Books for Christmas!

What’s on your gift list?

Do you have a book you’re hoping someone will buy you?

These are the books on my list (hint hint) … anyone??!!

The 80/20 Principle: The Secret of Achieving More with Less by Richard Koch

ReWork: Change the Way You Work Forever by Jason Fried (Author), David Heinemeier Hansson (Author)

Doughnut Economics: Seven Ways to Think Like a 21st-Century Economist Kindle Edition by Kate Raworth (Author)

What’s on your book list?

Education: A Dirty Word?

I hated school. I really did. Ask my parents, and they’ll tell you how much I resisted getting up in the morning, I resisted getting dressed. I resisted homework. In fact I was pretty good at finding a number of reasons why I should not have to go to school. I didn’t think that school was important, or that I was learning anything useful and I believed that the subjects were completely irrelevant to my life.

And the end result: I failed miserably at my ‘A’ Levels. A year later, with some theatrical experience under my belt, I scraped into a college of Higher Education to do a Drama degree.

What astonished me immediately, was how much I enjoyed it. I bounced out of bed in the morning. I rushed to my lectures to be there on time (gasp!). I spent time in the library, reading and applying myself. Even when I was struggling, I somehow found the focus to keep going. I ended up getting a BA (Hons) 2:1 in Creative Arts. When I phoned my parents to tell them, I think my mum nearly fainted with amazement.

What I realised was this: to learn at your best and your highest level you need to find out what intrinsically motivates you and then spend time learning this on your own terms. I chose the college I attended, I chose the course, and I chose the time commitment. Somehow these three factors had a massive impact on me, to the extent that on the day of graduation, I said “I could do that degree all over again. I LOVED it”.

Fast forward many years later and I felt as equally trapped as I had done at school. Only ironically I was now the teacher, and had a teaching role in Higher Education! In truth, I loved teaching and sparking the process of an amazing lightbulb moment where a student grasped a new concept or understood a theory for the first time. Working directly with students was what I loved best. There were much wider political and structural forces at work, though,  that meant I was often drawn into debates and challenges that had really nothing to do with teaching. I began to feel that there were no other options but to pursue this career to the exclusion of all else. Forever, until I retired. And that I resented.

Now, at the age of nearly forty, I could feel that same resistance I felt when I was a teenager. “I don’t want to get up. I don’t want to get dressed and go to work. I want a hot dinner not a packed lunch”!

I took a long hard look at my life and realised that I had stopped learning. I had cornered myself into a small place and it was time to expand my mind and my reality. As a side-line and a future legacy for my children, I had been developing another small income stream from a few single buy-to-let properties. But I had ignored it, and become rather blase about this small portfolio. This moment of emptiness with my job made me realise that the time to make a change was now. If I didn’t take the leap now (even with a job and four children to manage) I would never do it.

So I started to educate myself. I attended loads of webinars and networking meetings. I read books and subscribed to relevant magazines. I asked lots of questions and attended courses. And more courses!

And I started to buy bigger houses to convert into Houses of Multiple Occupation.

I began to apply what I was learning, and this made me hungry for more. My resistance lowered. I WANTED to learn, I wanted to read and know and I wanted to be AN EXPERT at what I did. I recognised that I was intrinsically motivated to learn how to create HMOs, how to create passive income and how to become financially free…

It’s true that for me, traditional education felt like a waste of time. Only learning what I was self-motivated to learn has ever inspired me enough to maintain my interest. Staying the course depends on you having the interest and aspiration that you feel for the subject matter.

Since that time, I recognise that I love entrepreneurship, business, communications, and people. These are the areas of life that I could study all day long.

It makes it even more fun when I apply it too.

You have to take risks when you are learning something you’re motivated to learn that’s not a school subject. People will think you’re a bit crazy, stupid or mad. No worries. Let ‘em think it.

  • Stay centred on your passion.
  • Make time for learning – theory and practice
  • Keep applying what you’ve learned to make it fresh and real (practice)
  • Take a break when you need some space to cogitate
  • Invest wisely – books, courses, materials.

And above all, find something you are intrinsically motivated to learn. Whether it’s crochet, cookery or computing. Patchwork, pottery or property. As Ray Croc, the McDonald’s owner once said ‘When you’re green you’re growing, when you’re ripe you rot’!

Saturation, Supply and Shifting Sands

If anyone tells you that the laws of supply and demand don’t apply to property, be very careful to analyse their motivation! Whilst property prices are much more linked to the supply of mortgage lending rather than the supply of properties, when it comes to rental availability there is a clear correlation between supply and demand.  In any market place, where there is an over-supply of product there will be an impact on the strategies used to sell that product. This might result in lowered prices, or better deals, or an improvement in quality. HMO rooms are no exception to this rule. If you are investing in HMOs you might have seen some changes to local supply. The fact is that in some areas of the UK there are more rooms than demand at present, and landlords are struggling to fill their HMOs. Why is this?

  1. The first reason is that investors have realised that the only way to maximise their portfolio income has been to invest in HMOs a) to counteract the pernicious new tax laws that are being introduced b) to benefit from higher monthly cashflow c) to leverage commercial finance and d) to protect against potential voids. With access to better information, training and support, more and more investors are recognising the power of HMOs for long term wealth and immediate profits.
  2. Secondly, the introduction of stamp duty on second properties over the price of £40,000 has meant that smaller, single buy to let properties are proportionately more expensive to buy. Coupled with the minimum mortgage or purchase price requirement from lenders where investors are investing via a limited company has lessened the appetite for cheaper properties, and increased the need for a higher return linked to a higher purchase price. HMOs make the perfect foil to these prerequisites.
  3. Brexit and immigration. Certain parts of the UK have already felt the negative effects of Brexit, with many Eastern Europeans migrating back to their home countries. According to Migration Watch UK ‘Although we have seen a fall in net migration of EU8 citizens there have been continued increases in immigration from Romania and Bulgaria, so it is too early to say what effect the referendum result has had on long-term international migration’. In other parts of the UK there is a growing immigrant population. Predictions are that immigration will stay steady in terms of net figures, but that certain immigrant communities may change substantially in terms of culture and mix.
  4. Student housing impacts. In many traditional University towns, an enterprising landlord could make a good living from students renting rooms in the locality. Recently there has been an explosion of high quality, contemporary purpose-built student accommodation wiping out the demand for individual HMO housing, necessitating a shift in market offering from landlords still wanting a profitable return. In many instances, they have adapted and upgraded their HMOs to attract the professional market, and this has in turn impacted the current professional HMO stock.  

These factors have created excess provision in some areas especially where investors have failed to understand the forces at work in the local economy and the necessity to adapt and change to the marketplace. So what can an investor do who is facing competition and wants to resist the lure of price reductions just to fill rooms?

  1. Ensure that you are creating a product that not only offers great value but also has a niche offering. Whether you offer personal service with a smile, have wonderfully designed interiors, or make HMOs great communities, you need to identify what it is you are good at and tell your market place about it. In this day and age, unique and niche brands get people talking and sharing, and your HMO business is no exception.
  2. Tell everyone what you do. Use social media like Instagram, Facebook and Pinterest to share your message and learn how to create advertising copy that sells your rooms (linked to the ideas above).
  3. Work with local businesses and estate agents to create win-win referral deals that benefit them too. Incentivise your tenants to give you referrals and ensure you get plenty of feedback that you either act upon or share!
  4. Respond fast and flexibly. If you cannot respond to a viewing or request quickly, in a competitive market place you will probably wait much longer to fill your rooms.
  5. If you are unsure about consistent supply of tenants, always have a plan B. What else might you do with an HMO that you just can’t fill? Might this present another opportunity that you have missed?

The ebb and flow of supply and demand in HMO rooms is constantly shifting. As investors we not only have to adapt to survive but also to thrive. In this changing landscape of rooms and provision, the creative, savvy and determined investor has the edge. Make sure you’re one of them!

 

How to FUND your HMO Project!

You’ve heard the phrase ‘ Money Talks’ no doubt. But if all yours has ever said to you is ‘Goodbye I’m off’ then you’ll know that making money from property is not as easy as it looks!

Funding your project is often the hardest part of the system unless you know what you’re doing! If you’ve FOUND a great property but have no money to buy it or develop it. you are well and truly STUCK.

Here are some of my top tips for ensuring that you DON’T GET STUCK without money when you are investing in HMOs…

1) Your money mindset is the most important part of the process.
If you believe, trust and TAKE ACTION, you can raise as much money as you want to. I know this may seem a little airy fairy, but trust me, I have worked with many people who say that the difference between being wealthy and being broke is what is between your ears! Not what you can do, your background or your education. It is purely how you THINK and ACT that makes the difference.

2) Create a clear budget for what you need.
Purchase Price – £140,000
Refurb costs – £50,000
Legals – £700
Stamp Duty – £4,500
TOTAL = £195,250
It looks like a lot of money doesn’t it? But how about if you break it down and challenge yourself to raise each part, bit by bit? (In reality most of this will come from your investor but it’s a great challenge to get lots of little pieces and put them together).

3) Do the maths on the project
How many rooms will you create: 6
How much will the monthly rent be on average per room: £600
Total Annual Rent: £43,200
With those figures you can work out the Return on Investment for your investor, your yield and the possible re-valuation at the end. It’s not an exact science as there will be voids, maintenance and so on. The key thing is to understand the maths behind it, so that you can give your investor some rough ideas as to their return.

4) Create a compelling reason why your investor should work with you
This might be because of your personality, your work experience, or your relationship with them. It is very rarely just about property investing experience or money.


5) Network and learn continually.
You are always pitching, whether you realise it or not. Your social media, your emails, your meetings and your networking say a TON about who you are. Make it great and make it memorable. People will fall at your feet to lend you money!

Multilet Income Multiplier Event
If you are dribbling to know more(!) I am leading my VERY last Multilet Income Multiplier event next weekend – 17th and 18th November at Crewe Hall in Cheshire. It is a fabulous hotel, and I’m even gonna take you out for dinner on Saturday night!
The event will cover everything you need to know to set up, scale and systemise your HMO business and is the very last one I will be running. As this is my last event, I am offering a very special rate for the last few seats I have available.
Just £499 plus vat for your ticket to this amazing weekend experience.
If you would like to know more, please click here https://goo.gl/6kERgs for full course details and information about what will be covered on the two day event.

The Information I Gather…

I’d like to share the pieces of information I gather when doing due diligence on a new area:

  • The local population number (you want it to be no less than around 80,000)
  • The mix of local employers (are there a couple of larger employers taking more than 100 new people on per annum)?
  • The mixture of properties available  – a mixture is important for steady rental demand
  • The demand for rooms (look at Spareroom as a guide – but notice the low quality of many of them)
  • The price of property versus the rental income
  • The public transport system and connections
  • The connections to the wider region in terms of jobs, transport and partnerships

All these are important factors when deciding where to invest.If you can nail down these facts, and demonstrate a strong demand for high quality rooms, in a place where there are good opportunities, and connections, you may have found your perfect investment area!

Are there other factors that you think I’ve missed?

Did I mention that I got into the last 100 for the Great British Bake Off 2018?

The experience reminded me that when you’re trying to create 6 cakes that are identical, you need a clear recipe to follow and a very logical approach. If not you get a terrible mess!

My recipe for success is simple. It’s five steps that are easy to remember:

Find It
Fund It
Finish It
Fill It
Future Proof It

Follow this and you won’t go wrong!

The Five Reasons Holding You Back from Progress

Who says you’re not going fast enough? Have you been telling yourself you’re not achieving enough as you seem to be going so slowly? Maybe you feel frustrated because you’re not getting customers, clients, or property deals as fast as other people seem to?

There are often a few reasons why you might feel exacerbated by your apparent lack of progress and I thought I would share the most common ones. When you’ve made that amazing and courageous decision to break out of your current life and start investing in property, or start your own business, you’ll probably be hoping that just your excitement and nervous energy will bring progress! Sadly, it doesn’t. Well, not on a consistent basis. So what is slowing you down, and what can you do to overcome this feeling of frustration?

In the following list of five reasons you might recognise something that you’re doing or believing which resonates with you and which you need to work on first.

You hold the belief that there is an ideal speed at which your business or investing *should* be expanding. You are comparing yourself to that inner belief and find yourself falling short.
You are comparing yourself to other people without knowing the background, education or prior knowledge of those people. They may have a hidden unfair advantage. So the comparison is untrue and unfair.
Your business doesn’t exist in a vacuum. If you are also a parent, or currently employed, or in a relationship, or committed to other activities (hobbies, community activities, charitable work) this will have a big effect on how quickly you can accelerate your business.
You have unrealistic expectations of success. This is where having an expert or mentor who can help you ‘keep it real’ but still attain your stretch goals is crucial.
You don’t have a clear plan, with measurable actions and a focus on process.

You know you need to make some changes, so what can you do?

Create a plan that has clear activities that you plot immediately into your calendar. Focus on activities that produce a positive process that will become a habit. Link these clearly to your goals. Include activities related to the other areas of your life that are a priority. If you are really committed to this process, ask someone else for their feedback on your plan. That will make it much more real.
Find someone to whom you are accountable on a VERY regular basis – at least monthly and preferably weekly.
CUT OUT THE RUBBISH! Anything and everything that saps your energy, belief, focus, strength and courage – GET RID OF. Yes it’s dramatic and radical. But if you’re going to achieve what you want AND ensure your children still recognise you, you have to be radical.
Consistency. It’s better to do an hour a day consistently than plan to do 7 hours once a week, but inconsistently. If you plan your time (see point 1 above) you will be amazed how much you can get done simply by getting up one hour earlier per day. It creates momentum, scale and compounding. (Here’s a really useful site if you’d like to have accountability for when you work – check this out https://www.focusmate.com)
Energy management. ‘The world belongs to the energetic’ as Ralph Waldo Emerson once said. If you’re not getting a good night’s sleep, eating good nutrition and taking daily exercise you will not have the energy to manage your current lifestyle AND accelerate your business growth.
STOP comparing yourself to other people. Like a horse on parade day, you need to wear blinkers to shield yourself from what everyone is doing and how everyone else’s success appears.
Take one day at a time. Plan it carefully, leave some space for emergencies, focus on energy management and remember to breathe!

And finally, you need courage to start something new and carry it through to fruition. Whether that is a plan for financial freedom, doubling the profits of your business, creating a magical marriage, being the very best parent you can be (or all four)! Whatever your path is, dig deep to ensure that your direction is in line with the real you, for that will unleash your bravery. Sounds esoteric but unless you start to figure out who you are in this big wide world, you will never travel a path that is enjoyable and fulfilling. Ultimately that will shape your success as much as implementing the practical steps above.

Have courage, be brave and be bold. I look forward to seeing your accelerated progress!
To your growth

Wendy

Finding the Right Location for your HMO

Finding the right location for your HMO might take some time but if you want to create an HMO that cashflows for many years to come, your due diligence now is worth it.  This is the first step in the process and the MOST important. Identifying your ideal investment area will also allow you to grow your portfolio quickly as you test and refine your model with a relatively small set of variables.  This will eventually save you time and money and allow you to create a ‘cookie-cutter’ approach as we have done in our company and repeat the same steps faster and more efficiently each time.

Initially you will need to choose your ‘macro’ location. This is the town or city where you are going to make a professional HMO work for you. In terms of an area where the most successful professional HMOs are located, there are some key characteristics you need to look for, which are namely:

  • A population of NO LESS than 80,000 people – otherwise you are unlikely to have the right number and supply of houses.
  • Robust and various transport links to the wider region (train, coach, bus, motorway, tram etc).
  • Within 20 miles of another equally large conurbation.
  • At least 20 medium to large employers (3000 people plus) who have a significant need for skilled or semi-skilled labour.
  • Local plans for growth, regeneration and investment (this is not always easy to uncover but looking at the local plan will ascertain local trends for housing and employment. Knowing the priorities of your local council for development over the next five years is a core part of understanding the viability of a potential HMO).
  • Retail and shopping facilities that cater for all segments of the population.
  • At least 10-15% of property in the rental market (i.e. predictable and steady rental market). This is true of most of the UK at present! This factor is important as it influences your tenants’ ability to move up and out of your HMO eventually. Some may leave due to job changes, others will purchase their own property and many will move into a single let property. If there is limited opportunity to move up the rental ladder this will affect the popularity of the area with regard to HMO room lets. Also having a strong local rental demand will ensure there are plenty of lettings agents locally who you can work with to let out rooms.

So as you can see, choosing the right location to invest in is critical if you’re to make the most of your money and investment, doing all you can to get a good return. After all, that’s why you’re in business, isn’t it?

Money Matters!

A while back I wrote an email to my group which was about ‘The Rules of Money’. Two days after that email one member of the group went out and raised over £150k. So I thought it might be helpful to you if I re-posted it here:

  1. Money likes flow – so what does that mean? It means that you need to think of money flowing through you. It comes in, and it goes out. As you make it, you spend it, invest it and use it. It is not there to be hoarded. It is a gift and an energy which needs to be seen as such, then you will become a vessel through which it moves.
  2. It likes to be used and leveraged in a structured and managed way. If you don’t have a handle on your money you will lose it, and won’t be able to make more
  3. It needs to be backed by an asset to be properly magnified! That’s why property is such a powerful compounding tool.
  4. It comes to people who can manage it and show diligence, competence and discipline. Decide today to raise your investment game by managing money better. Save some, invest a lot and spend as little as possible on wasted items and fripperies.
  5. It grows when you add value to people’s lives. Property is a people game, as such it needs you to be a people person! It’s not about bricks and mortar, it’s about solving as many people’s problems as you can. You do that, and you’ll get rich. You are already wealthy. You just now need to manifest it through the zeros (added to the numbers) in your bank account. But remember – keep it flowin’ and you’ll keep it growin’!

What does your money mindset and your actions say about you? Has this post helped you think about money? Where can you improve?