Every week I answer questions put to me by my audience on YouTube. If you would like your question answered next week on anything about property, whether it be about HMOs; rent to rent; lease option agreements; packaging and selling deals; finance; tax or anything else, comment on the YouTube page for this video. I will do my absolute best to answer your property investment question in the next video.
Also if there are any challenges you've got; things you are struggling with; something that is stopping you becoming financially free in the next 12 months or getting your first property deal, let me know and I'll try and do my best to help you with that challenge too!
Here are the questions I got last week and my answers to them.
Dan Stokes asks…
Would you do a financial freedom challenge with me? Me and my family have hit hard times since COVID and could really do with your help to achieve something great.
Dan, I appreciate the question; I appreciate you being a subscriber. Can I move into your house for a week and do a financial freedom challenge with you? Maybe. I get a lot of people asking me this
question but let me tell you something, you don't need me to move into your house for you to become successful in property. There are online resources, books, CDs, seminars. You can ask me questions right now and I can help you
I do sometimes move into people's houses and do crazy stuff, but that's something I'm definitely not going to be committing to and promising right now. Dan, what is it you need help with specifically? Comment in the comment box and I'll do my best to help virtually!
Daniel Matley says…
Hi Samuel. Me and my partner were well on our way to spending our lives trying to be debt free but you've convinced us that's madness. We have £300k in equity and looking to leave our lives in London to invest that money wisely in property. We often ask ourselves, if Samuel was in our position – what would he do? Would you use the money to buy 2-3 houses (in cash) to BRRR and keep recycling it?
Hey Daniel, great to have you as a subscriber on the channel and yeah, I think you're right about not
wanting to be debt free. Most very successful property entrepreneurs, investors, businessmen and women don't actually not have any debts. What they have is debt, but they also have cash flow and net.
So they might be high net worth individuals, but they're normally high debt worth individuals as well.
So my advice would probably be use the money that you've got, and take out any equity that you've got, if, and only if, you can invest that into something that's going to generate you good cash flow.
For instance, you mentioned buying a property and then pushing the value up and refinancing. That's absolutely right, rich people recycle their money.
I was just with a guy earlier; his name is Thomas Atkinson, he's 24 years old. He just bought a house and he had a mortgage on it. He was working full-time as an electrician and him and his partner were trying to pay off the mortgage on their house. Then I spoke with him and he watched some of my videos, and he said, “Actually, that's madness”. Rather than trying to pay off the mortgage, he refinanced it and pulled out a bit of equity and ended up with £50,000 cash!
With that £50,000 he's gone on to buy four houses, and now the money that he's making from his houses has replaced his income. So, he's left his job as an electrician and now he's working full-time in property. He's packaging deals; he's selling deals; he's building his portfolio because instead of trying to pay off his debt, he's learned to leverage debt so the debt became his friend as opposed to his enemy that he's trying to pay off.
Sycky Singh says…
Hi Samuel, been wanting to get some package and selling deals done as I feel I know investors that are interested. However, they don’t have the time themselves. Want to sell the packages to fund my first rent to rent deals. However, just want to know what I need to set up legally to ensure I am 100% compliant? Thanks for the time and see you on your crash course soon.
Hey Sycky, I can't wait to meet you at the crash course. Super smart booking and it's free, so I'll see you there and we can talk and get to know each other hopefully.
In terms of being compliant, you're going to need the right contracts in place if you're doing a deal with somebody. I wouldn't sell a deal to an investor without a contract, that's the most important thing.
Otherwise you could say to an investor, “Hey, here's a property investment. Give me three
grand and I'll let you have the deal”. They could pay you, but then in six months time or six years time they could say, “There's a leaky roof, you're responsible”. You’ll say, “What?
I'm not responsible!” Well, where's the agreement? So you need a contract, and the contract needs to specify exactly what your service is and exactly what they're paying for.
On top of that, there are other things that really you should have in place as a deal sourcer. Me and my friends have written a whole book on it. If you search “A Guide to Making Property Compliance Easy” on Amazon you’ll get a compliance book that covers all the ins and outs of insurance, and everything that you might need to become compliant not just as a deal sourcer, but also doing rent to rents, etc.
I hope that helps, see you soon!
Ethan Turner says…
Hi Sam, so me and some of my closest friends/family are joining together to raise the capital for our first property venture. We aimed to raise the money as fast as possible to get a BTL mortgage with the highest possible cash flow. We have a total of 11 individual investors, but some of them are worried about the large amount of partners we’re going to have since 11 is a lot. I see a lot of benefits, as we can raise capital faster and reduce risk on each person. Would you say that working with a lot of investors would be a good idea or would it become more hassle than the benefits give?
I wouldn't bring more people than needed, personally. Every investor is different, but for me, when you've got an investor that's invested in one of your deals or in a deal with you, that investor is going to come with a level of work. Conversations, contracts, etc. I'd rather take a hundred thousand pounds off one person than 10 people give me 10 grand, because I'm just dealing with one person.
You say it spreads the risk but really you don't want there to be much risk. You want to make sure that worst case is, it cannot lose money! So I wouldn't want to be bringing 11 people onto one deal unless I absolutely had to. I'd be trying to bring on as few people as possible. That's just my personal opinion.
Asia Mohammed says…
I don’t think I will ever be able to buy a house but I still watch your videos..
The love is real bro, the love is deep. I think you will though. Why don't you take one of Ethan
Turner's investors? He’s got 11 investors! Maybe you can just take one of those, just one of his
11 leaving him with 10 and then do a deal with one of those people!
Asia, you definitely will manage it, man. Even if you don't buy a house; even if you just control a house, you know manage it and then push the value up and put tenants in there, and benefit from the cash flow, you 100% will! Keep watching the videos brother and keep me posted. If you need any help any time, hit me up.
Aaron Dean says…
Did the UK do an eviction moratorium like the United States? If yes, how did that affect you, and how do you operate without that income?
Aaron, yes, they did do an eviction ban but it's finished now. They said that you couldn’t evict tenants for any reason, even if they didn’t pay rent during lockdown. Personally, it didn't affect me at all because my tenants continued to pay rent. Most tenants, if they're happy, are not going to stop paying rent, because as soon as the eviction ban finishes they're gonna get kicked out!
It's not that they didn’t have to pay the money, it's just that if they didn’t pay it there was a period where you couldn’t evict them because we were in lockdown. I think it's fair, I mean some tenants lost their job and were affected with COVID; that’s their home. If you evict them, where are they going to go?
During the crazy circumstances of lockdown and the pandemic, I didn't have a problem with it. I gave some of my tenants a reduced rent while they were there. Communication is key.
I don't know what the exact percentage is, but I think it was something like two percent of tenants overall stopped paying their rent because of the eviction ban. So, I didn't have a problem with that anyway.
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