Latest / The Property Entrepreneurs Podcast with Alasdair Cunningham / Got £5k and Want Property Income? Start Here (Listener Q&A)

Transcript

Got £5k and Want Property Income? Start Here (Listener Q&A) · The Property Entrepreneurs Podcast with Alasdair Cunningham

• 0:04
  SPEAKER_00: Welcome to the Prophet Broad Podcast.
• 0:06
  SPEAKER_00: Can we come over 625,000 700?
• 0:17
  SPEAKER_00: 7am, strategies, insight, and technique to work today.
• 0:22
  SPEAKER_00: We're on Spotify, Apple Podcast, and Audible.
• 0:25
  SPEAKER_00: Let's crack on it and let's build your business.
• 0:35
  SPEAKER_00: Hey, good morning guys.
• 0:36
  SPEAKER_00: How you doing?
• 0:37
  SPEAKER_00: Hope you're good.
• 0:37
  SPEAKER_00: Welcome to the Property Entrepreneurs Podcast.
• 0:39
  SPEAKER_00: My name is Alistair Cunningham, and on today's episode, um, I'm actually going to be answering some of your guys' questions.
• 0:46
  SPEAKER_00: So we've had uh a few people email questions in and email their particular examples of where they're at in business and what they're trying to do.
• 0:54
  SPEAKER_00: Um, so I thought I'd just respond to these particular people.
• 0:58
  SPEAKER_00: Um, and if you do have a specific subject or question or case study that you'd you want a bit of assistance with and you want us to perhaps cover it on the morning show, just email it to us and you can find our contact details um on the website.
• 1:13
  SPEAKER_00: So just head over to Alistair-Cunningham.com.
• 1:16
  SPEAKER_00: Make sure you spell my name with a D, not a T.
• 1:18
  SPEAKER_00: Now, uh one of the questions I got in, um, and it's actually come in a few times, and I do get it a lot on social media as well is look, uh, I've got£5,000.
• 1:28
  SPEAKER_00: What can I do in property to actually start generating some income?
• 1:32
  SPEAKER_00: Um, and it's normally around that five or eight thousand pounds, like you know, and typically I get this, you know, from younger generation.
• 1:41
  SPEAKER_00: Um, they want to start a business, they've saved up five or seven or eight thousand pounds and they want to do something.
• 1:46
  SPEAKER_00: And my answer is always gonna be the same.
• 1:48
  SPEAKER_00: It's always gonna be the same.
• 1:50
  SPEAKER_00: Educate.
• 1:51
  SPEAKER_00: You've got to educate yourself.
• 1:53
  SPEAKER_00: And I know, look, I know, I know, right?
• 1:57
  SPEAKER_00: You're gonna be, oh yeah, you're just doing that because you're trying to self-train it.
• 2:00
  SPEAKER_00: No, I'm not.
• 2:01
  SPEAKER_00: Because listen, I had a client once came to me, and the lady had about 15 to 18,000 pounds uh available, and she knew nothing about property.
• 2:15
  SPEAKER_00: She tried to do a rent-to-rent deal, it lost her money.
• 2:20
  SPEAKER_00: And then she came to me and she said, Alistair, and I I need help with property.
• 2:24
  SPEAKER_00: And I said, Right, great, no problem.
• 2:26
  SPEAKER_00: And she she showed me this example that she had, which was a rent-to-rent down in South London, and you know, it was never going to make any money.
• 2:34
  SPEAKER_00: And the reason why it was never going to make any money is because the rent was extortionately high, you know, it was nearly three and a half thousand pounds a month.
• 2:42
  SPEAKER_00: Like, yes, the the daily rate was£200 a night, but you know, it it was in such an area where it the occupancy rate was so low, it just was never going to make any money.
• 2:53
  SPEAKER_00: By the time you factor in the cleans, and you know, she had it for six months, she was having to foot the the shortfall every single month.
• 3:02
  SPEAKER_00: Okay.
• 3:03
  SPEAKER_00: Now she came to me after several months of losing money, and she's like, Alistair, I met you at the start of the year, and you know, I went out after after listening to what you said about property and business, I went out, I got a rent-to-rent deal, but it's been losing money, so you know, properties just doesn't work.
• 3:19
  SPEAKER_00: And I'm like, No, it does work, you just did it wrong.
• 3:22
  SPEAKER_00: You see, information without support is not going to lead you to where you need to be, right?
• 3:27
  SPEAKER_00: You know, you can get information on YouTube, but the vast majority of times that that's not gonna lead to success because you're only getting a piece of the puzzle.
• 3:37
  SPEAKER_00: And I actually think it's a disservice if I give too much information away free of charge, because then what happens is people think that they've got the whole picture, they think that they know exactly what they've got to do, they go out and they lose money.
• 3:53
  SPEAKER_00: And this is the exact case with this lady, she was losing money every single month, and I said to her, Look, you need to you need to come and do my training, you need to come and do my mentorship.
• 4:03
  SPEAKER_00: And she said, Alison, no, because that money I can use to get another deal.
• 4:06
  SPEAKER_00: And I said, Yes, but how did the first deal go for you?
• 4:09
  SPEAKER_00: But she never invested, she decided to get another deal, and guess what?
• 4:15
  SPEAKER_00: A year later, the same scenario, losing money, maybe one or two money uh months made money.
• 4:22
  SPEAKER_00: And my my thing being, if you've got five to seven or eight thousand pounds, put that into education and then start with a deal sourcing business or start with getting some rent to rents for yourself.
• 4:33
  SPEAKER_00: You can get a rent to rent if you do all the work, you can get a rent to rent for the basically the deposit in the first month's rent and then whatever it costs to furnish the property.
• 4:41
  SPEAKER_00: So you could put three or four thousand pounds into a rent-to-rent deal and do all the work yourself.
• 4:46
  SPEAKER_00: But you've got to be mindful that you don't have the full understanding of how to run it.
• 4:51
  SPEAKER_00: So what's ask yourself, what's better?
• 4:53
  SPEAKER_00: Is it better to invest five or ten thousand pounds into learning and getting the right information and knowing how to do it and having a mentor who's gonna guide you in the right places?
• 5:03
  SPEAKER_00: Or is it better getting a rent-to-rent deal that might not be in the right area, probably gonna lose your money and actually gonna set you back?
• 5:10
  SPEAKER_00: So my advice to anyone who's got five to seven thousand pounds, ask yourself, at what stage of business are you at?
• 5:16
  SPEAKER_00: Are you new?
• 5:17
  SPEAKER_00: Are you experienced?
• 5:20
  SPEAKER_00: Where are you at?
• 5:21
  SPEAKER_00: And then you need to have a a bit of a reality check.
• 5:25
  SPEAKER_00: Can you do this without the right information and right support?
• 5:28
  SPEAKER_00: And then get the right information right support.
• 5:30
  SPEAKER_00: Okay, so that's that's how I would answer.
• 5:32
  SPEAKER_00: And um again, five to seven thousand pounds, I would start with property sourcing or rent to rent in some aspect, or even potentially property management.
• 5:41
  SPEAKER_00: Uh, these are all let's say low money-down strategies.
• 5:47
  SPEAKER_00: Another question I got in, um, and again, I'm not going to say their names because some of it's quite personal, is um I got a gentleman who messaged me and he's had a rough time over the last you know 10 years.
• 6:00
  SPEAKER_00: Um he he's lost a business and he's ended up with a couple of CCJs on his name, um, and he's he's basically unable to obtain credit.
• 6:10
  SPEAKER_00: Um so a CCJ is a county court judgment.
• 6:12
  SPEAKER_00: So essentially, when you've got debt and it gets sent to the courts and the court awards it, you get given a county court judgment, it stays on your record for six years.
• 6:21
  SPEAKER_00: Um, and it does mean that you're essentially um black marked against lending.
• 6:26
  SPEAKER_00: You you know, you'll find it very difficult to get lending.
• 6:29
  SPEAKER_00: Um and he wants to know what routes he can take.
• 6:31
  SPEAKER_00: Now, he is fortunate that he has managed to recover financially a little bit, so he does have capital to get started.
• 6:38
  SPEAKER_00: So he's got you know he's got 70 to 80,000 pounds um across his accounts to get going.
• 6:44
  SPEAKER_00: Um so he wanted to know what route I would advise for him.
• 6:47
  SPEAKER_00: The the route I'd advise for you is obviously you can't get um you're gonna struggle to get a traditional mortgage if if you're the main shareholder of the company.
• 6:57
  SPEAKER_00: So if you're like 50% or 51%, um you're gonna you're gonna struggle because the mortgage will be against the main the main director.
• 7:06
  SPEAKER_00: You could reduce your shareholdings and bring in a partner who's not got financial um marks against the name.
• 7:14
  SPEAKER_00: Um you could also um pay a mortgage host to host mortgages for you.
• 7:19
  SPEAKER_00: I I would advise against the mortgage host.
• 7:22
  SPEAKER_00: Um, but you know, if you've got a trusted partner you want to bring into your business, perhaps your your husband or your wife or your your you know your partner you've been with for a long time, then that's a that's a you call.
• 7:32
  SPEAKER_00: Um definitely seek legal advice about that um from a solicitor about you know the consequences and and all that sort of things.
• 7:39
  SPEAKER_00: But that's one option.
• 7:40
  SPEAKER_00: The other option is just do property flipping.
• 7:43
  SPEAKER_00: So instead of um instead of like owning property and getting mortgages for property, the other thing would be um just do property flipping, um, which would be buying a property and then selling it um and making profit.
• 8:01
  SPEAKER_00: The other thing would be you could get bridging finance.
• 8:04
  SPEAKER_00: So if you've got£75,000, you could actually get bridging finance.
• 8:09
  SPEAKER_00: Um there is lenders out there that do lend bridging finance um if you've got CCJs, you just have to be fully transparent with them, get a good mortgage broker.
• 8:19
  SPEAKER_00: The reason why they will lend against bridging finance is because against property with bridging finance is because bridging finance is a short-term loan um and it's secured mostly against the asset, not you.
• 8:31
  SPEAKER_00: Um so you know, I I know I know examples of people that have gained bridging finance and they haven't even been credit checked.
• 8:39
  SPEAKER_00: Um, so you know, again, you need a really good broker when it comes to that.
• 8:43
  SPEAKER_00: And um, if you're one of my clients, I can I can obviously introduce you to one of my brokers that are, you know, specialist lenders.
• 8:50
  SPEAKER_00: So look, there's definitely options.
• 8:52
  SPEAKER_00: Um, definitely options.
• 8:54
  SPEAKER_00: Um, I think traditional buying property is going to be out of the question until you can sort that CCG out or sort out getting mortgage criteria uh mortgage lending criteria.
• 9:03
  SPEAKER_00: Um so that's that's gonna be out of the question for now.
• 9:06
  SPEAKER_00: Um, but again, you could do buy refurbished free finance and flip them.
• 9:09
  SPEAKER_00: You could um do buy refurbished free finance um and and then joint venture with them.
• 9:15
  SPEAKER_00: You could also do joint venture loans, so you could get a loan from somebody, um, but then they might not lend to you because you've got a CCJ.
• 9:22
  SPEAKER_00: Um you could do property sourcing, um, and you could even do rent-to-rent deals.
• 9:27
  SPEAKER_00: Uh now I know obviously with rent-to-rent deals, you are going to get credit checked, and I am aware of that, but there is cases where you won't be credit checked.
• 9:36
  SPEAKER_00: Um, and it might be that even if you do get credit checked, and you can explain, look, there's there's the um you know a failed credit referencing, um, but you've got money in the bank, but if you find a suitable property, um you've got enough money in the bank where you can pay a six-month deposit.
• 9:54
  SPEAKER_00: So I know uh obviously renters reform has sort of kind of abolished the big deposits.
• 10:00
  SPEAKER_00: Um, however, that's for traditional ASTs, traditional lettings.
• 10:04
  SPEAKER_00: If you're doing rent to rent, it's going to be in a company agreement, so you can you know make arrangements to pay six months up front and things like that.
• 10:11
  SPEAKER_00: So, again, there's ways around all of this.
• 10:13
  SPEAKER_00: You've just got to be creative.
• 10:15
  SPEAKER_00: So, yeah, I hope that helps.
• 10:16
  SPEAKER_00: I hope that helps.
• 10:17
  SPEAKER_00: Um, all right, another question um before we get out of here for today, one final question.
• 10:22
  SPEAKER_00: Um, Alistair, I live in London.
• 10:25
  SPEAKER_00: Um, property here is very expensive.
• 10:29
  SPEAKER_00: What would you do?
• 10:30
  SPEAKER_00: And this is something that I get asked all the time.
• 10:35
  SPEAKER_00: I literally get this question all the time.
• 10:38
  SPEAKER_00: What would I do if I lived in London?
• 10:42
  SPEAKER_00: Now, I personally think London's had its day when it comes to property investments.
• 10:48
  SPEAKER_00: I do.
• 10:48
  SPEAKER_00: Um I think the time to buy London property was 10 years, 15, 20 years ago when the values were lower and they've they've obviously since gone up.
• 10:57
  SPEAKER_00: Um they've since gone up.
• 11:00
  SPEAKER_00: But what what I will say is I've got plenty of clients in and around London.
• 11:05
  SPEAKER_00: Rent to rent work very well around London.
• 11:07
  SPEAKER_00: You just have to be careful of the 90-day rule with the short-term accommodation.
• 11:12
  SPEAKER_00: But definitely, um, there is options for properties in London.
• 11:16
  SPEAKER_00: Bi refurbish refinance works well in London because there is bi refurb, refinance properties in London.
• 11:21
  SPEAKER_00: So there is lots of opportunities in London.
• 11:24
  SPEAKER_00: The other opportunity is just look, get on the train or get on the car and drive an hour north because there's lots of um areas just north of London or wherever where you can actually make a very successful property business.
• 11:41
  SPEAKER_00: So, look, hope you found today's shows useful.
• 11:44
  SPEAKER_00: If you do have any questions, just uh head over to my website and submit them over there.
• 11:48
  SPEAKER_00: Um and look, see you tomorrow morning, 7am.
• 11:54
  SPEAKER_00: That's it for today, folks.
• 11:55
  SPEAKER_00: Thanks for tuning in to the Property Entrepreneurs podcast.
• 11:58
  SPEAKER_00: Hope you got massive value from today's show.
• 12:00
  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 out at 7am tomorrow morning.
• 12:08
  SPEAKER_00: Also, jump over onto Instagram and Facebook, drop us a comment, let us know what you've thought of today's show.
• 12:12
  SPEAKER_00: Head over to AlistairFelingum.com for the main website to get free resources, free training, and keep up to date with what's going on in our world.
• 12:21
  SPEAKER_00: Remember, property is all about building systems, created systems, created systems.
• 12:28
  SPEAKER_00: Now go out and make the business.