4 Deals in 1 Year Using Options and Property Filter - James Fox

My name's James Fox. I'm the director of JL Property Investment and Development Firm. So I've been working on the firm for the last 7 years. Originally started sort of with HMOs and building up a portfolio of HMOs sort of in Southeast London. I moved to Kent last year to kind of focus on flipping properties around here. So at the moment we've got sort of 2 strategies that we're working on. One is to flip houses. So we source houses sort of between 2 and 4 bedrooms. We refurb and sell those. And then long term we are looking sort of for blocks or flats or mixed use where we kind of buy and retain that. The strategies that we are using or the properties that we are kind of focusing on in in terms of the houses. It's generally properties that have a little bit of a problem. Could be sort of tenant-related or vendor-related problems, house-related problems, sort of subsidence, damp, structural issues, too dated for some sort of family to buy and renovate. So those are kind of the properties we are looking for. And generally we use options or delayed completions to purchase and do the transactions with.

Yeah, cool. And it sounds like you are essentially becoming the local property problem solver, I suppose.

We try to do a certain niche and I think that's kind of, In terms of where, if you're looking to flip properties, especially with options, try find a problem that you can sort of solve. And ideally you're trying to create a win-win solution. For me, I don't need to put that much capital in using an option. For the vendor, they're getting to get rid of a property that they're struggling to sell or an issue that we can resolve. And for the estate agent, obviously we're buying the property initially from them and then we're reselling it on the back end. So they're sort of getting two sets of commissions as well.

Yeah, no, nice. And I suppose when you, before Before you started using Propertyfilter, what— so when you were searching for properties, what kind of challenges would you say you were kind of experiencing prior to Propertyfilter?

I find I've spent far longer looking for properties. So especially if you're new to an area, if you're investing, like if you're fresh into an area that you're looking to invest in, you don't have the relationship with estate agents and most of the properties that you're looking for will be advertised online. You spend a lot of time then sort of trolling between Rightmove, Zoopla, OnTheMarket, any of those sort of portals. And I find the biggest issue with that is there's very little ways to actually source the property. Either looking at price, amount of bedrooms, the location, and there's very little differential between that. And then you phone the estate agent and you give them what you're looking for and they almost bang you 50 properties a day of stuff you're not really looking for. Yeah, I can relate to that. I used to spend a lot of time just like going in bed and you're sitting on the phone before you kind of switch off for the night and then you're scrolling through hoping that some property has sort of fallen out of bed and back on the market. And it's quite difficult because all of a sudden you, you look up and you're like, wow, that's just 30 minutes just gone. And it is, it's quite difficult. And I think having a platform where it's a little bit clean and everything's saved and you can hide properties or ask it to let you know when the price has changed, it makes it a little bit easier. And I think that that's kind of, it takes a lot of the stress away from finding it. You, okay, spend an hour, hour and a half on Propertyfilter every day, clean it all up, move some stuff along in the pipeline. Make a couple of agent calls and then it's like you put a system in place and having a sort of a clean platform and a clean pipeline makes life a little bit easier or far easier to sort of manage your business.

And I'm pretty sure I know the answer to this question, but would you say, or do you get your lead generators down to zero? So you're kind of keeping on top of your lead generators or is your inbox looking quite manic with loads and loads of leads in there?

No. My idea is I try, if I go to a new postcode, I sort of set, I don't always use the filters you use. I have like a certain category. I'm looking for houses between 2 and 4 bedrooms within this certain price, knowing that I can add value and sell it for slightly higher. I then put all the properties come up and then I hide everything that I don't particularly like or anything that's modernized, that goes into the bin straight away and those are hidden. Things that I think are a little bit too expensive where I can't sort of chip them down by $50,000, I kind of change those to like let me know when the price becomes a reduction. And then I try and minimize something from, let's say, 30 properties down to anywhere between sort of 5 to 10 properties. Then you can conduct a little bit of due diligence on those and see if the numbers will make sense, what you could offer, look at a little bit of the history, see if they've come back, if they've been reduced, and then phone the agent. So I try, like you say, get everything down to zero so when something new comes up, you can analyze it quickly and either just remove it again. I think once you understand property filter, it becomes far easier. I think One function that I, one feature that I really like is that when you sort out the properties, they give you a lot of, how would I say, like features. And what one of the biggest ones that I use is sort of the average price per low square foot compared to the average of the area or the selling price for that property is. And what you do is then you can sort of just click on that and you see the price differential before you've even negotiated. So I generally look at properties or offer on properties at about 15% below the average price per square foot of comparables. And I think that's a great way to analyze a property because a lot of people see what's the lowest price, what's been the most reduced, but you could find a property where the square foot price is a lot cheaper. And so these little sort of features, when you get to know them, does help a lot and sort of makes life a little bit easier. But I think you do also need to watch out because sometimes if they've done a rear extension, it's not on the EPC, then that sort of doesn't always come in. I don't always— sometimes if you over-filter everything, you might miss one or two. So I kind of, I guess it's a good strategy. It's probably the best. It's a strategy that makes the most sense.

Yeah. Okay, cool. And I suppose obviously it's obviously clear that you use PropertyFilter quite a bit and you've kind of fully utilised it. And I suppose what impact would you say it's had on yourself and your property business?

I've recently moved to Kent, so I've been here for the last year. I've been living in London for the last 13 years before that, it's quite a new area to invest in. And so for me, it made life far easier to sort of understand yields and prices. There's a lot more information that Property Filter provides, and so you can kind of go there and analyze a postcode quite quickly and sort of understand how much 2-bed houses, 3-bed houses, 4-bed houses, how quickly they sell, how long they're on the market, what's the average price. And I think you can spend 30 minutes on Property Filter and understand a postcode quite quickly or understand it. Probably 70 or 80% of what you need in order to put an offer through. So it made my life a lot easier in terms of finding areas within Kent. Kent's probably got about 20 different postcodes and I was able to nail it down to about 4 or 5 postcodes where we're currently looking to source properties. So in that sort of sense, it's sped up the understanding of knowledge of moving to an area. I think that's been a great help for me. Okay, so property that we're currently working on that we've got an option that will either be signed today or tomorrow. It's a mixed-use property in Folkestone. So that was on the market for £325,000. We secured an option on that for £317,000. So not a massive decrease, but we're able to purchase the property with a 10% deposit rather than a 25% deposit. We're then allowed to go into the property, uplift it, and we're speaking to a broker at the moment to be able to get us an end valuation on it. So we're looking to increase the value to around the £400,000 mark and then get a mortgage of £300,000 on it. So we'll probably leave somewhere in the region of £30,000 in left in the deal. The yield is quite good. It's about a 10% yield. So we'll get our capital back. I think within 3 years we'll have our capital back that we invested in the project. That was just something that was marked online. Nothing difficult to find. And that was straight from putting in there lowest price property and then just scanning through the things. So it probably took me about 5, 10 minutes to find. I think Property Filter over the last few years has sort of changed a lot. I think one of the features that I've really enjoyed is that you can kind of say off-market properties as well. So whenever I'm walking around or going in an area and I see a house and I think, well, that's got some potential, you can go onto PropertyFilter and you can save it and you can stick that on your pipeline. And I think that's a really great feature to have. So you can kind of run a couple of little sort of pipelines together, stuff that's on the market and properties that you find off the market as well. So that's been quite a really good feature, that sort of new taskbar that you've put in. I've really enjoyed that. I think PropertyFilter, in terms of us starting out, I think it's a great tool. There's a lot of software out there and you can kind of spend hundreds on software, but I think PropertyFoldz has got a great little package that if you're kind of starting out, whether you're looking sort of for rent-to-rent properties or just looking to source, it's a great way to sort of find properties. And I think it's probably more beneficial to someone starting out that's having to create relationships with estate agents and finding majority of their properties online. So I think it gives you tools like you've got comparable tools, you've got deal calculators, and if you're new to property and you don't have sort of Excel spreadsheets and things like that, there's like an all-in-one model that you can use straight away to sort of analyze quite quickly if a deal makes sense or doesn't make sense. So I think in terms of potential, it's great for people starting in property. It does cater towards a wide market, but I guess if I was starting out again, I'd be so happy to use a tool like Property Filter.