Most Property Mistakes Happen Before You Even Buy

Thanks, Graham, for inviting us on to this live session this evening.

Well, it's our first live session together, so hopefully we'll be okay. Anyway, I'm very happy that you have joined the Secret Property Club and you're now a partner to the Secret Property Club. What do you think that you will bring to the table and what is it that you're hoping to you know, to do with us.

Yeah. So, I mean, in terms of my own experience, I've been in property since 2004. I've built up a small portfolio of buy-to-lets. I've done a number of refurbs over the years. Before you invited us into The Secret Property Club, I set up my own networking, my own networking event and community called The Property Support Network. So I'm hoping that some of those members will obviously come across into the Secret Property Club, where we're obviously looking to add value and share the knowledge with the community.

That's really good. You know, you have a strong community going already. I think about 6,000 members on that community, right? And then the Secret Property Club itself has got about 1,000 members. So having joining forces, we'll hopefully have a good group of people experienced investors as well, that will be able to help those that want to learn a little bit more, learning from each other rather than spending tens of thousands of pounds in training courses. We have some people joining already. So if there's any questions when it comes to property investing or questions about The Secret Property Club, then feel free to just Write it in the comments, whether you are watching live or you're watching a recording, we'll try and get back to you as soon as we can. Now, today I wanted to maybe talk a little bit about one of the things that we wrote about on The Secret Property Club, which is mistakes that property investors make. And there's plenty of mistakes. I've made plenty of mistakes as a property investor myself. I'm sure you have too, Steve.

Very much so. Yes. And obviously sharing that knowledge with others in the community that you've got, hopefully we can prevent them from making those same mistakes from the lessons that we've learned.

Exactly. And that's exactly the point of the Secret Property Club really, is to help the community, you know, to go further in their property journey. Maybe a little bit faster because they want the feeling that they're doing it on their own.

Uh, the first thing, isn't it?

Exactly. The first thing that I would like to discuss today is due diligence. A lot of people think that, you know, you can go to estate agent or look for properties. The property looks good. You do a low offer and that's it. And then hopefully it's going to be okay, but there's a lot to due diligence and it's so important to do proper due diligence before you go into any property deal. What are the things that you look for when it comes to due diligence?

So obviously looking at comparables, Um, every property in every area will have its own ceiling price. So the point you make your money is really at the point that you buy the property. Uh, and there's no point overpaying for that property. Uh, cause if you don't buy at the right price and then you've got your refurb costs and your holding costs and exit costs. Talking about the exit, it's really important to make sure that you have that exit plan in place and you have multiple options on your exit. So if you're looking at just doing a flip, obviously politics at the minute is a bit up in the air with everything going on. So that could potentially have an impact in the property market 6 to 9 months down the line. So you've got to really make sure that you know the area you're on top of your figures in terms of potential refurb costs and the work that's going to be needed. That's when you need to obviously start getting professionals in to have the cost of the rewire, cost of obviously sort of new kitchens and sort of new bathrooms and that, those kind of elements within the property. And have a very good idea what the exit is going to be. Whether that's, you're going to obviously like to flip it, or whether you're going to hold it and do SA or do buy-to-let, or whatever your particular sort of personal strategy is.

Okay, so let's break it down that a little bit more. You said, um, looking at the figures, looking at the costs, uh, and looking at comparables. So when we talk about comparables, there's different ways to do it. Personally, because I know the area that I invest in really, really well. And I keep on, I keep tracking what is selling and what is not selling. I know the streets, I know the estate agents, I have conversations about the value of those properties. And then I look at the comparables of the sales that happened in the last year. So when we say comparables, just to clarify to those that are just starting out in property, if I'm going to buy a property that is on the market for £150,000 on Duke Street, for instance, then I want to look at comparables, properties that have sold in the same location in that specific postcode in the last year and how much they have sold for. I also want to see the condition of those properties and perhaps the size of those properties. We need to compare apples to apples, right?

Yeah, 100%.

So if the property that we're looking for is a, is a 3-bed that doesn't have a garage, uh, has only street parking and it needs a little bit of a refurb, uh, then I want to look at another property that another 2 or 3 properties that have sold in the same location that are very similar. So I cannot compare that one to a 2-bedroom. I cannot compare that one with another that have a garage, for example. It needs to be something similar, right?

Yeah, there's no point comparing a semi-detached with a detached property, for example, because you attract a different purchaser.

Yeah, so that's just looking at the comparables. Then the other thing that you mentioned was the cost. So when you say costs, you mentioned the refurb, you said solicitor fees, uh, if maybe any service that you want to add, if there's going to be a bigger project and there's going to be a need for planning or maybe architect fees or any professional fees, all that needs to be added. Do you use deal analysis.

Yes, I have my own Excel spreadsheet that I have that sort of basically I can put all that information into.

Exactly. So professional investors will put all the figures on that spreadsheet. And there's so many different spreadsheets. I kind of adapted from different ones that I've seen to then create my own to the figures that I like. But that's something that we actually have available on the Secret Property Club. And if you are a premium member with the Secret Property Club, then you have access to the deal analysis spreadsheets that we have on the platform. And there's deal analysis spreadsheets for all different types of strategies, you know, for if you're going to do buy, refurbish, rent, refinance, or if you're doing an HMO, it's a different spreadsheet. Or if you have, if you are doing serviced accommodation, then that's another spreadsheet. There's spreadsheets for everything, but it's, it really helps you do that due diligence on the numbers much faster, right?

100%. Yeah. And it's worthwhile doing that due diligence on say 2 or 3 different exits, like So that's it that you're going to do so that you know that if your first choice of your exit doesn't work, then you've got a backup plan as well that isn't going to get you caught and have a project that is going to cost you money. Because at the end of the day, everybody wants a project to make the money.

So that's part of the due diligence on the figures, right? So if it's not going to work out and it's not going to have the valuation that I expected as an HMO, can I still, can I sell it perhaps? Or if you're doing a BRRR, instead of keeping it again, can I sell it? What are the best— having different exits. That's a very good tip. What other things can we consider when we're talking about due diligence? To me, I'm also looking at the rental demand and what were the volume of sales that happened, because again, If I have to sell it, I want to be, I want to know if I'm going to be able to sell it.

Yes, exactly.

If I want to rent that property, then I want to know that I'm going to be able to rent it and for how much. So it's part of the figures, but it's not costs anymore. It's more about the outcome. Can I achieve what I wanted? Can I get £950 per month? Again, we need to check comparables, we need to check not just comparables, but we need to see that properties similar to ours, that 3-bedroom that we talked about, they don't stay on the market very long. People want to rent those properties. Then we also want to probably have properties in specific areas and locations. So that's another part of the due diligence. What is around the property? What's happening around the property in terms of applications. Is there any developments that going to cause any issues with that particular property?

And if it's not an area that you know personally that you've been selected to obviously invest in, you need to do your research into the area. So you can look at the crime rates, schools and transport links, et cetera. Within that area. You need to do the, not just the due diligence on the actual property itself, but the area the property is in as well.

You know, I usually, I tend to, when I, anytime I'm looking at a property that I want to purchase, I always try to speak to a couple of people in the area. And when I say in the area, I mean, the corner shop that is close to that property, or even the neighbours on the same street. And because I had a couple of situations, one of the deals that I closed was a neighbour that gave me insider information about the vendor, about what was happening to the property, not to the property, what was happening to the vendor. And because I knew then I was able to negotiate because I knew that that vendor was desperate to sell it. But the estate agent never told me, and the vendor never showed that they were desperate to sell, but the neighbor told me the story of the vendor. So that really helped me with the deal. It's not really due diligence, but you can get information on the tenant, on the property. Let's say it's a tenanted property and it's got tenants in it. And the state agent tells you, oh, they've been there for 5 years. And the vendor will say, oh, they're the best tenants in the world. And then you speak with the neighbor and the neighbor will say, well, yes, I think they pay the rent because they're there for 5 years, but you know, they party there all the time and police comes here every 3 weeks. So now we have a problem. Are we able, especially with the new renters' rights, if we're buying a tenanted property, we want to be very careful about who the tenants are. And that's why I recommend people to speak with the neighbours when you go and buy a property.

Yeah. And if you're looking at that area, it's also worthwhile going at different times of the day or at the weekends because the area might completely change at nighttime.

Yes.

If it's a heavy student area where they're all at university in the daytime and it seems a nice, lovely, quiet area, but come the nighttime or the weekends, having parties and—

One of the things, one of the things that changes the most depending on the time of the day, it's the parking. If you go there at 10 o'clock in the morning, it might seem like a lovely street. With plenty of parking, but when you go there at 8 o'clock in the evening, you realise that you couldn't find a parking space for yourself.

Yeah, everybody's home from work and obviously they've got the cars parked up at sort of work during the day and at home at night.

Exactly. Well, there is really plenty of things that we can discuss when it comes to due diligence, and there is pro tips that we also share on the Secret Property Club private sessions. And if you have questions about specific deal, a particular situation that you've never come across before, then we can discuss those on the private sessions on the Secret Property Club. If you're watching this video, then you can literally just send a message, leave a comment to get more information on what else we can offer you if you are a member, a premium member of the Secret Property Club. Then the other thing that you already mentioned, Steve, briefly, was about the costs, but this time I want to talk about the refurb costs and how people kind of underestimate the refurb costs. That's a huge problem because I think 9 out of 10 times the refurb costs end up being way more than what people expect. And then we also have on the other side of the coin, the returns. People will think that, oh, I'm going to get £300 a month, but then actually they only get £150 a month. Did you have that experience yourself?

Yes, I once did a project for an investor that we sourced the property for in Lincoln, and they bought the property, they provided all the funds for the refurb. But during that actual process, they kept changing their minds. They wanted, it was a typical Victorian terrace property with a rather large bathroom on the, like, sort of ground floor behind the kitchen.

Mm-hmm.

And we'd done all the sort of first fix within the property, and then he turned around and says, I think the bathroom's too big in relation to the kitchen. And we, he then said, well, I want to move the wall 1 meter forwards. And that just added to the costs. And that wasn't obviously originally scoped for. Um, so then we had to get building control involved with obviously putting lintels in, et cetera. So it's really important that you have a clear path of what that refurb is going to be rather than changing. Halfway through.

Budgets are really important and most people unfortunately are not good with budgets. If you go on holiday and you plan to spend £2,000, I would say that most people end up spending more than those £2,000 because it's a little bit like, oh, I'm already here. Let me enjoy it. But when you're running a business and when you're working on a property project, the numbers on the budget can make or break the deal. Because if I plan to, let's say, do a refurb, and then I kind of realise my total costs are going to be £150,000, I am then going to refinance that property. And once I take some of the money out, Uh, I will probably, let's say, end up with £20,000 that stay in that deal. Just as an example, if that property is going to profit £4,000 a year, then it's going to take me 5 years to get all of the money back.

Yeah.

But if I ended up spending another £10,000 on the refurb, Instead of getting all my money back in 5 years, it could mean that I'm only going to get my money back in 8 years. And that's a big difference in return when you, when you think of the return that you're going to have annually. That's why sticking to a budget and having a buffer within the budget is so important. But then you also have the issue with how you deal with contractors, because there is plenty of contractors that you will speak to them. They will give you a quote and it's going to be, just as an example, £4,000 for whatever. Um, but then things happen during the works and it's not £4,000 anymore, it's now £6,000. How can you deal with that? If you had any experiences like that, how can we try to kind of estimate and almost expect that there's going to be an extra cost. How can we deal with that?

You need to build in a contingency for obviously sort of unknowns. Because if you're doing a refurb and you've got to pull walls down, take plaster off the walls, etc. Until you know what that is, is, is like, and there could potentially be obviously overruns in the budget. Yeah. It's important that you have a clear goal of the target market that you want at the end of the project. It's like, there's no point putting gold taps into a rental because people aren't good. That's what that extra cost isn't going to be relevant. Well, so you need to know your target market at the end, whether it's for like tenants or to resell, but the sort of the standard of the refurb has to match the exit or like sort of like the person that you're trying to attract at the end of the deal to either buy that property or rent that property off you.

Yeah. So what you say, that actually is pretty good. The standard needs to match the exit. So it will be a different standard if you're going to keep the property and rent it, or if you're going to flip the property and sell it. It's going to be different if it's an HMO and you want maybe your furniture to last more than 6 months, or if it's going to be a serviced accommodation property. Where pictures and how it looks, it's very, very important because that's what people see when they are booking on websites like Booking.com or any other platform, or if you are trying to get direct bookings on your own website. But it completely is, yes, you're absolutely right. The standard of the work needs to match the exit. Uh, but I would like to add a little bit to that. Having a community, like a local community. I host a networking event every single month, PPN Lincoln, but we're talking to people all over the country and maybe even people in other countries because you're gonna learn from the Secret Property Club even if you are in other countries. Uh, but my point is knowing other investors in your local area that are doing the exact same thing what you want to do can massively help you. Because I can go to my friend Bernard, and that is also in the same area, and doing buy-to-lets, and I can invite him to come and see my buy-to-let, before I do any work. And he's going to tell me, oh, I did the exact same job using John the Builder. And he did amazing work. So I say, okay, John the Builder, can you come and see this property? And I can have a very clear idea if it's a similar project, what should I expect in terms of costs? Then I go to another builder. And he's going to give me a completely different quote. Let's say that my friend that already did the same project in the same street or the same type of property in the same town using the same builder, he spent £15,000. Now I have another quote from another builder that came in and said it's only £8,000. It's very interesting and just, okay, £8,000. I don't really have anybody with the same. You might have reviews and stuff like that, but I don't know anybody that has actually used that other builder. What can happen is those £8,000 will turn into the same amount. It's going to be £15,000 anyway.

They quote you the 8,000 to get the job.

To get the job, but they already knew it's going to be 15,000 anyway.

Yeah.

And that's the thing with always trying to get multiple quotes, always try to get references. And if possible, because when you start, you need to create relationships with the tradesmen, with the builders. So if possible, go and see a job that that builder has done himself recently, right? So that you can go and you can potentially even have a live recommendation from whoever, you know, on that property, um, paid for that work.

Yeah.

And, uh, and, and that can really help you, but that only happens when you create relationships with other local investors, uh, and kind of recommend the tradesmen that each other use. That can really help.

Yeah, that's the importance of having the power team. Yeah, having the right trades.

It's not just the recommendation and the quality of the work. If I send 3 or even 4 different builders to the same property, one builder will potentially see something that the other didn't. It was a crack on the wall. It was potentially, oh, the plumbing, it's not very good. So we need to think that maybe we need new pipework done. And then you can add that to the cost. If you ask just one builder, they will give you the quote and maybe they will miss something. So having different pairs of eyes looking at the same property, can potentially save you money or at least help you prepare for what's going to be the actual cost.

Yeah. And one thing to add onto that, David, is that to get the right quote for the job, it's really important that you specify the works that you want doing.

Yes.

Like say an electrician, for example, is going to do a rewire. You need to make sure that you specify what rooms you want sockets in, what type of sockets, Yes. You want light switches because changing the plan really does add to the costs.

Uh, yes. And, uh, well, I had that experience.

Do you? Right.

I had that experience multiple times because I'm the type of person, I'm not really interested in the details. My wife does that for me. I'm kind, I'm the kind of person, if I contract an electrician, I expect him to, that he knows what he's there for. And I kind of forget that if I don't give the exact details, they will, um, for their own benefit, not tell me about what type of socket do you want, or they will not ask Do you want new fixtures on the ceiling or should we keep the existing ones? To me, it's obvious that I want new ones because I'm doing a whole refurb and it doesn't cost that much. So I want to have new light fixtures. If, but because it's not specified, it was not written anywhere, they will do the job. They will not change the the fixtures. And then at the end, I'll say, well, but you didn't change the fixtures. And they will say, well, you didn't ask to change it. That's not on the quote. So that's going to be another £500 because I need to go to the shop. I need to order. I need to send my men over there. And it's going to take me half a day and these two people because my men never work alone.

It's like, so I stopped going for like sort of sockets. You think they're going to be stainless steel, for example, but the electrician quoted on just normal plastic ones. Yeah, exactly. That will have a massive impact on the overall budget.

Yeah, so I hope tradesmen don't listen to this because I don't want them to hate me, but the reality is they will take advantage of you and they will try to take more money than what they should. And you've got people literally in this industry teaching tradesmen how to get more money out of their customers. You literally have experts in this industry doing talk shows and going on events, teaching tradesmen how to make more money so that they can get out of the tools. That's not the business. That's not the people we want to work with. We want to work with the normal tradesmen, honest people that just want to do the job, have good reviews and customers forever.

So, so from your experience, David, so obviously a trade can either quote for the job or they can quote a day rate. Mm-hmm. And then they can specify, well, I think it will take you 5 days to replaster the house, for example. Would you recommend having a fixed price or to engage with a trade on a day rate?

To be honest with you, actually, To me, it depends what the job is. Usually you want to have a fixed price if it's a bigger job.

Yeah.

That's in my experience. If it's a bigger job, things can get out of control and you expect that it's 5 days and then it becomes 10 days. So I prefer to perhaps pay a little bit more because they will charge you more. They need to account for, well, if this goes wrong. Then I need to be covered. So they will charge you a little bit more, but at the same time, they want to finish quick so that they have more profit.

Yeah.

Right. The quicker they finish, the more profit they have. Um, so that works on a bigger project. If it's something small and if it's, um, a trusted tradesman, if he's a trusted tradesman, then I don't have a problem with a day rate. Because if it's someone that I have a long-term relationship with, and I know that they're not there trying to mess me around and, you know, trying to make it last as long as they can.

Look at 10 AM, we are gonna finish it. 4 AM, like 4 PM. Exactly.

That's why I say it depends. But if you're gonna, if you're doing a refurb on a property, and especially if you're getting a, if you're working with people that you haven't worked with in the past, then having a quote with written information, it doesn't have to be a contract because Tradesmen will run away if you want to use the words, oh, let's sign this agreement, right? It doesn't have to be an agreement. Here's a tip. Communicate with them via email. Communicate with them via email and say, oh, this is what we want to do, John. And John will say, okay, that's £5,000. Perfect. Oh, John. Before we start the work, just to clarify, with those £5,000, these and these and these, and we're going to list 20 things, all that is included. All that is included, right? The fixtures, these number of things, remove the rubbish from the site. That's a high cost sometimes, and they don't, it's not written anywhere. So you're going to put all of that on the email. You send it to them and say, I just want to clarify that all of these is included on those £5,000. Is that correct? John replies and says, yes. That's your contract. You don't need to get an agreement with a solicitor and a line to sign. You've got paper trail of all the discussions that you had with the guy. So you have proof of what was agreed before he starts the work. You also want to, on that conversation, that thread of emails, Discuss the payment terms. You want to say, John, I'm happy to pay the materials upfront so that you can get the materials, whatever that is, you know, 30%, 40% of the cost. And then I'm happy to pay half of the job once we can see the development, once you can see that the work is done, but I'm only going to pay the final payment, the other 50%, once it's fully completed, once I do a site inspection and we're both happy that there's no outstanding works.

Yeah, there's no snag.

And I don't care if it's because you left a paintbrush on site. You said you're going to take the rubbish away. And I said that I'm going to pay once it's all done.

Yeah.

So once we're both happy that it's all done. I'm going to make the last payment.

Yeah.

And I never, never, never pay before.

Yeah. But just on the material side, because obviously if you negotiate a labor-only rate and you're providing the materials, you need to make sure that those materials are on site when the contractor needs them. So let the contractor manage the materials to your specification. They're then responsible for making sure that there's a delivery for that job to be done at the right time. So there's no point having a plumber turn up to fit a boiler if the boiler's not there for another week.

So I don't, I don't tend to do that. Right. Uh, and I know that, that, so this is a matter of opinion, personal experiences, right? Like I said, I don't like to work on the details. I prefer to leave it for somebody else. Also, I like to have the knife in my hand when it comes to blaming somebody else. So I speak with my contractors and I ask them, again, it depends if it's a long-term relationship, if it's a new contractor. I will not engage in buying materials with a new contractor because he's going to blame me for everything. Yeah. Right? I know what materials cost, so you should know too. And if you don't know, you can do some research, right? You can say, this is what I want to use. Can you buy the materials? Right? Yeah, there you go. But he's, he bought the materials. He's the one responsible to get them on site on time. He's the one responsible to change anything that is wrong. He's the one responsible if anything is damaged. So I prefer to leave that, pass the ball on to somebody else. I know what materials I want to use. I tell them this is the paint brand that I want. I also do one other thing. I always ask them, what are you most comfortable with? Because let's say you have somebody fitting a kitchen for you. I don't need a kitchen company. I don't need a kitchen specialist, you know, with 30 years experience because I'm only doing a small buy-to-let with one kitchen on the wall. There's no cuts and special worktops to do. Very basic kitchen, right? So somebody that knows how to do kitchens can do that job, but I can ask him, what kitchen brand are you used to? Because if I come to him with something completely new and different, instead of taking him 6 hours to put it on the wall, it's going to take him 6 days. And he's going to do it wrong. And he's going to damage a couple of units because he'd never worked with that run before.

Yeah.

So I discuss with them, what are you comfortable with? And if I'm happy with, I will let them use whatever they are comfortable with because they're going to be much more efficient, much faster. And unless it's a big difference in price or it's the quality is wrong, I don't like it. But if possible, I always try to adjust to what they like.

Yeah.

It's a bit, it's a bit like the tools, isn't it? They will like the tools that they use. They don't want to use my tools. They don't, it's a different brand. It's the same thing. They want, you want them to use what they know how to use.

Yeah.

It's like taking a BMW to a Toyota garage. You don't.

Exactly. Exactly.

Yeah.

So I always kind of try to have that conversation with, anyway, you can speak about contractors and building works for hours and hours and hours. And we have a couple of people that are coming to the Secret Property Club that are going to do sessions on this stuff when it comes to developments or small refurbs, anything like that, pro tips that's going to help any investors doing works on refurbs, on bigger projects, HML conversions, things like that. Then the next thing that I would like to talk about, and I don't want to stay much longer than an hour, so let's just find another two things to discuss. And one of them would be the investment strategy. So if you're just starting out and you are in 2026, um, because people will go to a training course. Simon, Simon is here with us. Hello, Simon.

Hi, Simon.

Simon has plenty of experience when it comes to doing refurbs, and we were just talking about refurbs. Anyway, if we are just starting out in 2026, people will go to a training event, a networking event, and they will see other people doing serviced accommodation, rent-to-rent, HMOs, flips. What do you think, Steve, if you were starting now in 2026 in your area, what would you go for and why?

Oh, that's an interesting one.

That's an interesting one. Yeah.

Um, I'll help you. Yeah. A little bit of a back. Story on this. So my experience with buy-to-lets and refurbish-to-lets over the years, uh, about 4 years ago, I pinned my hopes on a new build project, um, which I invested 2 years of my life in, which was very painful. So it was for initially 18 apartments in Lincoln and we got planning after 2 years, subject to what's called Section 106 agreement. So it was going to be a massive step up for me. I wanted to get into new builds at the time. Having gone down that pain, so we got planning committee, the scheme got approved, but the Section 106, which is the contributions for health, police, education, et cetera. There was a delay in getting the response back from Highways, which is the council for Lincolnshire. And that delay was because of their ownership of part of the site that our solicitor hadn't picked up on. So if you'd have asked me that question 4 years ago, would've been new build because I was, that was what I wanted to get into. But now, because of the risks and the costs that that have on me personally, where I'm at now, I would love the opportunity to get just involved with a flip and a re— and just to basically buy a property that needed work and then obviously resell it or hold it and rent it. So me personally, Where I'm at now, I'd want to—

Where you are at now. Exactly. Where you are at now, it would look—

Change as you go through the processes. Yeah. Then there will be different contexts.

I was, I was going to say that to me, so, so that the question I asked, that's personal to each person. Uh, and, and it's so important to reiterate that you should not compare your journey to anybody else's journey. You have a different amount of cash in the bank than I do. You have a different experience than I do. The amount of time that you have is different than the amount of time that I have. Your risk appetite is different than my risk appetite. Your hands-on, um, appetite is different than my hands-on appetite. I don't want to do anything with it, with the properties that I own or that I work on. I'm not interested. I hate dirt. I don't mind that.

I've got a garage full of tools and hammers and spades and wallpaper strippers, all sorts of things. So I don't mind getting my hands dirty. And I quite enjoy the sort of, like, sort of ripping out and obviously going back.

Look, it's like that. I have been and will be the worst DIY person in the world ever. I can't, I'm just terrible at anything related DIY, etc. I don't mind planning stuff. I don't mind. Purchasing, but you're not going to find me on the tools. But that's just me. Even here at home, my wife will change the lamps and put the things on the wall because I will mess it up. Anyway, what I was saying—

Me and my wife nearly fell out the other day because we've just had a recent rewire at home. So we had to take everything off the walls and Sunday, we were putting the slides of the paintings and stuff like that, pictures back up on the wall. And it ended up me turning around to my wife and going, I know how a spirit level works. So I'm trying to get straight to her face, but it was like, well, the bubble's on the left. I was like, I know! I got so sort of frustrated. It was quite funny at the time.

Anyway, we are talking about the mistakes people do when it comes to property investors, especially for those that are starting out or don't have, you know, the amount of experience they wish they had. And when it comes to property strategies, the one thing that I will say is you need to think about what kind of strategy you identify with. If you're going to stress about the tenants, for whatever reason, you know, what are they doing in your property? Then if you're going to service accommodation, you're very likely to have a heart attack. So don't do it. If you have done properties before, you know, and you have, you are okay with having tenants, then you can think about what is it that you're looking for? Is it cash flow? Or is it the appreciation, the wealth generation that you're going to create over time? You know, if it's a retirement plan, then it's not the cash flow that you're looking for, it's more the appreciation the property is going to gain in the next 10, 20, 30, or maybe even 40 years. So then you also want to see the amount of time, the involvement that you want to have. If you want to be hands-on all the time, then you can go and do a referral, maybe with somebody experienced like Simon. But if you don't want to be hands-on at all, then you need to find the strategy that will allow you to do it without being hands-on, right? Simon, welcome to the live. I'm not sure if you have your mic on. Can you hear us okay?

Can you hear me?

We can hear you perfectly, Simon.

Excellent. Excellent.

So Simon, thank you very much for joining us. I decided to invite you on.

Thanks for the invite.

Thank you.

Because we've been talking about refurbs and mistakes that people do when it comes to property investing. And you have a lot of experience in doing refurbs because you do flips.

Is that right? That's right.

Yeah. Yeah. Yeah.

Why would you say to the people that are listening and going to listen in the future, why are flips a good strategy? Because Steve just said he wanted to do a flip.

Yeah. Um, I think flips are good because, uh, they do give you that injection of cash. Um, and you can, you know, If you get something that doesn't need too much work, you can literally flip it within the 5 to 6 months. You know, we've done, we've flipped it in sort of 3, 4 months before from start to finish, you know. And after that you've got a big cash injection to go on to the next one, on the next one. And then when you've done 3 or 4, hopefully if you're getting your 25 to 30% return on your investment that you're putting in, then you've, you've You're sailing free then, you know, you're sort of, you're not using your own cash. You're using the cash that's in the company.

Exactly. You know, but when you started out, I don't know how many years ago, but when you started, you didn't start straight away with flips, did you?

Oh, no, no, no. We were, we've started out with just buy-to-lets.

You started with buy-to-lets? With deposits, or were you buying cash already?

No, we were putting down 25% deposits. That was back, that was back in the day when you didn't have to, there was self-funding and the mortgage people. When we first, when we came back from abroad and we got our first ones, we didn't actually have jobs when we came back to England, but we had equity in other house, in other, uh, flats in England. That we pulled the money out of those and put down as 25% deposits, but they wouldn't actually physically lend us personally the money, but they'd lend it to a buy-to-let. It was such a weird situation. It's changed now. You have to, yes, you have to have to be funded, don't it? You have to make sure it's funded now from behind, out your own pocket if it hits the fan, you know.

But, but so, but here's, here's the, here's the thing, cuz today We're trying to speak about mistakes that people do. Is there anything in particular when it comes to flips that we need to be wary of? Uh, so that, you know, we want to learn from you.

So, uh, yeah. Um, I'm trying to think of one that's not gone too well. Yeah. Personally, we stay away from older properties, older Victorian solid brick wall properties. That's our personal preference. Because what you find with those is if they're— if they, you know, normally you're buying them when they need a bit of work, that's where the value is. And if you buy them, if you're buying them and they need the work, them older properties, they normally need a lot more work behind the scenes, you know, getting them, because obviously you're not just letting out, you're having to get it ready. For potentially a surveyor to come around and test everything, the damp, the— do you know what I mean? So in those older properties, you can really come a cropper with that, from above and from below, rising damp, penetrating damp, stuff like that. So that can be quite a biggie to, that could be quite a biggie to, to, to, to get ready for the surveyor to put his damp meter in and there's no damp, you know.

So do you end up going Do you usually actually do a full survey on the, on those properties? If you are not sure about, you know, damp, structural condition, all that stuff, do you do full surveys?

No, I don't. We don't, we don't have surveys. We don't do searches. We just keep it right down to sort of a minimum when we're purchasing.

You keep it simple.

Keep it very simple. Simple Simon.

Simple Simon. No, but this is why speaking with people that have the experience is important because you are successful at doing flips. You know what you're doing. You make money doing flips and you don't do those surveys. So, and this doesn't apply for everybody. Right. I don't want to say categorically, don't go and do surveys. Sometimes you want to do a survey, right? But what I'm trying to say here is you might go to a training course and they will tell you always do the best survey that you can, uh, which is quite expensive, but the reality is if you've done 1, 2, 3, 4 projects, similar type of property, same town, you already know those properties really well, right? And you kind, you almost can already, you can say with your experience, what are the chances of finding an issue in that particular property? Yeah, yeah, isn't it? I think that's what— that's what I'm saying.

You almost know before you go in.

Yes, exactly.

Just from the photos and stuff like that. And, you know, but look, going back to that, like you're saying, if you're having to, um, if you're doing it as a buy-to-let and you have to get, uh, obviously lending, then you've got to have the survey done as part of the lending.

Yes.

But sometimes that can be a bog standard.

Yes, they will only ask for a standard survey.

Yeah, yeah. Evaluation. Exactly, yeah.

Do you do, I'm sure that you and Duende do a lot of the work yourselves because I see you active doing jobs, but you also have people that work for you, you contract people when it's something a bit more complex, right?

Oh yeah, yeah, yeah, yeah.

Plumbing, I mean, well, on this latest project we've just taken on, we are stepping right back. Um, I went there last, uh, when we picked the keys up Friday. Um, I went there, just helped ship kitchen out. I've left someone on the job, uh, over the weekend and today he's there. Doing some work in the garden and he's stripping off tiles in the bathroom, stuff like that. I've had the plumber around today to get ready for the plumbing. Uh, electrics I don't do myself. So I was fitting the kitchens, um, and obviously the decorating I was doing, Wendy and myself, um, and a lot of other stuff. But this, this, this next project is a bit of a test for us because we want to step away and have more time to do other things, you know. So it's doing— it's so difficult. I mean, it's, it's 5-minute drive from my house and it's so difficult to stay away. I'm like itching to get around there and get into it, but I'm trying to promise, I'm trying to promise myself I'm not going to do it because I'll end up doing a bit and then a bit more and a bit more, and then before you know it I'll be back on the tool.

The reason I asked, the reason I asked about, um, working with the contractors is because another mistake that I see quite a lot of people make is exactly working with the wrong professionals, not just tradesmen. I'm talking about solicitors, the wrong accountant, the wrong mortgage broker. Do you have any experiences or maybe you, Steve, any experiences that can tell, can show and showcase what can go wrong when you work with the wrong people?

Time.

Solicitors and time, you know, that's such a big— they really sometimes drag their heels. We, we now use the same solicitor every time to buy and to sell. Um, we don't always use estate agents because we've had— if we have to, we will do, but we don't always. Um, but, and What's the other?

Yeah, the mortgage—

what, sorry, uh, Dev, our mortgage man. We use him all the time and we just give him to everyone that wants a mortgage, say speak to Dev because he'll sort it. So we literally, we've got on that side of it and the conveyancing and the mortgage side, two people we just use all the time and we get a good price from them. We work out prices that we're going to be doing this, we're going to be doing X amount a year, and they don't drag their heels because they want They're getting double, but they're getting double bubble out of us because we're buying it, we're buying through them. And then 4, 5, 6 months later, we're selling through them.

Yes.

So we're then getting twice, you know, whereas people normally buy through one solicitor and then sell through another one or whatever. We try and keep it like simple, simple again.

Simple Simon.

Steve, Steve, question for you because You have a big network of people, you know, so many people. Um, but when it comes to industry professionals, uh, Simon said very well, uh, I tend to use the same, the same people. I go to them again and again. What about different professionals for different strategies or for different situations? You know what I mean? Because if it's a mortgage broker, I might want to use a mortgage broker for my buy-to-lets and for my BRRR projects, but I might want a different mortgage broker if I'm doing a commercial project.

Yeah, or development or a new build. You need to make sure that they know the strategy that you're doing. In that deal that they have experience in that particular type of conveyancing, whether it's residential.

Yeah.

And the same goes for, the same goes, for example, uh, on other areas, not just when it's the broker or the solicitor. Uh, we also want to make sure, for instance, the accountants that we are working with I've, so my accountant wasn't familiar with serviced accommodation. It's different rules.

Yeah.

It's a little bit confusing. People will ask, well, is that, you know, you actually having, you have a lease on the property. Is that, is that a commercial contract? Is that an AST? They get very confused. So you need to know that your current accountant might not be the best accountant for your next project, you know? Um, so getting our contractors, our industry professionals working with us together, it's very important. Rather than make them competition. So let's say, Simon, you work with Dev all the time, but for a different project, you will have to work with somebody else. Actually get in touch. Get them in touch. I've done that before with two solicitors so that they could have a discussion and say, I can be a client for both of you. I don't want to waste my time. Can you please, Dev, pass the information that, you know, the other broker needs so that I can complete on that deal? And when we are upfront and honest and explain and say why we're doing that, they actually almost, they accept it and almost become partners in a sense, because they're both looking after you and they know that you're going to bring business to them. Anyway, the last thing I wanted to talk about is again, Steve, I think, um, that I want the first answer from. It has to do with the network because you have that big network and I see a lot of people that just keep to themselves and I think that itself is a mistake. When you keep for yourself, you don't want to share your knowledge, your contacts, your expertise, that's a mistake. We want to build a network. How can a network help you?

Your network, it's all about learning from other people. Obviously your network is probably going to be your biggest asset in the light of property. It's not about, oh, it isn't about bricks and mortar, it's about people and building relationships. It can feel very isolated if you're trying to do a refurb on your own and not having that network. And those connections means that you've got those support. If you hit a snag or a problem or you're unsure on something, that you don't have that sort of as a resource that you can sort of bounce off if it's an area that you don't know. And we've all gone through different learnings into property and being able to just ask a simple question. As in, what kind of boiler or what's for the property?

What would you do in this situation? Simon, did you have any experiences of how your network has helped you?

Let me think.

Whether that is because of someone that has the skill that you needed, or maybe someone that introduced you to the person that you needed, or it could even be that they gave you the motivation that you needed to keep going.

Yeah.

Yeah. I'm trying to think who's, who's really inspired me and motivated me. But to be honest, we've only, we've only, um, we've only been sort of networked. We haven't been networking very long. It's up to the last sort of year or two, we've been quite a closed shop, you know, but we didn't really—

what changed? Why did you go out there and started networking? If you've been doing it for so many years, we doubt network.

Yeah.

Um, I think we've just realized that you've gotta, you've gotta tell people what you are doing, number one. And like you say, if you can draw off other people's experiences, cuz we've done stuff in the past.

Mm-hmm.

And it's cost us a lot of money where we could have just put a question into a, not a forum, but a network. And may have got the answer back for free rather than spending £8,000 to £10,000 to get answers. To get a no.

To get a no. That is the answer that I was waiting for, you know. The network can literally be seconds away with your mobile phone. And I could be in Portugal right now in the sun, something is happening right here and I will, I'm one phone call away to get it sorted. I don't need to come back here to go and sort it myself. I have enough people in my network that could assist me, that could help me. Or again, if it's some sort of advice, the network will, will get you there. And that's exactly what we are doing. On the Secret Property Club. It's a community, property investors all over the place, but in one place, if that makes sense. We're going to meet, well, we meet regularly and online Zoom private sessions where we go deep into what each one of us actually needs. What are the questions that we have this week? What are the plans that I have for the next 6 months, for the next year? Let me prepare right now for what is coming ahead. And the way to do that is to have those private sessions and have those answers from the network. You might have a network already, and that's great. If you don't have, you need to build one, and you can do that inside the Secret Property Club. Anyway, guys, we've been talking now for over an hour, so I want to thank you both. Both, Steve, Simon. This is going to be everywhere. So you're going to be really famous. And I hope to see you again soon. Thank you very much, guys. I'll see you later.

Thank you, Simon.

Good to see you. Bye-bye. Bye-bye.

See you guys. Thanks.

Bye. Bye-bye.