Businessman Mohammed Raja is a seasoned property professional with his own estate agency and a large rental portfolio. He has also sold hundreds of deals over the years. But last winter he was feeling the crunch. His serviced accommodation was losing £7,000 a month, forcing him to plug the deficit with the income from his HMOs. So, Mohammed joined Samuel Leeds’ academy to find new ways of operating. Just three months later, every single one of his 20 properties is in profit, making £800 to £1,000 per month.
‘I realised the passive income from rents was the same as my wage’
Mohammed learnt early on how owning property could be hugely rewarding, both materially and in terms of giving him a relaxed lifestyle.
His father had a house in Reading which he was letting. Mohammed, who was training to be an accountant, stayed in one of the rooms while the other four were rented out. The tenants each paid £400 a month which left his dad with a sizeable margin as his mortgage was only half that amount.
When he moved abroad, Mohammed took over the running of the property while continuing to live in the house. It was then that it struck him his job was taking up a lot of his time, and yet the passive income from the rents was about the same as his wage.
“I realised I wanted to do more of that. That’s when I first bought my house next door to dad, and I did the same,” Mohammed recalls. “I rented out the rooms and was able to earn quite a decent amount of money from that.
“It was quite easy to get a mortgage back in 2007 and 2008. But then the crash came. So, I bought the most expensive house in west Reading. It was difficult but I never really worried about the crash because it was always rented out.”
Using the buy, refurbish, refinance method, Mohammed bought more properties over time. He would either purchase a house and sell it after doing it up or remortgage it to its new value to raise capital for more investments.
His latest acquisition is a property in Liverpool. He bought it in March for £270,000 and is spending £120,000 on refurbishing it. Once the work is finished, he will then remortgage it at around £500,000 which is the projected end value.
The entrepreneur found the property in November through an estate agent, with whom he had built up a good relationship, and has already lined up tenants to move in on July 1 (2023).
“The tenants are students. I was able to show them examples of other properties that we have in the area and say this is what your property will look like, but this is the one we’re buying for you.”
The project is scheduled to be completed before they arrive which means there will be no void periods and he knows what rent to expect. Each occupant will be paying £135 per week which will bring in just over £3,500 a month.
When Mohammed first went into Liverpool and began taking on properties, it took him a while to build relationships with estate agents. Persistence, however, paid off. He made it clear he was an investor and had other investors behind him who wanted to buy as many properties as possible.
“It was only when I did a deal with one estate agent and bought 13 properties off one vendor, and I had clients to buy every single one, that I made a name for myself.”
‘We are the solution for being as passive as possible’
Mohammed has also been selling deals to investors for ten years, starting out in Reading. He specialised in sourcing HMO opportunities as that was his field of expertise. However, the market became saturated and so he stopped doing that.
“I wasn’t going to be a bad deal sourcer by offering my clients something they couldn’t rent out,” he explains, adding: “I restarted about four years ago mainly in different locations like Liverpool, Preston and Coventry. That’s when I started building up a portfolio again of new clients.
“Over the last few years, I’ve secured about 50 deals for investors.”
His charge per deal ranges from £3,000 to £6,000. Investors are offered a turnkey service from sourcing the property right through to renting it out and managing it. If the place needs renovating, his company will also organise the work and help to refinance it afterwards.
“We’re making it completely hands-off because a lot of people don’t have the time. They want this to be as passive as possible. We are that solution.”
He manages some 500 properties across the country and owns around 20 properties, some of which are joint ventures.
Mohammed says he cannot buy everything he sees, much as he would love to. Therefore, he passes on some BRRR opportunities to his investors.
“I have really good investors who want these sorts of deals. I’ve even found the same deals on the same road that I’m purchasing on that I will sell to my clients.”
He finds his investors mainly through his estate agency. A lot of them are people he has known for some time.
He keeps his deal sourcing business separate from his agency to avoid any potential conflict of interest. The two operations differ in their objectives, he says. The agent aims to achieve the best price for the seller, whereas a sourcer tries to get the lowest price for the customer.
The businessman often sets up his deals with an estate agent over a game of tennis. “It’s about negotiating the best price. That is one of the things I do quite well. The estate agent might say this property is worth £210,000 and I’m saying no, it’s £190,000. So, let me start my offers at £190,000 or a bit less and then build it up.
“I was able to do a deal recently for a property at £200,000. They started off saying they wanted around £210,000.”
His decision to join the Property Investors Academy was prompted by seeing Samuel Leeds’ posts on TikTok.
“He kept coming up on my TikTok. I followed him and thought this guy really knows what he’s doing. I’d never been to see any mentor before. Everything I’ve done has been on my own.
“However, seeing what he was teaching, how he was implementing it and the way he put himself across to everyone made me think I have to go and learn more.”
After attending one of Samuel’s Discovery Days, he made up his mind to join the academy. But first he wanted to run the idea past his sister who works in his company and is involved in the financial decisions. She came with him to another Discovery Day, along with his mortgage broker, and they all decided it was the right thing for him to do. They too will be enrolling soon, he adds.
It was a big decision to make as his serviced accommodation business was struggling during the winter months when bookings traditionally dip.
“I was making a loss of £7,000 a month. I was really feeling the crunch. The money I was making on my HMOs was being pumped into the SAs. That’s when I came on board and started listening to everything Samuel was teaching.”
‘Mohammed puts right a big mistake’
Mohammed quickly realised on his training he had been making a lot of mistakes with his serviced accommodation properties. He was only advertising them on Airbnb when he should also have been using other online travel agencies like booking.com and having a channel manager to co-ordinate bookings.
“That was one thing I realised straight away I needed to do, and to learn more about SAs and how to manage them properly. On Samuel’s course I was able to implement the right things and I’ve teamed up with academy members in making sure the ones I do currently have are working successfully.
“I’m now looking forward to seeing what happens this winter. As soon as I see some of the red flags, I know what changes to make. However, I don’t think I’m going to get to that position because I’m already making those changes.
“Every single property that I own now is giving me between £800 and £1,000 profit a month. It’s turned a corner and I’m really pleased with it.”
The appeal of serviced accommodation, says Mohammed, is that it offers guests extra space, compared to staying in a hotel, and they have their own cooking facilities.
The Property Investors Academy has also opened his eyes to other strategies. After attending the Lease Option Bootcamp, he immediately secured two agreements with some clients who needed help with their properties.
Mohammed has agreed to pay each investor a guaranteed rent for the next five years which will enable them to fix their mortgage. In return, he has an option to buy the properties when the agreement expires.
It is an arrangement which is beneficial to both parties, he points out.
“If you know their mortgage is say £700 and you’re giving them £1,100, for the next five years they’ve got a guaranteed £400 profit coming from that deal. And at the end of five years, you’ve bought it off them for the price you agreed today.
“I’d heard of lease options before but until I came on the course, I didn’t realise how they worked. There are so many things I’ve learnt that I’m now implementing one by one and reducing my costs.”
Samuel’s teaching style has impressed him too. “He simplifies things and makes it so easy and straightforward for us to be able to understand. That’s really helped me.”
The passive income he derives from his portfolio remains his reason for being in property.
“A friend a long time ago said to me the best thing about properties is just waking up and knowing you’ve made money. You might wake up and you’ve got a booking. You might wake up and you’ve received rent. It’s just constantly ticking over.
“There’s no better income to have. Rather than working nine to five for someone else you’re doing it for yourself. That’s the beauty of it and you’re able to buy things with it, do the things you want to achieve and give your family a better life.”
His goal moving forward is to expand his business and turn it into a nationwide operation.
“My company is called Mr Sales and Lettings. We are based in Reading and Liverpool. We also have properties in Preston, Coventry, Lancaster and a few other places that we are targeting at the moment. But I want my estate agency to get to the position where we are across the country, and we are helping to find the right investments for the clients and going all the way through to managing them.
“That’s what we’ve been doing for a number of years but now I’m able to grow bigger and better a lot quicker.”
- When you’re getting into this business you need to know what you’re doing and how to do it and you need to be around the right people. I highly recommend Samuel’s courses. My experience has been fantastic.
- Once you buy that first property with an agent, they will keep coming back to you. If they know you’ve got the money, or you’ve got the clients, they will come to you. I get deals coming to me a week before they go to market. I get first dibs on them because I’ve built up that relationship with them.
Samuel Leeds’ verdict
“If you’re not stretched and growing, then you’re dying. It’s great to see Mohammed even now after so many years in the business pushing himself and being stretched. He’s a massive implementer and asset to the academy.”