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?

The Green Deal

The Green Deal helps landlords and tenants by allowing them to make energy saving improvements to their rental property without having to pay all the costs up front.

These improvements can lead to warmer homes and reduced energy bills over time.

For further information contact: Energy Saving Advice Service (England and Wales) on 0300 123 1234 or Home Energy Scotland on 0808 808 2282.

Alternatively, visit www.gov.uk/greendeal

SAVE VAT!

If you are using a builder who is VAT registered, you may be able to pay a reduced rate of 5% VAT on an HMO development instead of the usual 20%. However this depends on the type of conversion you are undertaking and what the use of the property was before it was converted. You will need to have agreement from your builder to charge you at this reduced rate and certain items are not included. This tip alone could save you thousands of pounds! (For further details please see VAT Notice 708: Buildings and construction, HMRC, 2014).

Future Proof

If you can demonstrate an ability to find, finish, fill and future-proof your HMO investment, you will discover that you become a fascination for financiers! Investors across the world are looking for secure, high yielding investments, and HMOs are no exception. I have completed many deals where money has been left in the deal – but it’s not been my money! Giving an investor anything from 7% return upwards is very attractive when banks can only return 1-3% at best. Your track record and ability to systemise and professionalise your business will be the key to creating an investible opportunity. Investors will be fascinated by you, fish for more information from you, and follow you. You therefore need to facilitate a way you can enable a favourable result for you both

Protection Against Downsides

A good investor protects against the downsides. Therefore any property that meets your requirement for an HMO ideally needs to have the flexibility to be converted back into a residential property or another use of property should the worst occur, and it not be possible to utilise it as an HMO any longer. (Even if that includes undertaking a planning reversion).

Audiobooks Offer

I started listening to Audiobooks about 3 years ago and at the time I was a little dubious about whether I would benefit from listening as much as reading a book. Being a visual person, I can get completely engrossed in a page of text, in a way that I thought wouldn’t be possible with an audio version. How wrong I was! I now find that whenever I’m in the car, cooking in the kitchen, or doing odd jobs around the house, I LOVE listening to audio books. There’s something very satisfying about completing a real, whole, complete BOOK (which believe me is a real achievement with four children) in the course of a month, over and above any ones I’ve also read.  

As well as being a fan of audio books, I am also a fan of Audible – the Kindle app that allows you to buy a monthly subscription and then take your pick of thousands of titles. You simply download and enjoy! There are so many topics to choose from – from investing, to property to HMOs (yes mine is also on there surprise, surprise) to cookery to yoga.

If you haven’t yet experienced the delights of Audible, I have a VERY special offer – if you join Audible this month, and buy my book ‘101 Essential Tips for Running a Professional HMO’ and download this as your FIRST Audible purchase (only about £4), I will also send you the paperback version ABSOLUTELY free! Just screenshot your purchase (or send me proof in any way possible) and your name and address, and I will pop a copy in the post to you! That way, if you decide not to keep Audible you can still keep my book. Happy listening! https://goo.gl/jpGwxM

52 Week Video Series – Week 5 – The Four Ps!

Do you REALLY know how to make customers return to you time and again? What are the four Ps that make them use YOUR services/ and business more than anyone else’s?

 

 

 

I look forward to hearing how you get on increasing your business by using these four Ps!

Too busy to systemise your business? Or maybe you are scared of the cost of it?

Busy deskIt was a cold, rainy day – the kind of rain that drips over your nose and down your clothes and makes you sopping wet even before you’ve stepped outside. You know the kind I mean. A fairly typical summer’s day in England!

I was sitting in our home office, when Andy walked in, cup of coffee in hand. As he sat down, I glanced across at his desk. The contrast between his desk and mine was stark. Mine – covered in all sorts of paper documents – bills, mortgage statements, letters, post-it notes of to-dos that hadn’t been done and should have been done last Friday. His – a monitor, wireless keyboard, mouse and speakers. No paper, no mess, no distraction.

He sat down and put his wireless headphones on, and I started to hear the muted ‘thud, thud’ of The Gorillaz latest album. I muttered under my breath ‘GEEK’ .. and proceeded to wade through the paper on my desk, deciding the quickest way to deal with the pile was to push it all onto the floor and use it as a new form of carpet tiles. At least that way I didn’t have to look at it. And my desk was then as clear as my darling nerdy husband’s.

‘Do you have the mortgage offer for Gainsborough Road somewhere?’’ Andy asked as he moved one earpiece to hear my response.

‘Um, yes, er, definitely, I saw it this morning’ I said, knowing that it was definitely here, somewhere. The only thing was which foot was it under?

After a search of about 10 minutes I enthusiastically pulled it out from underneath the pile and placed it ceremonially on top of his keyboard.

‘Wendy we need to talk’, Andy turned to me with a serious look on his face.

‘Oh, is the offer not what you hoped for?’ I replied.

‘No, it’s not that’ he said.

‘Ah so is it that we need to buy more coffee when we’re out?’

‘No, we’re fine for coffee.’

‘So what’s bothering you babe?’ I prodded.

‘Well, you know I love you very much Wendy, but there is one thing that is starting to drive me crazy’ he said.

‘Well I know I have that effect on a lot of people’ I said, with a cheeky grin. ‘What’s the matter babe?’’

He took a deep breath, and looked me straight in the eyes, ‘the truth is, unless we sort out our systems, this office and all this paper we simply will not be able to scale up. Your desk is a tip, you can never find where anything is and you are wasting not only your own time but mine too’.

I sat in my chair, feeling totally deflated. I had worked so hard to create a portfolio of HMOs that had given us financial freedom. We now had a regular passive income of £6k per month. The last three years had been nothing but hard work and I had the evidence to show that taking massive action, managing risks that many other people wouldn’t have the courage to do, and using other people’s money could create financial freedom. I had left my job and wound down my other business to focus on this one. Andy had also been able to leave his well-paid role as a contractor.

We were supposed to be happy.

But right now, at this point in time, the last thing I was was happy. I felt annoyed at myself, annoyed at him, and annoyed with the business.

The thing is I realised that Andy was right. Deep down, I absolutely KNEW that my entrepreneurial skills were great when it came to new ideas, growth, and creating income. But on the other hand, creating a system that someone else could pick up and use and freeing up my side of the office from all that paper that I had grown to know and love – well that was NOT within my gift.

I knew I had to change, I knew the business had to change and I knew that the only answer was to systemise.

So over the next 12 weeks, Andy and I set about looking at ways that we could create a leaner, more automated, systematic and ultimately leveraged business. We wanted to employ staff, or outsource the things we didn’t like doing. But to do this we had to start moving our erratic business practices onto a much better platform.

RESULTS

Immediately we began to notice a difference. First in the time we had. We had much more of it! The little jobs, the things that I would have had to write on a post-it note and stick on the edge of my monitor just to remember them, were gone. They were contained within a system. As long as I remembered to go to the appropriate tool, I could find exactly what I wanted when I wanted it.

Soon, this impacted our profits. We had more time so we had more time to do better deals, and more deals, and find more investment. In fact in that year alone we raised over £500,000 for further HMO projects. We bought another 9 properties, and added another £3,700 to our monthly income. There was no way we could have done that if we had been stuck behind our screens or on our phones managing refurbs, tenants or payments.

Our quality of life started to improve as we had more time to exercise, to do more with our family and to R-E-L-A-X.

This was all because we had systems.

Then the best part began as we realised that with the systems we had implemented, we could create a team to manage our properties, with marginal involvement from us. So we began to recruit – first a Lettings Manager who would run the lettings side of the business, then an Operations Manager who would run the day to day aspects of the business. This then, in turn, freed up mine and Andy’s time to do other deals and to speak with investors and to pursue some of our other passions.

So HOW EXACTLY did we do this?

In systemising our business, we both agreed that the key principles we needed in a system were that it had to be

  • Simple
  • Scalable
  • Shareable
  • Suitable
  • Secure

What were the tools that we needed and how would we decide?

We realised that the process would be a three-step process. First we had to SCOPE the business and decide how to breakdown each area, then we had to SPECIFY what our business did in each of these areas, then we had to SYSTEMISE. Most of all it had to be LOW-COST or NO-COST so that we could free up our time without taking up all of our profits.

Although I can happily use a computer and mobile phone, I am not the most technical person in the world so our system had to be easy to learn and implement. The last thing I wanted was anything that needed multiple log-ins or a computer science degree to operate.

After a few weeks of searching and analysis, Andy suddenly rose up one day from his computer chair and shouted ‘Eureka’! I’ve found the exact tool that will work to help us

  • Find properties
  • Fund projects
  • Finish refurbs
  • Find Tenants
  • Future-Proof our portfolio

And that tool is…. ? If you’d like to know EXACTLY what that tool was and HOW we used it to run and grow our business (and still do to this day) and how YOU can too ….
Click here to find out more

To your success!

Wendy

Look after the pennies ….

You’ve heard it said ‘Look after the pennies and the pounds will look after themselves’ and it’s true that small amounts can compound into big amounts if you are consistent.

Look after the pennies

In Best Nest, we hold dear a phrase that has served us well – ‘Low-cost, no-cost ’ which we use as a yardstick to test and assess new ideas, tools and concepts. The other useful question is to ask ‘Is this action/ tool scalable?’. We want to build a big business that is profitable and operates with as little as possible of our time and energy! But as we all know, profit can easily be eroded by spending too much money on fripperies, doodahs or tat. (Technical terms which Andy applies to any spending that is not in the budget). Watch out Wendy.

 

As well as investing for your future, you need to think about measuring your return on investment, time and energy. If you are better served by outsourcing an activity, and leveraging that person’s time to do something you are better at, do it! As long as they can help generate income or reduce costs long term, they’re worth having.

 

Although you will have to invest in staff (or contractor) costs, as long as you don’t utilise that time for catching up on Loose Women, you’ll soon realise the power and efficiency of other people’s time and skills. There are some great websites out there to help you too –

www.peopleperhour.com

www.workable.com

www.timeetc.co.uk

 

So make sure you measure what you treasure – that is your time, income, profit and energy – and learn how you can employ them wisely in your business to grow and fulfil your lifestyle and income plans!

 

To your growth!

Wendy