Latest / The Property Entrepreneurs Podcast with Alasdair Cunningham / Why I Chose Property Over E-commerce, Stocks and Restaurants

Transcript

Why I Chose Property Over E-commerce, Stocks and Restaurants · The Property Entrepreneurs Podcast with Alasdair Cunningham

• 0:10
  SPEAKER_00: 700.
• 0:21
  SPEAKER_00: Meet your phone with Spotify and Audible.
• 0:25
  SPEAKER_00: Let's cut home and let's build your business.
• 0:34
  SPEAKER_00: Hey, good morning, everybody.
• 0:36
  SPEAKER_00: Welcome to the Property Entrepreneurs Podcast.
• 0:38
  SPEAKER_00: My name is Alistair Cunningham, and today we are going to be discussing why I chose property over the other vehicles out there to make money.
• 0:48
  SPEAKER_00: It is a common theme that I get asked, like what made me opt for property when I was involved in other businesses.
• 0:55
  SPEAKER_00: So I'm going to be digging into that and letting you understand my thought process to why I think property is the number one wealth acquisition strategy in the world and why I think everybody should have their fingers involved in the pie of property.
• 1:15
  SPEAKER_00: So if you've listened to earlier episodes or if you have followed in my journey and you can know a little bit about my background, essentially I'm a boss and coach mechanic and I've had traditional businesses in the past, businesses that relied on premises and relied on service-based business type industries.
• 1:56
  SPEAKER_00: Or it didn't need my attention for 60 or 70 hours per week.
• 2:00
  SPEAKER_00: Now obviously property was the natural, for me, it was the natural direction.
• 2:06
  SPEAKER_00: However, there is other directions you could have gone in.
• 2:08
  SPEAKER_00: You know, I did consider uh online stores such as e-commerce and various other activities along the online e-commerce brand or e-commerce world.
• 2:18
  SPEAKER_00: Uh, I did look at that.
• 2:19
  SPEAKER_00: I looked at things like stocks and shares.
• 2:22
  SPEAKER_00: Today we've got crypto and various other derivatives and you know, creative online investments.
• 2:28
  SPEAKER_00: And I also looked at things like do I want to move into another traditional business?
• 2:35
  SPEAKER_00: Like we'd have our you know, traditional storefront or restaurants or things like that.
• 2:40
  SPEAKER_00: And, you know, I very quickly decided property was the vehicle that I I wanted to devote my time to, to learning about and building.
• 2:49
  SPEAKER_00: Um, and here's why, really, okay.
• 2:53
  SPEAKER_00: Look, let's break it down.
• 2:54
  SPEAKER_00: E-commerce, great, but you've got to have a lot of cash to acquire the product, okay?
• 3:01
  SPEAKER_00: So it's a very difficult industry to break into.
• 3:06
  SPEAKER_00: You've got to generally have the cash flow to be able to purchase stock in the product.
• 3:13
  SPEAKER_00: You've got to hold a lot of stock.
• 3:14
  SPEAKER_00: Your profit margins um are generally pretty thin when you factor in things like taxes, VAT, storage, um undercutting um competitors like undercutting your prices.
• 3:31
  SPEAKER_00: So, really, to really dominate in the e-commerce world, you need to have you know sole exclusive rights to a particular product or a brand deal or something like that.
• 3:43
  SPEAKER_00: And you know, I I've got friends that do very well in e-commerce.
• 3:47
  SPEAKER_00: Um, you know, Adam Pearson's one of my early clients, and he's he's he's doing you know three to three and a half million uh a year on e-commerce.
• 3:56
  SPEAKER_00: He's absolutely smashing it and doing phenomenal things.
• 3:59
  SPEAKER_00: Um, but he has had his ups and downs.
• 4:01
  SPEAKER_00: So e-commerce for me, when I was looking to build my business, was really something I didn't I didn't factor in because I didn't have loads of cash, I didn't have any brand deals, I didn't really know much about it.
• 4:12
  SPEAKER_00: So for me, it was like, you know, get some stock, put it in a warehouse, sort out some ads, sell your product, okay?
• 4:19
  SPEAKER_00: Today we've got things like Amazon FBA and all the different ways of selling, you've got TikTok shop, and you've got all these different things.
• 4:26
  SPEAKER_00: So I think it is slightly easier to get into selling products online now than it ever was before, okay.
• 4:33
  SPEAKER_00: Secondly, I looked at stocks, shares, derivatives, bonds, and that market.
• 4:40
  SPEAKER_00: Look, I know nothing about that.
• 4:42
  SPEAKER_00: Um, I'm not gonna sit here and say I and even pretend I do.
• 4:46
  SPEAKER_00: I knew absolutely nothing about stocks, shares, um, and day trading and all that um that jargon.
• 4:54
  SPEAKER_00: And I will say I did go to quite a few training courses about it, but I just couldn't get my head in the game.
• 5:01
  SPEAKER_00: Um and again, I didn't have loads of money to get started.
• 5:05
  SPEAKER_00: And you know, the the for instance, if you're doing day trading, you've got to have that cash roll to to get you going and to to keep you going.
• 5:14
  SPEAKER_00: Because let's face it, if you can only afford to put£500 into something and it gives you uh you know a 10% return over the course of the year, or you know, even if it's 50% return over the course of the year, that's still not a lot of money.
• 5:30
  SPEAKER_00: So you've got to be starting with a lot of money, and I I didn't have that to get started.
• 5:36
  SPEAKER_00: I looked at things like other traditional businesses, like do I want to open like a restaurant, or do I want to open like a play centre, like a soft play centre, or you know, things like that.
• 5:45
  SPEAKER_00: And again, startup costs were were quite were quite restrictive for me.
• 5:50
  SPEAKER_00: And again, you're location-based, um, you know, monthly expenses are incredibly high, and again, you've got footfall problems, you've got to get bums-on seats, shall we say, and you know, that is quite a difficult thing to do in some instances.
• 6:06
  SPEAKER_00: So, really, what piqued my interest when it comes to property?
• 6:10
  SPEAKER_00: Well, I'd always had an interest in property.
• 6:15
  SPEAKER_00: However, my interest in property was very much traditional buy-to-let or traditional buying of property, and it all comes from my interest in actually student accommodation, believe it or not.
• 6:29
  SPEAKER_00: So I was interested in student accommodation, um, HMOs, but in student areas.
• 6:35
  SPEAKER_00: Um, the reason being is because I I actually visited a few because I I used to be a student, um, I never stayed in the accommodation, by the way, but I used to be a student and I saw what the accommodation was like, and it was pretty terrible.
• 6:45
  SPEAKER_00: And I thought you could do a much better job.
• 6:47
  SPEAKER_00: And the reason why I liked student accommodation was because think about it.
• 6:51
  SPEAKER_00: Students arrive at a certain point of the year, they generally pay for their rent all up front.
• 6:55
  SPEAKER_00: Mummy and daddy generally pay for it, so the student isn't actually paying for it.
• 7:00
  SPEAKER_00: You've got consistency because they need to be there for the the whole duration of their their um their term, but there is downsides.
• 7:09
  SPEAKER_00: Like obviously, they don't look after property very well, the property only has to be very basic, things like that.
• 7:14
  SPEAKER_00: So that's what really piqued my interest.
• 7:16
  SPEAKER_00: I could make money from providing better quality student accommodation.
• 7:20
  SPEAKER_00: So I thought to myself, okay, I'll start a much better student accommodation business, um, providing accommodation for students, but I'll do it to a better level.
• 7:29
  SPEAKER_00: Because of course they're going to look after it if you give them a better, better product.
• 7:33
  SPEAKER_00: Yeah, they don't.
• 7:34
  SPEAKER_00: They don't, they don't care about it, right?
• 7:36
  SPEAKER_00: You know, I had I had uh some HMOs um in Wolverhampton for students originally, and yeah, they just didn't give a shit about it.
• 7:43
  SPEAKER_00: It it was, you know, I spent all that money making it nice and making it good, and they just didn't uh they didn't give a riff about it.
• 7:49
  SPEAKER_00: And I actually decided students weren't for me.
• 7:52
  SPEAKER_00: Um now back to why I got started on property.
• 7:57
  SPEAKER_00: Property is ever increasing.
• 7:59
  SPEAKER_00: So think about it.
• 7:59
  SPEAKER_00: It's always going up in value, property always is uh in huge demand, property is always, always, always tangible, so you can always go touch it, see it, and feel it.
• 8:10
  SPEAKER_00: Right?
• 8:10
  SPEAKER_00: So you've got an asset-backed commodity as opposed to stocks.
• 8:16
  SPEAKER_00: Stocks can go up the stairs and out the window very quickly, okay?
• 8:20
  SPEAKER_00: Crypto, up the stairs, out the window.
• 8:22
  SPEAKER_00: You know, one day it can be worth£100, tomorrow it's worth you know, the price of toilet paper.
• 8:28
  SPEAKER_00: Um, and I didn't like that.
• 8:29
  SPEAKER_00: Whereas property, if you look through history since records began, it's typically always gone in one direction, which is upwards, apart from a few minor corrections through certain periods of time.
• 8:40
  SPEAKER_00: So for me, that's one reason why I love property.
• 8:43
  SPEAKER_00: Because of that, because I knew it kept going up in value, because I knew it was a tangible asset, because I knew there's huge demand, it's always going to be there.
• 8:52
  SPEAKER_00: That made me dig a lot deeper into finding out, okay, I'll start I haven't got 100 grand or 50 grand to even get started in a property business.
• 9:00
  SPEAKER_00: I'm a mechanic, right?
• 9:02
  SPEAKER_00: I can probably get my hands on around 10 grand, but you know, my belief was you can't start a property business with 10 grand.
• 9:10
  SPEAKER_00: That was my belief.
• 9:11
  SPEAKER_00: It really was.
• 9:12
  SPEAKER_00: You cannot start a property business with 10 grand.
• 9:15
  SPEAKER_00: And you know, I I let that stop me pursuing my vision of having a property business for for for honestly for about a year.
• 9:24
  SPEAKER_00: And then it just so happens I actually saw an advert.
• 9:29
  SPEAKER_00: I can't remember where it was, to be honest.
• 9:32
  SPEAKER_00: I saw an advert for an online course.
• 9:35
  SPEAKER_00: Um, and this online course was uh it was like a virtual event, like a like a webinar type thing.
• 9:41
  SPEAKER_00: And I watched that webinar and it was with a guy in America, and he was talking about section eight.
• 9:48
  SPEAKER_00: So out in America, there's a thing called Section 8.
• 9:50
  SPEAKER_00: Section 8 is essentially social housing, okay?
• 9:53
  SPEAKER_00: So social housing properties in America.
• 9:56
  SPEAKER_00: So he was talking about how he was making, you know,$20,000 to$30,000 a month from Section 8 properties.
• 10:02
  SPEAKER_00: I'm like, okay, great.
• 10:04
  SPEAKER_00: And one of his big taglines were you can do this without using your own money.
• 10:09
  SPEAKER_00: I'm like, great, I haven't got loads of money.
• 10:12
  SPEAKER_00: I need to find ways to get into property without loads of money.
• 10:15
  SPEAKER_00: So I watched the webinar.
• 10:16
  SPEAKER_00: During the webinar, he explained essentially the strategy called property wholesaling.
• 10:23
  SPEAKER_00: You'll know it as property sourcing.
• 10:25
  SPEAKER_00: And what he used to do, right, he was based in Texas, um, I can't remember the name of the town, but he was out that neck of the woods.
• 10:31
  SPEAKER_00: And what he used to do was he would go to the local authority, he would go to the local authority and he would say to them, Look, where do you have a requirement for section eight properties?
• 10:44
  SPEAKER_00: So where is there a need for section eight properties right now?
• 10:47
  SPEAKER_00: And they would say, Look, we've got a huge demand in this area, this area, this area, and this area.
• 10:53
  SPEAKER_00: So he would then go out to those areas and he essentially would do what they call guerrilla marketing.
• 11:00
  SPEAKER_00: And I'm sure you've seen this.
• 11:01
  SPEAKER_00: Uh, the billboards on the side of fence posts and on lampposts and things like that as you're traveling.
• 11:06
  SPEAKER_00: And he was essentially saying, I want to buy your house, call me, things like that, or houses wanted, call me.
• 11:15
  SPEAKER_00: He was also, well, alongside the billboard advertising, he was also just knocking on people's doors, like, you know, sticking leaflets through people's doors, coal calling on people's doors, and also looking on a website called Zillow.
• 11:29
  SPEAKER_00: Zillow is the equivalent to right move, but for America.
• 11:33
  SPEAKER_00: He done everything he could to find properties in those areas, and when he found them, he would go and sit with the owners of the properties and he would try and negotiate some sort of deal.
• 11:45
  SPEAKER_00: Now, that deal might have been a below market value offer.
• 11:48
  SPEAKER_00: So if it was worth$200,000, he'd say, Look, I can give you$160,000 and I can complete in the next two weeks.
• 11:56
  SPEAKER_00: Or he would uh offer a long-term lease where he would say, Look, you don't need the money, you don't want to sell it, you don't want to live here, so why don't I lease the property for 10 years and give you a fixed rent for the next 10 years?
• 12:09
  SPEAKER_00: Or he would offer like a joint venture agreement.
• 12:11
  SPEAKER_00: Whatever.
• 12:12
  SPEAKER_00: He would do whatever he could to get the property under contract.
• 12:16
  SPEAKER_00: So he's now got a property under contract at some sort of discount or some sort of agreement.
• 12:22
  SPEAKER_00: He would then go to the local authority who are looking for Section 8 properties in that area and say, Look, I've got this property for 10 years, how much can you give me for it?
• 12:32
  SPEAKER_00: And they would say, Look, we can give you for that property$2,000, just for ease of numbers,$2,000 per month.
• 12:39
  SPEAKER_00: Okay, so he's got two parts of the puzzle.
• 12:42
  SPEAKER_00: He's got the property and he's got a 10-year contract on the property, and he's also got the local authority agreeing invariable to give him$2,000 a month every month for the next 10 years.
• 12:54
  SPEAKER_00: So he's got a property and he's got a route to monetization.
• 12:57
  SPEAKER_00: Now all he's got to do is he's got to make a choice.
• 13:00
  SPEAKER_00: Does he buy it or does he sell it to somebody who wants to buy an investment property?
• 13:06
  SPEAKER_00: Now, this particular gentleman had no interest in owning property.
• 13:10
  SPEAKER_00: He wanted to purely just introduce that contract to somebody else, and that's exactly what he did.
• 13:14
  SPEAKER_00: So he went networking, he met investors, and he would go to an investor and say, Look, Mr.
• 13:19
  SPEAKER_00: Investor, you're looking to buy properties.
• 13:21
  SPEAKER_00: I've got this property with a 10-year contract, paying£2,000 a month.
• 13:24
  SPEAKER_00: You can get the property that's normally$200,000, you can get it for$180,000 or$160,000.
• 13:30
  SPEAKER_00: Do you want to do the deal?
• 13:31
  SPEAKER_00: Investor would inevitably say yes, and he would charge a$10,000 fee for all of the work.
• 13:38
  SPEAKER_00: And that blew my mind.
• 13:40
  SPEAKER_00: I'm like, okay, so I don't have to be a property investor, I can be a property entrepreneur.
• 13:46
  SPEAKER_00: I brought that strategy back to the UK, I closed 122 deals in my first year, I banked over£400,000.
• 13:52
  SPEAKER_00: Simple.
• 13:53
  SPEAKER_00: I got shown how to do something in property, and I made a decision very, very quickly that I'm going to do that in the UK and I'm going to dominate.
• 14:02
  SPEAKER_00: And I absolutely did.
• 14:03
  SPEAKER_00: 122 deals in the first year.
• 14:05
  SPEAKER_00: I didn't have to use huge amounts of capital to get started, and I I made a huge success of it.
• 14:13
  SPEAKER_00: I've since done over 625 deals like that, and I've made millions of pounds from property, and I've also built a seven-figure property portfolio, and that is why I got invested in property.
• 14:25
  SPEAKER_00: Because property for me, I know always goes up in value.
• 14:28
  SPEAKER_00: Property for me, I know is always in huge demand, and property for me was something that was accessible to me, providing I was happy to become an entrepreneur.
• 14:37
  SPEAKER_00: Obviously, if you want to invest in property and own the asset from the outset, then you're going to have to invest in property.
• 14:44
  SPEAKER_00: You're going to need a huge amount of capital to get started.
• 14:46
  SPEAKER_00: But if you're prepared to be driven, if you're prepared to be entrepreneurial, if you're prepared to actually build a real business, you can make significant income very quickly, but like you know, it's it's it's mind-blowing.
• 15:03
  SPEAKER_00: It really, really is.
• 15:04
  SPEAKER_00: And you know, I made£415 or something thousand pounds in my first year, and it set me up forever.
• 15:11
  SPEAKER_00: And I want you to remember this before we head off for the today.
• 15:16
  SPEAKER_00: Property investors sit back and wait for years to see their income, but property entrepreneurs can get paid within the next 30 to 60 days.
• 15:26
  SPEAKER_00: Property investing is passive, property entrepreneurship is massive.
• 15:32
  SPEAKER_00: Alright, I hope you found today's session useful.
• 15:35
  SPEAKER_00: Uh I hope you got value from it.
• 15:37
  SPEAKER_00: And if you are serious about building a property business, get in touch.
• 15:42
  SPEAKER_00: I'll give you the systems, I'll give you the processes, I will partner with you, and I guarantee you will get to six figures, providing you show up, take action, and go all in.
• 15:52
  SPEAKER_00: Alright, have a great day today.
• 15:54
  SPEAKER_00: Let's speak tomorrow morning, 7am.
• 16:00
  SPEAKER_00: That's it for today, folks.
• 16:01
  SPEAKER_00: Thanks for tuning in to the Prophet Entrepreneurs podcast.
• 16:04
  SPEAKER_00: Hope you got massive value from today's show.
• 16:06
  SPEAKER_00: Share it with a friend, make sure you're liking it, make sure you're following it so you get the notifications the next time the show comes up at 7am tomorrow morning.
• 16:13
  SPEAKER_00: Also, jump over onto Instagram and Facebook, drop us a comment, let us know what you've thought of today's show.
• 16:18
  SPEAKER_00: Head over to AlistairFelegon.com for the main website to get free resources, free training, and keep up to date with what's going on in our world.
• 16:26
  SPEAKER_00: Remember, property is all the building systems, create the system, created systems, nice to start now.