first deal together than I had in the best part of 3 years as an Artist – the equivalent time for that deal was about 2 full days painting!

Andreas said the yields back then were crazy, and they may never go back to them in his lifetime – but they may go back in our lifetime , so his advice is buy for cash return, not growth.

He is a straight talker, a lot like Lord Sugar. Acutely aware of all the downsides and how much people kid themselves of their real asset value. He was impressed by our local yields and thinks we should just keep buying them: hotels are better leverage but higher risk.

His top tips are [take serious note]:

1. Buy for cash return: go for 10% – NOT capital growth – it's a bonus

2. Be realistic about your asset value, don’t overestimate your net worth or over borrow

3. Get proper tax planning now. The taxman is your sleeping partner and owns 50% of your assets unless you plan in advance – plan for the future now so you can reduce it.

4. Buy and refurb flats in the West End – lots of room to add value. If he had the time he'd be all over it. You got the heads up first here

5. Hedge loan interest: some tracker, some fixed. Read the swap rates in the FT daily to see the cost of money [the first person I have ever met to read the FT more than Mark!]

6. If rates take longer to rise, when they do they'll go crazy – plan for it. It may be good in the short term but in the longer term there could be more trouble to come

Mark asked him where the smart money is heading.

He now focuses on hotels rather than residential property.

He recounts his “golden rule”: watch what you owe, and view investments as long term. “It's like playing Monopoly,” he says. “You start with a little house in a road. Then you buy a street, then you buy a hotel… then you end up in jail!” He lets out a huge laugh. It's time for another sneaky cigar.

We are discussing Andreas talking at the Property Super Conference or one of our larger events, so watch this space…

Speak soon

Invest for Freedom, Choice & Profit

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 2011

Click here to find out more about the
Progressive Joint Venture Buying Frenzy

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 2011

Click here to find out more about the
Progressive Joint Venture Buying Frenzy!

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 2011