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.
His Golden Rule
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...