Transcription
cheapest house in the UK. Purchased it for £38,000. Hang on, bought it for £38,000. I didn't even know houses existed in the UK that were that cheap. The G had been living in it, hadn't treated it right, hadn't used a bathroom for years. Lovely it was. Do you think it was the cheapest proper in the UK? What on Rightmove? It was. They had poo all over it, basically. Yeah, really good to have you on the show, Damian.
Thanks for having me. You've been in construction now for 12 years. 12 years. And in the last couple of years, you've blown up your property business. Yeah, absolutely. Millionaire? Yep. Making passive income of over £10 grand a month? Yep. So I want to pick your brain and find out how you've done it and how you've managed to scale your business. So firstly, what was it that got you into property investment in the first place?
Yeah, I started off about about 18 months ago. I I looked at a property, I thought there was a bit of money to be made. Didn't really understand, um, the strategies that were available and the ways of doing it all. But when they seeing the property, no, can make some money. Purchased it, renovated it. But I purchased on a mortgage, and I got to the end and and sort of made a bit of money. And I sort of said to me for, I and do, I've known for years and years, you know, come and have a look. And he came down, he said, yeah, brilliant. What you doing now? I said, well, got to wait a while till I remortgage it. He said, what do you mean, remortgage it? I said, well, you, I don't own it. I I own it through a mortgage. So he then sort of said, well, look, next time, you know, moving forward, you need to go meet my mate Samuel. Um, he'll get you in the academy, he'll, uh, he'll teach you how to do it properly. Anywhere from there, really. He's a good friend. Yes. I mean, the fact that he pushed you to me, he obviously cared about you. Yeah. And Scott, anyone doesn't know him, he's also been on Winners on a Wednesday. He did the academy, I think it was like 2019 when he did the academy.
So when we met and you went through the training, what was the first deal that you did? Because you've done lease options, you've done rent to rents, you've done buy, refurbish, finance. Um, what was the first deal that you did?
Whilst I was sort of in the process of signing up for the academy, I did one with Scott. So that one aside, the first one I did sort of after doing the BR course, um, was a property in Gainsborough. Uh, purchased it for £38,000. Did a £20,000 renovation. Jeez. It got revalued at £100. So pulled out £75,000.
Hang on, hang on. You bought it for £38,000? Yeah. I didn't even know houses existed in the UK that were that cheap.
The one thing that that the academy taught me is that, you know, you should never stop, stop trying, stop looking for something. Even if you're not in a position necessarily straight away, you just never stop looking. Because because good things will come. And I went to view the property, or I I rang to view a property, um, in Gainsborough. And they said, no, but look, someone's just pulled out a deal. Done if it's of interest. But you've got no time to view it. You need to complete within 8 days. I can give you a video of the property, but that's it. We've got no time to show you. Take it or leave it. It's got to be a cash purchase. Well, send me the video. So I sent the video. I thought, wow, this is a mess. I mean, the gentleman had been living in it, hadn't treated it right, hadn't used the bathroom for years. He'd been using rooms. And lovely it was. So it was it was real, real bad state. And I think that's why the other, um, other sort of party had pulled out. But either way, SP list, um, I asked a favour, see if he'd he'd work over the weekend, check in the search packs if I paid him a little bit extra. And whatever. He's a good guy. And yeah, essentially, we got the deal completed in in four working days.
You know what that shows as well? The power in business, have been able to make quick decisions. You have to be a quick decision maker. If you're a faffer in in in the property game, you ain't going to get anything done. They are, they are. And every time you find something decent, if you're, well, let me just think about it. Let me speak to my wife and my lawyer and my dog, and let me pray about it. Deal's gone. So you move fast on that? Yeah, yeah. Well, it was a, it was a case that there was a, a third party company where, uh, recovering debts that were owed by the gentleman who were selling the property. And they'd basically sort of said, look, I'm getting this amount of money, this is happening on this day. And so when, when, so they pulled out, they got to go back to the market, and everybody's got to put bids in, and it's got to, you know, be competitive again. And the property market at that point was rising. So I'm thinking, well, it could be an opportunity. I have a look. But at the time, I remember looking on on Rightmove, the cheapest property in this, a three-bed, this is a three-bed terrace. The cheapest property in the whole of the UK, three-bed, in real, real bad state, was £47 grand. I thought, well, if I'm buying the cheapest property in the UK, I've got to make money, surely.
Think it was the cheapest property in the UK? Well, on Rightmove, it was. On Rightmove. I searched for Rightmove three-bed properties. Even Leisa, cheapest house in the UK. Yep. That had poo all over it, basically. Yeah. And then renovated it. How much do you say the renovation was? Uh, it was just over 20. So in total, that's like about 58, 59 grand, I think, including legals. It was 60. 60 grand for everything. And then you got it refinanced at 100. So yeah, we valued at 100 and pulled 75 out. So you didn't just pull out all your money, you pulled out all your money plus £15 grand tax-free? Absolutely. Dude, that is the deal of deals. Where is it? Gainsborough. Gainsborough. Yeah. Is it let now? It's let. Yeah. Get £595 a month. And what's the mortgage payment? Uh, £363. So have I, love that. That, I've not seen many deals as good as that. I've seen a few, but that is brilliant. I'd love to go visit that house. Yeah, absolutely. We'll around that house. So that was the first one. Did you get a lot of confidence from that?
Yeah, I, to be fair, with my construction company, I've been sort of part of refurbs before, so I sort of understand the process and and, you know, get it. But the fact that I found it myself, yes, I progressed in myself. I mean, I hadn't, I've only ever viewed the property, still to this day, I've only ever viewed it three times. Wow. Uh, once was when we'd gone back to brick. So he'd already gone back to brick from from purchase. Um, once was once we when we were sort of just finishing painting the walls, and then once was when I at a letting agent there. I've never been back since employing people to do it. And and what te? Yeah, that's it. And it's just, yeah, the deal was good. But the thing is though, although it's a really banging deal because it's so small, there was still only 40 grand profit in it. The net percentage was really high, but the actual profit wasn't that high. Um, not knocking it because it's a banger, I'd buy it. But what have you done since then? Have you into bigger deals now?
Yeah, so that was a JV with, um, with a close friend of mine. So our next project is is purchasing a property for £73 and a half. So, okay. What I'm saying is, we've not put any additional money in. We're just scaling up from from where we were. Yeah, because you just pulled all your money out. So you're recycling it into the next deal. Is, have you bought that now? Um, it completes next week. Nice. So what are the figures on that one? So it's £73.5 purchase price. The renovation will be about 16. Yeah. Now, originally, we thought the GDV would be around 100 to 110. So the deal, well, 110 to 120. But it is in a place where we can do it as an SA. No six months in with full money out. But actually, a property nine doors down has gone up for sale and sold already. Um, but they, that was, so this is a two-bed terrace. Sorry, this is a two-bed cottage. That's a two-bed terrace. And that's just gone on the market £167.5. And it's smaller than the cottage. And yours is a cottage. And it's got parking. So now I'm thinking, well, if the GDV was even close to what the terrace property would be, where is that? That one is in a small village north of Scunthorpe. That's beautiful. So that that will probably make you another sort of £60, 70 grand. Pull all your money out. It will get more than the money out as well. Yeah. Um, and when purchasing the property as well, they noticed a little parcel of land that's not been acquired. So we've, we managed to acquire that with it as well, which we now can put a door out into this part of land on on the side. And we're going to have decking and a hot tub there and everything. Beautiful. It's going to be really well done.
Would you reckon that will make a month in cash flow if you do a service accommodation? So we've calculated to be about £2,400 profit at 70% occupancy. Wow. That's like replace the average salary for most people. Just done that one deal. Yeah. That's it. Now, the thing about you, Damian, is you've basically done every strategy. So you've done service accommodation, lease options, rent to rent. Have you got a rent to rent? Yeah. So I, I only got my first rent to rent two weeks ago. Still in the grace period. I'm still renovating the property. It's looking really good now. Literally, furniture goes in next week, and then it's going to be, it's going to be launched. But I just feel that obviously, you, you pay the money for the academy. And some people sort of say, you know, well, I'm thinking of this, I'm thinking, I'm thinking, you know what? I'm just going to do everything. I'm going to try everything. I'm going to see what I like, see what I don't. I want to make a success out of every strategy so I can have the sort of knowledge all around. Because you never know what's around the corner. Yeah. You know, I've got four lease options going through. They go through in two weeks. That all came from viewing a BR commercial to residential property. Then the lady asked to to meet me and said, you know, I've got an issue, I need to sell this property. I said, look, it doesn't work for me. But I met her, you know, as a friend for advice, really, because she was struggling with the portfolio. And it turns out that there was only four properties really that were causing her trouble with with sort of negative cash flow. And it put her in a high tax band. Shadow more in her name. So I met her with her as a friend at Starbucks and met with her five times. She lives two hours away from me. But I just did it sort of for a bit of advice. Um, but then, yeah, it just so happened that the that it opened up that the four deals actually being a lease option to me. And me worrying about the problem tenants would, yeah, solve her problem. If it was a win-win, rather than looking at lease options as, uh, what you're getting. Oh, wow. Buy a house now and pay for it later. Isn't that amazing? Yeah, it is. But I, a lot of people say to me, seems too good to be true. That's because they're not thinking about the value that they're adding to the other side. It has to be a win-win scenario.
So this lady, then, how many problem does she have in a whole portfolio? So her and her ex-husband have a total of 18. Right. All completely different. Apart from these four were was similar to each other. All four of them, um, she purchased in 2008 and purchased at market value then. So now the properties that that are worth about the same amount as they were then. Wow. It's not even gone up in value in the last sort of 15 years. Not at all. And she's, she's out of a fixed term on a mortgage. So she can't remortgage these. Because a lot of the mortgage companies are look at her and saying, well, you're, you're a portfolio landlord. So, you know, we won't remortgage it. And her financial situation has changed. And these are all in her name. So she's really struggling to remortgage them. Um, therefore, the mortgage payments are pretty high. The tenants have got in there. I mean, one of them completely trashed one of the properties. The the problem, some of them are problem tenant tenants. So, so to her, they're they're pains, liabilities. And once to take a tax off, she actually making a, I think she's making around £600 pound month loss on the four. Jeez.
So how are you going to make money from them then if you take those bad, horrible four properties off of her?
I'm going to turn all four into HMOs. Right. All I've been to all four. The layout's perfect. Um, there's gonna be three, four-bed and one six-bed HMO. Jeez. Nice. Um, and I've agreed the purchase price of of the figures that are roughly what they're worth now. So the renovation cost will be, um, I'll get that back obviously when I purchase the properties. I've got five years on two and seven years on the other two. Wow. So I just stage it, purchase them when the properties are worth enough to basically put no money in. And just. And is that they're going to work legally as HMOs? Absolutely. You've checked all the, done all the checks, article four, licensing, everything. I know the licensing officer. We've checked the article four. Um, I've got a, a HMO in the similar area. I've just checked everything. I've spoke to, um, the relevant people as well to make sure there's demand for them. And there absolutely is. There's, there's several agents that are wanting to take them off their hands already. So.
And from her perspective, she probably hasn't got the inclination or the knowledge or the energy or the time. Yeah, I think it's more energy. She's, she's, um, you know, gone into it with the energy, but that's sort of she's tired. She's she's had enough. And the great thing with her as well, is because this started off as me just giving her advice as friendly advice as whatever else, um, and she's now, she, she's inheriting some money. And, um, wants to do a project with me to to basically foot source it, project manage it, and we go 50/50. She puts all the money in and do a JV as well. That's awesome. I think it, it just comes from being active. You know, don't always look for what's in it for me. Look what's in it for everyone. The thing is with property, Damian, is it's it's quite a big pie. So there's everyone can make money. The letting agent can make good money, the deal sourcer can make good money, if there is a deal sourcer, even the solicitors and the brokers, you know, the landlord, the owner, that if you a rent to rent, there's, there's enough money in the pie for everybody to be able to make a piece. And if you're knowledgeable and valuable, you know, you're in the construction background, so straight away, bang. If you're doing a joint venture, if I was partnering with you, and you find, I'd be thinking, well, he's, he's in the construction business, he's going to be to add a lot of value there. So the more valuable you can get, the negotiation, the decisiveness, the fact that you were able to negotiate that property for 30, what was it, £38,000? You know, that's, that's a skill. Um, the more you can bring to the table, the more valuable you are. And then ultimately, value is followed by money.
So how much are you making on average right now then a month?
Currently, the properties that we've got, um, we make about £12,000 profit a month. Excellent. And where's the majority of that coming from? The majority of that is from a joint venture deal with a property that we, we basically purchased it with the intention of converting it to an eight-bed, eight on-suite HMO. Um, the property is not in terrible state, it's livable. And whilst we're waiting for the planning, we, we thought, well, it's, it's vacant. We may as well sort of see if we can, you know, offer something back and and speak to some social housing, um, places and sort of say, you know, do you want any temporary accommodation? And, yeah, it got snapped up basically on a deal, which means that we don't need to renovate it straight away now. Brilliant. And, yeah, it houses, um, people fleeing domestic abuse situations, people coming out of rehab, rehab for various things, people, uh, leaving hospital, maybe can't climb stairs, so they need a downstairs room, and whatever else for a few weeks. So it's sort of giving something back. And then they, and they pay generously as well.
So when did you buy that property? So acquired that one about 14 months ago. And did you buy it or did you control it? We've purchased it on a mortgage. How much did you buy it for? Purchased it for £152,000.
Why so specific? Because that's what we bought it for. That that's exactly what we got. £152,500. And on the day of completion, we, we were toying between the time sort of reselling it back on because we knew the housing market was booming. And we sort of thought, well, free somebody, we won't that serious. But we thought we have a couple of estate agents we know come around, have a look, and they valued it at £250. So we got it massively under market. Negotiation king.
So you bought it for 152? Yeah. And then you got it revalued after you bought it. How long after? On the day. So we, we've got the keys at 11, and they came around at 2, 2:30, and 3. All three grand below market value. Yep. How did you get it so cheap? Well, it had been on the market for a very long time. And we'd been to meet the lady who was selling it on behalf of a sister. It sadly passed. But it just took so long going through, like we, we put the offering in, we put the offer in, and it completed 13 months later. And we knew within that year's time, the properties were increasing value. So we were a bit like, I wonder what it is worth, you know, because we thought we'd got it under value, under market value anyway. And I, I wonder what it is worth. And a couple of properties on the same sort of stretch of the road or whatever else had had sold, and they'd sold for a lot more. And we're thinking, well, I think we've made a bit of money here, you know, it's worth having a look. But yeah, they came back at all, all of them valued the same as well. That's the power as well. I know that wasn't a lease option, but it, while you were waiting in those 13 months, the seller could have pulled out. But a lease option is where when you set the price now, but pay for it years down the line, where the seller can't pull out, but you can. Because you have the option, you have an option to buy, not the obligation. So, so £100 grand below market value, you must have been buzzing with that.
It was really, really pleased. But if you bought it for £152 grand? Yep. How much did, how you've not refurbished it yet? We've done part refurb. How much you spent? Between 14 and 16. Okay. So you didn't, couple of boilers, couple of flat roofs to where the. And how much are the social housing paying for it? Uh, we, we have average, um, turnover from them about £12 grand a month. £12 grand a month, mate. That's insane. He started off as genuinely being something we thought, you know what, we can give something back. You know, we've made our money already. We already had it valued. We already made a money. That's just ridiculous. That's emergency. That's it. Yeah. So it, we do have spells where we, we're making a loss, you know, there's no one in there or whatever else. So, okay, it is a high-risk strategy, but it's one that was low-risk for us because we were intending on it having it empty anyway. It was a case that we were waiting for planning to go through. It was a six-bed property.
How does it work then, Damian? Help me out, because normally the deals that we've got where we pass it to housing associations is they give us just a flat guaranteed rent. And then they then make profit off the back of it. So they might pay us three, four, five grand a month, but it's guaranteed. But it sounds like that's not the case of this one.
Absolutely not. No. So we work almost like the overflow. So they've got XY Z number of properties that they they house people in as priority. But they had too many people in these houses. They didn't want to take another one on long term because their intention is to come away from the strategy. But they needed someone short term, you know, and sort of said to us, can we just put these couple of people in there for a couple of weeks? And then couple of weeks never ended.
So how did you find them? Purely, purely look. The person who, um, was selling the property, they, they basically had a contact who had a contact who had a contact. And you just followed up the lead. Yeah, absolutely. And, and, yeah, he just sort of went from there, really. And now, you know, we, we've had options to do sort of long-term, long-term deals with them as well.
What are you most proud of that deal? I think the, the Gainsborough one was the Gainsborough one. I was proud of because I sort of, it was quick decisions, quick negotiation, had to get in there. And then and then sort of I purchased it. I'm thinking, have I missed something here? Is there something wrong? So I was quite, quite pleased with that one.
What's your favourite strategy so far then? Because you've done lease option, you've done rent to rent, you've done service accommodation, you've done HMO, you've done social housing. You've basically done everything.
Yeah, I think, um, I think the BRRs, you know, what is what I know. And a few academy members will message me regularly asking questions. And I love, I love answering them. I love helping people out as well. So the BRR strategy. But I think sort of BRR to SA or BR to HMO is definitely the way the way forward. I did two BRRs for a standard sort of B to sort of exit. And whilst it's good, it's sort of, it never really earns you the cash flow that you want at the end. So, yeah, I'm, I'm sort of for me, I'm looking for things that are going to give me good cash flow afterwards, going to keep passive income increasing. But that one deal you did though, where you bought it £100 grand below market value, that's added £100 grand to your net worth straight away. You do that 10 times, you're a millionaire. Absolutely. You know what I mean? It's not that, not that hard becoming a millionaire. No. Stop. Property is not. I agree.
How busy are you on your construction business now? Have you systemized that at all?
Yeah, so it's quite systemized. But I, I also enjoy it to a degree. I've got my family work for the business, my friends work for the business. The business partner, that's a really good friend of mine as well. So I sort of enjoy still being part of it to to a degree. So I'm working for, I've worked for roughly 30 to 40 hours in in that business, um, a week. Right. And I, I probably give about five hours a week to a charity that I'm a trustee for as well. That's good.
Tell me about the charity, book that you do. The charity called Community Wishes. They help sort of disadvantage families and and disadvantage and poorly children. I really enjoy it. It's, it's not a massive amount of time. Obviously, don't get paid. I wouldn't want anything. You know, be fun getting involved with the fundraising, getting involved in in the publicity for the charity and stuff, and just helping out, um, in general. I'd love to know more. We could donate to that as well. That that sounds really good.
So what would you say to people that are in construction? Because I, I meet a lot of people that are in, you know, the building trade industry. They've got construction businesses, they're making decent amount of money because there's decent money in it. But they really fancy themselves actually buying the houses themselves because it's quite frustrating, I think, when you're constantly working on other people's projects and you're seeing how much money they're making, and you're kind of the worker. That's it. It's a bit frustrating a lot of time. People want to go on the other side and join the rich. What would you say to people trying to transition over to the other side?
The first thing I learned was you need to look at a property as though you're paying a builder to do it. Even if you're going to renovate it yourself, um, you've got to look at the the figures as though you are employing somebody else to do it. Because you can very easily fall into, which I know a friend of mine did, fell into a trap of saying, well, I can do this, I can do that. Purchased the property, and all they did was tie all their time up and made little profit. Yeah, because the deal wasn't good enough for another investor who was going to pay somebody else, because it didn't stack. Yeah. So I think the first thing I'd say is, is just make sure that the deal is right. But I honestly can't, uh, promote the the academy enough. Because for me, like looking back at my first deal, it was in Swadlincote. Purchased the property for £147, spent about 20 on it. And yes, okay, it's worth £200k now, but my money's still still tied up to this day. I've done all these other deals and I refinance it next May, and I'm like, oh, great, I'll finally get my money out. You know, it would take me far too long to become, you know, financially free or or wealthy doing it that way. You know, it's amazing the little things, some of the little things that you teach, how important they are later on in the journey as well. And it sort of sticks with you. And, and just being surrounded by the right people. You know, these people are successful people, they've done it, they've been there, they'll all assist each other. And it's really important to get educated on the right way of doing it on property, just like you would have done with the construction. Yeah, yeah.
Did you come down to a crash course? Yeah. Started a crash. What did you think when you came to a crash? When you came to the first crash course, what happened? Yeah, I just, I learned, I learned so much in that course. And, and I always was going to sign up for the, um, BRR course because that's where I wanted to sort of learn. But there was no way I weren't doing the academy then. You know, I sort of, I was in, I was 100% in and really enjoyed it. The funny thing is, because like over a crash course, it's only one day, but I want to teach so much. But I know if I just teach, teach, teach, teach, teach, a lot of the information will get lost. So that's why we do like every, every like half an hour, I say, turn, give them a high five, just changes the energy. And it changes what will be your, um, best lessons that you've learned then over the last sort of 18 months of building up your portfolio?
I think, you know, don't, don't take any situation for granted. You know, I've been to view a BRR and come out with four lease options. I've been to, or or should say, been to a BRR, come out with nothing. And then been to, um, just just help someone, came out with four lease options. I've been, I purchased a property to do a BRR to HMO and ended up renting to social housing. I've been in so many weird and wonderful, yeah, so situations like, like, you know, purchasing a property from a video on my phone. It was like, what are you doing? And my sister is like, what are you doing? I'm not buying it. Yeah, yeah. I don't, I think I just think don't take anything for granted. You know, educate yourself, get yourself knowledgeable, get yourself open-minded. You know, stop thinking of the negatives, just think of a way of making it work. And, and, uh, and then just go for it.
I love that. And I love what you say as well about being open with different strategies. You ended up going for a BRR and then it turns into lease options. You end up going for a HMO up to housing association. People say to me, what's the best strategy? And I say, there isn't one. You need to just become well-rounded and learn as much as you can. And then just go out there and say, right, what's most suitable for this? You know, it's like, uh, if I'm speaking to an estate agent, I'll say, what you got for me? I'll pass me something. And I'll be thinking, could it work as a HMO? And no, maybe not. Could it work as this? And you've got to be well-rounded. Yeah. Absolutely. And, um, I'm really proud of what you've achieved. It's great to have you on the academy. And thank you so much for coming on the show.
Thank you. [Music] Cheers.