Property Mentoring

Property Mentoring

Thinking about getting Property Mentoring ?

There are so many people coming into the Property Investment market in the past few years, it would be easy to think that everyone must be providing property mentoring as a service.  It’s amazing how many people have been in the industry for just 12 months as a Property Mentor who proclaim to have all the answers and have only just started themselves. Experience is vital.

Maybe they have got all the answers.

But it’s funny how you never hear about them a year later.

Their methods may have been quick and dirty, but they certainly didn’t last the amount of time needed to be in the property game.

Rules (and markets) are constantly changing, and there are a few basic rules that you need to stick by :

  1. Property is a long term game : No question about it – after 19 years in the industry as a buy to let investor, and for the last 10 years as a Property Mentor to others, I’ve seen it all.  But the thing that stands out that you may be able to make money quickly, but can you do it long term.
  2. The numbers never lie : The numbers are there for a reason.  It’s fine working out property profits with mortgage rates at just 4% – but what if they go over 7%?  Have you worked out whether you can still survive on that ?
  3. Don’t give up your day job (just yet!) : I’ve seen it far too many times where the person starts in property, starts to do well, but then quits their day job only to find out that 3 tenants haven’t paid and 2 boilers need replacing completely.  Suddenly, no income and bad tenants.  It’s enough to make many an investor go bust.  And that’s exactly what happens.

For those that come through as Property Mentors, and disappear after their first year, there are always more behind them to replace them with the next latest and greatest of ideas to make money in this market.

And that’s the beauty of property isn’t it – you CAN make a lot of money quite quickly but as the rules change can you continue to do so ?

My big concern right now is with serviced accommodation.  Recently, in London, you now need planning permission if you want to use the property as a serviced apartment for more than 90 days.  Of course some people will try and get around it and hide that they’re renting for more than 90 days, but how long do you realistically think this can continue ?

And in other parts of the country – don’t you think that this may happen elsewhere ?

In Leeds, we used to run a very successful serviced apartments company – we literally owned the front page of google for all of our websites that were to do with short term lets and serviced apartments.  BUT as soon as everyone else starts to do it, that’s when you know it’s time to get out.

Serviced Apartments are a method to earning some good income right now BUT I worry about how long it will last – and I see people going in HEAVILY in this area to make as much money as possible.

I saw the same thing when buying off plan was all the rage as .. well … it can only go up can’t it.

Until it didn’t.   Then they went bust owning apartments they couldn’t sell as they lost their value.

So this is why you need a Property mentor.  And not just one who has been in the industry for just a few years, but one that has been through all of the ups and downs over the last 20 years.

If I was looking for a Property Mentor, then this is what I would be looking for :

  1. How long have you been in the property industry for ?
  2. Do you live off the income your portfolio provides, or do you rely on coaching to make your income ?
  3. Seriously, just how many hours a week do you work ?
  4. Can you provide me with references (especially printed ones out of a book!)
  5. Have you done what we’re wanting to do ?

I mean if you ask all of those questions, that would be a good start right ?

I know they’re a little bit different than you may have seen elsewhere, but we like being a little bit different.

That’s why we’ve weathered the storms over the last 20 years and come out the other side.

So look, obviously one of the things I do is provide Property Mentoring and coaching for people.

If you’re serious about making that change for you and your families future, the first bit I would always suggest is listen to some podcasts.

Property Mentoring with my Property Mentor Podcast Series
Property Mentoring with my Podcast Series
You can download mine from itunes or directly from my website : UK Property Podcasts

 

Once you’ve listened to those, or watched some of my videos on YouTube, then perhaps it’s time to see what you get with your Property Mentoring.

You don’t want just 12 weeks, you want 12 months – that’s because you’re going to run into all sorts of obstacles that we can help you overcome – but you need time to get through those first – hence the 12 months package.

You also want regular contact with your coach via coaching, group coaching and mastermind events.  That’s exactly why we provide all of those things.

You can find out exactly what we offer with our Property Mentoring Package here >> 12 months Property Coaching Package

What are the opportunities to make money in Property ?

So there are several different ways to make money in Property, that’s why i love it so much.  Want to just sit back and let the income come in, then that’s buy to let. Just one word of warning with this type f property investment however.

There is NO SUCH THING AS PASSIVE INCOME !

Even Buy To Let where it’s rented long term still has it’s issues that you need to get involved with.  For example, what happens if a tenant s stops paying rent, and, even worse, refuses to move out?

What policies do you have in place that will make it easier to get an eviction, and to charge the tenant for all of your costs ? So for example, as a Property Mentor, one of the things I always do is provide my Property Coaching clients with a copy of my Tenancy Agreement – this is the one that we picked all the best bits out of everyone elses and then applied it to our own.

We also have series of four letters that you can download to deal with non payment of rent; each more severe than the last.

But Can’t my letting agent deal with all that?

You would like to think so wouldn’t you, but in my experience it’s rarely the case.  Even if the boiler goes, guess who eventually gets the phone call to ask what to do – yep – it’s you.

The buck will always stop with you – so it’s never completely passive.

So what are the opportunities in property then – let’s go through them.

Buy To Let

An obvious first choice.  So the question is what sort of yields will you be getting back from this investment.  In London for example. it may only be a 3% yield.  Whereas in the North East it can be 10% yield.

How to Gamble On The Property Market

Capital Growth.  I see it being advertised and in my opinion if you’re investing for capital growth, then its the same as put £100k on red at the casino.  Why would you risk your entire future income on the whim of a property market ?  And what if you time it wron.  London is a prime example.  It can work, but I like to increase the probabilities that all the work I do today will pay off for my future, and not be affected by something that happened in a particular location.

My advice on this one would be to buy for yields in different parts of the country and balance it with higher risk, capital appreciating properties in London – but notice how I say ‘higher risk’ – that’s because they are. Any good Property Mentor will suggest that you not just run off and buy high capital growth properties. Especially by the way that, guess what, the Property Mentor just happens to have the right properties for you to buy.  Whenever we suggest properties, we don’t make any money on that sale – that was as a Property Mentor we can remain unbiased in our advice.

Rent 2 Rent

This Strategy is becoming more and more popular now as people have struggled to find deposits. It’s crazy – the deposits required are 25% or more these days – so that’s £50k on a £200 property in London.  For £50k by the way you could buy outright in some parts of England !

So rather than a huge deposit up front, some investors have utilised other peoples properties where perhaps it’s a tired landlord who can’t be bothered anymore, or perhaps a homeowner who has been gifted a property and doesn’t want to sell, but doesn’t want to be a landlord either.  So giving it to an investor who will give guaranteed rents for the next 5 to 7 years is ideal for them.

They get a secured tenancy, and the rent 2 renter gets access to an asset with which they can rent out to the market place.  There are many rent to rent Property Mentors out there. Make sure you get one with experience of course. As the previous owner of a lettings agency, this is in fact what we did.  But we had an extra layer of protection as a lettings agency because not only did we make 10% on someone elses rent run, we also didn’t lose any money should the property be empty.  In fairness however, we rented stuff so fast they were never empty. One question to ask if you’re considering Property Mentoring, is about how much experience they have about lettings. This is a pretty major part of being successful!

Lease Options

A Lease Option is in effect exactly the same as Rent to Rent.  The only difference being that at the end of the term (say 10 years), you have an agreement (called an ‘option’) to buy the property at a price already agreed.

Let me give you an example.

Property Value : £100k

Mortgage : £105k

In this situation, the owner cant sell as its in negative equity, so you then come along and offer say £105k in perhaps 10 years time.  By this time, you’re hoping the property has increased in value so you can not only pay the £105k you’ve already agreed, but that the property is actually worth more money – let’s say £120k.  In which case, you’re now £15k up.

One word about these.  They haven’t been tested in court.  This makes me nervous, as I like a lot of certainty in my life.  So this is what we do.  We offer the vendor an ‘uplift’ in the profits.

So we may offer say 25% uplift – this means that should the property be worth more than £105k, that we will give the vendor 25% of any of that increase.  So with the example sale price of £120k, that’s a £15k uplift, with which we give 25% (Which is £3750). Any good property mentoring company should also suggest this.  I hate those companies that are always trying to screw people over – that’s not what life is about. It might make you wealthy, but only in money. And that’s a poor choice.

Why do we do this ?

It effectively rewards the vendor for making the decision, and also acts as an incentive for them not to go to court later should they get a solicitor who may think they have been unfairly ‘duped’.

Now all of this MUST be written up by a solicitor. And they need a solicitor too who has acted in their best interests. So technically, it should be water tight. Any good Property Mentor will give you access to a great solicitor.

But you’ve just made £15,000 on an asset you don’t even own, I think it’s an honourable thing to do to help the vendor out too. As a Property Mentor, I believe ‘doing the right thing’ is paramount, and I hope that should you become a client to a Property Mentoring company that you (and they) would too.

Property Sourcing

We LOVE Property Sourcing.  This allows someone with not a lot of money to make some money very quickly.

You could source Rent 2 Rents, Lease Options or Below Market Value Properties (BMV) and sell those deals onto an investor.

If you’re buying deals then this is a great way to get started with some big discounts, but you have to do your due diligence.  I see a lot of rubbish out there on the market place that are presented as ‘deals’ and they’re rubbish. But they sell !  Someone is buying these rubbish deals up.

But when you become a property sourcer, you want your deals to be watertight, great value, so that you can go and find another deal and sell it to the same investor.

You can make between £1,500 and £4,500 per deal quite easily.  The difficulty lies in first sourcing the deal, and second find an investor to sell it to.

Get those two obstacles resolved, you will be successful as a property sourcer.

Any Others?

Now there are many more mores in which to make money that I haven’t talked about such as conversion from commercial to residential and assisted sales, but we’ll save those for another article.

Property Mentor

If you have any questions, or want to know more, then you can also complete our webform here : Apply to work with me

But whatever you do, start by getting educated about what you want – and you can do that with the Property Mentor podcasts.

I hope that’s helpful for you !

Daniel Latto

Property Mentoring

Property Mentoring with Daniel Latto
Property Mentoring with Daniel Latto

 

Property Mentor

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