Tune in to hear two of the UK’s property experts discuss all things property. In today’s episode, your host, Mark Home interviews Experienced Investor, Best-Selling Author & Founder of Property Investing Network & CrowdProperty.com, Simon Zutshi. Mark and Simon discuss what they’ve been up to in the property world, the strategies they’re currently using, where to invest and how they both raise finance in very different and unique ways. Hear both Simon and Mark’s journey into property, how they started out and how they’re planning for the future. Listen and learn the insider secrets to successful UK property investing and take away with you the knowledge and advice of two of the most successful UK property millionaires.

 

KEY TAKEAWAYS

Q&A With Simon Zutshi

 
How does cram property work? I think it's still quite interesting. Peer to peer lending and crowdfunding is still relatively new. I think most people in the UK might have heard of it, but haven't done it. And the UK is actually the pioneer of it. So about 6 years ago, I was at a business event. I always invest in myself. I always try to learn more. Getting around like-minded people. I was at an event which was kind of a future, a future trend something. And I was talking about peer-to-peer lending and crowdfunding. And I thought I didn't really know what it was. I'll explain that you people bring projects, said it might for a business or to raise money for a record or a new product, whatever it is. And the crowd come and fund it. And at that time, I was doing quite the size deals you are doing Mark but I was converting care homes up north into like 20 25 flats and things. And I was generally using my money and other people's money, which is one thing we teach people how to do. I believed that traditional banks who traditionally would fund developments. In the last couple of years, they are not seeking into… And they really wanna make you jump through the hoops… And I thought, there's gonna be an easier way. So, I was mainly funding things through private money. And I realized, I would like to build my 1 lending 50 grand to do my projects. A lot of people in my database didn't have that kind of money but would love to get a better return on their investment. So, I thought, could I solve two problems at the same time? Could I help developers who are struggling to get the debt part of their deals and then also help a normal consumer get much better on their money and all those activities regulated by the FCA? So we put together a peer-to-peer lending platform. And obviously, we've got lots of people who have done our training. And you are draining who are finding great deals. And then we help funds those deals, very very quickly. And actually, we are... no matter how we're funding. We have them two funding from the crowd. We also got a couple of institutions who put in money in as well. And it's a way of cutting out the bank, cutting out the middle man. So, this is effectively development finance... short term. It is kind of similar to bridging but much quicker and I think it's fast reliable finance.


So, it is much quicker than bridging, why is that? Because what we do is... so people will come to us and they will say, "Well, I've got this great project." And in five minutes, they can fill in a form. Literally, 12 boxes. And within you say 24 hours, we can say, "Yes, we can find it or not." So very quickly to say and… We don't lend on a bad deal. It's gonna be a good deal. But the initial is just very quick. And then depending on if how organized the borrower is, we always get a Rics valuation before and after. And that's often the slowest thing. We can put someone on the platform. We promote out to all of our lenders. Typically things are funding in minutes. We're talking several hundred thousand pound. I think that 3-400 thousand is the average. We do anything from a hundred up to a couple of million. And so which is really fast.


What does it cost to borrow money from you? So, it ranges from about 2-4% depending on the size of the loan. Ah no, that's the arrangement fee. And then the fees vary.


You've obviously bought stuff. Isn't it mainly Birmingham? I was buying everywhere which is probably wasn't the best thing. I've got some things in my portfolio for the last couple of years. I've been selling it off. Always look where you live. Always start there. Maybe half an hour or so out from that, which is much easier. But then again, if you have a good network and reliable people, you can absolutely invest your money. We've got some people who trained with us, who invest from overseas. Yeah, because they set up a good power team. 


How he got into HMO. The first house, I bought in 95. And I rented it out. It was just right next to Birmingham University where I went to study. And I got a job at Capri's. And I rented the two rooms out to a friend's party because they didn't have flats in the area. They want to live in the area and as a student, I was quite socializing with other people. And I realized that the rent that they paid me covered the costs: my mortgage, my bills. So I saved all my salary. And had a part-time business when a student, I cover rents in Birmingham. That was a really good fun cash business. And so I had this money in my business bank account. And in 98, I bought my second property. And it was like 10 minutes closer to Capri's. My friends came live there, and my first house, I rented out. So I became a student/HMO landlord in 98. It was accidental, yeah. I thought I wanted to get into property but I didn't know it's going to be HMO. 


Return equity. So as the value goes up over time. If you sold that property. Assuming it's a rental, you have to pay some capital gains tax. How much money would you get out? And compare that to the cash flow you are getting now. 


Section 24, you just touched on it. And what are you doing about it? Section 24 is actually a very clever piece of legislation. I completely disagree with it. But it's very clever the way that they've done it because if you are a high-rate taxpayer, which most property investors are, you're gonna get covered basically. I don't know about you but I've spoken to a number of property specialists. And I find they all disagree on what should be done. So, I say to people, go and speak to a number of people, listen to what they say, and whoever you resonate with the most, that's probably the person to go with. So, I've chosen a particular root. I think it looks pretty good. 


Purchase list options. One of my favourite strategies is to purchase lease options. We can use those to take on a portfolio. Have a schedule of when we buy them over a number of years. The landlord can go sit on the beach and retire. And actually, they can maximize their capital gains allowance each year. And that particular strategy works incredibly well in this market.


What are the strategies and stuff that you're doing now? You know I love HMOs though. And I think HMOs sometimes get a bit a bad press because I think in many cities, there is an oversupply of HMOs. But actually, they're very average standard HMOs and if you make yours slightly better, then the competitors, you should have no problem renting them out. And I think HMO is a recession-proof strategy because if time gets hard and people have to tighten their bills, they can't afford to live on their own, and a student as their part, they have to pay their bills as well. Actually, HMO is a form of cost-effective. So, I think in the right location, always a property, a good HMO should always rent out. 


Co-living, so what is your view on it? I have never done any unit bigger than 8. I've done a series of flats within a building. I'm probably not the best person to speak about it because I don't have an 18 or 20 bed one. I've got 40 rooms in a building but that’s all split into 6s. 


What is your view on service combinations? Service accommodation is obviously a very area sort of property specific and so I think if you wanna have a very profitable business but it really is more towards the business rather than sort of hands-free investment. We have quite a few trainers and loads of our delegate who do that. And I don't have the time to do that. We have a letting agency that manages all of our units. We have some service units, Rob and I, in the local area. And I reckon quite fear that our delegates do better than we do in terms of their milking profits. Probably because of the areas and because they are involved on the ground doing it every day. And they get paid to do it. It's not passive. But a great model, and certainly great for those people who, you know, maybe they’re in a job. They wanna leave their job. They wanna replace an income. They don't mind giving their time cause it's still only... a day a week. They're gonna be replacing their income from their job. 


Why the book is called “Property Magic.” So I call my book Property Magic because the analogy is that property if you don't know how it works. It could seem more mysterious and you don't know but when you know the secret, just like a magic trick, it is actually very straight forward. It's not easy, but it's straight forward. Just like Property Magic. That's the book. That's what it's all about. That's where it came from. 


In terms of the future now, where do you think we're headed? Where do you think we're going year 3 5 years now? So, I think generally the market has done very very well for the last 10 years since 2009. And I think that when you have a broom, you gotta have a little correction. I possibly don't think we're gonna see the same kind of crash as we have in 2008 and 2009... The banks are much smarter now, really controlling the lending. So different circumstances. But I think, seeing a dip probably is gonna happen as more and more landlords want to sell their property. Uncertainty, amateurs not knowing if they should go in or not because of all these things going on. Uncertain about if a different political party comes in. It might be “game change” for everyone.

 

BEST MOMENTS
“Tell you what, all the stuff we bought miles away has not been as good as buying here in Peterborough. All the streets, we know. All the areas, we know. When there is an issue or there is a licensing or whatever, I know how to fix it because I learn all the stuff, all the locals and the regulations and all the... and then talked to the local agents, talked to the locals and everything. And I find a way through it though and when you're miles away. Well, if you're in 10 different areas… Investing close to where you live probably in your own country, where you understand the language, you understand the law, you understand the finances and tax. It's got to be the best thing."
“When you're investing with money, you got to be so careful with your money. And boring is sometimes the best thing to do, isn't it?”
“For me, that's what property is all about. You buy something, work once, get paid forever. ”
“I think, every year, you should look at your portfolio. And when you buy something, my favourite measure is the return on investment. So how much do you put in? compared to how much is it generating for you. It's gonna be the best measure.”
“I think a stretch of at least, selling at least one property a year, and getting your capital gains allowance. Your personal allowance. And then reinvesting that money in a better cash flow property.”
“I really believe that if the paper is telling you one thing, maybe the opposite is true.”
“Specialized knowledge means you can earn more money. That's what I do too.”

 

VALUABLE RESOURCES
https://www.crowdproperty.com/
https://propertyinvestorsnetwork.co.uk/

ABOUT THE HOST
Mark Homer is an entrepreneur investor.  He has worked with investment since he was 15 years old using the laws of wealth! He is a spreadsheet analyst with an impressive following from major publications including BBC Radio, The Wall Street Journal, The Independent, and co-authoring the UK’s best-selling property books.  Mark has always looked for the best investment vehicle, and at the end of 2007 with Rob Moore the co-founder of Progressive Property his joint portfolio produced more profit than any of the other investments he’d tried in the last ten years, combined. 

CONTACT METHOD
Email: Markhomer@progressiveproperty.co.uk
LinkedIn: https://www.linkedin.com/in/markhomer1
Facebook: https://www.facebook.com/markprogressive
Twitter: https://twitter.com/markprogressive

ABOUT THE GUEST
Simon Zutshi, experienced investor, successful entrepreneur, best-selling author, is widely recognised as the top Property investing Speaker in the UK. He became financially independent by the age of 32 having started to invest in 1995.

Passionate about sharing his experience, Simon founded the property investor's network (www.pinmeeting.co.uk) in 2003 which has grown to become the largest property networking organisation in the UK, designed specifically to provide a supportive environment for people like you to network with and learn from other successful investors. Since 2003 Simon has taught thousands of entrepreneurs and business owners how to successfully invest in a tax-efficient way to create additional streams of passive income, give them more time to do the things they want to do and build their long-term wealth.

CONTACT METHOD

Facebook: https://www.facebook.com/OfficialSimonZutshi/

LinkedIn: https://www.linkedin.com/in/simonzutshi/

Tune in to hear two of the UK&rsquo;s property experts discuss all things property. In today&rsquo;s episode, your host, Mark Home interviews Experienced Investor, Best-Selling Author &amp; Founder of Property Investing Network &amp; CrowdProperty.com, Simon Zutshi. Mark and Simon discuss what they&rsquo;ve been up to in the property world, the strategies they&rsquo;re currently using, where to invest and how they both raise finance in very different and unique ways. Hear both Simon and Mark&rsquo;s journey into property, how they started out and how they&rsquo;re planning for the future. Listen and learn the insider secrets to successful UK property investing and take away with you the knowledge and advice of two of the most successful UK property millionaires.
&nbsp;
KEY TAKEAWAYS Q&amp;A With Simon Zutshi
&nbsp;
<ul>
<li>How does cram property work? I think it's still quite interesting. Peer to peer lending and crowdfunding is still relatively new. I think most people in the UK might have heard of it, but haven't done it. And the UK is actually the pioneer of it. So about 6 years ago, I was at a business event. I always invest in myself. I always try to learn more. Getting around like-minded people. I was at an event which was kind of a future, a future trend something. And I was talking about peer-to-peer lending and crowdfunding. And I thought I didn't really know what it was. I'll explain that you people bring projects, said it might for a business or to raise money for a record or a new product, whatever it is. And the crowd come and fund it. And at that time, I was doing quite the size deals you are doing Mark but I was converting care homes up north into like 20 25 flats and things. And I was generally using my money and other people's money, which is one thing we teach people how to do. I believed that traditional banks who traditionally would fund developments. In the last couple of years, they are not seeking into&hellip; And they really wanna make you jump through the hoops&hellip; And I thought, there's gonna be an easier way. So, I was mainly funding things through private money. And I realized, I would like to build my 1 lending 50 grand to do my projects. A lot of people in my database didn't have that kind of money but would love to get a better return on their investment. So, I thought, could I solve two problems at the same time? Could I help developers who are struggling to get the debt part of their deals and then also help a normal consumer get much better on their money and all those activities regulated by the FCA? So we put together a peer-to-peer lending platform. And obviously, we've got lots of people who have done our training. And you are draining who are finding great deals. And then we help funds those deals, very very quickly. And actually, we are... no matter how we're funding. We have them two funding from the crowd. We also got a couple of institutions who put in money in as well. And it's a way of cutting out the bank, cutting out the middle man. So, this is effectively development finance... short term. It is kind of similar to bridging but much quicker and I think it's fast reliable finance. </li>
<li>So, it is much quicker than bridging, why is that? Because what we do is... so people will come to us and they will say, "Well, I've got this great project." And in five minutes, they can fill in a form. Literally, 12 boxes. And within you say 24 hours, we can say, "Yes, we can find it or not." So very quickly to say and&hellip; We don't lend on a bad deal. It's gonna be a good deal. But the initial is just very quick. And then depending on if how organized the borrower is, we always get a Rics valuation before and after. And that's often the slowest thing. We can put someone on the platform. We promote out to all of our lenders. Typically things are funding in minutes. We're talking several hundred thousand pound. I think that 3-400 thousand is the average. We do anything from a hundred up to a couple of million. And so which is really fast. </li>
<li>What does it cost to borrow money from you? So, it ranges from about 2-4% depending on the size of the loan. Ah no, that's the arrangement fee. And then the fees vary. </li>
<li>You've obviously bought stuff. Isn't it mainly Birmingham? I was buying everywhere which is probably wasn't the best thing. I've got some things in my portfolio for the last couple of years. I've been selling it off. Always look where you live. Always start there. Maybe half an hour or so out from that, which is much easier. But then again, if you have a good network and reliable people, you can absolutely invest your money. We've got some people who trained with us, who invest from overseas. Yeah, because they set up a good power team. </li>
<li>How he got into HMO. The first house, I bought in 95. And I rented it out. It was just right next to Birmingham University where I went to study. And I got a job at Capri's. And I rented the two rooms out to a friend's party because they didn't have flats in the area. They want to live in the area and as a student, I was quite socializing with other people. And I realized that the rent that they paid me covered the costs: my mortgage, my bills. So I saved all my salary. And had a part-time business when a student, I cover rents in Birmingham. That was a really good fun cash business. And so I had this money in my business bank account. And in 98, I bought my second property. And it was like 10 minutes closer to Capri's. My friends came live there, and my first house, I rented out. So I became a student/HMO landlord in 98. It was accidental, yeah. I thought I wanted to get into property but I didn't know it's going to be HMO. </li>
<li>Return equity. So as the value goes up over time. If you sold that property. Assuming it's a rental, you have to pay some capital gains tax. How much money would you get out? And compare that to the cash flow you are getting now. </li>
<li>Section 24, you just touched on it. And what are you doing about it? Section 24 is actually a very clever piece of legislation. I completely disagree with it. But it's very clever the way that they've done it because if you are a high-rate taxpayer, which most property investors are, you're gonna get covered basically. I don't know about you but I've spoken to a number of property specialists. And I find they all disagree on what should be done. So, I say to people, go and speak to a number of people, listen to what they say, and whoever you resonate with the most, that's probably the person to go with. So, I've chosen a particular root. I think it looks pretty good. </li>
<li>Purchase list options. One of my favourite strategies is to purchase lease options. We can use those to take on a portfolio. Have a schedule of when we buy them over a number of years. The landlord can go sit on the beach and retire. And actually, they can maximize their capital gains allowance each year. And that particular strategy works incredibly well in this market. </li>
<li>What are the strategies and stuff that you're doing now? You know I love HMOs though. And I think HMOs sometimes get a bit a bad press because I think in many cities, there is an oversupply of HMOs. But actually, they're very average standard HMOs and if you make yours slightly better, then the competitors, you should have no problem renting them out. And I think HMO is a recession-proof strategy because if time gets hard and people have to tighten their bills, they can't afford to live on their own, and a student as their part, they have to pay their bills as well. Actually, HMO is a form of cost-effective. So, I think in the right location, always a property, a good HMO should always rent out. </li>
<li>Co-living, so what is your view on it? I have never done any unit bigger than 8. I've done a series of flats within a building. I'm probably not the best person to speak about it because I don't have an 18 or 20 bed one. I've got 40 rooms in a building but that&rsquo;s all split into 6s. </li>
<li>What is your view on service combinations? Service accommodation is obviously a very area sort of property specific and so I think if you wanna have a very profitable business but it really is more towards the business rather than sort of hands-free investment. We have quite a few trainers and loads of our delegate who do that. And I don't have the time to do that. We have a letting agency that manages all of our units. We have some service units, Rob and I, in the local area. And I reckon quite fear that our delegates do better than we do in terms of their milking profits. Probably because of the areas and because they are involved on the ground doing it every day. And they get paid to do it. It's not passive. But a great model, and certainly great for those people who, you know, maybe they&rsquo;re in a job. They wanna leave their job. They wanna replace an income. They don't mind giving their time cause it's still only... a day a week. They're gonna be replacing their income from their job. </li>
<li>Why the book is called &ldquo;Property Magic.&rdquo; So I call my book Property Magic because the analogy is that property if you don't know how it works. It could seem more mysterious and you don't know but when you know the secret, just like a magic trick, it is actually very straight forward. It's not easy, but it's straight forward. Just like Property Magic. That's the book. That's what it's all about. That's where it came from. </li>
<li>In terms of the future now, where do you think we're headed? Where do you think we're going year 3 5 years now? So, I think generally the market has done very very well for the last 10 years since 2009. And I think that when you have a broom, you gotta have a little correction. I possibly don't think we're gonna see the same kind of crash as we have in 2008 and 2009... The banks are much smarter now, really controlling the lending. So different circumstances. But I think, seeing a dip probably is gonna happen as more and more landlords want to sell their property. Uncertainty, amateurs not knowing if they should go in or not because of all these things going on. Uncertain about if a different political party comes in. It might be &ldquo;game change&rdquo; for everyone.</li>
</ul>
&nbsp;
BEST MOMENTS
<ul>
<li>&ldquo;Tell you what, all the stuff we bought miles away has not been as good as buying here in Peterborough. All the streets, we know. All the areas, we know. When there is an issue or there is a licensing or whatever, I know how to fix it because I learn all the stuff, all the locals and the regulations and all the... and then talked to the local agents, talked to the locals and everything. And I find a way through it though and when you're miles away. Well, if you're in 10 different areas&hellip; Investing close to where you live probably in your own country, where you understand the language, you understand the law, you understand the finances and tax. It's got to be the best thing."</li>
<li>&ldquo;When you're investing with money, you got to be so careful with your money. And boring is sometimes the best thing to do, isn't it?&rdquo;</li>
<li>&ldquo;For me, that's what property is all about. You buy something, work once, get paid forever. &rdquo;</li>
<li>&ldquo;I think, every year, you should look at your portfolio. And when you buy something, my favourite measure is the return on investment. So how much do you put in? compared to how much is it generating for you. It's gonna be the best measure.&rdquo;</li>
<li>&ldquo;I think a stretch of at least, selling at least one property a year, and getting your capital gains allowance. Your personal allowance. And then reinvesting that money in a better cash flow property.&rdquo;</li>
<li>&ldquo;I really believe that if the paper is telling you one thing, maybe the opposite is true.&rdquo;</li>
<li>&ldquo;Specialized knowledge means you can earn more money. That's what I do too.&rdquo;</li>
</ul>
&nbsp;
VALUABLE RESOURCES <a href="https://www.crowdproperty.com/">https://www.crowdproperty.com/</a> <a href="https://propertyinvestorsnetwork.co.uk/">https://propertyinvestorsnetwork.co.uk/</a>
ABOUT THE HOST Mark Homer&nbsp;is an entrepreneur investor.&nbsp; He has worked with investment since he was 15 years old using the laws of wealth! He is a spreadsheet analyst with an impressive following from major publications including BBC Radio, The Wall Street Journal, The Independent,&nbsp;and&nbsp;co-authoring the UK&rsquo;s best-selling property books.&nbsp; Mark has always looked for the best investment vehicle, and at the end of 2007 with Rob Moore the&nbsp;co-founder of Progressive Property his joint portfolio produced more profit than any of the other investments he&rsquo;d tried in the last ten years, combined.&nbsp;
CONTACT METHOD
<ul>
<li>Email: <a href="mailto:Markhomer@progressiveproperty.co.uk">Markhomer@progressiveproperty.co.uk</a></li>
<li>LinkedIn: <a href="https://www.linkedin.com/in/markhomer1">https://www.linkedin.com/in/markhomer1</a></li>
<li>Facebook: <a href="https://www.facebook.com/markprogressive">https://www.facebook.com/markprogressive</a></li>
<li>Twitter: <a href="https://twitter.com/markprogressive">https://twitter.com/markprogressive</a></li>
</ul>
ABOUT THE GUEST Simon Zutshi, experienced investor, successful entrepreneur, best-selling author, is widely recognised as the top Property investing Speaker in the UK. He became financially independent by the age of 32 having started to invest in 1995.
Passionate about sharing his experience, Simon founded the property investor's network (www.pinmeeting.co.uk) in 2003 which has grown to become the largest property networking organisation in the UK, designed specifically to provide a supportive environment for people like you to network with and learn from other successful investors. Since 2003 Simon has taught thousands of entrepreneurs and business owners how to successfully invest in a tax-efficient way to create additional streams of passive income, give them more time to do the things they want to do and build their long-term wealth.
CONTACT METHOD
Facebook: <a href="https://www.facebook.com/OfficialSimonZutshi/">https://www.facebook.com/OfficialSimonZutshi/</a>
LinkedIn: <a href="https://www.linkedin.com/in/simonzutshi/">https://www.linkedin.com/in/simonzutshi/</a>

Investing, business, finance &economics - Mark Homer has the experience to help you with many of your questions & challenges. Mark My Words is a successful, eccentric & introverted businessman’s experience of 20 years with no waffle, ads, bravado or big pitches. Mark will interview the worlds most successful business, finance & money experts as well as impart his knowledge in a factual, direct manner. Mark runs & owns multiple businesses & property portfolios so teaches you what he does on a daily basis. A contrarian investor & capitalist, Mark will help you raise more finance, make more money & grow your business empire.

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