The final few days of the year and the first week of the new year offer us the time to pause for reflection and design, with intention. I hope you look back on your 2019 and acknowledge all of the incremental progress that has been made on your journey in property investing. It is important to think about the past year intelligently because past performance is the best predictor of the future.

This is a short post that is becoming a mini tradition for me to share at this time of year – and it contains absolute gold for you if you choose to invest the time to work through the following 6 sections to answer questions for yourself and your own last 12 months in property.

This intelligent reflection forms the most important part of the year end review and planning process. In my questionable opinion it’s essential to punctuate this time of year with such a process. I am starting this exercise myself now and it forms part of the overall review and goal setting process that I invest significant time in over the first couple of weeks of each year. I will follow this up with my summaries on the goal setting process next week.

Happy New Year when it comes, and wishing you health, wealth and happiness in 2020 and for the decade ahead!

PART 1

*What are my personal current strengths?

*What are the business’ current strengths?

*What were your biggest accomplishments this last year?

*What marketing or business development won this year?

*What was the best thing your property business created for you?

*What was the most extraordinary value or customer experience that you created? (who did we really move the dial for?)

 

PART 2

*What were the most important lessons learned?

*What were your weak points, what do you need to improve?

*Are there any threats to your business or market?

*Any missed opportunities?

*What are the current weaknesses of your business?

*Were there any ways to improve customer service in the last year?

PART 3

*Specific metrics for your business this last year (what was it you were focussing on? What were you trying to grow? What were the conversion rates you were trying to improve?)

*Products/services sold in 2019?

 

*2019 gross revenue?

 

*2019 Expenses?

 

*Split into 3 categories- what percentages were:

Marketing _

Operations _

Income/Salaries/dividends _

 

*2019 net profit

 

PART 4 (need to compare year on year, power of measurement)

 

On a scale of 1-10, how would you rate your:

 

*Lead Gen –

 

*Lead conversion –

 

*Customer fulfilment (following through on the promise)-

 

*Human resources (are they the best people in their roles)-

 

*Financial Systems (how clear on numbers month on month)-

 

*Market research –

 

*Satisfaction of the people in the business –

 

*Satisfaction with your work life balance –

 

PART 5

– Write a  letter to yourself (having reflected on each section). Write it as if you’ve gone back in time and are writing the letter on 1st Jan 2019 explaining the bumps, scrapes, wisdom to come. This works on the idea of reconciling expectations from a year ago with where you really are today.

 

PART 6

What single word would put a name to 2019?

Just before Christmas 2017 I shared a post about ‘presence’ over presents at Christmas [link at the bottom]. As a father, husband, son, brother, uncle, godfather and friend, I’ve gradually come to realise over the years that the magical time of Christmas is an opportunity for so much more than giving and receiving presents.

Don’t get me wrong, I love to give presents, and my kids in particular love opening them but what I’d really like to teach them by example, is how to be fully present and create rich memories.

 

As a large family we’ve been incredibly blessed with good health however this year has thrown us some challenges with one of the family going through chemotherapy. I’m overjoyed to say that it has been successful and celebrating together this Christmas with all of my family will be particularly special.

 

After a fantastic year in our property business and after pushing hard to finish strong all December I am looking forward to some awesome down time this Christmas. Not just relaxation but I mean really intentional memory making time with the ones I love.

 

I wanted to share a few ideas I picked up about we can all enhance the time we have with our loved ones and create enriching and lasting memories.

 

Here they are:

 

#1: CAPTURE THE MEMORIES

-make a conscious effort to pull the phone out and take some quality pictures of your loved ones laughing, playing, dancing etc (be sure not to bury your head in texts or social media, get back to that family party and really be there). Then after all the events, compile your photos into an online album to share with all those you created the memories with.

 

#2: FEEL THE MUSIC

-in advance of a family/friend gathering ask them to each send you a few of their favourite songs. Create a playlist for the gathering then enjoy the awesome atmosphere that you created.

 

#3: SPREAD THE LOVE

-write out a selection of thoughtful question prompts directed towards each of your family members/friends attending a meal with you. For example, “Something I love about [Name] is……”

“Something thoughtful {Name] has done for me is….”

“[Name] makes me laugh when he/she does….”

-have a few of these on each placemat and have everyone complete them to be read out later.

 

#4: BOX OF QUESTIONS

-write out a selection of questions that you would love to ask to learn more about your loved ones and put them into a little box

-during a family/friend meal have different people pick out a question to answer, this will prompt super engaging conversations

 

#5: TIME vs TRINKETS

-in place of impulse buying gifts to bulk up what’s under the tree, write out a Christmas card with a selection of experiences you will share with that person next year (I love that one).

 

#6: DON’T JUST GET TOGETHER, GIVE TOGETHER

-It has been said that families who give together make lasting and meaningful memories together.

-This might be organising a financial donation to a chosen charity, giving out soup and sandwiches to the homeless or any number of different chartiable things.

-This year my wife and I have organised a surprise dress up night with a twist, a little like a secret santa but with a big difference. For the name we picked out of the hat we have to buy a full outfit for them from a charity shop for £20 or less, and they have to wear it for the party night. There will be 17 of us so we will be donating in the region of £340 to various charities by buying up old clothes and random accessories, and then after the party we will be donating all the goods to Cancer Research for them to sell on again.

 

 

I hope some of these ideas resonate and help others out there to be fully PRESENT this Christmas and to create enriching memories.

 

Wishing you all a very Merry Christmas

Click here to read the 2017 Christmas post 

 

 

I don’t know about you, but I love stories that carry an important message. One such story I discovered this week was the bedtime story of the ‘Raven Who Would Rival The Eagle’ by the Greek storyteller Aesop. 

 

If you haven’t heard the story, please google and look it up- it’s been adapted into a poem by W.T. Larned.

 

For speed and convenience, here’s a very quick summary:

 

-A raven sees an eagle swoop down from the sky, snatch up a sheep and fly off. 

-What a meal he thinks to himself, I could do that.

-The raven picks out a fat looking sheep from the flock and landed on her back.

-He tries to fly off but cannot lift the heavy weight.

-The shepherd hears the commotion and rushes over.

-The raven is captured in a cage and has neither a feast nor his freedom.

 

WHAT’S THE MESSAGE?

Some might say the message is about the risk of being over confident, but I prefer the interpretation I heard from Darren Hardy, which was this- if you’re a raven, don’t try to be an eagle, just be the BEST YOU! You can’t be someone else but what you can do is learn the mindset and action steps they used to create their success, and the resilience and grit that they applied consistently.

 

I’m sure everyone who reads this will have a version of this at some point in their lives, trying to copy or be someone else. What’s yours? And what does being the best you look like?

 

For me, back in 2014 the eagles I tried to copy were software entrepreneurs. I struggled like hell to build a software business, something totally alien to me. I was definitely the greedy raven but the proverbial sheep (the software business) was too heavy for me to lift. 

 

But thankfully my little story has some pretty cool outcomes. I applied the same principles I learned in starting a software business and used them to start a serviced accommodation business from scratch, that was profitable on day one! I found a way to be the best me doing something I really enjoy, and will continue to do all my life- investing in property. 

 

I’ve also come to recognise that part of being the best me is to share what’s delivered results for me so that others may grow and become the next best version of themselves. Everything I’ve been referring to with my little story above about applying a powerful approach to serviced accommodation, and now other property strategies, I’ve shared in my new book. 

 

It’s called Predictable Property Profits and it launches very soon so please look out for the notifications. In the book I share all the detail behind the approach I’m talking about, and there will also be some great bonuses available with the book on launch day. 

 

Until then, I encourage you to think about the message in the fable of the Raven and the Eagle- what does being the best you look like?

This week I was reminded of a great metaphor I first heard almost 10 years ago- that of being like a ‘river’ and not a reservoir or even worse, a swamp.

 

‘A river is free flowing and abundant with life, a swamp is motionless and stagnant. Rivers have traditionally been the focal point for settlements, trade, progress and expansion. Swamps = smelly back waters where people don’t want to live’. This was the reminder from mentor Darren Hardy.

 

When I was recruiting full time and commuting to work I distinctly remember discovering two key resources that shifted my thinking and opened my mind to actively leading with value. The first was John C Maxwell’s 15 Laws of Growth, and in particular his 15th Law- “The Law of Contribution”. This was my first introduction to the abundance mindset of believing that we will keep on receiving so long as we are dedicated to personal growth and always have much to give. We should “be a river not a reservoir”. In other words pass on knowledge rather than keep it to ourselves.

 

The second resource was an article in Success Magazine called “The Monchu Method of Networking”. As I read it I instantly recognised how neatly it applied to the world of recruitment. [That was back in 2011, and now with property as my focus the same method is equally applicable]. In short the article was about identifying circles of people who we want to help succeed and people who could help us succeed. The underlying message was about making a conscious effort to serve our various circles with value each day.

 

I remember how that article really resonated with me and walking to work that day I began thinking about how I could proactively better serve the people in my market. I forget to whom my first offering went and what exactly the article was, but the process grew into a habit as I began intentionally looking for opportunities to add value to other people’s lives. 

What exactly is leading with value?

In short, leading with value is all about genuinely seeking to add value to others and building a relationship before ever asking for anything in return. That value could come in all shapes and sizes from information, advice, or even something as simple as listening to what someone has to say.

 

What about you, are you a river or a swamp?

 

If you’ve been learning things over the last 10 years, have you been sharing what you learn with others?

 

The 2 key things about a river are 1) they have a fresh source of input; and 2) an outlet that allows the fresh input (water) to flow through it. Swamps on the other hand just pool water in the lowest lying areas.

 

You are no doubt getting new input, ideas and insights from what you read, events you attend, courses you work through but are you letting it flow through you to make room for more new ideas? By doing so you won’t be losing anything, on the contrary, you’ll be gaining by sharing what you learn and reinforcing it. 

This distribution outlet might be a conversation with your family or training your team on how to run your property business more effectively, or….you fill in the blanks 

 

How could this philosophy benefit you in your property business, what about with family and friends?

 

With whom are you going to share new ideas to keep things flowing THROUGH you and keep you from becoming stagnant?

This week I attended a great property investment presentation that was part of the 10 year anniversary celebrations for my friend’s Property Management business in Edinburgh, called Southside. 

 

I thought it would be helpful for some people if I summarised and shared my notes from the talks- this will be of particular interest to those investing in Edinburgh, and even if you don’t invest in this area there are some useful principles that will apply to any area.

 

KEY REASONS FOR INVESTING IN EDINBURGH

1. A major business centre

-Edinburgh has the strongest economy of any city in the UK outside of London

-43% of the city population holds a degree (highest in any UK City)

-Edinburgh has the most FTSE 100 organisations outside of London

 

      2) Education & Innovation

-60,000 students across 4 universities (grown from 25,000 in 2001)

-Tech hub- Edinburgh is one of the UK’s fastest growing tech ecosystems

 

      3) Tourism

-Edinburgh is a top tourist destination, a big contributing factor to pushing up house prices

-The Edinburgh Festival is the 3rd highest ticketed event in the world (over 3 million tickets sold in 2019)

-Year round tourism (Edinburgh had the highest hotel occupancy of all UK cities in 2017 with an ave occupancy rate of 83.7%)

 

    4) Growing Population

-Census 2001 – population of 430,000, Census 2018 – pop of 513,000

-Edinburgh’s population is predicted to be larger than Glasgow’s by 2032

 

    5) Housing

-Edinburgh had the highest growth in households of all Scottish cities between 2007-2017, up by 7.2%

-Strong and growing PRS (27% of Edinburgh households were recorded in the PRS in 2015, up from 14% in 2001, source – Scottish household survey)

 

THE 5 ‘D’ PRINCIPLE DECISIONS FOR BUYING, AND REASONS FOR A SELLER BEING MOTIVATED

 

The founder of Southside shared some guiding principles learned from years of investing for himself and from helping clients to do the same . Below a set of five things that an investor can seek to establish in order to uncover a deal. These are opportunities to add value and some of the reasons why a seller might be motivated and therefore willing to do a deal with you. 

 

DEVELOPMENT

-In other words, what’s the angle to add value? Add a bedroom? Extension? Attic conversion?

 

DISREPAIR

-Buyers are often put off by seeing scores of 2 and 3 in the Scottish Home Reports but understanding what refurbishment is required may well be your opportunity to negotiate a lower price and in turn add value. 

 

DEBT

-Is the vendor struggling to cover mortgage payment? Do they have other debts they need to pay off by selling a property? The landlord selling a rental property may have kept the property in poor condition so are now struggling to rent it and they don’t have the cash to refurb.

 

DIVORCE

-Selling of a larger property in order to downsize/split value

 

DEATH

-Selling part of someone’s estate

 

Here are some other short hand notes of interest from the series of talks:

*Always look at the floor plan of the property listing before spending time to go and view it- is there a quick win to be had by combining the kitchen and living room to create an additional bedroom? This will require an understanding of building regs for activity space and room sizes. 

 

*Inflation is good for property investors as it has the impact of eroding the true value of the mortgage debt.

 

*You never want your mortgage interest to be more than one third of the gross rent. (Calculate that over time the annual costs associated with the rental property will account for approx 33% of the gross rent).

 

*Plan ahead for refurb projects (ie just like cars need maintenance to run smoothly we have to treat our rental properties in the same way, so rather than spend all the profit each year, put aside an amount to cover the cyclical refurbs that will be needed every 7-10 years. 

 

*Invest for monthly cashflow, any capital gains are ‘icing on the cake’ but we can’t bank on them being there.

 

*There are 6000 HMO’s in Edinburgh and the market to serve is still under supplied

 

*Definition and criteria for an HMO in Scotland

-3 or more unrelated individuals living together in a dwelling

-HMO license is granted by the local council and can be valid for up to 3 years

-Strict criteria for the grant of a license- 3 main criteria are: 

-property meets the specific HMO criteria

-Property owner is a fit and proper person/entity

-Property Manager is suitable, experienced and has processes and knowledge in place

 

Hopefully there were some useful insights in there that may have either validated your thinking or prompted some new actions.

 

Have a great week ahead.

 

[Congratulations to John and the team at Southside for 10 years in business, and a huge thank you for your great work in managing my properties]

There is no doubt that a unique dance of back and forth thoughts goes on in the minds of every property investor when it comes their decision on whether to proceed with a deal or not. 

 

By virtue of spending a lot of time with fellow property investors, its a common occurrence for Chris and I to have conversations about deal analysis, risks vs rewards and the whole ‘shall I shan’t I’ dilemma. 

 

What’s interesting about these conversations is that as humans we are typically seeking some form of consensus, approval and permission from our peers and mentors before we proceed. However, we must bear in mind that what’s good for one person may not be good for another.

 

As one becomes more educated in property, we can sometimes feel the desire to be back at the beginning with limited knowledge and a cavalier attitude, because then we would have less holding us back from diving in (I’ve certainly felt that in past years, even though we recognise that’s no way to build a property portfolio). As we increase our knowledge there is the risk of paralysing ourselves with analysis, looking for the elusive risk free deal with a guaranteed high return. 

 

However it really doesn’t have to be that way- we don’t have to have an arduous decision making process. We each need to create a system for decision making so that when opportunities are found or presented, we have the mental capacity to take action on a number of them. With that in place the decision process can be more of an elegant and well practised ‘mental dance’.

 

This will not always come down to a matter of Return on Investment (ROI), but many other variables that are particular to you, your beliefs, your values, and other factors. 

 

We simply can’t expect any investment to be 100% risk free. The only truly risk free decision is to do nothing at all, but then what’s the opportunity cost of doing nothing? In order to use property as a vehicle to increase income and wealth in assets, you will need to make the decision to proceed with a certain number of deals. To do that you will need to run the decision through your own filter – is the deal good or bad in the context of your life and objectives. 

 

So what might that look like? Here’s one possible approach to help create your decision making filter.

 

The way we like to talk about it round our Mastermind tables is to start with ‘WHY’. In other words, what is it that we actually want property investing to create for us. This is getting crystal clear on what you are working towards and deciding if the deal moves you closer to that big why or not.

 

At the next level the prospect deal might be filtered through how closely it aligns with how you are involved, and the possible input required from you. For example, if the nature of the deal will require your input into tasks you enjoy, possibly draw on your existing expert skills, network and knowledge, then you will be more attracted to it. If the nature of the investment requires you to be doing activities that are not in any way aligned with what you want to do or enjoy, then its going to rank lower. 

 

When it comes to the rewards, there is no one size fits all. The level of ROI you are happy with is completely a personal choice. I think so long as you are happy that the investment can conservatively deliver a return better than ‘A another’ investment you have experience in, often that is satisfactory. It will always come down to what you feel is a fair exchange.

 

When it comes to the risks, it is each investor’s responsibility to carry out sufficient diligence to understand and mitigate the possible downsides. This involves working through all the possible what if’s and marrying up the appropriate exits, business structures and associated financial downsides. The somewhat comforting thing about property is that quite often time can be a great ally to put certain things right. However, whilst some deals will come with large upsides, the downsides may be proportionately too large for the investor to shoulder if the worst case scenario unfolds. This is why it is so helpful to specify a certain risk tolerance as part of your criteria. For example you may be willing to work with (and potentially lose) 10% of your net worth, but you wouldn’t want to put 90% of your net worth on the line.

 

As you can see there is certainly no one size fits all when it comes to decision making. The purpose of this post is by no means to be prescriptive but rather prompt the conversation for investor’s to have with themselves in order to define their own criteria to arrive at a decision. One thing I do know for sure is that if you are ever feeling too emotionally attached to a deal, there is a risk of compromising on your criteria in order to push it through. The antidote to this is to work harder on your deal flow so you feel OK with turning deals down in favour of the ones that do meet your criteria [I’ve written a separate blog on the importance of deal flow if you’re interested, see link at the bottom].

 

So in conclusion, I wanted to leave you with 2 fantastic questions that will help you implement a decision making process for yourselves. These were shared by our mentor Paul Smith.

 

Once all of your number crunching and diligence has been done, you have to decide what is right for you, your goals and your measure of safety. To help, ask yourself these two key questions:

 

1. What’s the best possible outcome for this deal and will it make a difference to my life?
2. What’s the worst possible outcome for this deal and will it make a difference to my life?

Here’s to some great deals being done in the final stretch of the year!

Click here to read the post on deal flow

 

I’m sure there are many property investors out there who can relate to those weeks where you don’t feel like you’re making much progress. Maybe you had set a goal to have reached a certain stage in your analysis by a set date, or to have started a refurb by a certain date. However, even with all the right intention, you find yourself not making much progress because you are waiting for key inputs from various third parties. Sound familiar?

 

In the last couple of weeks Chris and I have felt like we’ve had a lot of waiting across all of our property deals. Here’s a list of some important things we are waiting on:

 

-build cost estimates from a QS in relation to a potential development site

-drawings from an architect to title split our commercial property and commence a programme of works

-a contractor to finalise a quote on works and confirm a schedule for a single let refurb

-a planning application decision to convert a 2 bed to a 4 bed

 

It reminds me of that famous Guinness advert where the group of friends are waiting to catch the biggest and best wave, do you remember – “Tick followed tock, followed tick, followed tock….” then it comes, they paddle out, they ride it, and celebrate (remember the charging horses in the waves?). And the tagline- “Good things come to those who wait”.

 

So what’s the message of this post? There will be many times with property projects where you find yourself having to wait, and often, good things will come from that. However, while we are waiting for certain inputs, contributions and information from others, it doesn’t have to stall the feeling of progress. 

What can we do?

How we plan and execute a week can have a big impact on how we feel at the end of that week, and subsequently how we go into the next. If you set a load of goals that don’t happen, maybe because you are still waiting on other inputs, then your brain’s perspective might be one of disappointment and frustration. In other words “the outcome wasn’t achieved this week”, or “I didn’t get this project to where I wanted it to be”, and you can feel down about it. 

 

One of the key things I’ve learned over the last 5 years about the psychology of goal setting and achievement is this – the goals we set for ourselves, and the way we measure them, must be entirely within our control. In other words it is within our power to initiate them, continue and complete. 

 

I’m conscious that it is unrealistic to think we are in control of an entire property project, because it does require the inputs from a power team around you. What I’m highlighting however is that knowing this, and to maintain your motivation, it’s important for us to set weekly goals and measure our progress against the things we are in control of, and the effort we put in against it. 

 

So what does that look like in reality?

 

In the context of waiting for third parties, like in my four examples above, that means doing things like this – providing them with absolutely everything they need to complete their part; thinking ahead to what they’ll need next and preparing for it, and yes of course, being that ‘squeaky wheel’ when needed to push things along with calls/texts/emails. Alongside tasks like this, there will always be plenty of proactive sub projects, that are fully in your control, that you can schedule in and complete in advance of them having to be urgent. Examples might be getting admin in order ready to apply for finance, business development conversations with prospect end users/buyers/tenants of the property, or any number of related tasks that you could fill in the blanks for. The key thing is to schedule a bit of time each week to think ahead, get organised and plan for these things.

 

In summary, your weekly property goals have to be what is within your control to progress – focus on those things and you’ll feel good about your done list at the end of the week. Look at it the other way and you’re at risk of feeling disheartened and frustrated, which can have a negative ripple effect, This is a very subtle difference but can have a massive impact on how you view your accomplishments, progress and sense of satisfaction.

So in the week ahead, what is something in your property world that you and you alone can progress and feel great about doing so?

[Image credit: Guinness advert]

Investing a weekend a few years ago to learn from Dr John Demartini, alongside reading his book ‘The Values Factor, really had a lasting impact on me.’ 

 

Understanding our highest values and living in alignment with them is integral to Chris and I, in family life and in our property businesses. So much so, we even named our main property business Adaero, a latin word for values. Our values guide how we do business, how we strive to interact with and serve others, and how we make decisions. 

 

Whilst this week’s post is not about any particular property strategy or deal, it’s about something so important that it transcends the tactics and strategy. Property is ultimately a people business, which is why we feel so strongly about having a solid set of values to guide us.

 

Having gained some understanding of values and the importance of them across life and business, I wanted to find a way to teach a solid foundation of values to my 3 sons. Back in late 2017 I set a goal to teach my kids a different life value each month. This would involve teaching through simple stories that give a meaningful message, little games and tasking them with learning a quote. We are now in year two of this nice little monthly habit and although the boys might whine about it occasionally, I know it’s helping shape them to become great individuals. 

 

So, for a bit of fun, and if you’re interested, here are the 12 values and quotes that my boys learned in 2018. You may like to do something similar.

JAN- LOYALTY, SERVICE & DEPENDABILITY

“The strength of a family, like the strength of an army, is in its loyalty to each other.” – Mario Puzo

FEB-  RESPECT

“Treat others as you want them to treat you because what goes around comes around.”- Shera Chowdhury

MAR- LOVE

“We must show love through actions that are sincere, not through empty words.”- 1 John3:18

APR- UNSELFISHNESS & SENSITIVITY

“Someone who is all wrapped up in himself makes a very small package.”- Anonymous

MAY- KINDNESS & FRIENDLINESS

“No act of kindness, no matter how small, is ever wasted.”- Aesop

JUN- HONESTY

“The high road is always respected. Honesty and integrity are always rewarded.”- Scott Hamilton

JUL- JUSTICE & MERCY

“I have always found that mercy bears richer fruits than strict justice.” – Abraham Lincoln

AUG- COURAGE

“Our doubts are traitors, and make us lose the good we oft might win, by fearing to attempt.”- William Shakespeare

SEP- PEACEABILITY

“Control your anger because it is only one letter away from DANGER.”- Anonymous

OCT- SELF RELIANCE & POTENTIAL

“For things to change, YOU have to change. For things to get better, YOU have to get better. For things to improve, YOU have to improve. When you grow, EVERYTHING in your life grows with you” -Jim Rohn

NOV- SELF DISCIPLINE

“Self-discipline is doing what needs to be done when it needs to be done even when you don’t feel like doing it” – Anonymous

DEC- COMMITMENT

“When you make a commitment, you build hope. When you keep it, you build trust.” -Stephen Covey