This is Part 1 of a 3-part series on building your simple buy to let portfolio that cashflows.
- Part 1 – [You Are Here] How We Grew Our Property Investment Portfolio From Zero To 12 Properties In 14 Months
- Part 2 – How To Actually Make Atleast £1000/Month From Your Property Investment Business (Due for publish on 29th Jan 2019)
- Part 3 – Stop Diversifying Your Business Too Quickly!! You Lose If You Do… (Due for publish on 5th Feb 2019)
Here’s the thing…
It isn’t difficult to build your property investment portfolio…
We know because we have tried it ourselves did some fundamental mistakes but soon realised and started to grow one step at a time.
We have been able to add 12 houses in 14 months with no rocket science behind it but hard work and bounce back from failures the next minute.
Here is my disclaimer: We cannot guarantee that you will be able to achieve same results due to dependency on your own situation and factors that influence your lives.
We started OK but soon got exposed to the hardship of nailing our property investment area.
No surprises there:
But then we were in for a harsh reality.
Property is easy and infact any business is easy, the hardest thing is humans and human mind.
If we can understand and be in control of ourselves then the issues sort out themselves eventually.
What you learn from events and coaching sessions is great but be willing to break the rules, specifically when it suits you.
Here is how we did this a little different…
We Went Messy With Our Property Investment
We didn’t have a plan. We just went to our property investment area without any purpose. Its fair to say, what we did consistently was though to go to our area pretty much each week.
It took a wise soul to ask us following question one evening:
“OK boys….How many properties have you viewed?”
We gave a good stare at each other in our hearts covering our shock.
Its then we woke up and realised, we need to start viewing properties.
Since then we did pretty much about 50+ visits to our investment area in 12 months. i.e. averaging about 4 times in our area each month to either view properties or refurbish properties or build our business team.
The first 6 months was adjusting to the new reality of property offers being rejected and accepted and multiple property refurbishments going in the same go with a new power team.
It was a mess….
Only until the point when we realised the first thing we need to do is slow down a bit and stop giving offers.
Sort out the refurbishments of existing properties before we take on new. Tenant all the properties so we don’t end up just spending with no returns.
Tip: Pace yourself when you have big goals to create a large portfolio in short amount of time.
We Chose An Insanely Investor Unappealing Area
We chose few investment areas which were popular like Liverpool / Warrington / Swansea. However, after giving 30 offers we could see, the properties were being purchased at asking prices with a view to turn them into HMOs.
Our investment criteria does not allow us to leave more than £5000 in the deal and expect to have minimum of 20% return on investment for the money left in the deal.
So the inevitable happened. No offers accepted.
Here is the deal though:
We broke the second rule and went for an investment area 2 years ago, when not much was happening in the area. Not many investors were investing in Wigan at that time.
We implemented what we learnt viewing and giving offers in an area which has less investor focus comparative to Warrington or Liverpool.
So we had our space.
The only criteria we had at that point in time was we should be able to build a buy to let portfolio at property offer prices less than £50K before refurbishment.
Wigan now is a good buy to let investment area and is a focal point to many investors.
Tip: Go for those pockets of areas which are not prime yet but you see decent growth forecast or at least is great when it comes to monthly cashflow.
We Didn’t Go Direct To Landlords…We Went Opposite
Once you are out of a property investment events, you tend to focus on direct to landlords. Issue we see is too many of investors go for that perfection point of reaching direct to landlords, so you get better deals.
This often ends up with procrastination given you lose momentum.
You will have to understand that direct to landlord is great but only when you have time to focus on that method of sourcing properties for you. If you are day job holder and wish to do direct to landlords, its more likely you will not have enough time and lose momentum.
Instead we just went with the easy way and only sourced properties from estate agents as part of our portfolio building.
However, you see that momentum is still with us even today and now we created this amazing blog where we directly capture potential landlords details on this website to some extent.
Eventually direct to landlord will be part of our strategy but with full knowledge that we took our time until we are comfortable enough to focus on that.
Tip: Don’t do a strategy just because you are taught or you saw that worked for others. Assess your situation and see if that strategy is suitable for you when you invest.
We Did Tons of Area Visits And Viewings
There is no such thing as “UNABLE TO FIND DEALS”.
Investors who think they cant find deals actually have either of these two problems.
Not enough viewings – They either don’t visit their investment area enough or do not view properties consistently without expecting a result. Do the work and results will come.
Not Offering In Time – They do view properties but are not quick enough to give offers. Speed is everything if you want to stand a chance to secure below market value properties.
We did tons of visits to our investment area, to such an extent that people in our area started asking us if we moved across to the area from down south.
In last two years we stand at over 3 visits to our area each month and have viewed over 350+ properties to which we have given offers as per our deal profile.
We learnt a lot about our area where we invest and the familiar faces have been taken notice and pretty much most knew we buy houses in exchange for lots of smiles.
That’s an overkill. We pay for buying houses too…besides those lots of smiles.
We Stuck To One Property Investment Strategy
I am not against the idea of doing multiple strategies, specifically if other strategies give you higher cashflow.
What I find is people trying to do Serviced Accommodation, Rent to Rent, Sourcing and Buy to Let strategies all in one go.
That does not work for everyone, unless:
You have right amount of time, support network and mindset to structure yourself personally to multi task that efficiently.
Lets be honest, shall we?
There is a sound reason why about 80 people out of 100 wanting to build property investment portfolio cant do it successfully.
Life does not end with just being able to implement strategies, in fact life starts once you implement them.
Biggest failure of property investors lies in not being able to manage their portfolio effectively and get it to cashflow despite having good number of properties in their portfolio.
The simple solution for us was to stick to one strategy and implement it end to end “repeatedly” including being able to manage the portfolio and systematise as much as we can.
We are now focused on automating few tasks which now in our eyes qualifies us to move on to next cash-flowing strategy.
Yes its time taking but at least is assured growth and cashflow.
Tip: Its a question of failure resulting from multiple strategies in one go versus sure but assured growth following one strategy. What’s it going to be?
We Are Now Converting This To Proper Business
One can either identify their way of what works for them and make it a business or follow the crowd and just buy properties.
No illusions, we decided to do the former.
Yes there are failures, but certainly steady growth.
Slowly we diversified our experience and journey we did so far on building ourselves in that process into this very blog. Social media, email marketing, content development, media based engagement, building a small team offshore for future requirements and…..I will stop it there.
But you see the point.
Do it as a proper business and stop relying on the usual MLM based network marketing when you can convert your own expertise into a scalable business.
We diversified into coaching our clients who buy into what we do and our idea of building self before business. Results from those clients are slowly coming to light both in property and in IT businesses.
This blog alone we intend to make it a revenue generator equivalent to 5 buy-to-lets in next 1.5 years.
Tip: Failure is imminent and so is success but what goes in between is what will decide which side you land.
I hear and understand that business is easy but we complicate it as humans. Property investment is no different. Its easy if you stay still and just do it exactly the way the experts teach…
Issues manifest when you deviate from the course and cannot take ownership of getting back on to the course.
If you think me writing this means I am on the other side building my portfolio, then let me tell you other side has same problems but at a different scale altogether which I need to overcome.
Wait…isn’t that growth? Indeed it is and let me conclude by welcoming you to our zone of “growth with limitless intent”.