Best Strategies In The Current UK Property Market w/ Simon Zutshi

Transcript

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The purpose of wealth talk is to educate, inform, and hopefully entertain you on the subject of building your wealth. Wealth builders recommends you should always take independent financial tax or legal advice before making any decisions around your finances.

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While Welcome to Episode 164 of wealth talk, my name is Christian Rodwell and membership director for wealth builders. And I'm joined by our founder, Mr. Kevin Whelan. Hello, Kevin. Hello, Chris. Good to see you. How was your summer off? Are back once again. Yes, we've taken a break in August. So yeah, it was good. Thank you. Yeah, I did manage to go to Ibiza, and had a bit of dancing and just about recovered from that, but it's very pleasant. Thank you. And how was yours? I didn't do any dancing.

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No, no, no, no. You're like, you're like a kid going on school holidays. Aren't you like spring break? You're American. But no, no,

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I'm much more sedate now. So no other little foodie trip around the northwest of England. With some kind of Sheffy type things. Northcote was one of those which is very famous shift there. So that was good. And went down through Chester and then down through Cheltenham and back through bath and into back into London. So no good, good trip and enjoyed. I love the UK. There's some wonderful places to spend in the UK. And we're going to be doing the Scottish trip when a campervan soon. And then got a little Germany trip coming up. So lots of lots of short trips, which is what I prefer to do three or four days, every day, try and get a trip away every month if I can as long as

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time allows with whatever's happening with the family. Yeah, good. And now hope you our listeners have had an enjoyable holidays. And if you've been away that you've had some time to relax, because Kevin, the news is just doom and gloom. And then, Chris, we've had a heatwave.

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Now we're heading straight into the eye of the storm. I know we don't get hurricanes in the UK very much. But we are heading for a heck of a storm. And usually we talk about, you know, we'd like a quote or two don't we're wealth builders. And we often say it's the same economic wind up loads on all of us. But it's the set of the sail that makes the difference. And usually you can see the wind is coming from a single direction. And that's obviously a sailing analogy. But right now, Chris, we're getting it from the north, the south, the east and the west. We're getting it from all directions. We're going to be buffeted in a way. We've never been buffeted before. We got spiralling inflation, obviously, the big news is always the news as the you know, the the the energy costs and how much of a budget it's now taking from from average people. We've got interest rates on the rise. And that's now looks like it's inexorable. It's going to put pressure on property margins is going to put pressure on people who've been on fixed mortgages, you know, 75% of the mortgage population in the UK go for fixed rates. And when they come off those fixed rates, they're gonna get shock. And that shock is going to make them feel uncomfortable. We've got stock market volatility, that's inevitably going to happen. As a result of that when everything's uncertain. And the real test, Chris, when you know, terrible things are coming, is when you get social unrest. And we're getting that, you know, we're seeing strikes not just in the way we've seen them from public sector, we're seeing it now with Can you believe we're getting barristers going on strike, I mean, them I've never seen that in my lifetime. And, of course, the train strikes and all sorts of different things. Now, I'm not politically motivated here. But I'm just saying, when you get a high degree of social unrest, it, it sends the news out. And the news is almost so Doom so gloom that most people get tempted just to hunker down from the wind, you know, and try and save their way we're going to tighten our belts, we're going to reduce everything and constrict everything. And that's not the way to build wealth, as we'll discover. And we've got a great guest today, that whenever you get great

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challenges, huge amounts of uncertainty and we're heading into that. Obviously, the key skill is creativity. The key skill is being proactive and seeking opportunities when everybody else is seeking shelter. Absolutely. Just before I introduce our guests today, we are going to be addressing this on the 14th for set

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At timber with you and I, Kevin will be holding a webinar for wealth builder members. In fact, anyone who wants to join who's worried about the troubled times that lay ahead, and that webinars titled How to Survive the financial storm ahead, it's on Wednesday the 14th of September at 7:30pm, you can register now it's completely free, go to wealth builders.co.uk forward slash financial storm. And we'll send you the details of how to join us. And on that webinar, Kevin, we're going to be sharing some real good values, some some real tips that people can put into action right now to start saving money to start, you know, having a bit of bit more peace of mind as to how they're going to manage of safe situation. And also the creative skills that you can put in your armoury. So that you can build a financial fortress around you and not just be stuck sheltering from it, as I mentioned earlier on, so definitely ways to save money, and some of those are spectacular. So in an inflationary world, where we're going to be showing people how to save up to 50%, on some of the costs, and we'll go through all of that, we'll dive deep into that Chris will cover that, you know, in some detail, because we want to give great value to people, we know how much they need to run. Yeah. Okay, so today's episode is going to be focused around our special guest, who's Mr. Simon zushi, the founder of property investing network, very, very good friend of ours, trusted partner, and Simon is going to be sharing today, some of the best strategies that people can be using in the current UK property market. Kevin, your relationship with Simon goes back a good way. Tell us a bit about that. Now, it's it's a, it's been a long time. I mean, when you wealth builders, you know, we consider ourselves a hub of excellence in all matters that relate to wealth. And therefore we like a central hub of support, you know, we try and surround ourselves with the best people with whom we share values and, and who we share the common integrity and the style of sharing and the and the style of really giving, in terms of how we,

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we, we want to kind of be known and Simon is like minded and I like Simon a lot. He's, we spend time in each other's company, we spend time on the phone every couple of months or so, just chatting to each other as fellow business owners, you know, picking each other's brains on what's going on. So the most amount of time for Simon resonate with him personally, professionally. I'm delighted. He's a SAS Klein to wealth builders as well. So he invites me to speak to his audience. And I'm always delighted when he's got a message to share that I think is relevant to our audience. And he's definitely got a message now. Absolutely, yes. So let's not waste any further time. Let's head on to our conversation with Mr. Simon Suchi. Simon, welcome back to wealth talk today. Thank you, Christian. Really pleased to be back here. Yeah, it was great to have you on on the show. And just looking back when last time was it was actually back in April 2021.

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Wow, it was indeed. So we were just coming out of obviously, the pandemic at that stage, and who knew kind of what was ahead. So why don't we start there and sort of look back at that last 12 months and see what happened since then? Well, it was interesting, you know, before that, probably, maybe a year before that when it all kicked off for the meantime, 2020. And the Bank of England was suggesting that property prices are going to come down to 16%. You know, big retailers weren't paying the rent on their units. So we're all shut. So people who are investing in commercial property for the first time ever didn't get this guaranteed rent coming in. And the world was about to end, as you probably remember. And I thought in 2020, that we'd probably see a property market crash by the end of the year. However, I think the government's to be fair did incredibly well, in completely unprecedented times stepped in, they created the stamp duty holiday, they brought in furloughed and extended that several times. All the bounce back loans, which was a support businesses, I'm sure many of those they weren't supposed to be, but they're probably used as deposits for property as well. So all of this caused an absolute boom in the market. And as we know, in the UK, there is this underlying high demand because we live in an islands with a limited amount of accommodation, and an increase in population. So over the long term property prices go up. Now, as we know, property prices don't always go up. They always have a little correction. Usually, after a boom, there's often a bust. And having had probably a pretty good growth period for the last 10 years. And then this little two year maker boom. The question is, well, what's going to happen moving forward. So would you like to know what's going to happen in the market, Chris? Let's find out. Well, let me get my crystal ball.

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And the thing is, I guess I guess what I really learned in 2020 is that you just never know. No one knows what's actually going

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Need to happen. And there are some people who say, Well, there's this underlying demand, which I agree there is and prices will maybe stabilise a bit, but then they'll continue to grow. Some people are saying there's gone up so much, it just doesn't stack up anymore, it's going to have to come down and correct. My personal view is, I think that because of the changing legislation, so for example, we have the fact that if you have a rental property by 2025, really, it needs to have an EPC rating of C, so Energy Performance Certificate of C, to be able to rent it out. Now, if it's if it's currently rented tenancy in there, you've got till 2028 to do that. But some properties, it's very difficult to upgrade them, somebody's going to spend money and will be fine. But that was the fact that the government's got rid of, or getting rid of section 21. And also, there's the effect of section 24, which is where they change the tax rates that we as property investors pay, there are more and more reasons why many landlords are thinking about, you know, maybe I should retire, maybe I should sell up the portfolio. There's been massive growth of last 1012 years, and is it gone up maybe I could cash out now and and just sit on the money or go do something else. Now, that I think is an underlying thought in many investors minds have been doing it a long time. But then with the very recent changes this year, and in the last couple of months of the Bank of England base rate going up, there are many investors who've had buy to let properties for the last 10 years that have been making good money for them, but only making good money question because the interest rates were really low. And with interest rates going up, those profits are being squeezed. And that's just another reason for more or more landlords thinking about selling up. Now. Here's the question. I mean, that kind of makes sense why on all the experts I'm speaking to, we're all seeing the same thing that more and more landlords are looking to retire. And if you think about in any market, you always have some people coming in, who are new who are starting, and some people are exiting and retirees, that always happens, but we're just seeing more and more looking to retire. So the question is, if all of this extra landlord stock comes onto the market, will the underlying demand be enough to soak it up? And prices continue? Or will there be an oversupply? Which means that maybe prices thought to correct?

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Now, I don't know. But my if I had to put money on it, I think they're going to genuinely slow and start to correct. Okay, I don't think we're going to have a big crash. But hey, I just don't know. Okay. But here's the here's the really important thing for me, Chris. And again, if you follow this logic,

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I think there'll be landlords who are thinking about selling up who remember the crash in 2008 2009. And who remember property prices, because of the global financial crisis came down 20, sometimes even 30%, who might be thinking while actually I'm thinking about retiring, prices are starting to dip, maybe I should sell now, even at a slight discount, because I take 10% off now, it's better than having to sell it 20 or 30%, in a few years time. So I think for that reason, we will see more and more landlords looking to sell, which means actually, if you're looking to get into the game and start or get more property, as long as you know what you're doing. Now, it's always a good time. Yeah, and I know one of your golden rules, Simon is always buying at discount, you know, that's where you make him. Absolutely, if we can buy at a bit of a discount, we means we've got some equity trapped in the property day one, it gives us a bit of a bit of a safety buffer. And if we want to refinance to get our money out, it's easier to do that quicker. Having said that, Chris, I will sometimes buy things at the full listed price, because sometimes the listed price has already been discounted. And it's slight distinction lights give you an all the listeners is that sometimes people think is advertised for 250 I've got to pay less than two I've got to buy at a discount not recognising that 250 might already be a good price, because it might be worth 272 80. Does that make sense? Yeah, yeah, yeah. Yeah. And I guess coupled with all this, obviously, this week, we've had news that inflation has hit double digits for the first time in 40 years, we obviously know that the fuel costs are increasing interest rates continuing to go up. So the demand probably is starting to drop slightly as a factor of let's talk a little bit let's talk about recession. And so so so with high inflation, and I don't know about you, Chris, but I think true cost of living has gone up more than 10%. I mean, if you look at energy costs, so your your gas, your electric, we've seen those shoots up masteries there's nothing else apart from it in the news, really. If you filled up your petrol or your diesel, you know, that's really expensive. If you've gone to the supermarket, you know, my wife keeps telling me the basket of goods is costing a lot more now than it did last year. Right. It

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cost of living has gone up more than 10%. Now, what this means is if people are paying their mortgage or their rent, they're paying their their electric bills or paying the petrol, they're paying the increased cost of food, they've got less disposable money. less disposable money means less money to spend on other things, which means companies generally don't sell as much of their products or services, they contract, they make people unemployed. This adds to the problem, this is how we get into this downward spiral in a recession. So there will be unfortunately, homeowners who cannot afford to pay their mortgages or who are made unemployed and cannot afford buy. So some of those people might also be selling their properties, which is going to add to the challenge with landlords looking to sell. So I do feel that unfortunately, anytime recession comes, there will be lots of people who are going to lose out there are going to be lots of victims through no fault of their own. Just what's happening. However, the good news, Chris, those of us who are educated, those of us who have some courage and confidence to move forward, recognise that this is probably going to be one of the best investing opportunities this decade when everyone else is running for the hills as they were in 2008 2009. If you know what you're doing, and if you're holding for the long term, and that's important, that's golden rule number four, for the five golden rules.

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Actually, it doesn't matter what happens short term, as long as it's making cash flow, as long as you know, you can rent it out, there's really high rental demand. So actually, there are going to be some winners and losers. And people listening to this podcast can choose which side of the equation they want to be on, because it is your choice. Yeah, I was just gonna say, you know, for a lot of people, it's a difficult, difficult decision, because they're thinking, well, how can I build wealth now when I've really needed to kind of cut back and you know, save what money we've got fear of potentially losing jobs and things but actually doesn't now is the time you have to be thinking out to build wealth. And it's interesting, you know, so so there is fear of losing jobs and recession, etc. Right now, two years ago, when so many people were on furlough, they had the same concern. And actually, that was a real wake up call. I think a lot of people during 2020 realise, you know what, I've got one source of income coming in, that is not enough, I need to have multiple streams just in case something happens to me, or happens to my job, I miss my business. And that income doesn't come in. And this is this is a second tap on the shoulder. By the way, if a recession is coming. It's just another example of how you've got to have alternative income streams coming in. And you know, if you're not listening to these two warnings, you don't really want the third tap on the shoulder because that could be a real problem for you. Yeah, yeah. Of course. So Well, first, we teach Seven Pillars of Wealth, seven different asset classes that you can focus on. Now, property, of course, has been, you know, your primary focus, I guess, Simon, but you know, obviously, you've built a business around that you've built joint ventures and created IP. So you've got multiple pillars there work? Yes. Leveraging your pension as well. So, you know, the more most of the pillars, I've actually utilised, I think it's right. I don't think you should have just one pillar. I completely agree with Kevin's philosophy. I think you need to have a diversified structure to hold the roof up, right? Yeah, yeah. So if we obviously looking at looking at the property pillar, Simon, with your 20 plus years experience here helping 1000s and 1000s of people to start generating multiple streams of income from property? What are some of the strategies that are really working right now? And for the next 12 months, people should start putting their attention to Yeah, so it's interesting. A lot of people have I've heard people say, oh, you can't buy properties at the moment, last couple of years, because prices have been shooting up. And whilst I agree, prices have been shooting up. And and, you know, if you're buying through an agent's, which is what many people do, there's been a lot of competition. And and it's been difficult, it's not been easy. Having said that, a lot of our students who may be going direct the vendors and helping people solve their problems have still been getting really good deals. So you can no matter what's happening to the market still find motivated sellers. However, I think a real focus for anyone moving forward right now should be looking at landlords, current landlords who are looking to sell up and get rid of their properties. And if you imagine someone who's got a built profitable for over a number of years, if they sold all of those in one go, they would have a lot of capital gains tax to pay. So capital gains tax, just for anyone that knows the tax you pay when you sell an asset that's gone up in value could be stocks could be

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property, and it's a difference between what you bought it for and what you sell it for less than the buying or selling costs or capital improvements. So most landlords who are selling property are going to have some capital gains tax to pay. Now we all get a capital gains tax personal allowance each year, I think it's a time of recording so it's 4300 pounds. If you own a property in joint names with a partner, it's almost 25,000 pounds. So in other words, you could sell some assets and the first almost 25k If you own it in a partnership

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With with a relationship partner is tax free, but you only get the allowance once each year. So in an ideal world, a landlord should phase the sales of their portfolio over a number of different years, utilising that maximum allowance each year, thus reducing the amount of tax they pay. So in theory that makes a lot of sense, right, Christian? Yeah, absolutely. The problem with that is if someone says, Well, I want to retire, I don't want to be holding on to my last property for another five, seven years, whatever, I want to kind of get rid of them. Now, there's an amazing strategy that we can use called a purchase lease option. Now, it's something a lot of people have heard about lease options, and they think they know about them. But my experience is they don't if they if they knew about them, they absolutely would have done some of these deals, and they only work in certain circumstances. But what an option allows you to do, we can go to a retiree land or say, Hey, I will take the properties on for you right now. I will take away the hassle. So while you're waiting around five, seven years to sell your properties, you can go and sit on a beach now next month, if you want, because we do everything through solicitors, we get it all done in three or four weeks. So you can take off and I'll take on responsibility. Now why would we do that? Well, if a landlord sold a property, they'd get a chunk of cash, they'd probably put it in the bank, and it would do nothing for them. In fact, they'd lose money because of inflation. Okay, they'd lose all the rental income from the property when that's sold. So what we do, we take on the property, and we give them the money to cover their mortgage and costs and a little bit of profit and not as much profit as I've made before. So that means there's some profit for you. So you can get to make profits monthly on a property that you don't even own, which means you don't need a deposit. And you don't need a mortgage. So it means anybody we've had, we've had 17 year olds who can't even get mortgages have been able to control houses in multiple occupation HMOs on options, and make 1000s of pounds of monthly cash flow without deposits. Now mortgages. So literally, anybody can do this. Now, before listeners get too excited. This doesn't work in all circumstances, there are two criteria we need to look for to make this work. The first one is that the person selling the property doesn't need the money. Now, as we've heard, to be honest, the vast majority of normal people selling a property, they're selling it because they probably want to use the equity, the cash elsewhere, maybe to pay down their own home mortgage, maybe to invest in a business or to do something else or pay for their daughter's wedding. That's why they're selling the property because they want the money. However, there's a smaller group of sellers, mainly people like landlords, people inherited property, etc, who don't want the property anymore. And they don't really need that the money, they probably just put the money in the bank. So that's the first criteria, someone doesn't need the money. The next criteria, we don't have what's called favourable mortgage conditions, because we are going to start babysitting their mortgage. So the property stays in the name of the owner, that any mortgage stays unnamed, but we cover the payments for them. So ideally want to buy to let mortgage, ideally a low interest rate, interest only, and the people who have these kind of mortgages are typically landlords. So this is why if you're looking to buy from landlords purchase lease options can be an incredible strategy. And the other benefit, Chris, we agree a price today. And then we have the right to buy, but not the obligation. So we look officers probably for next three, four or five years, we get profit from that property. And then if we want to buy, we can buy that property, but based on the price today, so prices might go down a bit, they'll probably come up again. So the price in five years time, the value in five years time is probably going to be more than the value now when we're agreeing the deal. So we get potential capital growth as well over that period. Now, that means you can either buy that property in five years time if you want, or you could sell it to someone else. And you get the difference between what you've agreed to pay the owner and the value of the price what you sell it for. So this is such an incredibly powerful strategy. And and most people just don't answer they think, Oh, it only works on properties of negative equity. And yes, you can use on negative equity properties. But actually, you can use it on properties that have got 100% equity. And this is why we're doing some further training about this, as you know, Chris, because most people are completely unaware of this strategy. And what if it's really a tool or they don't really understand it, so they're not using it and they are missing out on a huge opportunity, what's probably going to be the best buying opportunity of the next decade. Yeah, and I know many people that have used this and used it to very good effect. So yeah, I can absolutely vouch for that. So you mentioned some training. Well, if you can share with us some links, Simon we can put that up.

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available

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pretty soon. So I would check, go and click on the links go and register. It's completely free of charge. And we're gonna explain you know, what these options are, how you use it, how you sort of the legal paper, all the things you need to know

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So to really understand if it's something you want to use as part of your investing portfolio, but it's a great way for people who, who want to get started in property, and you know, it crucified, lost everything and had to start again, this is what I would be, I'd only be doing these use these particular tools, because anybody can use them in the right circumstances. Yeah. Obviously, our focus is our audience in the UK here, Simon, can this strategy work for outside of the UK as well? Absolutely. So actually, in the UK, just be really transparent about this right now in Scotland's you can't use purchase these options. And that's because the Law Society of Scotland doesn't really understand, say, recommend their solicitors not to do them. But instead, we could do something called an exchange with delay completion to exchange now, and we complete in the future, it's not quite as good as an option. But actually, sometimes the owners in England or Wales, they don't want to do an option because we don't have to buy if we don't want to, and that might be concerned, they want to get rid of the property. So we might do an EDC here in England as well. So it doesn't work in England, in sorry, in Scotland. And I think there are one or two states in Australia, where it doesn't work. But pretty much everywhere else around the world. The concept absolutely works. Yeah, fantastic. So alongside purchase lease options, obviously, there's we know, there's 1215 or more different strategies within the site. You teach these on your masterminds and property at live events as well. So, you know, in terms of other strategies, what are you seeing any differences, obviously, you know, massive boost with people holidaying in the UK and staycation. Yes, we have and so serviced accommodation or short term. And so what Airbnb is sometimes called is where you take a property, and instead of having a tenant in there for six months, or 12 months, they say a very short amount of time, it might be a holiday maker, it could be a business person who's who doesn't want to stay in a hotel for a week, they'd rather stay in a little apartment, it could be contractors who work during the week and go home at the weekend. It could be families who comes here for big reunion can be big groups. So there's all types of different types of clients, we call them client rather than a tenants. And you can do this with studio apartments, it could be big houses, there's there's all sorts of different demand for this. And we've certainly seen in the last couple of years when when COVID stopped and things opened up. Certainly in the UK, there was a massive boost in what we call staycations. So instead of people having to go overseas, with the hassle of PCR tests, and that the cost of flying, and fuel is very high, obviously. So it's a lot to fly out the UK, staying in the UK, seemed a real preferable option. So it's real boost. And I believe that people can actually because it's seen as commercial property, I think people can use their pension, can't they, Chris? Yes, they are. If they're buying that because you can't, you can't join you have normal residential accommodation. As part of your SaaS, however, this is not the this is this is not a permanent residence or short term, let it seem very much as a business. And so you can use that with your pension, which is great. And I think that's going to continue. And if you think about it, if we go into recession, where times are hard, that people still want to get away, they still want to go on holiday, but they may not want to go or be able to afford to go overseas, they they might want to stay in a hotel. And you could have you know, a couple of families come together and stay in the same place because their friends or a couple of couples won't go away for a weekend break. You know, staying in an Airbnb unit together is far more cost effective and probably more fun than just having their own hotel rooms. So I think even in difficult times, I think this service accommodation short term, lets Airbnb, whatever want to call it, I think is a really good strategy. The other strategy because it just said Chris has about 16 different strategies you can use. The other strategy that I believe is is is always a recession proof strategy is HMOs houses of multiple occupation. And let me explain why. So for those who don't know, an HMO is where you take a house and you rent it out to people for six to 12 months on a room by room basis. Now, when you talk about this law, people say Oh, you mean student accommodation? Well, students is just one type of tenant actually four types of tenants. A student is one of them, people who are going to university. Often they live in university accommodation for the first year, then they like to move into a house because they kind of like to have parties and then move in with their friends. And in many universities, there is an oversupply. In fact, I want to put a caveat here, that in most cities, there is an oversupply of HMOs. So why am I saying is a good strategy to use? Well, there's an oversupply of very average HMOs. There's a website you could look at called spare rooms dot code at UK, which is where most people advertise the rooms in this type.

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property. And you'll see there's lots of competition, but it's all very boring. It's Magnolia walls. Standard furniture, when we teach our clients is to have very high standard what we call co living. So Heisei looks amazing. It's very functional. And Ron, just a room in a house, people are kind of buying into a community. Why is this important? Well, first of all, in again, in COVID, we had a lot of people who were living in apartments or studios on their own, and it was very isolating, and people kind of feel they want this community, which is exactly what you get in a co living HMO. And also, when times are tough, someone to live in an apartment on their own, they got to pay the rent, plus all their bills. Whereas if they move into an HMO, they might actually have more space, even though some of it is shared to have their own room, they might have their own ensuite, or they have a shared kitchen, shared living room, etc, they'll have more space, and they're probably paying less money than they would if they're paying their rent and their bills, because in an HMO genuinely the bills are included. So what this means is it's more cost effective for people. So that's why I think HMOs are a really good strategy as long as it's a high end HMO, not the average HMO, which is what most people have, where you're going to be competing on price. And just very quickly to finish the comment question, the different types of tenants. One is students, second is young professionals, people who have been to university, they're used to living in a shared house, they quite like that, they might move to a new city or town for a job. And by moving into a shared house, they get an instant social life, people who are like them like minded friends to go out with, and it's more cost effective than living on their own and apartments. The next group is just working people, people who are working in factories, offices, shops, they've not been to university, nothing wrong with that. But maybe they haven't lived in a shared house before. But now they don't live with mom and dad anymore, or either mom or dad don't want them to live there anymore. So they move into an HMO. By the way, you shouldn't really mix these tenants don't put students with working people, but you can put working people and young professionals together. And the final type of tenant which I think is a huge growing market, Christian is social housing. So people who are on benefits now, my advice here to people listening is you don't really want to run an HMO yourself with tenants on FHA benefits, because it's a lot of extra work. But there are charities who are specifically set up to house vulnerable people, whether they're ex offenders, whether they're

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people coming out of the military that is integrating back into society, whether they are, you know, single mothers with kids, whatever it might be, that they're providing really good safe accommodation much needed accommodation for these people, they get a much higher level of benefits from the local council. That means they can then pay the landlord pretty much the full market rent for the property. And they often pay all the bills as well. So and that is a growing market, there's just not enough accommodation for these vulnerable people. So you can provide an HMO providing much needed accommodation, helping the community and still making money is what I call impact investing. So yeah, HMOs service accommodation, I think those are the two main strategies that are kind of recession proof that I think there's gonna be big demand for them when done correctly. And also both of those, by the way, can be done with purchase lease options, because purchases options I talked about earlier. They're not really a strategy. They're more of a tool that can be used in conjunction with any strategy single let's HMOs service accommodation, commercial residential conversion, commercial property, in the right circumstances, purchases options work with all of those. Yeah, that's very interesting. Thanks for sharing that Simon. And of course, you know, you've created the property investor network, so people listening now who perhaps like wow, curious about all of the things that you're talking about, but don't really know well, who can I go to to find out more? How can I network with people like this? Tell us just a bit about the network? Absolutely. So when I started investing Chris back in 1995, I bought a house or rented out some of the rooms and I that was all there was to it, really. And in 98 I bought a second house kept the first one I became a landlord. And I realised that was making it was actually a student HMO, my first one and I realised that was making really good income. So I've got a few more managed to leave my job at Cadbury's. Not that I didn't like it. It was a great job, great company great people but I like my freedom more. And two years after that by 2003 or completely replace my my leaving salary from Cadbury's thanks to my income for property. But you know what, those first eight years Chris they were hard, you know, I did okay, but I also made some really stupid mistakes because I didn't know what you don't know what you don't know one of my favourite sayings. And I started investing in my own personal development in about 1998 and in in the year 2000. I found

Unknown Speaker  35:00  

and went to a Tony Robbins event was amazing. And I learned all about environments and the important about importance of getting the like minded people around you people who can support you encourage you. And at the time, there was nothing in the UK. So in 2003 really a self serving to be honest, Chris to help myself to connect to other people, because none of my family had invested apart from own homes than my friends invest. They're all busy working, I felt very isolated. So I set up the very first networking anywhere in the UK for property investors called the property investors network pin for short. And now there are 50 meetings, 50 meetings around the country, the idea is there in the evening. So you can go off to work. And it's a great place to meet other like minded people, a lot of people go who are completely new to property, and rather than making expensive mistakes themselves and want to learn from other people and, and be inspired because, Chris, I think sometimes wonder, Well, can I really do this? Can I replace my income? Can I can I do it and when the best ways to build that belief is to meet other people in your local area who've done exactly what you want to do, then it means it's possible and absolutely, with the right knowledge, the right mindset and support, you can absolutely do that if you decide to do that. So you can build your belief. You can make local contacts, you can get recommendations for builders, solicitor's account, all the things you kind of need, as well as learning some of these strategies and how to do it. So it's a great way to really dip your toe in and find out if it's right for you. And I think Chris will probably put a link or somewhere in the show notes or below the video to pin meetings as pin meeting.co. UK and I think, Chris, we have a code for you. I think it's probably I think it might be wealth builders. But we'll check that if people want to come to their very first pin meeting to check it out for themselves. It's only 20 pounds to come along, which is just a bargain. But if you've never been before, you can use the code as wealth gift, wealth builders gift to you to come to your first pin meeting completely free of charge. And if you're listening from overseas, we actually have a virtual pin meeting the first Wednesday of every month, it's at lunchtime, 12 Noon to 2pm. UK, lunchtime. And we have people from all over the world who want to invest in the UK, kind of join that virtually to to learn more connect to people on the ground in the UK, who can help find deals and do some of the running around for them. So it really is a great supportive environment to to help you become a more successful investor and get there much quicker than you would on your own. Yeah, that's amazing. Well, thank you very much for that. And absolutely, I'll share that link alongside obviously all the information for people find out more about the purchase lease options as well there, Simon, thank you. Just finally then for people listening. Now, obviously, this is wealth talk, we you know, we've committed about helping people build their wealth to reach that place of financial independence where they don't have to trade time for money, the next few years, definitely looking like they're going to be a little bit turbulent Simon. So just any final words you'd like to share with people just to keep their spirits high? Yeah, absolutely. And look,

Unknown Speaker  38:08  

I think we are going to have difficult times, the press is talking about recession, we can all see the increase in costs and the effect that has on money in our pocket. So it's a reality. The question is how you decide to deal with that and how you interpret it, either. It's doom and gloom, and oh, my God, we can't do anything and look what's happening, you can't do much about it. But you can absolutely take control of your financial future. And you know, being part of wealth builders is a really smart thing to do. Because you have these different ways of people, creating income, and property is only one of them. And I think you should have, you know, a diverse portfolio of investments bringing money into you. But it's not as hard as you might think it is, you know, thanks to things like wealth builders, and the kind of training we do as well. You don't have to go and work it all out yourself, you can get help, you might need to invest a little bit in yourself, but by by investing in yourself, it's probably the best investment you'll ever make. followed very closely. I believe by property, then business and other things as well. But you know what, investing in yourself gives you a bit of a psychological upgrade a bit of a boost, because you you're backing yourself, you know, and particularly in property, one things we teach is, at some point most people run out of their own money. And rather than to stop investing, you can use other people's money. But if you want someone to invest in you or you've got to invest it in yourself, first of all, because someone investing you wants to make sure you know what you're doing and you're not going to lose money. And you can lose money in property if you don't know what you're doing. So investing is really important, but you don't have to do it on your own. Help us here. And you can get to financial freedom much much quicker than I did. It took me eight years because I was doing it on my own the hard way. So my final words are look help is here for you. You just need to reach out for it. Seize the opportunity and recognise it

Unknown Speaker  40:00  

For the next couple of years, although it might be difficult for a lot of people, it could be actually a huge opportunity for you. So make the most of it. Yeah, great words to leave some there, Simon, and we enjoy working with you immensely. And we look forward to obviously continuing to do so. So thanks, I really appreciate it.

Unknown Speaker  40:22  

As always, lots of good value from Simon there, obviously, many, many years of experience, he's seen the market cycle occur, and you know, can really draw upon that. And yeah, great stuff for us to dig into there, Kevin, which we will do in just a moment. But we've had plenty of reviews coming in, whilst we've been sunning ourselves on the beach and filling our stomachs with nice food up north. So I'm going to read one out from GP, who's a wealth building member says, For me joining the wealth builders Academy has been a life changing experience from being given a serious series of inputs and challenges to confront, to being assigned an excellent coach to showing me the power of leveraging knowledge, time, connections, resources, and more. I've matured in these 12 months, probably more than at any point in the last 20 years. I took the programme seriously. And I dived into a new way of doing stuff of getting myself out there and building relationships. For somebody like me, it was gold dust. Very interesting review. And Chris You know, when whenever you go on holiday, we get a bit rusty, don't we? So

Unknown Speaker  41:27  

I stumbled a bit a few minutes ago, when you definitely stumbled with the reading that you need to read a bit more.

Unknown Speaker  41:33  

We need glasses now, Chris, so you can maybe I've got a birthday coming up next month. So yeah, another year passing?

Unknown Speaker  41:41  

Yes. So thanks, Jamie. Yeah, you know, we have absolutely love having GP in the community. And, you know, obviously GPS and Academy member for anyone who's interested in learning about how we help our members to actually create, build and protect wealth, we've have a programme which is the wealth builders Academy, you can find out more by heading to wealth builders.co.uk, forward slash Academy. So just before we move on to Simon, who's obviously a consummate professional and what he does, I want to make a comment about GP GP came out of his shell so much in his last year, I can't tell you how much connecting he did. But with integrity, and with style, he always did things with style and a smile. And you know, from somebody who's Italian, you know, Giampaolo

Unknown Speaker  42:29  

English is not his first language, but to have so much enthusiasm to connect, and now he studied to do his own IFA exams, and he's passed those. So he's now going to be a professional financial advisor. And, and I've said to him, Look, you can call on me at any time to get a tip or to some guidance or to, because you've got to take your hat off to anybody who creates that kind of connection, when his native language isn't English. I mean, obviously, you can speak for the world, right? He, you can't really shut GP up. But you know, he'd be laughing now if he was listening to it. But that's who we just love in our community. And so thanks to you, GP and thanks for continuing to, to favour us and to stay with us in the community, the world builder communities even stronger by having you in it. Yes, yeah, totally agree with that. Okay, so thinking about some of the things that Simon shared with us there, and Simon was a guest about a year ago, we've just coming out of the pandemic. And he mentioned there that some of the predictions certainly from the Bank of England, you know, perhaps didn't quite go the way that they thought, and what are your thoughts on the Bank of England, Kevin?

Unknown Speaker  43:41  

Well, it's a bank, and it's in England.

Unknown Speaker  43:45  

Apart from that, you know, it's interesting,

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when you got a period of time, like we're seeing now, I'm worried, I'll tell you why I'm worried is because the only tool the Bank of England can use to combat rising inflation is traditionally and it's the tool they will be using, and you can see they're using it now is to put interest rates up, which exacerbates the problem than solve the problem. Because, see, the problem at the moment is not that inflation is demand lead. It's supply side lead. In other words, there's problems everywhere with supply. And that's what's driving prices up. And you can't solve a different problem with the tool you've used historically. But of course, the only playbook they'd got is rising interest rates. Now that's happening in America as well. The Fed are on the same journey. They're doing the same thing. But there's a very delicate balance in play because, Chris in the last decade or so the biggest borrowers are the government's, you know, the Fed are the biggest borrow in the states and Bank of England and the government are the biggest borrowers in the UK. And if interest rates keep going up, then it's going to cost more to run the economy because we'd be paying much more of

Unknown Speaker  45:00  

GDP, the things we produce a country, much more of our overall revenue in servicing Sterling debt. And this is not going to be a good place. So I'm not optimistic about how the Bank of England are there to solve the problem. I think if anything, they might even cause more. But that's me being not political. But just looking at it from my own perspective, which could be right or wrong, because like Simon's crystal ball, it's a, it's still broken, it's still in the cupboard. I don't know, if I've ever get it out again, because you can never see clearly, because the world is so unpredictable and so uncertain. And we're getting so many life changing events that are unpredictable black swan events, like the pandemic, even like the heatwave in we're getting everything thrown at us. And the storm is coming, which is going to be Hone precedented. And, and I think we need to prepare for them. Yeah. Which is why we're so passionate about helping anyone and everyone who wants to learn about wealth to, you know, understand how to think like an entrepreneur, you know, not just to follow that same path. You know, as we say, so many people will be following, which is just, you know, be scared from the news hunker down, not make any changes, you know, try and save, but not expand, you know, very much contracting. And when it comes to building wealth, there's always a certain language that people need to learn and get familiar with, there was certain language, Simon shares, which is more property lead, you know, section 21, which is around the change in eviction rules, and section 24, which has to do with mortgage interest. But you know, language is important here as well. Yeah, whenever you're building wealth, you're going to be learning new language. And for some people, new language can be a challenge. And they can kind of close down their ears in their mind when they hear language they don't understand. So thanks for taking a moment to explain section 21 and section 24. And, you know, if you've listened to the podcast for a while, you will have heard a whole raft of different words, you may not have heard before, SAS, the wheel of wealth, debits, hope you'll just so many different things, and and every pillar will have its own language. So you have to be willing to learn a new language or like GP learning a whole new language, but you have to learn individual words and get to know what they mean and not be frightened by them. But to take time in the community to understand what they mean. So you can use them. And once you've used them a few times, you get really comfortable and confident with them. Anyway, Chris,

Unknown Speaker  47:37  

one of the points that Simon made or observations was that naturally, some landlords will be looking to start offloading some of their portfolios, they will have, you know, remembered the difficult times from the last economic crash and, and so opportunities will be arising if you know how to find them. And one of the opportunities that Simon talks about one of the strategies that he particularly feels can can benefit not just the landlords, but of course, the investors is purchase lease options. And Simon explained in detail there, you know, what purchase lease options are all about, but you have to be creative. And that's what that entrepreneurial thinking is all about. It's kind of what else can you be doing now that, you know, allows you to find deals in a difficult market.

Unknown Speaker  48:26  

Unquestionably creativity is the challenge. And for many people, if you're be mentioned, think we've said it three times now hunkering down if you're hunkering down, you're not creative. You know, you're constricting yourself, you're worried and you're, you really are not being open minded to new things. So I would encourage anybody, just to be open minded just to look at what's going on and see opportunity. Don't close down the opportunity, even if you see it and see what other people are doing. At least you're open to the idea of the art of what's possible. And even if you don't do it, you spectate, nothing wrong with spectating for a while, but wealth building is not a spectator sport. It's a participative sport, and you participate when you get to a place where you understand. You get good support. You're connecting to the right people that you feel trust, and you feel resonance with. You do your due diligence to make sure you're managing your risks as far as you can. There's no risk free anything in the world. And then you take the right action. And if you do that, which we all know Chris is the wheel of wealth is embedded in the very essence of what wealth builders is about, then you should be able to make some progress. Anybody can make progress with what's going on right now. I'm not saying purchase lease options is the right for everybody. But take some time to understand it. You know, there's no one strategy. That's great for everybody. But creativity in itself is a great skill. It's resourcefulness

Unknown Speaker  50:00  

So how you build your resources is you become more resourceful, you don't go back to doing nothing. Save, you can't save your way to wealth, it's impossible to save your way to wealth. Unless you want to live a frugal lifestyle, where literally, you're compromising everywhere. I'm not for that. I'm not for counting your cappuccinos and, and that kind of budgeting lifestyle, not interested in that at all. It's so much easier to expand your means, and to expand your mind. And I encourage everybody to find a community in which you can get that expansion doesn't have to cost you anything. In fact, we give so much Chris, completely for free. We vet we obsess about how much we give away for free. Because we know if we do that, that might just be that one bit of knowledge that one piece of inspiration that guides someone to, instead of just listening to participate in their own wealth. And whether they do with us or not, that's not our key, or key is that in the end, many people will gravitate towards working with us and our community will get stronger as a result. Yeah, absolutely, we certainly see ourselves as that hub. That leads off to all things went off in all directions. And, and Simon has actually given me a link to a more detailed webinar that he's recorded, actually around purchase lease options. So that is in the show notes. So if you're listening now on your phone, tap, and click on that, if you're interested to jump on completely for free, some really good education there. I mean, when people are giving free education consuming, because you might get a blinding flash of the obvious, you might just get something that goes That's for me. So just go in open minded, don't pre judge pre judging means prejudice. Don't be prejudiced about somebody else's ideas, be open minded, learn something, dismiss it if it's not for you, and brace if it is for you. But either way, we've got so many people who are willing to share free content. Yes, in the end, they hope that you'll find a way to them, that's fine. That's life. But you don't have to. And so just you know, jump on the webinar. Yeah. Now, coming back to that word of creativity, Kevin, obviously, different ways to be creative within property. But there's a way to be creative with the funding as well. And Simon talks about pensions briefly with, you know, being able to purchase some kinds of types of properties. So more commercial lead property, and sometimes serviced accommodation that you can actually hold within your pension if you have a suspension. So perhaps just expand on that a little bit. Well, look, you're absolutely right, Chris. And if you think about the storm that I mentioned, one of the winds blowing at us is the rising interest rates. So when you get rising interest rates, lenders make a bigger margin, that's what they do, they make more profit,

Unknown Speaker  52:48  

their underwriting gets tighter, which you did in 2008. And as a result of that, you become less able to control your source of funding. Now, if you can bring a source of funding, that previously you've overlooked or even undervalued, somewhere, it's in your life, and pensions is the perfect example. Now, we'll be touching on that in the webinar, because we believe that there are two things you can do to be creative with your pension number one, cut the costs, make the cost of running that pension dramatically less, that's the very least you can do. And we're going to show you can do that by 50%, you can cut your costs typically by 50%. Now in an inflationary world, if you can cut your costs and something by 50%, it's got to be worth knowing, right? Second, is if you can learn how to harness your pension, and turn it into a wealth building tool. Now, SAS isn't for everybody, the small self administered scheme, you're going to Google that bind is not for everyone. But it's for people with limited companies who've got an aspiration and ambition to grow their wealth. Now, if you can do that, the chances are instead of being just on the stock market, you can turn that into property, you can turn that into property with a greater predictability of revenue. And also potentially, and I'm just talking about potential, a higher return. If you cut your costs and improve your returns, you're going to be building your wealth. So you're going to be cutting a path through this wind. And I think that's a key thing. So being in control of your funding, particularly in property where Simon specialises is a key skill, and we're seeing now communities of people getting their pensions and almost, you know, creating communities of funding, not in any form of

Unknown Speaker  54:37  

rushed way, not in a way to circumvent any rules or due diligence is just to say, hey, we've got money. You know, if you imagine the average suspension is worth, say, 300 grand for the sake of a number, and you got 100 people doing that in a community. You've got millions of pounds worth of money which can be used to help you

Unknown Speaker  55:00  

that you can share in the value with people you share values with. And that's where we started by talking about Simon. So you know, we share his values, and we would like you to share in the value of his knowledge. And anybody else's Well, we bring lots of people or our partners to the table to share their inspiration. But when it comes to property, Simon is really at the cutting edge of his game.

Unknown Speaker  55:26  

Yes, so thank you for Simon, sharing all of that wisdom and knowledge with us today. And the free resources. Don't forget that Simon offered is the opportunity to go to a pin networking meeting. If you haven't been before you can get a free ticket and the code and the link is in the show notes today. And of course, the purchase lease options webinar with Simon as well. And if you'd like to jump on with Kevin and myself next week on the 14th of September for our How to Survive the financial storm ahead webinar and head to wealth builders.co.uk forward slash financial storm.

Unknown Speaker  56:03  

Okay, I think we've greased the cogs Kevin after

Unknown Speaker  56:08  

a bit of the rest.

Unknown Speaker  56:10  

We'll be we'll be running smoothly for next week. But until then, Kevin.

Unknown Speaker  56:16  

Until then, my friends see you didn't even remember the end quiz now.

Unknown Speaker  56:21  

Let's leave it in.

Unknown Speaker  56:23  

We'll catch up Same time, same place next week. So

Unknown Speaker  56:30  

we hope you enjoy today's episode. Don't forget that we are constantly updating our resources inside the wealth builders membership site to help you create, build and protect your wealth. Head over to wealth builders.co.uk/membership right now for free access. That's wealth builders.co.uk/membership

Transcribed by https://otter.ai