Transcription
On my dinner hour, I went into Lidl. This is COVID lockdown, and we were told to. I see this 80-year-old bloke. So, I went and helped him and said, "Listen, I don't mean to sound patronizing, but can I give you some help to hurry [music] up and get you out of here because of this virus?"
So, he says, "Yeah." He says, "That'd be lovely." I ended up calling him morning and night, morning night, morning night because he didn't have family and I didn't want him being depressed. I find out that his son had passed away 2 weeks prior. But this one day, I took the shopping to his house. I dropped it off and he says, "How would you feel, John, if anyone ever gave you a house?" I said, "Nobody generous enough for that." He gave me his son's house that had passed away. I said, "Can I not buy it off you?" He says, "What use is money to me? It's not going to buy me more time." He said, "Promise me that you'll make something of it."
This house here, this is where it all started for me. I'm John Simpson, and I'm a very active member of the Samuel Leeds Academy. I'm going to be talking to you about how I purchased my entire portfolio using creative finance, which means none of my own money. And this is the house that Ted gave me during the COVID lockdowns. He also gave me 6 and 1/2 thousand pounds towards doing it up, which started as a loan and it wasn't a loan. Then it was a loan. Then it wasn't a loan. Then it was a loan. Then it wasn't a loan. And then he passed away and [music] I still to this day don't know whether it was or it wasn't a loan.
Ted was just a random man that I met in Lidl. I just asked him if he could [music] if he wanted to help with his shopping and he said, "Yes." Put his shopping in the boot. I took his trolley back. Came back with his quid. He says, "You know, these 2 weeks have been the worst 2 weeks of my life." I said, "Why is that, Ted?" "It's because of the virus, like." He says, "No, my son died." Wow, that's heavy. Um, so, what I did, I gave him my number. I took his. Said I'd give him a call. I called him later that night. We spent a couple of hours on the phone. The next morning, I rang him up. Checked on him. Then later that night, I rang him again. We spent hours on the phone. And that happened morning and night, morning and night, morning and night for for ages. I got to the point where he'd say night sometimes and he'd say night, Greg. Oh, I'm I'm John. Greg was his son's name who lived in that house before he passed away.
Cuz when he gave it to me, I said, "Can I not give you some money?" I didn't have any money. I was young from Stoke that was broke, but you have to try and offer at least somebody's doing that for you. He says, "What use is money to me? It's not going to buy me more time. What I want you to do is promise me that you'll do something with it and that you won't forget your family." Said, "I can honor that." And I've spent all the time since he's given me that. I was trying to figure out how to help people and I figured out how with the way that I use lease option agreements to help families that are struggling get onto the property ladder, but I didn't live up to the second half of my promise. I did forget my family. And Ted always used to help put things back in perspective because [music] you'd be stressed, you'd be talking to him and be like, "Oh, yeah, work's a bit >> [music] >> manic, itch. I'm getting stressed. I've got to do this and I've got to do that." He but then he just something simple like he'd say, >> [music] >> "How's the family?" And it just makes you I don't I don't know what it was. It was just something about when he'd like put it back in perspective. >> [music] >> That's the little. >> Is it? >> Yeah. >> You know he even even remember the car space he was car parking space he was parked in.
>> This house behind me, my cousin actually reached out to me saying that the landlady was selling the house. They needed a quick sale. Typically on this street, the houses three-bed houses are 145. Yeah, I picked this one up for 100 grand. I haven't spent anything on it. Tenants in there still happy and yeah. That's a dog. This is a long-term investment. It's on a normal AST. She wanted to stay. Eventually, she might want to buy it, but it's always open with my tenants.
[music] The main question that I get asked, how do you buy houses with no money? There's three ways to buy a house. There's cash, mortgage, and a bridging loan. The creative finance utilizes a bridging loan. If you wanted a mortgage or a bridging loan, you can remortgage a property, take out cash, use that cash for a deposit. Whereas, what I do is the same thing, but I don't take out the cash. The money that's in the property that people [music] would typically refinance and take, therefore making their mortgage go up, I just use that money to buy another property without making [music] the mortgage payments go up. So, yes, short-term, it's more expensive, but then long-term this mortgage has stayed the same. I haven't increased that, so therefore it's keeping cash flow higher, outgoings lower. You're basically using the house as a deposit rather than using cash as a deposit.
So, this property behind me was one that I acquired after doing the Never Use Your Own Money Again course with Samuel Leeds in 2022. I learned the term lease option agreement, and my friend rang me. I up Simp, does anybody you know do building control certificates? I said, usually building control, but I'll have a go. He said, well, my dad has been offered 75 grand for this house from a like a We Buy Any House company. He says, but because they've come and it's had a new roof, and it hasn't got a certificate for it, they've offered him 50. I was like, well, yeah, I'll do his roof three times, and give him a certificate for 25 grand, mate. He said, on a serious note, does he want me buy it? I'll buy it for 70. So, I came up, I had a look, and we stood at that we stood at the gate there. And I said, listen, I said, I've just bought another property. I haven't got the money for this one right now, but I am willing to give you 70 grand, but can you wait 12 months? And he agreed to it. We bought it for 70. I gave 70,000 pound for it, and it was valued as it stood at 140. I still haven't spent a penny on it other than electrical and gas safety certificates. And it's tenanted again long-term. They've got the option to buy it if they wanted to.
>> [music] >> What made me the compassionate landlord is how I was utilizing properties increasing in value over time, how I was using that difference in equity to help people get onto the property ladder. So, properties typically double in value every 10 years. And in 10 years, what I do is I offer my tenants the option of a lease option agreement. So, if it's in 10 years when it's doubled in value, they can buy that house off me for what it was worth 10 years ago. That difference in equity, I can gift that as a landlord. I can gift that to the tenant. And then they can use that as the deposit, so they don't need [music] to save. This is aimed for people who are working hard who can't catch a break in life. The idea of it is to give fixed rent for 10 years, knowing that they've got a safety net. So, go out and live your life. Go out and scale. Go out and do what you want, knowing that your rent's fixed. It's not compassionate at all, in my opinion. I don't think it >> [music] >> I don't think it is compassionate. I just think it's It's just normal. Like it should be It should be normal. What I do shouldn't be special.
[music] This one was actually a pre-auction offer. I paid 92,500 for this one. Spent 35 grand on it. The mortgage valuers came out and valued it at 170. He had spent 130. Refinanced at 170. Got a 85% mortgage and then pulled out like all the money. That one there, the second one in with the light brown windows, that's one of mine. This one was a friend of mine who's a plasterer. Originally, they wanted 100 grand. In Stoke, you get something that's called red ash, and it's what they used to use to backfill the floor before they put the concrete on. And what it does is releases a sulfate gas that cracks the concrete. Like 99% of houses in this area have got it. It's either red or black in color. So, I came down and I made the offer. I said, "Listen." I said, "I'll give you 80 grand without a red ash test because I know it's got red ash and I know it's going to cost me like 15, 20 grand get get fixed." I ended up paying 81,500, which is 80 grand plus his solicitor's fees. It cost me around 30 grand to do it up. That was including the red ash. It was just me, my friend, and his son on some shovels with some gorilla buckets. We piled it all up there on the driveway. But, what happened is I had the valuer here on the purchase. The valuer came, went inside, looked at all of the property, valued it. He was like, "Yep, fine. I agree with the valuation. Sound." He got in the car, drove off around the corner, and he had the team of people here ready, and we dug it out straight away. So, by the time the purchase had gone through like with in like 7 weeks or whatever it was, we'd already done the work, refinanced, and then it was valued at 160. So, again, another banging deal.
I don't typically use estate agents as such. Estate agents, they overvalue. It's not even creative, really. I just figured that if it's my generation, I'm 34. People who were 34, we grew up with Facebook. People who are my age, they they tend to own houses. So, if I put a post out saying, "Oh, I'll buy any house for cash," and then they see it and they eat they're scrolling when you doom scrolling at nighttime, like, "Oh, I wonder what he'd offer for ours." Drop a message, and then that's where that's where most of my properties come from. Yeah, I've actually not long had a message. Like, it was yesterday, and I've got a viewing today off one from Facebook from that exact thing. I'll take you. We'll have a look. You okay?
[music] >> Yeah, not too bad. >> Oh, sound. Needs a rewire. Oh, wow, look at the size of this bedroom. Oh, yeah. Bloody massive. >> Yeah. >> I was expecting just a normal little semi-detached or something. Bloody huge detached.
[music] There's a There's a deal in every single property. It's about pivoting to find it. If somebody says no, it's because you asked the question in the wrong way.
[music] So, when I discovered the creative financing, I asked three different brokers. I got told no by two. The third one said yes, because I asked the question in a different way. But, I I know straight away off the top of my head that the end value of that house is going to be about 360. Going to spend about 25 grand on it. It's going to be worth about 360. The juice isn't worth [music] the squeeze. You buy it for 300, spend 20 grand on it, spend 25 grand on doing it up, all without interest. That's 345,000. It's [music] going to be worth about 360. You've made 15 grand. No thanks. It it it's not worth it.
This the creative finance, which is about the purchase, I exclusively hold it for the Samuel Leeds Academy members. These people they they've chosen to invest in themselves. They want to be better. They deserve to know every single avenue. This property that I'm going to take you through now is actually me stepping out of my comfort zone. This is my first BRR to SA. Bought it about 6 months ago. Done a refurb on it. And now it's just been listed on um booking.com Airbnb. It was actually an archery thing you had the set of doors, and this was a living room with a log burner fireplace in there. It's been settled as HMO compliant. So, every door's got fire doors, the smoke alarms all the way through. Because my mentality behind that is we've just had the renters we threw them out and broke them in as of the 1st of May. So, I'm therefore thinking, well, future proofing, what are they going to ask for next? Okay. So, with this property, the average nightly rate for the area for a three-bed house, this is a four-bed, sleeps eight people. The average nightly rate for a three-bed is around the 125 mark. So, I've marketed it at 125 for now with a 20% discount for the first five people. I'd probably be hoping to get around the region of 140 per night.
>> [music] >> So, my journey on the academy was very surreal. So December 2022 I did a training with Samuel Leeds which is called Never Use Your Own Money Again. I'd gone away not use my own money, bought seven properties and then I joined the academy.
>> [music] >> Five weeks later on Samuel's social, Samuel messaged me. He says, "Here's me address. Come down tomorrow." Obviously I messaged him back and said I'm far too busy. No, I didn't. I dropped everything. I did the winners [snorts] on a Wednesday. When I told the story I was didn't think anything of it and he released it on Christmas day. And remember then on the January I went down on the HMO training. I remember walking across the car park and people were nudging each other like lads and pointing like this and saying like that that's him and I'm thinking Oh god. What's going on? It was just weird and I remember I sat in the academy room and I'd had a I'd had a coffee and I'd speak to people and people just swarmed around me. This is the first like official academy experience that I'd had. Six, seven months after I joined the academy, Samuel offered me a position as accountability coach. Five weeks later I was offered the position as a mentor and I was absolutely taken back. Like was crazy.
>> [music] >> Samuel has created a big family of property investors and he's impacted so many lives including my [music] own. I don't I don't think Samuel realizes himself properly how many lives he's actually changed. People think differently because of him. In a sentence, I am nothing but grateful for Samuel and Russell. Nothing but grateful.