Is Real Estate Investing a Better Option Than College?

0:00I reached out through the family and just asked around if anyone knew anyone in property so my direct family weren't in property at all still aren't in property I want to get them into property though but actually my dad used to work with someone he used to be a sales guy with this other guy and he got into property years ago this this friend of my dad's who he worked with in 1994 I think he bought his first property and he's just been the very simple way buy develop refinance or flip on and sell so literally buy it run down refurb it up and achieve a new valuation so he' done that over 30 years and and I thought you know I've got to speak to this guy I've got to meet him in person so I went I met a couple of people for for coffees this guy done really well out of it bear in mind now when

0:48He wants to go skiing he doesn't he doesn't you know buy a trip on Ryan a or or one of these commercial flight companies he takes his own jet there so he's doing pretty well yeah yeah so I thought I've got to got to speak to this guy so sat down with him in his in his mansion and yeah just just kind of absorbed everything that I could he gave me wealth of knowledge kind of reinforcing the learning that I've had that you know you can hold on to a property over 20 years possibly it doubles in value you can just refinance and the refinance sum is taxfree and I thought well if it makes you money while it's just sat there you know property's just sat there increasing in value over time time you know it can't really be a bad thing and if he's done this and he if he's advocating it surely it's a good thing to do

1:37So then I met him for a few times for a few coffees and I actually I didn't pitch him for finance I I told him I pitch other people for finance so bear in mind this guy's in his late 60s he's done a lot of this and now he's he's becoming more cashr off of the these you know the property income and everything so I sat down with him and I prepared an investor pack for this I found online and I thought do you know a really good way to pitch is actually ask for his advice so I literally sat down with him I said you know I'm looking to pitch for investors I know a few people who are looking to get into property they would have cash to put into this deal do you mind if you look over my investor pack and just tell me you know if you were investing what would you want to see you know what looks good what looks bad what information am I lacking so I got

2:26Halfway through kind of delving into it with him where he was menta be helping me out and he actually stopped me and said well why don't why don't I give you the finance and I was thinking well this is kind of kill two birds of one stone I don't have to prepare another pack to speak to anyone else and yeah that's how it went so he's he's actually invested the finance for me to buy this property it was a really really good opportunity off of another business owner he runs multiple businesses as well the seller of the property and he was looking to retire so it came at the right time where I took over a business that kind of have slightly older technological knowledge in it and I could walk in there and put in this kind of Airbnb knowledge if you want to say that and kind of just try and double the business really so yeah it was an opportunity I couldn't really refuse

3:14Because I saw loads of loads of things in in the property and in the business that could be improved because I'm seeing it day to-day you know we're packaging and selling deals that are Airbnb deals we know exactly what to look for when you want to make a property make more money you want it to stand out on listings you want it to be a better guest experience and I I saw a few few areas where that could be improved with this property so I just had to go for it they say you know if you ask for money you get advice and if you ask for advice you get money and I think this is such a perfect example of that you know I I advocate the exact same thing that you did you know just creating a tangible outline of the deal that people can can see you know people always ask like what's the best way to raise private

4:03money and they think that it's like just going around and asking people for money and it's and giving them a theoretical idea of what they're doing and that's not it you got to have something that like people can touch and see and feel and like you said you put together a proposal but then you don't ask people for money you you offer an opportunity and that's really what you were doing you're asking for his advice but at the same time it was a huge opportunity for him and he could see that because he's you know a trained investor and could see I'm going to make a really good return on my money if I invest and he's obviously been mentoring you so he knows that you know you're willing to take advice and do things the right way so it makes makes a lot of sense for him to to invest in that so that's it's a great approach that you took how did you

4:51Come across this business owner that wanted to sell this property it was it was on a website in the UK we we use right I think in in the US uz Zillow just for sale houses yeah it was literally just it was on the residential area rather than the commercial essentially that and a few other properties had been up for sale so I'd viewed I'd viewed loads of properties probably like I'd say 20 properties over over a few weeks long story short they just you know they weren't sort of cutting the mustard they were too expensive or you know the seller wanted wrong different terms for me and and it didn't work the numbers didn't work so I just walked away I thought you know what in the end of the day it's okay that those properties don't work I'm sure I'll find something in the future but then a couple of months later this property I saw it you

5:40Know being for a massive decrease in in price and it was up for auction so I was thinking right you know that doesn't usually happen so I called up and just asked the situation and he just explained you know I just want to sell the property I'm happy selling the property and that that's kind of it so with that knowledge that's when I didn't pitch the investor yeah I definitely didn't pitch him and then yeah got the finance in place decided to purchase the property purchased it through auction I negotiated a 90-day completion so from when we agreed to buy it I had 90 days to complete on the property managed to do it in that time and yeah that that's kind of how it works it's funny when you think about people finding good deals a lot of people say you'll find nothing good on the market like

6:28everything good has to be off the market you know sort of pass you down the side by an estate agent or you know direct to the seller but I mean I found this online so I'm I'm going to be an advocate for for online just searching online because you know you can see so much of the market in such a short amount of time if you're looking on listings through sort of right move we have other sites in the UK that you can find sort of commercial listings or property or sorry businesses for sale sometimes if the business is selling the property as well that's obviously and added extra but yeah it was a really good opportunity that came across yeah yeah and if you know how to search out opportunities within the market and you're really dialed in then I agree I I'm I'm closing in two day on Friday on a five unit that is

7:18It's on Zillow and it's you know I'm still getting at a huge discount because it was listed for a while and it has specific features and my market that I know really well and it's it's going to be a great deal and we buy a lot of them that are on the listed on the open market so it absolutely can be can be done so what were I guess I can you give me kind of the broad Strokes of what the deal numbers look like on the property yeah 100% so we it was initially on the market for so there's two properties involved in this I'm just going to put them together for the sake of sort of ease okay so initially they were both on the market for 635,000 they

8:06Then got reduced over time down to 550 so they're both on the market 550,000 that was when they were still on the open market and when they went to auction they were reduced to 340 soly that drop is quite big I ended up so it went for a weak auction I ended up not not going ahead with it because I was a bit too scared I wanted to get survey around to Value the property or sorry give a level two survey on the property before I bought it which includes valuation so at least with that you know pen and paper valuation I know that just by buying the property I'm going to make a some money on the equity game yeah which was the main goal for this equity and cash flow I actually didn't buy it there I bought it on the next auction because it just went from that one we auction straight to another one week auction

8:56I that what was the reason it wasn't selling at these different price points it's because it's so unique so and the condition of the property isn't like it's you know brand spanking new it's not amazing Condition it's perfect for the market that we aim to achieve which is contractors because contractors generally I mean it's a nice placeas for contractors as long as they've got for good for good money a really nice bed nice facilities they're pretty much happy they don't have too many requirements for you know loads of pool tables or like a swimming pool or any of great amenities and features yeah it's it's more of a simple simple requirement I'd say so the yeah I think that's why they weren't selling and a lot of people thought it was a risky business because maybe this you know without

9:44Being too extreme maybe the the accounts you could see the accounts very well so for the previous business it was hard to tell the viability of it all this other all the other you know things to go with it a few people are actually looking to buy and convert into a residential house which you know these buildings are huge one is a 13 bed and one is a nine bed they're next to each other so they'd be very big buildings you'd have to obviously have a lot of money to buy it then convert it and then be able to sit on the equity of that property as your own home not necessarily making you money so I think the market for buyers was very low got it yeah and it went yeah went for sale we bought it eventually for 320,000 and I think I actually felt quite rushed to make that offer because there was another person coming

10:33To look at it they were flying over from Ireland which is probably a 2 three hour flight from where this property is so I was thinking if people were going to fly over to see the property I don't think they're going to walk away they're they're almost definitely going to purchase it on the spot so I had to I had to close it so we did close it 320,000 with auction terms so auction fees on there they're about 4.2% I can't remember exactly what that cost was along with solicitor stamp Duty which stamp Duty I imagine you have that in the US you pay a tax to the government when you buy property yeah in different states it's different yeah rules on there but yeah yeah we have that so yeah that went well I think all in was around 355,000 but the great thing is as soon as I agreed to buy it the week after

11:21I was like okay let's get that surveyor in there I just need to know from mental sanity that I'm not making a bad decision and in the state of like a non-running business vacant possession they valued it at 510 wow so already just getting in the property you've made that Equity gain obviously you don't realize the equity gain until you can refinance which is actually something I'm looking to do now we're coming up to a year of ownership generally most properties that are commercial based which this one is you need a year books to then refinance so we're hoping to to get that over the line in the next few months which would be really really good and then I use that Equity to do the next project buy probably develop maybe sell maybe keep we we'll see when when the time comes that's great that's great so what was the time frame between

12:10When you closed on the the purchase of the property and when you were able to start booking out the rooms and what all was involved in that like what was the cost and what what were some of the things that you did to the property so the great thing about buying the property as it was was it was being run as a guest house before so very traditional guest house you know staff on the door they welcome you to the property you've got an option of like a breakfast or an evening meal wow very catered accommodation so very literally like a hotel so yeah the day I got the keys was the day we were taking bookings there were people still still walking in the door who obviously knew the previous owner had had an amazing service last time and thought you know they wouldn't assume that you know it's been taken over because we kept quite a lot of The Branding the same everything

12:59Looks as if you know it's it's it's the same ownership for the last few years so yeah day one we started taking bookings which was very very nerve-wracking very nerve-wracking because I mean looking back I don't really know how I did it it was I walked in suddenly we're taking bookings for a 22-bed hotel where actually a couple of the staff that said they'd stay on didn't you know the week before I completed or or closed they said that they were going to retire so I was I was thinking yeah these challenges are getting even bigger but luckily when I walked in a couple of the staff there wanted to stay and and they were absolutely amazing I don't think I could have done it without them so we've got a full full-time on-site manager at the moment she is absolutely spectacular she handles most of the day-to-day managing so for example if we do an evening meal

13:48Or a breakfast she helps out and she does that she does some of the cleaning we've also got other cleaners on on side as well so without without that team in place I think it would have very easily gone South yeah but yeah they were they were amazing help and then from day one it was just about putting systems in place so I think we've we've had a call before about the systems you have in a business and how vital they are to how you operate day-to-day because one person can't do everything in the business it's just not it's just not doable you need help from automations software other staff there needs to be other people or other help in place to to make sure that everything runs smoothly MH are you are you local to that hotel I live about three hours driveway wow what

14:37Were you there a lot when after you first purchased it I mean you got the keys there you got the staff and taking bookings like were like how did you manage that initially yeah so for about a month I just lived there because you know on day one we don't have the software in place the systems aren't there there's people knocking on the door wanting not wanting a room for the night obviously they don't they don't know at the moment we're looking to automate it but yeah you know I had to do that all from the start and it was it was quite a good experience being in there day-to-day because you only really realize what has to happen when you're doing it dayto day and especially with an operation like that I feel like you need to see it firsthand to take on a project like that if I was just you know I took the keys walked away I think it would have very easily gone South I think there's there's a kind of a speciality to to getting hands-on

15:25Experience on your first deal or at least your first few deals because you know you get some sort of realization of what things maybe cost what the right procedures are standard operating procedures how to treat guests how to talk to guests how to make sure everyone's experiences is as they would expect walking into a property you know so yeah basically live there for a month and then after that a little bit less frequently and and then now I'm going there every every month or two you know I haven't been there since sort of middle of December and it's late January now so yeah about a month and a half and I don't plan on going up there until late late February so it's great because the ongr staff are doing an amazing job you know they're getting exactly what they want which is you know a stable income my

16:14Income is obviously much more volatile from this property like for example it's it's slightly seasonal I mean you probably have it in in the ebnb industry in the US where some months are great some months not so great so yeah it's Bal balancing the risk but yeah it's it's really proved to be an exciting project yeah do you do you still do like meals too you still do breakfast and offer a dinner yeah occasionally I mean the funny thing is we lose a lot of money doing breakfast or eaing meals yeah like we we lose double the value of whatever they're paying us for the meal because we only charge you know 122 is is a small amount to pay it's probably like1 1415 for a fully cooked meal with a drink of your choice as well so but then you've got to think about the overheads that go into that you know staff staff wages for a few hours

17:03To prepare the meal cook it do everything around that and the ingredients as well but we do offer that because a lot of people who come they've they've come for years and they come because they get that personalized service which we still want to be able to provide you know if they want that we want to be able to step in and go yeah we can still you know we can still facilitate that which we do we we're really really really glad that we can still offer that oh