Transcription
Merry Christmas everybody! It's Winners on a Wednesday time, every single Wednesday. I interview one of my students, and they talk about how they're making loads of money, becoming really successful as a property investor.
But this interview is a little bit different. I'm going to be interviewing a guy called Jonathan Simpson. I was in the trap of spending the money that I was earning, needed to earn the money that I could spend. I couldn't join the academy because I was skint. I actually used my last £22,000 at the Birmingham event. Came down, I emptied the back of my Volkswagen Caddy at the time, and I was full well going to sleep in the back of that van.
He's very successful. He's bought 10 properties in the last year or two. But what he's doing is he's giving his houses away. I'll rent to people using a lease option agreement for 10 years. They will rent from me, and I will sell that property to them in 10 years' time for what it was worth 10 years ago. They can take that equity to a mortgage lender, and there's the deposit.
In this video, you're going to learn how he is a capitalist, but he's a compassionate capitalist. And I thought, what better inspirational story to share on Christmas Day? Before all of this, I was an accountant for JCB. What was your salary? £24,000. What's the portfolio worth? Probably about 1.8. I was basically using A and B to purchase C, remortgaging C, and then using B and C to purchase D. You're going to enjoy this one. So Merry Christmas and enjoy the interview.
Jonathan Simpson, welcome to Winners on a Wednesday.
Thank you for having me. We finally got you on the academy after months and months of pressure.
Well, glad you love me here.
Yeah, man, 100%. So, um, when we first met, you were skint. Absolutely. Tell me what life was like, and then I want to, I want to go through your whole journey, and I want to find out how you did it, and hopefully be able to inspire some people and give some golden nuggets to people watching at home.
Okay. Um, yeah, when I first met you, it was down in, in Birmingham, actually. One Pound Crash Course, of course, where everybody meets me. Yeah. And then it was straight onto Never Use Your Own Money Again. You final one that you did.
And when I, let me ask you a question, 'cause you seem like a, you're, you're from the North, right? Northerners generally speaking, the more you go, the more skeptical you are. So when I'm in Manchester running the crash course, when I do a special offer, I say it's an at-seminar special. I can sense in the room people thinking, "Yeah, it's not a special offer." Whereas in London, they were like, "Yeah, of course it's, you know, it's fine."
When I did the special offer, I said, "I'm never doing this again." In fact, the course that I'm selling, I'm never ever going to repeat. Did you think that that was sales talk, or did you just think, "Yeah, fair enough," and just take it at face value?
Um, to be honest, I took it at face value. The stuff you were saying, I understood. As a builder, I just understood that the numbers and everything that you were saying, the process. I knew it was a process, and I believed it. As far as the money went for the cost of the course, I wasn't, I wasn't taken back. I just, it was the, the demand that you created that there was only 29 spaces. Yeah. And, and I was up there. And sometimes people think that, "Oh, but the thing is, we can only take 10% of the room." Normally, in the morning, we'll get one or two sign up. So if there's 200 people, they go, "Okay, got 30 spaces." Then one person signs up in the morning. "Okay, we got 29 spaces." That's how it is. If I say, "I'm never running the program ever again," I'm never running it again. That program you did, that was the one. That was the last one. That's what got me. 'Cause you would never, you never doing it again. But because I was skint, I needed to not use my own money again. Does that make sense? I had no money to use. So I had to learn how to do it without. And that training that you signed up for cost two grand. Yeah. Never repeated it ever. It was the last time I ran that. That pro. I've ran other programs, was the last time I ran that program.
And what, what happened on the program?
Um, well, says does what it said on the tin, really. Um, you taught me not to use it. There was terms in there that I'd never heard before. Lease option agreement, that came into practice along the journey. Raising finance. Buy, refurbish, finance. B.R.S. Yeah. So obviously, they kind of intertwine, don't they? Never use your own money and the buy-refurbish finance. 'Cause it was a four-day course. Never use your own money, buy, refurbish, refinance, and they kind of all link together.
So knowing the process of buying, you taught me to look for deals. That was, that was the main thing that I took from it. To find a deal. You forced me when I was there with no money to find a deal. Get my phone out. Yeah. Find a deal.
And then, did you have any little voices in your head saying, "What's the point of finding deals when I got no money?" Or were you just like, "Follow the process, man"?
Well, with the course being called Never Use Your Own Money, I was waiting for the punchline of, "Right, now tell me how to not use my own money." Uh, I'll find the deal, but then I need to learn how to buy it with no money.
So you came to the program. You were sleeping, were you sleeping in your van or something at the time?
So, um, I was down there. I actually used my last £2,000 at the Birmingham event, the One Pound Crash Course, and rolled into that. And then came down in December, I think it was, a few months later. Yeah. Um, and I came down. I emptied the back of my Volkswagen Caddy at the time, and I was full well going to sleep in the back of that van. Um, I had no money for a hotel, being honest, truthful. I didn't have, I didn't have any money. Yeah.
Um, so, yeah, I was sleeping in the back of the van that night. Locally, there was Academy members. There was two, um, and I took one of their offers. I don't know if I should mention that.
It's fine, you can, you can say whatever.
Okay. So there was, there was Nural and there was Nathan. Yeah. They both offered. Nural said, "You can sleep on the floor if you want." And Nathan said, "Well, I can't have you sleeping in your van. Mmm. You can sleep, you can sleep on the bed, and we'll build a, we'll build a wall of pillows to stop you touching me." So I took the bed option. That's, I went with Nathan.
It shows the lovingness and the kind-heartedness of fellow Academy members. Yeah. Absolutely. It's, um, we, we don't just meet each other. All of us, December 2022, all the journey started. Yeah. And those guys have both been on Winners on a Wednesday now. Yeah. They, they successful. Arguably more successful than I am. They've done really well.
You've done super well though. So since that program, you've bought eight houses. I did. You not do rent-to-rents or anything like that? You've just been literally buying houses. Yeah. And the ironic part is, I haven't used my own money.
Perfect. Yeah. The course did what it, what it said. And you didn't join the academy straight away because you used all the training that you had and just cracked on and just did it. Yeah. But did I mention that I was skint? I couldn't join the academy because I was skint. Sure. So the whole, the whole thing of not using my own money and everything, and it all rolling up into, it's had a snowball effect of "not use a mute." So I needed to learn how to undo everything that had been taught, if that makes sense? 'Cause I was in the trap. I was in the trap of spending the money that I was earning, needed to earn the money that I could spend.
What were you doing, um, before all of this?
I was an accountant for JCB.
Oh, really? So you working as an accountant? What was your salary?
£4,000.
This seems a bit low for an accountant.
Well, it was cost accountant. And once you graduate, I had a degree in accountancy and finance.
Yeah, man. Maybe I'm being really stereotypical now, but I didn't put you down as, I would have put you down as like a builder or...
Not, it's all part of the story. How long have you got? What, what story? What do you mean? So I was an accountant at first for JCB. Uh, I graduated as an accountant January 6, 2012. I got brain damage. Got assaulted. Um, and I got brain damage. And I was going to go in the RAF. That was the dream. I was going to go in the RAF as a winchman or a pilot, one of the two. Um, and I failed the medical because of the injury. So from there, I needed to reevaluate what I was going to do. Um, I went on and studied accountancy and finance at uni. From there, obviously got a degree. Uh, I got my degree now. Went out, became an accountant, training accountant for a company. Thought I was stepping up the ladder. Went to a JCB as an accountant. I was there. COVID happened. I got put on furlough. And then I was made redundant from an accountant. But I needed a job to pay the mortgage because I'd got, I'd got a mortgage and I got a to feed. I had a very good friend of mine, and his name was Simon. And I rang him and I said, "Listen, Sim, if I get you some, if I get some jobs in, can you teach me everything that you know?" Um, so that I can, about what? He was a bathroom fitter. He was a gas engineer, but he also fitted bathrooms. So I said, "If I get us some bathrooms, can we go out and fit these bathrooms?" So obviously I can pay the mortgage, essentially. Yeah. Um, and that's how the building work came about.
Because now, so you did work as a building?
I am a general.
Of course that you're, you're true calling. But could you not have just got another job as an accountant?
Well, part of the, the furlough process, where the journey all started for me. Uh, I was on furlough on my dinner hour. I nipped a little supermarket in there. Everyone was panic buying toilet rolls. This is COVID lockdown number one. Yeah. Get to the end of the aisle. I got my basket in hand. Uh, I see this 80-year-old bloke up the top struggling. I go up back down the aisle, and something just, Ted, just clicked. Said, "Go and help him." So I went and helped him. I said, "Listen, I don't mean some patronizing, but can I give you some help to hurry up and get you out of here because of this virus?" So he says, "Yeah, he says, "That'll be lovely." Uh, I find out that his son had passed away two weeks prior. He wasn't in his 80s, he was 95. 10th of June, 1925, his birthday was, and his name was Edward. Um, and I called him Ted. Everyone called him Ted who knew him. Um, lovely man. 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. So I was calling him, I was looking after him, I was doing his shopping for him. Um, I took him, uh, this one day, I took the shopping to his house. I dropped it off, and he says, "What do you do, John?" "Never mind this." This is a couple of weeks past. I says, "I'm an accountant, Ted, but the dream is to get into property." "Um, but nowadays, obviously, you spend what you earn, and you can't save. It's impossible." He says, "How would you feel, John, if anyone ever gave you a house?" Ted said, "Don't happen to me." Says, "There's nobody generous enough for that." But obviously, if, if it happened, be overwhelmed. Condensed a little bit of time, but he called his solicitor and said, "245 Brookwood Drive, I want to give it away." He gave me his son's house that had passed away. Wow. And I said, I said, "Ted, I said, can I not buy it off you?" He says, "Like, don't, don't give some people don't do that kind of thing." "Can I buy the house off you?" He says, "What use is money to me? He's not going to buy me more time." "He's 95." I'm thinking, "Well, yeah, you got a valid point." But I said, "That's not the thing." He says, "What I want you to do is promise me something." And I said, "Yeah, okay." He said, "Promise me that you'll make something of it, and you won't forget your family." And I said, "I said, yeah, okay. I can, I can live up to that." He gave me the house. He gave me money to do the house up because the house was a shambles. It was, hadn't been looked after. At the time I purchased it, it was worth, got given it, it was worth 30 grand. Here, two-bedroom semi-detached house. So that's where the thing started. I got given a gift, basically. Did the whole Homes Under the Hammer thing. Did it up with the money that he, he gave me. Did it up, refinanced it, pulled the money out. But you give a broke person of money, I spunked it. It was gone. I remortgaged it. I had no money. But how do you get given a gift like that, make a promise of, "Make something of it," and then not give that gift back or pay it forward or do something? I had to honor the promise. Hence, Never Use Your Own Money.
So that's why you then did the training?
That's why I did the training because I needed, I knew, I knew that if I'd done it right, if I had the education in the first place, then I wouldn't have spunked the money. It's, you can't, you can't learn how to make money from people who don't make money. Does that make sense? You, if I'm, if I'm down the pub with my mates who are in, in my circle, I'm not, nothing against my mates, but we're all in the same trap. We got taught to go and get a job and work 9 to 5 to make the money, and then pay the bills, get your mortgage, pay your mortgage off, then die.
That's an incredible story. I'm almost a bit shocked to be honest, that some guy, his son passed, and then he just gave you the house. Just don't know him.
Unfortunately, he has passed away now. Like I say, he was 95 at the time. Um, he, I, I did call him morning and night. And there was a couple of days I couldn't get through to him, and I was doing a bathroom up with Simon around the corner from where he lived. Um, he'd given me a key to his house. I didn't have it with me this day. Like, I wasn't, I wasn't going to go or anything. I was just working around the corner, but because I was there, I thought, "I'll just nip in because I haven't heard of him." So I went and nipped in, and his car was there, but he wasn't answering. I looked through the back window. Um, and it's like a fire escape window on a conservatory. Used to keep it open for the cats. And, um, it was a jar, like I see for the cats, and I had to open it and open the window because I could see him lying on the living room floor. And I thought, "Well, [ __ ] me, he's dead." He wasn't Trooper. He was in the Army. He was telling me that he got deployed to Normandy on his 18th birthday. Like, this guy's a war hero. He was a trooper. He was lying there, living room floor. He'd been there, I don't know how long he'd been there, but he'd broken some ribs. Um, I got the ambulance to him. They came, they took him. Went in the hospital, broken ribs, pneumonia. Got over the pneumonia. He, a trooper, had a bowel infection. Got over that. Caught COVID. And the hospital rang me then. This is when the hospitals were all shut. And he says, "John, he says, if you can get here, you can come. We'll open the doors and we'll let you come say bye if you want." So I did. I wanted to. I went up. He was devoted to his wife. His wife was named Mary. And I could go this way, go left, or I could go straight on and go and get a picture of his wife. And I thought, "I'll go get the picture." So I did. I was driving a Mercedes C220 at the time, and I booted it. Down, I got the picture. Booted it down the A5, A500. I get down there, I get to the turning. It's Royal Stoke Hospital. There's a turning on the A34 that goes by the maternity block. I'm there. I'm at the traffic lights. Get a phone call. Says, "Johnny's gone." I was like, "I couldn't make it." If I didn't get the photo, I would have been there. I would have been holding his hand to as he passed.
Yeah, you did what you just felt was right at that time. But I went to get a picture of Mary. Um, but yeah, I tried, tried to do what was right by him. But yeah, he's not, he's not with us now. But I'm hoping he's watching, and he's definitely doing something right, 'cause he's putting the ducks in a row for me. Like, he's, he's basically changed your life.
Yeah, he did. He's basically changed my life. So, respect Edward. That's awesome. So that happened. So now you're working, doing trades work. You got this house for 30 grand. You did it up, pushed the value up. Cool. But then you realized, man, I need to really figure this business out.
Mmm. Came to a crash course. Yeah. Um, again, I'd ran out of money. I'd got this property, but then it was that property where the journey started even more. It started unfolding even more, because I then used the equity out of that property plus the property that I lived in to purchase the property that I found on your course that you made me look for.
What happened?
So you being you, being bossy, you stood on the stage and you said, "Right, start looking now, because it only happens if you make it happen." So I get the phone up. Luke, I find this deal. And I'm like, "Right, it's been on the market for ages. It's got red ash." I'm thinking, "Right, structural problem, something with the floor." It's so fake gas cracks conquered in the floor. And I'm looking through and thinking, "110, 110 grand for this bungalow." It's been on the market ages. Looking in the area, I'm like, "Nah, this has got a GDV of a quarter of a million." This, I'll have a look at this. So I looked at this, this property. I booked a viewing while I was there on the course, of course, 'cause again, I make everybody.
Yeah, yeah. You're finance man. Yeah.
You're finance man. Stood on the stage, say, "Does anybody got an example that they like to share? They think it's a good deal?" I said, "Yeah." He put on every cost he could. He's like, "Yeah, that works out an all-money-out deal. That's a good deal." "Can everyone give him a round of applause?" I'm like, "I'm thinking, yeah, I don't know." I told you some all-money-out deal. I'd worked it all out. I think, but he verified it. Yeah. He verified it. So, okay. I went and viewed this property. I did it up for the first time in 14 years. What happened to interest rates? They went through the the roof. So I'd got this house that I'd purchased, not using my own money, by securing against my house. I'd gotten 30 grand worth of credit card debt because obviously I wasn't earning because I was doing this property up. And then interest rates go through the roof. It's now worth quarter of a million. No one can afford to buy it because the interest rates. I'm like, um, okay. So I've remortgaged. Still carrying the 30 grand credit card debt because that was the idea. Short-term debt to get short-term ear. Bad debt to get a good debt and get free. So I was like, okay. So I had to remortgage the house, which cleared everything that I'd borrowed to purchase the house. But I still got the 30 grand credit card debt. Mmm. Whilst I'd got this house, this is where it started just took off then, because, uh, I had a phone call off a friend of mine. We were in Little again. Little, same shop, same shop as where Ted was. I'm walking down the same aisle, the same aisle as where I was when I seen Ted. Phone rings. It's we mate, Brad. He says, "Up, Simp." That's everyone calls me Simp. "Up, Simp, he says, "Do you do, do you know anyone who does building control certificates?" I says, "Usually building control, mate, but why?" "Yeah, I see what I can do." He says, "My dad, he's trying to sell his house. They've offered him 75k, but they've come and looked at the roof from when he had the re-roof done, and they, because he hasn't got the certificate, they've dropped it to 50K." I said, "Tell your dad I'll give him 70." He says, "Don't you want to look at it first?" I said, "Yeah, I'll look at it, but tell him, like, not not set it. I'll buy it." So I went up and I says to him, I shook his hand. Name Martin. Shook his hand, said, "Look, I, I'll buy the property off you, 70k." Have a look around. We ended up going from this house to his house. We drove from there to there. His two sons were there, he was there, his wife was there. And I explained. I said, "Listen, I said, I've just bought this bungalow. All of my money has gone in there, so I've got no money to buy it. But what I can do is, I'll give you 65 grand, but I'll tell an investor that it's 70, and I'll make £5,000 just for telling them." That's option one. Or option two, I can buy this property off you for 70 grand, but I'll give you the money in 12 months' time. Once I've done this bungalow, I'll give you the money in 12 months' time, and I'll give you the contract. I'll take ownership of it now, and I'll cover all the bills, like the council tax and stuff, and I'll just rent it out. And then, um, I'll give you the money in 12 months. They went out, they had a smoke, they come back in, they said, "We'll go with option two." But bear in mind, did want a quick sale, hence they were going to like a, "We Buy Any House" company for the 75k. So the fact that they'd said yes to option two, and they were going to wait 12 months, with a three months' grace period for it to complete, so 15 months. I was like, "Hey, for real?" Like, "Option two?" "Yeah." Says, "We believe in you. We believe in what you're doing. We believe that like you really want to make a success of it." So I'm like, "Okay, thank you." So I got this lease option agreement that I'd learned. It's Never Use Your Own Money. So from there, I've got this bungalow. I've got another, another semi-detached house that I didn't have to do anything to. So it just sat there, and I was earning £850 a month rent from it. Um, and then this other house comes about. This one I bought for 81 grand. This had red ash again. So my property, when I bought the bungalow, I secured it against my property. When I remortgaged it, removed that security, which means it can be used again. So when it came to this next property, well, I needed to, to purchase it for one, and then I needed money to do it up. So I'd put out a post on social media about needing investors. It turns out a very good friend of mine, they were interested. I'd done work with him before, the family. Um, and she was like, "Yeah, my mom and dad might be interested in investing in you." I didn't end up using them at that stage. Where I'm just introducing it now, because when I found the money to do this property up, it was worth 165 grand. I remortgaged it, and then I had some money. But then the mom and dad, now, whilst this property was being purchased, I had another one come to me for another house. So I said, "Right, can you lend me the money to purchase this house? And then when I remortgage this house, I'll use that money to do this house up, and then I'll, everything just, it's all blurring together. It's, it's all like everything's happening so fast. This is all within like 18 months. So I use this money from there. That house is now up for sale, being sold, and it'll repay the investors. So I get up to this one. This one's then done and sold. That one's remortgaged. This one's been done and sold. And then I get another house. Um, I purchased this house and then put the owner of that house in one of my houses, and she's renting that one. And I purchased this one off her.
But you do exactly what I do, which is finding really good deals. Yes. Not saving up, getting a deposit, buying a house. No, you're just using leverage and equity from some other houses to finance other properties, getting option agreements, bringing in from other investors. You're basically just using all of the strategies and all of the tools to buy as many properties as you possibly can, and then paying the investors back with the equity that you've pushed up in the house from the refurb.
No, exactly. Yeah. That's exactly it. I was, you basically using A and B to purchase C. Yeah. Remortgaging C, and then using B and C to purchase D. But then you're left with the assets. I've got all of the assets. So every cash-flowing asset. Now, this is, this is where I learned on your course about good debt. Because like I said about that very first property, sometimes you need bad debt. So that credit card, if them interest rates hadn't have happened, that bad debt, short-term bad debt to create long-term good debt, surely that's a good thing. So I was using them credit cards then. But because the interest rate shot up so high, I've then got a loan to pay back the credit cards. Because obviously the high-interest credit cards, got a low-term, a low-rate loan to repay the credit cards.
Do you still own the house that Ted gave you?
I do. I will not sell that one.
Never sell that. Right. Now then, is it eight houses that you own in total?
You know, you're doing well. Nine. Nine. With the 10th going through. You know, you're doing well when you can't count. When you're like, "Hold on, nine with the 10th going through." The 10th going through.
How did you manage to get the money to join the academy? Where did that money come from? And because this was obviously the academy was much later. This was all from Never Use Your Money Again.
Yeah. So I, the third property that I'd purchased after Never Use Your Money Again, yeah, I remortgaged that one. And then you actually reached out to me to congratulate me, if you remember.
I remember.
And that was nice knowing that, although I wasn't an academy member, you recognized me.
Of course, 'cause you're still a customer. Yeah. So you, you recognized that I was doing well. Yeah. And then, um, yeah, then when I remortgaged that property, I thought, "I'm going to commit. I'm going for it." Because you, you asked at the start of this, you said about how did I, being a northerner, did I think it was all a scam?
Yeah. Well, yeah, you kind of do when someone's saying, "Oh, it's this easy and it's that easy to make money." And then you're saying like, "I won't leave you on your own. You're not, you're not in this on your own. Like, I'll be with you." So the fact that you'd messaged me and recognized it, yeah, that went a long way with me. So, yeah, then, then I joined. And this was October 2024. It was Nathan, actually. I mean, I, I generally try and keep people as best I can, even if people aren't on the academy. If they've done, if they've paid for some training and, and, and they're doing well, or if I see them struggling, or I see them, you know, I keep an eye on people's socials. But Nathan Lamb, who let you sleep in his bedroom, he messaged me and just said, "Oh, this guy, he's not on the academy, but he's helped me a lot with my building works. He's a builder. He's in Stoke-on-Trent. You probably don't remember him, but he did the Never Use Money Again program in '22. But he's, you know, I just wanted to give him a shout out, and he's doing a great job." And then that was when I followed you on Instagram, or at least I scrolled through your Instagrams and saw what you were doing and thought, "You know what? Fair play, man." So then we, we was chatting on Instagram, and I was just saying, "Well done, mate. Like, what do you need next? What do you need help with?" We had a little, a little conversation. And then I think I said to you, um, "You need to think about the academy." And you were like, "I know, but cash flow is a bit tight. I got all these deals and all this." And I just said, "Well, when you're ready, come, you know, come to me." And then you did. Remember?
Yeah, I remember. But taking it back to Nathan, and then taking it way back to Ted, and then taking it way back to when I helped Ted first. I led with my hand, my heart. Like, as a man, a man that should be of morals. Men have honor. Men have honor. And all that. You shake hands, and it's a deal. So I led with my hand, and I helped Nathan with his refurbs. And then it's come back. I helped Ted. Ted helped me. I helped Nathan. Nathan's helping other people. Do you know what I mean? Like, you should always lead. Lead by example. Lead, and others will follow. Like, that's 100%. That's how it is. And also, don't go, have to be paid back. Don't go into a business relationship or a community or anything thinking, "What can I get?" But if you go and thinking, even with you, with all these deals, if you go and thinking, "What can I give?" Like, when you're doing these deals, the guy was being told 50 grand for his house. And then you came in and said, "I'll do it for 70." You could have thought, "Oh, I'll do 51." Yeah. But you're like, "No, it works for me at 70." Mmm. "But I'll pay now." Sorry, "I'll buy now and pay later." Yeah. And you got an option on it. Yes. But he got what he wanted. So it's win-win.
How about talk to me about cash flow. How much are these houses worth? Like, what's the, of the 10 houses, which I know you're in nine now, but it will be 10 very soon, what's the portfolio worth roughly?
Probably about 1.8.
About 1.8. So you're talking about 180 on average for for a house. So they're like smallish. Yeah. Smallest kind of. How are you renting them? Who are you renting them to? Is it families?
Yeah. So up to, up to present, yes, it's families. And my company is called Ly Ray Estates, which is a combination of my two daughters' names. And what I've tried to do is remember my roots. That I was struggling. I was, I was spending what I was earning. How could I save for a mortgage? So what I've tried to do is make it possible with Ly Ray Estates is that I'll rent to people using a lease option agreement. So that for 10 years, they will rent from me, and I will sell that property to them in 10 years' time for what it was worth 10 years ago. Damn. So for 10 years, I get a guaranteed rent. In 10 years, that dead money rent is turned into an investment. On the lease option agreement, I state that they are owning the house. They are taking all the maintenance, all the responsibility. The house is theirs. I put it on land registry that I cannot do anything or evict them unless they do not pay the rent. I guarantee the purchase price. That's on land registry. That's on land registry. That's a security for them. This goes bigger than just giving that. L. Men, men's mental health. You can, you can speak as a man because you are a man. Men's mental health is going through the roof, and we struggle when we can't provide and protect our family. Yeah. So if I can now put a security down on a property from doing something so small as guaranteeing a purchase price for a man, and it means that mentally for him, he can, he's now providing and protecting his family from whatever happens. Surely that's another good thing, really.
It's huge. Wow. I've not seen that before. So you're renting the houses out to families, and you're saying to them, "You can actually have a sense of ownership of this house. Put your own stamp on it. Maintain it yourself. You have an option to buy it. All you have to do is pay your rent on time." Yeah. And, and if you pay your rent on time and look after the house, then in 10 years, how will you feel if in 10 years those houses are worth like half a million each, and they're buying them for 190? Historically, you taught me that historically, every 10 years, house prices double. Yeah. So if I say I'm going to sell these houses and I'm going to cash in, what happens with the profit? You get taxed. It's a bit of Robin Hood mentality, really. Why would I get taxed on a lot of profit and give it to the government when I could sell it and give that money away? Does that make sense?
Yeah. Makes sense. I'm going to get taxed regardless. If I try and do a good thing, and if I sell that property for what it's worth, I'm going to get taxed on what it's worth. If I sell that property for what it was worth 10 years ago, without the contract, I'm going to get taxed on the market value, of course. So I'm going to, I'm going to be paying tax.
You're going to pay tax, but you're still going to make a lot of profit. So that lease option agreement, it protects the customer, the end user, the purchaser, and it protects me from the tax.
Well, it does. But at the same time, if you, if, if it's worth 500 and you sell it for 500, you're going to have a capital gains tax. You're going to make 320 profit, and sure, you're going to have to pay a lot of tax, but you're still going to keep a lot of profit. Profit. If you sell it for 180, financially, it doesn't make any sense. You're, you're almost doing a Ted in a way, not giving the house away for free, but you're being almost like a, a mini Ted, certainly in spirit, to a whole bunch of families across the area.
Yeah. Well, in a society that's driven by greed, everybody wants more, more, more, more. Lead, and others will follow. If I do a little bit of something and help somebody, somebody else will. It's true. Be helped. If, if I'm in a position, which I will be, I'm determined, because I've got young guys, I've got kids. I've got three kids that are going to be watching and learning from me. And if I can teach them the morals, if you could be helping others rather than just achieving and doing it for yourself, then that's the way it should be. Because you could, you can, you can serve yourself and others as well. Do you know what I mean? You can make money and help other people.
Well, bro, I think it, I think it's amazing because I think that number one, you're buying rundown properties. Yes. That are currently not fit for purpose to be a house. Yes. No one can live there. You're buying it cheap. Sure. You're then refurbishing it. You're renting it to a family at an affordable price. Beautiful. But you're making profit. But you're renting it to your family at an affordable price. Cool. But then that family that I'm renting to, know that they can actually buy that property. They can fix the price in there, and they've got 10 years. Mmm. To save for it. As inflation goes up, up, that house is not going up because they're fixing the pricing now. And the rent, the rent's fixed as well. Yes. Surely not fixed for 10 years, though? Surely there's, there's inflation.
It's, um, I fixed the rent for 10 years. 10 years. 10 years. Because you know the house that Ted gave me, I used the equity on that to purchase another property. Just because I'm not remortgaging this property and taking the capital, doesn't mean that I can't use the money that's in that house to buy another.
Would you describe yourself as a capitalist?
No, I'm not. And it gives you, yeah, I'm not in it for a warm fuzzy feeling. I'm trying to provide for my family and do the do the right thing. I, I am obviously, everybody wants the nice comfortable life, and they want to be rich because they want the nice things and stuff. Yeah. But it's you who taught me, 'cause since I've joined the academy, I've done your, your other courses, and then I realized in the academy that you can utilize equity without needing the cash. Right. Because I would have been crippled if them interest rates went up and I'd taken out max mortgages. Yeah. The P.E., the people where I'm from, Stoke-on-Trent, it's not, it's not a wealthy area. People can't afford high rents. So therefore, if I can keep the rent down, this is the logic behind it. If I keep the rent down, it allows people a margin when everything else is going up to save. Now they can have holidays, they can afford Christmas, they can do this, they could do that, they could do the other. They can save for a bigger deposit towards the house. But you know yourself that there's two people, two sets of people, sorry, who can gift equity. One's a relative, and the other is a landlord. Yeah. As their landlord, I can give them that equity. They can take that equity to a mortgage lender. Yeah. And there's the deposit. So the, don't necessarily, it is a little bit like the Right to Buy. Yes. I'm a private council. Yes. So they could potentially, depending on the, obviously depends on the lenders' rules, but they could use the discount in 10 years as the deposit. Yes. Meaning that they don't necessarily even have to save. Yes. Will there, will there be rules around it that they can't then sell the property for five years and stuff like that, or can they do what they want?
Do what they want. Wow. That's inspiring. That's challenged me. You know, you know what? 10 properties, right? I'm saying here now to you, man to man, and obviously on camera, I'm also, I'm going to match that. I'm going to do the exact same thing with 10 of my properties.
Good. And this is what this is all about. If you can do the same, 'cause what, what's I'm doing? That 10 properties, I'm, I'm, I'm pledging to to structure it, rent, rent out to families, give them an option to buy after 10 years with the rent not going up. I'm, I'm pledging that right now. Yeah. And this is, you know, when this is going out Christmas Day. Wow. That's a good Christmas present. Because Christmas Day falls on a Wednesday. Right. Now, it's a Wednesday, but obviously we're filming in advance. But I think Christmas, it's next week, is it Christmas? So this will be going out next week, which is going to be the 25th. Wow. So what a Christmas story. No, that's good. But this is so now, you were very successful in this in this game, in the property game. Somebody like you doing it, lead, and others will follow. Ted, Ted led by giving me that house. I then set this business model up. The same. I'm now telling you about the business model, and now you will influence other people.
Exactly. But now, what do we do? When people have a sense of ownership, they're going to spend more money on that property. What happens when people are spending money on property? The property goes up in value. There we go. And what happens when the properties go up in value? Property investors win. It's a full circle. The economy gets better. People are spending more money. People, when people's standard of living goes up, yes, mental health goes better. Everything gets better. Everything is better. Because what happens at the moment, there's an "us first, them" thing with tenants and landlords. Yes. So landlords are annoyed with tenants. Yeah. You're not paying your rent on time, or whatever. Yeah. Then the tenants get annoyed with the landlord for putting the rents up. Then the landlord doesn't fix the property. That's why I don't like. Here's what I don't like. I don't like forced rent caps. I don't like forced socialism or anything like that. I think we should. I believe in a free market. I would describe myself as a, as a capitalist, but a compassionate capitalist.
I'd agree with that. When, when you see, when you put a title on it, socialist, capitalist, and all that, I'm like, "I'm just John from Stoke. I'm just, I'm just a person with a heart." Yeah. If you, if you and your kids were struggling and you needed somewhere, I've got somewhere. If you need to eat, you can eat. If you need something, you can have it. If I've got it, I'll give it. It's, that's the way, that's the way that it should be. It's not about, I don't know, it's not about, it's not competition.
I know what you mean. But here's the thing, here's the thing as well. If generosity, people that are successful in business, if their hearts are touched, and they just feel like they want to, yes, be generous, that's what should be encouraged. Mmm. Because as soon as the government do things like rent caps, where they freeze the rents, the landlord's doing it because they have to, and now they're annoyed, and now they don't fix the property, and they don't, and the standard of living goes down, and everybody ends up miserable. Whereas if we can create an environment and a culture between tenants and landlords where actually everyone's, because you know, if you're fixing the rent for 10 years, that gives them peace of mind and security. But you're obviously going to fix it at a point. Well, you know, you're still going to make something. It might not be huge, but you're going to make something. You got to pay your, you know, you've invested a lot of money into the property, you've got to make a return, otherwise what's the point? But everybody's winning. It's, it's a scenario where everybody's winning.
Yeah. So you could do, you could do premium rent. You know what I'm saying? Your rent is going to be fixed now. We'll do market rent is, rent value is 850. Yeah. Let's do it at a grand. And they're like, "Bloody hell, that's high." You're like, "Yeah, in two years, when everyone puts the rent up to 1200, yours is a grand." And also, not only that, but also you're getting capital appreciation of the house because as the house is going up in value. Yes. But it also incentivizes tenants to pay their rent because if they know that. So it waivers on on a lease option agreement. You know, that you state the terms. Yeah. And you have to agree, and I have to agree. Right. And we write it down. And if I say that tenant is responsible for maintenance and upkeep, tenant is responsible for everything. You're basically waving your rights as a landlord. You've still got an as that goes with it. Mmm. That says you'll make sure that the property is safe and up kept well and everything like that. But they've still got an option to buy. This is on land registry. This is the. So all the securities there for both the purchaser and the seller. But what, what can you tell everyone? The same as I can. Is with an option agreement, who's the person who can choose to walk away then? Yes. The purchaser. So me as the seller, I can't do anything unless you don't abide by the term of paying the rent all the time, on time. Yeah. Put the power in their hands. So it gives them a sense of ownership and responsibility. Yeah. It also, as, as you said, as someone that wants to provide, or someone, you, because most tenants, they're helpless in terms of getting on the property ladder. There's no chance. Exactly. Yeah. Whereas now, it's like, "No, I can." It's brilliant, mate. I think that is compassionate capitalism defined. And whether you're a socialist, even maybe not a communist, maybe even a communist. Um, you believe in anarchy. You're a capitalist.
Well, I don't think anyone, one could really, personally, I don't think anybody could argue with that. Because it's just from the heart. Thank you. Inspired by Ted. Yeah. So this Christmas, then, we can, we can, uh, give a nod to Ted this Christmas. Yeah. And, uh, bro, I really appreciate you sharing your story.
No, absolutely. And I'm so glad to have you on the academy, to be fair. I thought you were going to give me a grilling. If it's like, "Property, you should make money. You should be doing this. You should do that." But then, like, like you said before, about it creates a relationship. It doesn't, it doesn't just create a relationship of ease. Landlord, ease. No, it's good together. You can thrive. Doing what I'm saying, you can, you can thrive. You make money, they make money. Because the, the whole, the whole thing of, if I, if I buy it for 70, just easy numbers, if I buy it for 70 and spend 30 on it, and it's now, I've spent 100 all in, but the new value is 150,000. I remortgage at 75%. Remortgage of 112,500. I've now got that money. That's debt in the bank. Mmm. Plus I'm receiving the profit after, when I sell it, from the difference between what I've got to repay the mortgage and what I've sold it for. So I've got 37,500. Yeah. So I've got 37,500 profit after that. Plus I've got guaranteed rent for the 10 years. And I've waived my rights as a landlord. Yeah. And, and every business, between, even with a business between customer and business owner, if you've got a happy relationship where everybody's happy and pulling in the same direction, just makes life so much better and more fun. Everyone's happier. Everyone's on the same page. You're not, you're not causing misery. Or you're not, 'cause 50, £50. Are you over the amount of properties that you've got? It's a hell of a lot of money. But from one house, it's not much, is it? It's not a lot. £50 is not a lot. But for somebody, you can only just afford to get buy per month, but it's a lot of money. So when you've fixed it over this, right now, yeah, you might be paying a little bit over the odds. But don't forget, these people are working. They've been paying into, they've been trapped in this cycle forever. And they're probably at the moment paying into their pension scheme. But instead of, because actually, I don't want to pay into my pension scheme anymore. I'm going to put that money towards the difference in rent, and now I'm going to be a property owner.
I'm it's great. Thanks for coming on the show.
Thank you very much.
Merry Christmas.
Yes, you too. Have a good one.