We have started placing boards around some of the developments we are doing, this was of course in the hope people would notice, business would increase and perhaps JV partners with nearby properties would come along. Instead the calls have only come from time wasters, agents often pretending not to be agents and even people who want advice on planning who pretend they want to do a JV. Not one useful phone call has come from this. I had one guy call me up and start telling me how he had been involved in the building we own in Bell Street and how he knew the original owner, and how long he had been in the game. Getting annoyed I asked him what is it he wanted from me, which led to him telling me how many big deals he has done; I still do not know what he wanted although he did manage to coerce me into a meeting.
This is a good indication of the property market in general. It’s full of blaggers and chancers.
Being in property for a period of time is akin to a filtration system, you get rid of the debris and then work with the contacts who can really deliver and get things done.
I guess its human nature too, most people do not deliver on what they say. They like to speculate and talk about things rather than take action. This tendency stretches to many areas of life, typically exercising and dieting. There are many magazines some even weekly, giving the latest research for optimal exercises and diets. The need for these comes from the fact that most humans like to talk, research and speculate rather than to do.
This is the same with investors too; many contact and meet us, they earnestly say they want to do a deal, yet when you place one underneath their noses they come out with a story. When this story is satisfied they then come out with a different story. They keep doing this in order to avoid making a decision.
You cannot confront them with anything, as the story is not the real reason it is merely a covering, an excuse.
The real reason is fear and their relationship with money. This is not an intelligence thing, many very clever people in the highest rungs of society suffer with the same issue. The reason why this issue is hard to solve is many investors are not ready to acknowledge that this is the actual issue. You cannot wake up a man who’s pretending to sleep.
I remember confronting one client who came to our seminar, in quite a frank way. He had been in touch with us for several years, asking about deals and meeting us, yet whenever a deal was placed in front of him there was always a reason why he shouldn’t do it. The excuse I got from him that evening at the seminar was that we always rush him – he needs more time.
It doesn’t take long to make a decision, it could take a second or as it did in his case many years. I told him we don’t touch lemons, we only place deals in front of him; and because they are deals they go very quickly. Hence we need quick decisions, it’s not from the point of view we are trying to force him into something which is purely for the sake of force. When we have time we are happy to give it. So frankly I told him if he was not interested he should not waste our time and more importantly his own.
The deals which we placed in front of him have only gone up in value. His indecision has cost him hard money. This conversation seemed to shift something in him and he nodded his head in agreement. He finally agreed to move on the next deal, and give it some attention. He ended up purchasing a three bedroom property, ex-council with a long lease, in Hallfield Estate for £318k in 2011. Currently the property is worth £650k. From a £100k investment he has made £230k in four years. Prices in this area have jumped and are still set to rise even further off the back of the regeneration going on in Queensway.
This is a trait which causes procrastination and stems from fear, which costs hard money. You can perhaps get away and fail to see the effects on other areas of life. There are many investors who sit on the fence and always have stories as to why they shouldn’t invest.
The issue is if you do nothing you actually go backwards. Property generally rises medium to long term and money decays sitting in the bank. The cost of living in society is only increasing. I remember we didn’t have to pay for University and we used to get free bottles of milk delivered in Primary School. Neither of these exist today.
Therefore sitting on the fence is not an option, even to maintain your current standard of living. There must be progression otherwise you will get left behind. This does not mean you should be reckless or blind in making your decision, but let’s face it property is not rocket science. There are only two ways to make money from it: capital growth and income, there is no third way. The income and outgo is also easy, a layman can understand it, the outgo is mortgage payments and other expenses and income can only be rental.
On the other end of the scale the reverse can also be true. I met a CEO of a listed company which was started by a very rich Billionaire who owns not one but two Gulfstream G650s, they cost around £65m each. I asked him why a man who has this much money is so hungry for more as I had got to know a little about the man’s character. He give me an answer which surprised me in its simplicity and truthfulness – it was a one word answer: insecurity. It is insecurity which drives him to acquire more and more in such an insatiable manner. This means it cannot be satisfied, as matter cannot satisfy an emotion.
So it seems the rich on the other end of the scale also have their issues. But if you’re going to have issues anyway I for one know which end of the scale I would want to be on!
The Real Deal
Highgate, London, N6
Purchase Price: £550k
- A nice two bedroom flat in a very strong location
- New built
- Excellent finish
- Landscaped communal garden
- Share of freehold
- Close to the open spaces of Queen’s Wood and Hampstead Heath
- Excellent capital growth prospects
- Very good buy and hold opportunity
Call us now to secure this deal!
!Tips of the Week
The majority of money in property is made from capital growth, don’t sacrifice this for just rental yields as this is only a part of the returns.
A heavily discounted property may not be the best buy. Where is the price going to go in the years to come should be the question. It may stay the same, or go even lower.