Transcription
Welcome to Platinum Property Training's podcast, where we will be talking about business, money, and let's not forget the economy, real estate, and bringing in real inspirations. These are people that are doing some great things in our world. Like, share, add this to your playlist, and subscribe. Keep track of our updates. Okay, you beautiful people, sit back, relax, let's listen, let's get down to business.
All right, welcome back to this week's edition of Platinum's podcast. Now, and I tell you, I bring big names in here today. Sit back, you take as many notes as you can, because this guy has built it from zero to a big, big business. Uh, Mr. Daniel Kennedy, you are very, very welcome to Plum Studios. Uh, we're going to spend the next little bit of time, uh, maybe having a few little small arguments, maybe a couple of, uh, golden nuggets we're going to pull out. You, as usual, when you came on here last time, you're doing a bit of training upstairs to our members. It was fantastic. People are still talking about it. I mean, when it comes to HMOs and, uh, turning properties around, you're an absolute hotshot at it. I think you're, you're, you're really, really on top of your league of what you're doing over there in Birmingham, and you are very, very welcome in, and thanks a million for giving up a bit of your time today.
Thank you for having me. As you know, it's always a pleasure and never a chore to chew the fat about property. There isn't as many people that can, uh, chat at the level that you can, so I'm looking forward to this. I hope we don't have any arguments because hopefully we're on the same side.
Right, well, we are. Well, yeah, no, look, absolutely brilliant. So, listen, let's get straight into this. For all the, all you people listening in on the podcast, over the next, uh, week or two, really, really pay attention to this one. Maybe relisten to it a couple of times, take plenty of notes, because we're going to be giving away some really, really lumps of gold. So, tune in. It's not of I get big, big names on here. Daniel is definitely one of them.
All right, so let's kick in. How are you doing over across the pond? Uh, in Birmingham, how, what's the property market look like over there?
It's, um, definitely been tougher to get the deals in with the interest rate rise, but the flip side is margins have been hit. It's a, it's a tougher market, but there are deals to be had. If you built the pipeline prior to this new environment, it's all about being consistent and trying to do deals in every phase of the market and just constantly adjust your numbers. So, it's, me personally, uh, we've had a bit of a spurt of growth after a period of pausing. Um, I feel that we're over the worst of it. I imagine it's the same over there as well. Uh, and it's going to be a real good opportunity to to get these deals when people don't fully comprehend that the worst is over. So they're still in 2022, '23 sort of environment where that everything's going wrong, interest rates are going up. We still haven't had that iterating the market. That that's kind of over now, and we're things are going to get better. But I'm trying to get a few more before the rest of the buyers realize it's going to get better before they, before they wake up.
Yeah, it's definitely a buyer's market at the moment. 100%. 100%. Yeah. Um, so that's what we're trying to do over here as well, in this side of the pond. You're trying to chase stuff all the time. You know, only, well, the amount of pain because I remember even going back maybe 10, probably not, you know, 12 years, I think, uh, but I remember your story right back from the very start of you trying to hunt deals like an absolute beast. I'd be telling, I tell people at all the time the story, you know, even the night, you had no money to put petrol back in the car to get you back up to, uh, your next event or whatever you were doing at the time. You'd run out of money, uh, because you're out hunting deals. I mean, just take me back a little bit, because some people think when they get into property, this is going to be simple, easy. Uh, it's going to, you're going to have the Bentley, you're going to have the car, you're going to have all that shiny [ __ ]. I know how big your [ __ ] is over there. You definitely could afford the cars, you could afford the watches, but give a little.
Absolutely not. Yeah. Gives a little bit of a taste of maybe your first deal and how hard you had to work to try and get that done.
Absolutely. That's a really good way to start. So, initially, I knew that property was a good thing, vaguely on the periphery of my sort of psyche. I want to get in, didn't really know how. And then so I sought out people who were teaching, and those were the Wealth Dragons, as you know. Uh, myself and you both thought with them. Um, and they primarily taught us how to source deals. Now, sourcing deals is a really great way into the market if we haven't got any money. And what sourcing is, is where you would take a property, maybe it's worth £60,000, try and negotiate it for 40 or 30, and then sell that for a couple of thousand pounds, and then you would build up capital that way. So it's a very, it's a very capital-free way of generating money from property. It's about being creative.
Now, first week after learning how to source property, I discovered that the credit file was really, really important. And I used a credit card to pay for my training, which probably wasn't the best use of that. Only to then learn that my credit file is really, really important. My payment was coming out on the 27th, and didn't get paid on the 30th. So I was like, oh my God, month one, and I'm going to screw myself over by having a late payment on my credit card. So I was like, all right, we need to get it done. I, I then tried to find an area to source, and I got really, really frustrated with myself because I had analysis paralysis. I was like, should I do this area? Should I do that area? And I was wasting a record amount of time and getting really annoyed. So I just opened, uh, the atlas that I had, put my finger down, and it landed in a place called Hartlepool, which is 9 hours away from where I was in London. I was like, right, I've picked my place, and I drove there.
Now, the, the problem was, I didn't have any money for marketing because I, I was absolutely brassic. I was happy to take that with, because I had a secure job. I was in the military, so I knew I was going to get wages. Um, so I just wrote on bits of paper saying, "We buy houses." And I went in a suit, knocked on a couple of doors, and I said, "Hi, my name's Daniel, I'm looking to buy some houses." And I got really negative reactions, like, really negative. And I was like, couldn't comprehend after about 30, 40 doors. I was like, why is everyone being so rude to me? Like, I'm trying to offer a service here, trying to help people. And then I thought, hold on, I'm the common denominator here. So it must be something I'm doing, not they're doing. So I, I changed off and I said, "Let me, let me be a more local person. Let me try and build some rapport." And so I was still in my suit, and I tried to mention that I was in the Army really quickly. So because usually somebody knows somebody who's in the R.A. or somebody knows they were going to join, but they had an injury, blah, blah, blah. And that didn't work either. And then I thought, let me pretend to be a builder.
And so I wrote on these little bits of paper, "We buy houses," a big number. Um, and then I wrote £500 on the back of it. And I knocked on the door and said, "Hi, my, I know I'm a local builder." And all I did was just wear my normal clothes, which were dirty anyway because I was gardening. Um, "I'm looking to quote any work." And then I would hand them this piece of paper with the £500 facing up. And then I'd look at the £500 and pretend that that reminded me that I also bought houses. I'd be like, "Oh yeah, as we're builders, we also buy houses. So if you know anybody who's selling a house and you put us in touch, I'll give you £500." I was trying to like cast a wider net instead of pitching to that one person, I was pitching to that everyone that one person knew. And immediately the reaction was a lot different. So I knew I was on to something there.
Now, also, that something happened that wouldn't obviously was going to happen. I had to go and pretend to quote loads of work. Loads of people would be like, "Oh, I've got this, got this job that needs quoting. You want to come and look at it?" And then because I've just knocked on the door asking for building work, I had to walk around pretending like, "Oh yeah, yeah, well, I'll get back to you with a quote." And then whenever that'd go, I'd be like, "I'm fully booked up." And I'd just take the, uh, the lease for the property. So I knocked on this gentleman's door, it's One Striker Street, you can look it up. And I say the pitch, and he goes, "I want to sell my house, but I don't like speaking to people I don't know. Let me get my friend, 'cause he's a bit more savvy than me." And I don't even remember the vendor's name. I remember the, the gentleman, and Bob was the guy that came down, and we had a chat. And this is how green I was. So those of you who think that you need to know everything and you need to be perfect, it's, I want to dispel that immediately. What you need to do is start. Start first, and then worry about the how on the way down. A great analogy is jump off a cliff and make the plane on the way down. And this is what you really got to do in property.
We were in the front room, and it was a two up, two down terrace. Every terrace on that row was like £40,000, £41,000, £42,000, £43,000. And he would say the property unencumbered. And I didn't know what unencumbered meant. I had to walk into the kitchen, call the trainer up and go, "Said, it's unencumbered. What does that mean?" "Oh, it's good." Walk back down. And as we're negotiating, he'd be like, "It's freehold." And then I'd have to go, "Right, I'm sorry, one second." Walk back into the kitchen, "P, what's freehold? Is that good?" That's how green I was. I did not know anything. I know it needed a bit of work. The property was a bit tired, but not too bad. And every house in the last like two, three years have sold for like £40,000 on this terrace house. So I was really confident of the GDV. Now, I tried to sell it online, and no one would buy from me. So again, I did a bit of self-reflection. Never had any property experience, didn't have any contact, didn't have any past clients. I thought, right, this, this is an issue. No one's going to trust me to hand this money over.
We negotiated the property for £26,000, and it needed about £1,000, £1,000 worth of work doing to it. So it was a small, small discount, but one that was a very low barrier to entry because of the price. And it would rent out for about £600, which is phenomenal in terms of in England to get a property for £36,000 that rents out for £6,000. The yield was brilliant. It was really appetizing to a cash buyer. I put the post out on Facebook, and a gentleman in Sweden called Sven said, "I will, I'll be up for doing this deal, but I want a RICS survey." Now, in the UK, we have the Royal Institution of Chartered Surveyors. Now, they are an institution that the banks use to value property. So Sven wanted me to pay for this valuation, and then he would buy the deal. So we agreed £3,500. If it values up, I didn't have the £450, £500 to pay for this flipping valuation. I called everyone out. I called my grandma, I called all my friends, and no one would lend it me because I was desperate. I was like, "Please, please lend me the money, please." And no one was interested. But I did have my mom's car. So I went to a Cash Converters, pawned it because I was that sure that I'd be able to get it back when I got see.
We're laughing now because we have a bit of [ __ ] coinage. Right back then, I had [ __ ] zero. You had zero. It's easy to laugh about it now, but the good, the good point is the son of a [ __ ] is listening to this, need to get, take action and do it. And, and, and it, no matter if you have no money in your pocket, you have to get and start. That's the real. I know we're laughing about it now, but it was painful at the time.
Now, this is the interesting thing. I also didn't have anywhere to stay. So then I had to ask this bloody vendor if I could stay in the property. I was just presenting myself as a professional buyer. So I was like, "Can I sleep in your living room?" So I slept on the sofa for four days in there. The RICS, the RICS surveyor came around the next day, and he, he did the whole walk. And bear in mind, I stayed in this property for four days. The valuation came back, and the GDV was £60 grand. And I was like, "Huh, why the hell is it £60 grand? Everywhere else on the house is 40, 40, 40." Uh, and then when you look at the street, you can see the R Terrace houses, and then this one had a bit, it was a bit higher because it was on the corner. It was the first one. And then I had stayed in this property for four days and not realized it wasn't a two-bed, it was a bloody four-bed. I'd missed a whole floor during my analysis of the deal. So when it came back, the refurb was pretty much the same, £11,000, and it was a four-bed, and the GDV was £60 grand. So then I sent that to Sven, and I had like a bit of a, a bit of a problem. I was like, "I feel, should I send the deal and try and get more? Because I'm only getting three and a half K here, and it's basically 50% off. Like, what, what should I do here?" But thought, no, let me stick to my word. Let me be really sure of the money that's coming in. Uh, and then immediately, Sven was obviously thinking the sun was shining out my ass then. He was like, "You are an excellent person. I want to work with you." And then also, I had the, on the way back, I got the car back. So I was very thankful for that. I was driving down to London. Bob didn't hear me say, "I'll give you the £500 if you put me in touch." But during the whole negotiation process, Bob was absolutely critical to this transaction. Without him, it wouldn't have happened. And I had the devil on one side and the angel on the other. And the devil was like, "Keep it, it's all yours. Don't give them a blood banning. Keep." And the angel was like, "No, no, you know what the right thing to do is. Give them, give them £500." So I got the £1,750, which was half of the fee, and then he was going to give me the other half when we completed. Uh, I, it cost me about two, 210, two, 22 quid for the interest, and they like charged me near on 50% interest, the swine's Cash Converters. But it is what it did. Got the car back, and then I gave him £500. And on the way back, unbeknownst to me, Bob was a member of the local Masons' Lodge. So a very well-connected person in Hartlepool. He got me three more leads, which two turned into more deals that I didn't close. All three, I only closed two. And Sven gave me the cash upfront for both of them because I'd built the trust with the first deal. So within the first week, I'd managed to pay off the, the education, which was really, really fortunate, just by taking action really, really quickly. Um, he eventually went on to buy 11 deals from me. Sven in that area. I, I, I sourced 21 deals in the first year, and he bought 11 of them.
Over the half [ __ ]...
So again, then you, you, you had this. They, they, I think the statistics with training companies and with different trainers is, some people, I think you've got 21 days. So someone that literally takes action now. I don't mean by going out and actually getting your deal in the first 21 days, by actually just going on the hunt and feeling all this emotions kicking into your body, like, "Am I doing the right thing?" And as you said, the devil on one shoulder, the angel on the other. You're trying to get the two of them to talk. Uh, you're in the middle trying to make a booking. But that then would have been the switch for you. That would have been, [ __ ], I can actually do this. Or you can pull this thing together.
Oh, oddly enough, you think after 21 deals, I would be a believer. But I was still thinking, I was like, "There's something wrong here. This can't be real. This can't be." Because although 21 deals sounds amazing, I only made about £47 gross because I was starting to spend. I started to professionalize my business cards, I started to do advertising. So there was a lot of associated cost. So the net was only about 40. Um, and because I lost, I also lost £7,000 to a builder on my first, um, interaction with a trade that had my pants down. It was only when I bought my first property that I've bought, "Oh my goodness, I'm onto something here." And that was at the end of year one. So I did a whole year of sourcing because I didn't have any money. Right. I was broke as anything. I needed to pay back the credit card, which was like seven grand. Um, the, the total training was 12, but I had savings that I put into it. And then I just kept recycling, recycling, recycling until I came upon an opportunity in Birmingham. And it was just very, very random how I got that deal. But during that first year, I also did six months in Afghanistan. So I wasn't even there, but the referral system kept the leads coming in because there were people sourcing for me who were part of the local community. So I managed to get a couple of deals done remotely as well.
So again, remember you telling us this story with, with the actual £7,000 on last time you done HMO training upstairs. Uh, so that, I think it's very, very important for people to listen. Sometimes when I'm telling them these things, they don't listen. But you actually handed over seven grand on a little bit. I'm not saying foolishly, mate, but you just thought that was the name of the game. Give, give people a little rundown of, of, uh, how, how foolish you are.
So, so what happened? I came out of the military. I was in the military, and in the military, there's a very different culture. We have the culture of the solving the problem is way more important than saving face. So if you make the problem or you caused it, you'd be open and transparent with what you did. Yeah, because solving that is more important than losing face. Now, I thought that translated into civilian life. Now, my first interaction with builders, they are so goddamn charming. They have such good charisma. It's really, uh, I'd never come across anything like it. He was saying like, "Oh, brother, we're going to do great things." And I was like, "I found him. I found my builder. This is my guy. We're going to build a great business together." And I found him on Facebook. What if you had that? He contacted me. He seemed the most professional. He, and, you know, obviously he was very charismatic. He came around the site. And the reason why I was managing this is, this was, this is the reason why Sven only bought 11 because he didn't work with me after this. Um, he said, "You want to manage this project because my trades are busy." So, like, with no experience, no qualifications, I was like, "I've sourced property. Of course I can manage trades. How hard can it be?" We, we know that now. Um, and he goes, he quoted the job, £1,000, 800 or something. He goes, "I need £7,000 for materials." And I was like, "Jimmy, Jimmy, don't you worry, lad. I've got you. I've got you, brother." Went and got the seven grand out. And soon as I handed it to him, he started walking to his car. And I was like, "You're going to get the materials?" "Yeah, yeah, mate." And then as he drove off, I remembered I was like, "I met this guy on Facebook. I don't even know if his name is Jimmy. Didn't take his registration, and I've got no contract." And then I looked at my Facebook, and he blocked me. And I was like, "Oh, no." I went to the police station, and they literally repeated what happened in my head. They were like, "You met this guy on Facebook, you don't know his real name, you don't have his registration, and you don't have a contract. What do you want us to do with that?" And so, obviously, I had to eat that loss. I couldn't let the client do that. Uh, but it, it lost Sven, lost confidence in me after that because he, he didn't want me to do it, even though I, we had a successful relationship business-wise. So it's a bit of a shame. Major setback and a major blow. And again, for anyone that's going to be logging in, because I know there's a lot of people in their group getting ready to lodge builders in place, and you just can't predict how things can go wrong. You can't predict, uh, whether they're going to take that money and use it to finish off the last job. You now need to be in fully, full control of that, and contracts are really, really important, and term sheets, and, and trust. Major. I'd like to say that was the last time I ever let that happen, but unfortunately, it needed to happen one more time for me to really learn my lesson. It really happened on my first deal as well, and then I never, ever, and now I have some rules. Never pay upfront for a builder unless you have an established relation with trust. If you haven't seen it with this, it hasn't happened. Pictures can be doctored, pictures can be misleading. Only if you've seen it. You cannot build remotely. I don't care what you say. You need to be on site with regular visits. Yeah, it, or else you're just inviting trouble.
Yeah, absolutely. And that leads me into the next part, and which I think is, we're going to just go into this step and stones because I know we want to get to the juicy big stuff, but, uh, we have to wait. It's like a little bit of foreplay first. Yeah. The next thing then, uh, when you're building out these relationships, say, say you're, you're, you're going to be a new investor coming on board, exactly like yourself. You've gone out, you've hunted a few deals, you may have put a few together. Now you're on your first one, now you want to trade it. What would your recommendation be to someone, um, that may be listening in that's, is going to just about to pull the trigger on the first deal, and they think they can do this remotely, and they think that they don't have to turn up because John has the build under control? Just give me your rules on this.
I really don't. That, you're inviting like building. When you're on site is hard enough. Yeah. So when you do it remotely and you're inexperienced, you are almost guaranteed to fail. What is much better for your long-term positive outlook in property is that you partner with someone who can be local. 50% of a successful deal is better than 100% of a deal that goes south. If you have to do it remotely, make sure you find the right people and you partner with them. Like, one plus one in a partnership doesn't equal two, it equals 11 in terms of how much easier it makes your life. The fourth multiplier of productivity. Now, anybody who does it remotely and tries to outsource everything, I, I can guarantee you, you're gonna have problems where you need to be on site to solve them. What happens when you have trades is they all blame each other. There's absolutely no loyalty. No one says, "Hi, my fault. I will solve it for you." They all go, "It's his fault. It's his fault. It's her fault. It's my fault. It's not." I've never heard anybody that, "I'm going to sort this for you." And they don't have the same want. They don't have the same interest in this deal. So they're just going to go to the next job if it becomes difficult. You have to be there to make their lives as easy as possible because you're competing against all the other sites that they can just jump on to.
Yeah, absolutely. And that's, that's right. I hear a lot of people saying, "Well, I've set the contract in place now." And this really boils the [ __ ] out of me when I hear it as well, because why the [ __ ] do I have to go to site every day if these other Lambo leaners don't? Right? That's what I can't get my head around. Because there's trouble on my site every [ __ ] day. They're not doing it. They can't be doing it. They can't. Anybody who lives a lavish life lifestyle for property is not doing property. They're doing education because the cash flow is so little. It takes long. It takes years for it to compound in any meaningful way to affect your life in a positive way. Yeah, you don't get rich in property year one, year two, year three, year four, year five. You get rich after the first decade, after the second decade. Yeah, then, then, then you can maximize it. In. So again, turn up the site every single day. Take your advice on that. Don't trust your uncle. Don't trust your auntie. Don't. No, no. When Dan says, you, you physically see it with this. This isn't, this isn't a WhatsApp feature that you've seen because that [ __ ] can be photoshopped too. You're going to make a payment to two grand to your, your skimmers next week. You physically go, touch the walls, make sure you're happy, write the check. I think that's really basic. That's basic, and it works, and it's worked for us, and it definitely, definitely works for you.
Uh, I really, oh, sorry, go on.
No, go on.
No, no, you. I, I really preach like slow and steady. What you want to do, like your first deal should be a vanilla build. Just to learn the transactional process, learn how exchange and completion works, learn how dealing with solicitors and mortgage brokers works. Then you're ready for something that maybe requires a little bit of work, maybe a new kit, new bathroom, then potentially go on to something larger, and just do that slow growth. Now, if you're consistent, there's a really good video of my path on my page where you can see the deals that I do first are very, very small, and they get bigger and bigger and bigger and bigger. What you, what's going to happen is you're going to make catastrophic mistakes, even on the smaller deals, and when they're small, you're better able to, you're in a going to be in a better position to recover from them. Yeah. If you go, it's really easy to get in a deal like a large deal and, and get stuck and not be able to get out of it. There's, there's huge developers that have gone bust because they went too big, too fast. Yeah. Slow and steady is the order of the day with property. Remember, lifetime business, it isn't a short-term business. Yeah. I back that 150 million percent because you're going to be able to deal with the challenges when they come. But if, if you do have 25 apartments on your first deal, and it, and that really should have been paint the walls, paint the floors, and put a sofa in, you're up [ __ ] creek. It's very difficult to get out of it. It's really in trouble.
So, just take me when you're saying again, and I get in trouble for this around here as well, because sometimes I push people a little bit too hard. Maybe when you're saying your first little deal, you're talking about paint the walls up, tidy up a few little things? Just give us a little mix of what you would try and push one of your guys into for the first one.
My first refurb, I, I messed up, right? I lost seven grand. Far too big. All it was was new carpets, new kitchen, new bathroom, paint the walls, and I managed to mess that up. So I would maybe just something that just needs where you could do the work yourself, where you could just paint it, clean the carpet, and it's good to go. So maybe you're not going to make too much money, maybe you're not going to make massive amounts and pull all your money out and then be able to go again. But that's fine. You're going to have learned so much from that process. You're, you're much better off having an activity where it's de-risked, like you source it to somebody who knows what they're doing, and just be involved in that process of the sale and learn. Yeah. As opposed to do it yourself, just for the first couple.
Yeah, yeah, absolutely. And, and, and just trying to understand that's the real education. Like, I mean, when you're standing there and all this, uh, social media [ __ ] is gone, and you're standing there with a set of keys in your hand, nobody else is around, and you're like, [ __ ], now I have to pull this [ __ ] together. The ticker's going like 90, the bank account is empty, you're like, [ __ ]. But anyway, you'll get through it. Exactly. You will get through it.
So, what now? Obviously, we, we talked about a couple of vanilla deals. We talked about probably trying to not lose some money on the front ones. You, at the front end, buying. How important is that to you? How important is the buying process?
I'm gonna expand on that a little bit. When, when you make your offers, and you make your purchase price, the asking price should have absolutely no influence on what you offer. What you need to do when you purchase a property is start at the end and work backwards. You work out what the GDV is. Now, this is the wonderful thing about property. As you become more educated, and you become more competent, you're going to be able to see things in that deal that other investors can't. As you learn the planning systems, as you learn the different permitted development rights, as you learn the potential uplift and different strategies, whether it's serviced accommodation, HMO, or splitting it into flats, etc., you're going to become better at extracting the higher amount of GDV. Now, this is the wonderful thing. You apply your strategy, whatever it is, you work out the gross development value. For those of you who don't know, that means what it's going to be worth at the end of it. And now, if we were to look at the same deal, there's a very high chance that we would have different GDVs because we'd be looking at it through different lenses. We work out our profit margin, which is always going to be 25% because we want to leave no money in. Then we take off how much it's going to cost to achieve that GDV. Let's, for a good example, let's say the GDV is a million. We can lend 75% against that million, so £750k. Let's now imagine all the transitional costs and the cost to develop it is £350,000. So we're going from 750, taking off 350,000, so now we're at 400,000. I believe. Yeah, yeah. 400,000. That determines our offer price. Because you, and that property is that you want to pay £400,000 for, might be advertised at £800,000, 100 or two, one or 200,000 off the GDV. And you just have to make so many offers and then follow up over the long term. The, the deals will start to come like London buses. You just got to be really consistent.
Now, it's going to be very demoralizing in the, in the first year or two when you struggle to get deals when you do it this way, because these deals don't fall on your lap. They require you to do lots of follow-up. The deal is always in the follow-up. They might require that person to go through three or four sales, them all drop, drop out, and then the opportunity gets presented to you because then they start to value the time that it's going to save them versus the money that they're going to get. Now, you just have to keep following up until the time is more important than the figure. Yeah. A lot of people say the money isn't in the first high, it's in about the 12th high. That's, I'm very good at. I, you say hello until they literally say, "Right, call again. I'm going to call the cops." I was like, "You sure?" Anyway. So again, you, you, you present, you, you, you, when you're stacking your deals, it pulls you out a number, whether it's £100,000, £500,000. You know you're in safe hands. Then you know your strategy is going to kick in. You've allowed all your costs. You do the follow-up as many times as you can. A lot of them are going to go to people coming off the stock market, inexperienced people. They're going to overpay for the deals. That's perfectly fine. First-time buyers and people that are falling in love with the property, that's fine. We, we know we're going to lose all them. Can't argue with them. But there's going to be, there's going to be in that little pipeline that you've created, there is going to be a few motivated sellers. We know that. That's, that's our hunting ground.
So, where, what do you do after that point? You have your deal in place. They've literally said to you, "Okay, Dan, I'm, I'm happy with this." Now, what's your next point to call for someone that, let's do for people starting out. Let's do from conception to delivery, shall we? Just go through that whole process.
The first, first step is, I don't do any due diligence on any of the properties. I'm only marketing the vendors. I just want them to have that conversation that they're open to selling. So I'm not doing any targeted marketing. I'm blanketing an area of certain properties that I want. It's only when they call me up, "Hey, I'll be interested to sell," then I do actual spend time looking at the property. I do my due diligence. As we said, start at the end and work backwards. Then, when they say yes, or most times they say no, it goes into the pipeline for a year or two, then it might come out. Only at that point do I worry about how I'm going to fund it. So I don't have the money sitting in the. Every deal that I've done, I have, I've had like four or five grand in the bank, and a million-pound deal might get accepted. Only then do I worry about how I'm going to fund it. I'll look at the portfolio, maybe see if I can refinance anything, or I'll JV it out with somebody. Yeah, get them to fund the whole development.
Now, the key thing is, if you're wanting to do stuff like this, you have to be all over social media. You have to be completely transparent about the mistakes, the successes, the lessons that you've learned. Give away all your IP. Now, this might sound controversial. You give it away because most people aren't going to do anything with it anyway. Anyway, I have such a low opinion of people wanting to improve themselves. I don't understand whether there isn't more people doing this. Um, when you give it all away, and you show them your mistakes, you show them your, your, your successes, you show them everything, people are going to come to you who like you. Because social media is a great platform for you to meet people without actually having to meet them. You'll get people that don't like you, you'll get people that really like you, and you can build relationships with them. When you get in a position where you're seen as competent, and you're the person who can find the deal, extract the value, build it out, and manage it, you are the finite resource, not the money. Somebody just presses enter in a bank, and the money gets created. Now, that money needs to be placed somewhere for it to generate an income. Now, if you are one of the few people who can find these sort of opportunities and deliver on them, you are the finite resource. And what will happen over the long term is people will come to you or say, "Hey, I've got this money. Let's get involved. I'd really like to do something with you." And you will be so surprised at where this comes from. People you had no idea have a couple hundred grand sitting in the bank will approach you. I've never had to ask. In, apart from when I'm on builds, when I talk about a deal, I always get inundated. I've got way more people who want to place money than I have deals. The deals are the hard bit.
Yeah. Now, this is the problem that you have to really resist. It's very easy to get into a deal, and it's very easy to get into a bad deal. You can have this person here saying, "I've got £500,000. I want a JV. Let's do something together." You're going to be motivated by a. You must resist that urge because the second you do one bad deal and you lose that person money, it's over. We've all seen it how it all gets plastered over the internet, and you're never able to recover from that bad sort of stain because [ __ ] sticks, right? Yeah. We all know the bad operators in the space. You've got to really cover your reputation. Yeah. And that's all you really have is your reputation.
And I mean, if you're going to, again, like we're fast-tracking here, 10 years. And I know there's people starting out this week, next week, in 10 weeks' time, you're going to have to start at the bottom again. But like, there's no truer words that can come out of a person's [ __ ] mouth. That's exactly what happened for me. That's exactly what's happened for you. And that's the truth about what you have to do. So if you want to sit back behind the cotton wool and not go on social media, or be scared that they're going to come and abuse you and hate mail you, and if that's going to, if that's going to [ __ ] hurt you, you're gonna have to harden up. Yeah. You're going to get a lot of abuse. Landlords are not often in a positive light in the UK. I'm sure it's the same in Ireland, right? Yeah. 100%. But look, I mean, it's probably some dip [ __ ] in his mom's, uh, room that's renting, paying his mom £100 that's that's hammering the living daylight. Tell you. And again, I come from the heart. I'll tell you, you can say whatever the [ __ ] you want. I have my stack. You go get yours.
But again, so we're going to pass in through then. So we, we've talked about a few. Where do you see the real, real money in property? Where do you see of your career now in property? Where are you saying, "Paul, I'm telling you, this is where you should be aiming for"?
Well, when your first couple of deals, they have to be low risk. Yeah. So you can't be going in and doing big new builds. You can't be going in and doing massive conversions because there's going to be mistakes and hurdles. Now, I have a rule for development where if your portfolio can't sustain the interest on that development, the development is too big. But that stops me from overextending myself. But there's no doubt within my mind, the last three deals have been the most profitable, and that they are larger new builds, larger portfolios. There's just way more profit in them. Like the farm, for example, we purchased it for a million. Uh, we've done phase one, which is convert a couple of the units. The phase one has been valued at 1.2 with the land being valued at £800,000, and I've only spent £350 on it. So we, that's allowed me to have a development plot, which is going to be eight barns, each barn valued £500 to £750. The build cost for each barn is going to be about £300. It's just absolute license to print money. And that's the build to sell model. There's just way more, like chunky cash. But I would never be able to do that without the slow, steady income from the portfolio, where it's earning three, four grand a month from each HMO. That's, that builds a very big safety net to allow me to plow money into the planning applications, plow money into the pre-commencement conditions, just stuff like that before the lending gets in. So I would recommend everybody does really low-risk things, but that are more guaranteed. So your HMOs that aren't in an Article 4, or buying an old HMO that has planning, buying an old house that you only need to refurb, just stuff like that's sort of guaranteed. But the return is lower because there's going to be more, um, competition for those types of deals. Before you go into the really big, like converting massive mills, or converting old factories, or old office blocks, or anything like that. That is, that is the strategy for year 10, 11, 12, 13, when you've built up a portfolio that gives you a really big safety net to land if you crash. That's really, really important.
I never actually thought of that. And that's, that's the same has done that for me. I got this question now because we've started to trade now at the moment because we have enough rental stock. So I've passed on the rental stock side of things, and then we built a fund up for a couple million, and we're just buying, fixing, and selling to bring in obviously chunks. Now, a lot of people want to do that at the start. Perfectly fine, but I completely amen to what you just said there. Get your own [ __ ] sorted. Cover all your bills, all your expenses, get it all solid. Learn your education from. Get your 20 tenants under you, whatever you want, and then explore into things. If your portfolio can back that. So if your portfolio can hold the risk that if this thing does go, hits up, it'll give you time to figure it out, to, to get out the far end, because you are going into a new venture now. You're taking a lot more risk. So much to learn. So there's so much that you're going to need to learn with developing, and it changes constantly. There isn't any course out there that can teach you apart from when you do it. Now. I, the development, even though it's very profitable, I see it as such a risky venture. I will only do a development if I get the land for a pound or nothing. Now, that's quite a difficult KPI to reach. And the way that I do it is I have phase one, that's guaranteed, like stuff that has planning, a house maybe that needs a refurb, that will allow me to, to partition off the land at zero value, where all the lending is on the house, and then I can put it in planning and build out using land that I've acquired for essentially no money. Only then do I feel comfortable.
Absolutely gold again. Uh, let's just talk about the timeframe in, in, in, and something like that. And look, I watch your stories. I'm sure anyone that's listening to this, you'd be a fool not to go and tap into Dan's space there now, straight away. You can get him on, on you, on LinkedIn. You're on, not on LinkedIn, unfortunately. I'm only on Facebook, which is Daniel Kennedy Official, and Instagram, which is Daniel.
Kennedy official and I'm completely completely transparent with all my deals. Although we did have some snake trying, we had an offer accepted and we had some snake go around and try and gump us. So we're being a bit more secretive about what gets accepted until it's more of a sure thing.
Now my wife, wife told me about that. Yeah, and I'll tell you, her exact words was, "Some son of a [ __ ] has had to try to ruin Daniel's deal." I was like, "What?" Yeah. So she's watching your [ __ ] too. But look, I mean, you go follow it because I know I heard you're working there in that space. So just, just back to the time frame, how many hours a day are you putting in to get these things to kick in? And you have a serious amount of stock now.
Yeah, we, we've, we've got about 11 active sites at the moment where we've got planning or they're being phased into the build. So they're all stabilized, most of them. So they're all generating cash flow. So I can do it as and when I'm available because I'm expecting things to crop up that delay things. Uh, so we're, we're planning now like three, four years ahead in sort of the build calendar, right? And then it, let's just say, what, what, so what, what development are you currently working on now in, in your HMO portfolio? You, you've a good few rooms.
Yeah, we got a 13-bed HMO, we've got an 11-bed HMO. And then straight after that, we'll be building, um, four new build flats and then converting a tired block of flats and optimizing them. It's seven units and we're gonna add two more units in the left, one in the basement, and then turn two studios into our one bed. So we, we do them in like twos. Nice, nice and easy, lovely.
So in, in your time frame, let's just say one of them units there, say the seven unit, how much effort are you putting in that on a weekly basis? Just, just so, a day, a day or week on that unit? We have basically, uh, a pretty organized calendar where every three months I hit up what I call the pipeline. Now these are all the offers I've made to past vendors where I say, "Is that deal sold? Or I'm still open for a chat? Or are you interested? Has anything changed? My offer still stands?" Etc. Just being consistent. Uh, so during that period, it takes me the full week where I'm constantly calling up every offer I've ever made. And then I'll, I'll spend probably about two, three days sourcing because that's the highest ROI return activity. Uh, and then I'll spend maybe a morning a week because I've got staff who managed the portfolio, just showing the, the auditing the letting stuff. And then vast majority of my mornings, a few hours, uh, each morning, I'll do material runs for the sites. But other than that, I'm, I'm pretty much, I spend most of my time sourcing.
Really, really, really important. Yeah, without a doubt. It's the highest ROI activity because no one can really do it like you. When you've invested all that money in education and you've upskilled yourself, it's what you should be spending most of your time. If I could, I would track myself even more from the construction and the lettings, which I'm slowly doing more and more to focus more on sourcing. Yeah, it's a great, great point because again, when we're doing on-air side here, in-air internal business, they're always telling me, look, you need to ease back a little bit from site and do what you're better at, which is hunting deals, negotiating them, getting people on board, and then, and then obviously getting them over the line. But you, it is a great, great, and it's a massive, massive ROI. But you know yourself, when you don't, if you let the site drift a little bit, that thing can cost you dearly. And you know exactly, you're in there hunting, getting the prices down, and his material changes, you're ordering 65 slabs or 100 slabs one day, and you realize, well, where's that other 40 going? When you, if you step completely back there, you'll go missing. They're getting put into vans and gone. So no, fantastic.
Yeah, now just on your portfolio side of things, so the ones that are up and running and and operational, how much time do you have to give in there now? Are you, like myself, you've nearly completely stepped away from that? Well, we have a, a really competent member of staff who's recently come on board. So I'm teaching him the ropes really at the moment. Um, but he's got it to a place where I'm already doing way less than I normally would. Uh, I maybe spend about two, three hours intensively teaching, and then now I'm maybe doing an hour, two hours a week where he just asks me questions and I answer him. I direct him to the trade that needs to sort that, etc. Right.
And then when it comes to H, another thing that we hear over here from, ah, look, these people that say you don't have to turn up to site. Does Dan Kelly still turn up if there's a leak in a property or there's a seal in that? Like last Friday night, me, I had to put a seal in. Now unfortunately, but I had to do it. Damn right, I do because the tenants are what pay everybody, right? And they, you've got to keep them happy. And your guys, no matter how much you pay them or no matter how well you treat them, they just sometimes they're not going to turn up when they need to. Like you have to. Like you, as the business owner, I feel the best way to operate is you will plug all the gaps in your business. You hire staff, do bulk of the work, but there still going to be stuff that gets through the cracks. And that's going to be that. There's sometimes there's toilets that promise won't go in because they're, they're that dirty or the cleaners, like we had the service accommodation cleaners not go into the, the cushion den because there was a spider's web. So I had to send somebody up there to do that. And that enabled that his role couldn't get done. So I jumped into his role for that day and I, I worked him, I worked his job. So yeah, I'll do anything. Like if, if there's nobody to put that hand down that toilet to unblock that toilet, then it's my hand that's going down there. Like, absolutely no qualms. That's where that's where the money is made. That's where I smell the success. That, and it's the same thing. And like, I know it's, look, it's a fantastic business to be involved in. It does free up a lot of your time. It can release you from, uh, going to 9 to 5, from working and having someone dictate what you do every single day of the week. But I am definitely, definitely reared with the same shovel as you. And I have no issue. I will put my hand. I will, once that system is blocked and my cash flow is being jeopardized, I am in that toilet bowl and getting that [ __ ] flowing. H, so we, I have no issue getting anything done. I will go out and cut a garden if I have to. That's what built it to where we are.
The great thing about owning a business is you get to decide what 23 hours of the day you get to work. Yeah, exactly. Absolutely. That is another crucial point. How many hours in a week are you putting into this to, to building? Like you got a lot of people that will sit online, might educate themselves for four or five hours, but we know there's 168 hours a week. I know how busy you are. How many hours are you doing averagely per week? Typically, I work from 10 to 10, Monday to Sunday. Sorry, Monday to Saturday. And then I have my Sundays off for a bit of walking. Um, and that's why we're growing. If, if I wasn't growing and I, I was stable and I wasn't seeking to purchase anymore, you could, you could do it. You could work three, four hours a week. But while you're growing, you owe it to yourself and your investor to work every hour God sends to make sure that the investment, the money that they place with you, is going to be a success. Now, I feel a real burden on people when they lend me money. I, I feel the weight of it because sometimes they've exchanged their time for that. When you're taking 30 grand or 50 grand or 100 grand of someone, 100 grand might be 40 years of their adult working life. Now, I am not going to chill out and go on holidays to the Bui and chill and and not work every single hour that I possibly can till their money returns. Yeah, is returned to them. Like we, it's absolutely obligated that you've got to do this. I feel now, if you're willing to do that, you shouldn't be lending money. Yeah, you need to hold money and people's time with the reverence that it deserves. I work 10 to 10. H, sometimes like when, when I was really busy, uh, 16-hour days, easy, easy, especially when I'm on site. Work in way. Yeah, like no crims. Why they don't get paid? They don't care why you don't have the money. They care that the money isn't there, and you have to make sure that it is. Yeah, absolutely. And people will be listening into this going, oh, the same property is an easy gig. It is an easy gig, but you're in the growth cycle. You're back to the start each time. And you're gone back to them long, long days. I mean, again, I think it was Thursday night. Perfect. Yeah, Thursday night was 12 on every deal each time. Yes. Ah, that's so good. I'm gonna steal it. Lovely.
H, so any golden tips? Now I know you're at to give loads and loads of nuggets away today. Um, and it's been a fantastic, uh, catch-up. Most importantly, because I, I, I, I love learning from you too, and you've done some really, really fantastic things. So I'd be watching all the time and saying, yeah, I might have a little pop at one of them investments or might educate over here. Uh, any, really, any good, good tips for someone that maybe wants to scale up, start up, even from the, from the ground? Yeah, absolutely. Like, if, if you're just, there's so many people who don't do anything. So if you just go out and start taking action, you're already beating 99% of the people there. The reason why it's so easy to be fairly successful is because there's no competition. Yeah, so many people won't even invest in their future. Yeah, like they'll give all their time for short-term activities that yield no results. What you need to be doing is planning in decades and generations versus planning in weeks. Um, getting in property is a real great method of really discovering how much you can take. Like you, as a person, the amount of stress that you can take on will grow by taking stress on during that period of growth. It'll be horrendous. I've had times where the stress has changed my voice, it's been that miserable. But now a bank down values or investor pools 400k, it's just Tuesday. It doesn't even bother me. And you'll get this real superpower of being able to just overcome any problem. You should look at a problem and be like, "What is God trying to teach me? Why is he giving me this problem? He's wanting me to learn something here." As opposed to go, "Oh, it's so hard for me. Such a victim. Everything's so tough." Um, like reprogram your mind and see obstacles as an opportunity to hone some skill, some some trait, gain something from it. And your, your whole having of work. So if you don't have any money, great. The only way is up. If you don't have any deal, great. The only way is up. You can't go back. If you got, if you start at zero, zero to one is, it's going to be the hardest jump. So just keep at it because one to two is a lot easier than zero to one. Two to three is almost inevitable once you've got there. Yeah, that's brilliant, brilliant advice. Dan, again, it's been a great, great little episode. I'm gonna rewatch this one back myself a couple of times. H, I'm dying to get you back over here. I know you like the old. So I'll send, I'll send, I'll send, I'll send over the, the, what you call them, [ __ ] stupid airplanes. H, what's that? G, G, Gulf. I'll send the Gulf stream over for you. Collect. Told you I have one and get you over here. We're only 20 minutes away from the airport. So I can, uh, I'll send the Gulf stream over collection, then I'll send a helicopter. Let's organize it now. Now is probably a good time to do it during the period of time because I've only got two deals on. Normally it's like four or five. So I have got the time. Brilliant. Well, good to come over and spend some time, see, see the firm. Yeah, absolutely. We definitely will. Um, and the other thing then is for anyone that's pushing into big developments, what is your key tips to them? They might be going up to like 10 units plus. Yeah, everything that can go wrong will go wrong. So just plan for that. So you don't want to make, you don't want to be going in on tight numbers. I only, like, even with all my, my vast experience, I have my own build company, I really understand the planning system, I understand the management system, I know everything from conception to delivery. I will only do a development get the land for nothing. If I have to pay anything for it, it ain't going to be worth it for me because I know I'm going to mess up. There's going to be things that I don't know. Even with a decade worth of experience of living and breathing property, that is going to cost me tens of thousands of pounds. The farm deal, for example, I didn't know when you convert barns, you need new septic tank systems, another 80k out of nowhere. Right. I'll just pull that out my ass. Um, I was expecting that though. I have a line in every deal of stuff that I don't know about. And I make it 10% of the GDB. So I had a line in my, in my deal stacker of 200,000 of stuff that I don't, I'm not even aware of. Yeah, that's just going to come up. Yeah, slow and steady. But it's definitely worth it. That, in terms of the growth of the portfolio, the last three deals like 5 million each in GDB, as opposed to like the three, 400,000 deals that we've been doing. But these, these three to these four to five million pound deals, the farm is probably a bit more. It's going to take years to see that to fruition. So you have to have that portfolio in the background because you can't live off air, right? You need, you need cash flow to live your day-to-day life while you do these big chunky things. And it all started out with one little tiny deal. How correct. What I would really like to impart upon people is that you shouldn't put the property people on pedestals. Yeah, the only people who want to make you feel crap about yourself and say that you need them are the people who only do education. The property people will be really, really happy that you're getting involved. Is what I found. And I'll talk to you about the, the hurdles. This is why you're a real rare case. I know of so few trainers that talk about the negative sides. So few. And you're one of them. It's really a testament to your character. Probably why I have no, it's probably why I have no money. Probably why I have no money in the bank in this business. Maybe I'll start talking. If I didn't [ __ ] love it so much, I should probably shut my mouth and tell them how good the life is. Send you over a couple of pin stripe suits. Listen, it's been brilliant. H, again, I think people, the reason why people love us and people love us because we're real. We're not full of [ __ ]. We're real. We tell the real story. They follow you on media, they see you down at the toilet. I put every single thing in there. And I, I, I checked my stories today. I meant the amount of value I give away. And you said a really, really important point. And all of my money comes from my group. All of it. I put a deal up there, they fund it. When I wanted my 2 million, someone gave it to me in that group. When we wanted to increase it to 5 million, that's coming from that group. So that's that one. What, what you said is really, really important. And I think a, a narrow-minded person would say, don't tell them anything, don't show them anything. That's not how you get a flow of money. Company. I think your IP, your IP everywhere. And people are going to hate you. We were out having a beer there two weeks ago, and your man Bo walked into a local pub, which I haven't been in years. "Oh, here's money." I was like, "Shut up, you [ __ ]. Like, no idea the [ __ ] pain we went through." You're gonna get that. And that's just part of the process. Wait till your trades say, "Oh, you're lucky." And you think, you look at them, you're like, "Luck did that?" Especially when you start from nothing and you build up a massive business. When other people start from the same position as you and they see what you've got, you strip away the reasons of why they can't do it because you started in the same position. And they're not going to thank you for that. So that's something you have to overcome as well. Very few people are going to stick around from when you start. Your whole group of friends are going to change. Your whole acquaintances are going to change. Yeah, absolutely. And you have to be ready for that too. You have to be ready to move with the next part of your generation or move with the next part of your life or what you want to do. Which I think is really, really important in the property space. H, you, is there, this is our final one. Is there anything that scares you on property? What scares? I have one thing in property that, like building out big units and all that, I can deal with it. I'll get through the [ __ ] mess. I know I will. I just have to focus on it until it's done. Well, the one thing that scares me is fire. I don't care about the banks, you can deal with them. I came from zero. That's it. Is there anything in there that scares you other than interest rates [ __ ] shooting up? It would be not being able to pay my investment back. Like going back to them and saying, "I've messed up. You've lost your money." That would, I would not be for me. Everything would have to get solved before that happened. Um, but if I couldn't pay people back, who would give me their trust and time? That would be more damaging than losing money. Yeah. So anyone that's listening into this again, take that point on. Um, you're triggering my brain with something there as well. We were going to book a holiday and we had one investment, uh, last year. It was only small, but there's no way was my family booking a holiday until that investment was returned. Because imagine that person that I owe, and we only went over by a small bit. And like, I, I keep well in contact with them all. H, all of our investors. We have, we have an app at the back of our, our training, H company, that all of our investors can see us on a weekly basis and see the good, the bad, and the ugly. So they're well, well capable. So refinance isn't going according to plan, or the banks throw some matters, they know about it. But there was no [ __ ] way was my family gone skiing when we owed that. We had their money. And I think that's how we got more money because you, you paid it back, then you go on your holiday. Where I think a lot of people put the car before the horse. And if you're raising money, what you have to do in this game, I think, take it less than half down there on that one. Make sure I couldn't agree with you more, man. Like they, that phrase there, they spend the profit before they've made it. Like, if you have outstanding investors, there's no fancy car, there's no fancy house, there's no fancy holidays. That's you working until you pay them back. And then you get to use the excess cash flow for luxuries. Absolutely.
Well, Daniel Kenny, I'm delighted you came on board today. I know you have a busy schedule for the rest of, rest of your night. Uh, any final thoughts? I just want to thank you. You're doing great stuff over there in, in Ireland. It's really impressive. And I do look forward to coming, everyone seeing you all. Um, if you want to know more about what I do, again, Daniel Kennedy Official on Facebook and Instagram, and you can see all the deals that we do. We're active in quite a bit, and I'll share all the hurdles with that as well. Again, thank you, thank you very much for having me. It's been an absolute pleasure. Absolutely. And I can't wait to wrap a few up and maybe we'll head over to you and learn a bit from your space too. So Daniel Kandi, the deal H, the property Matchmaker. We can find him online, and you can grab him on Instagram, Facebook. H, and if you need any other information, you can reach out to our office, and we'll connect you with him. Daniel, until next time, have a fantastic night. I really, really appreciate you doing it. Keep going. You're, you're absolutely killing it over there. I'll chat to you soon.
Okay, team, I hope you really, really enjoyed that episode. Massive amount of content, massive amount of golden nuggets. And the thing that I really, really love about Daniel, he started with absolutely zero. He started with a passion, and he started really, really just grinding, making mistakes, and then building to what he has built now, which is huge. So I hope you enjoyed this episode. Again, as many notes as you can. Relisten to it, watch it, whatever you have to do to get it sunk into your brain. And until next time, till I bring you more big cats like Daniel, we'll chat you all soon. [Music]