Wealth Through Property Book

Touchstone Education Ltd
Copyright 2021©
Foreword
Hello, I’m Paul Smith, your story teller and Educator throughout this book. I’d like to firstly
congratulate you on your interest in creating Wealth Through Property, welcome to the
3%...once you hit the end of this book, I’d like to think you’ll be on your journey to join the
1%.
Now, before I go any further, I need to emphasise that I'm not from a wealthy background.
Both my parents were teachers. My dad is from a working-class family in Essex, they didn’t
have a lot of money and I grew up in a pit town in Yorkshire.
Mum and Dad would buy those big Victorian houses that needed a total refurbishment, as
stepping stones to our next home. Buy, renovate and sell on. As I got bigger… and less
dangerous with power tools… I used to help out. We’d add central heating, double glazing,
indoor toilets and indoor bathrooms. Little did I know at that point where my life would take
me in the years that followed.
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Foreword | Wealth Trough Property
Dad was always telling me, "Listen Paul, when you invest in property, you are buying the
day that you will not work”. From a very early age, I had this concept, that property was a
second income stream as it was what Mum and Dad did in their spare time. As I got older
and began to understand the numbers I was thinking, "Well, why doesn't everybody do
this?"
One of the properties was in Roe Green Lane in a place called Hatfield in Hertfordshire.
Mum & Dad purchased that property for £15,000.
The total refurbishment spend on it was about £11,000
Giving a total cost of £26,000
(as I was 12 year old...I’m afraid I can’t recall the legal fees or stamp duty)
A few years later, my family sold that property to move somewhere else for £65,000. Now
that, ladies & gentleman was incredible money at that time for my family.
It really was the first time in my Mum and Dad's life in which they had money to spare, so
they bought themselves a second hand Volvo estate and went on holiday to Portugal, I was
delighted.
Property had finally made a difference to their wealth because as teachers with four children,
they had no spare money initially. I suppose, I could confidently put my current drive and
determination, down to being in my childhood environment.
Fast Forward to today, I'm sitting in the front room of one of my properties, this is my
Scottish home, it’s called Duneira and is situated in Rhu, Scotland. It’s beautiful.
I just have to pinch myself that I own this along with my beautiful wife Aniko. An eight-
bedroom detached house that sits in over an acre of ground. We also have a fabulous six-
bedroom detached property, in Doncaster, which we classify as our main home as it is close
to our main businesses.
We co-own an estate agency, a letting agency, various property investment companies, a

property education company, as well as our property investment portfolios. Our businesses
in total turnover many millions of pounds per year.
Recently, we were able to add another jewel to the crown, our multi-million-pound Villa in
Theoule sur mer in South of France, just past Cannes. Stunning, gorgeous views, looking out
over the Mediterranean. Here is a picture of the view from our garden:
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Foreword | Wealth Trough Property
Recently, we were able to add another jewel to the crown, our multi-million-pound Villa in
Theoule sur mer in South of France, just past Cannes. Stunning, gorgeous views, looking out
over the Mediterranean. Here is a picture of the view from our garden:
It was a six bed in need of a full refurbishment. The previous owners were in their late 80’s
and had done nothing to it for the last 30 years. We’re now undergoing a renovation that will
increase the value by 1,500,000 euro.
That is so far away from anything I could possibly have dreamed of when I was a child,
power drill in hand, helping my Dad with the various projects that we did together over the
years. I can't even tell you how special that feels.
The one thing that most people think they need to be successful in property is actually the
least important. Cash. It’s simply not true. It does help to get started with, but if you have all
the other skills, the cash will come.
Literally anybody can do this, with the right guidance.
Very well done once again for taking the decision to understand more about Wealth
Through Property so that you can do it too. Let's continue this journey together.
-Paul Smith
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1
CHAPTER 1
Do you want to be rich or

wealthy?
In most people's minds, being rich or being wealthy is the same thing. I can assure you, the
two could not possibly be more different. Let me give you my definition of wealth.
There are three conditions that need to be met for anybody to be truly wealthy:
1. Wealthy people receive income without exchanging any of their time for it.
2. Wealthy people's expenses are lower than their income.
3. Wealthy people have multiple streams of income.
Now, just give yourself time to read back over that because I'm certain, this knowledge
fundamentally alters the way that we approach life itself.
Let's focus on the educational system. Primary school, secondary school, perhaps college,
possibly university, and then off into a job.
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Chapter 1 | Wealth Trough Property
At each stage, we’re conditioned to learn how to efficiently exchange their time for money.
Students are told, "A university degree commands a higher salary." “Work your way up in a
company” “You might get a company car and good benefits” “Make sure you have a good
holiday allowance and pension scheme”...
Nobody at any point ever says, "Well, have you thought about how you can make money
whilst you’re not working?" because that's what receiving income without exchanging your
time for it actually is, passive income. “Passive Income” means acquiring assets that work
so you do not have to.
I want to explore that concept in this chapter to make sure we're all pointed in the same
direction.
My career falls into two parts. Between the ages of 17 and 40 I worked for various blue-chip
companies. Ford Motor Company, Rowntree, Cadbury Schweppes, Whitbread and then
finally Allied Distillers. At each stage, I was head-hunted, and I got a significant uplift in my
hourly rate. By the time I was 36 years old in the year 2000 I moved to Scotland to become
Managing Director of Allied Distillers. Hundreds of millions of profits, billions of turnover,
three and a half thousand staff. By most comparisons, a very large role for which I was very
well paid.
If I think back to my very first year with the Ford Motor Company, I made just over
£11,000. Which, for the 1980’s, given the job that I was doing was very good money.
However, earning £400,000+ with other benefits in my last salaried role in the early
2000’s...is huge money. I'd learned how to exchange my time for money, I was a
professional time trader.
What I hadn't done at that point, was learn how to receive money, for not working. Hold that
thought.
People become wealthy because they acquire assets and then they use those assets to pay for
their expenses, their liabilities, their lifestyle. Way back in 1895, a gentleman called Hubert
H Bancroft wrote ‘The Book of Wealth’. I learned about this from my mentor, Dr. John
Demartini.
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The purchasers of the original ‘Book of Wealth’ transpired to be families like the
Rockefellers, the Rothschilds, the Vanderbilt’s, the Kennedys, the Carnegies, the Fords. In
1898, when Mr Bancroft had written his 10-volume book, ‘The Book of Wealth’, a study of
wealth going back over the millennia, how wealthy people developed a “wealth mindset”
and which assets they invested in. He put an advert in the New York Times and it was
published on February the 21st, 1898.
This seminal work on wealth he then sold at a cost of $2,500 per copy. This is not adjusted
for inflation that is the actual 1898 selling price.
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Even now that would be an incredible amount of money to pay for a book. So popular was
this book, he released a second edition in a higher volume. It was still $1,000 per copy. Even
for the cheaper second edition if you adjust that for inflation 120 plus years later, that’s
around $70,000 for a book that sold out in an instant.
Investing $70,000 to learn how wealthy people think and using these insights to go on and
become wealthy is an incredible bargain.
This book, Wealth Through Property, gives you access to the same insights that Hubert H
Bancroft wrote about in his Book of Wealth all those years ago. If you treasure and respect
this book as if you had paid $70,000 for it, you will prosper greatly.
How do I know what's in the Book Of Wealth? Our mentor, Dr. John Demartini bought one
of the original 10-volume copies. My wife Aniko has been in Dr. John DeMartini’s office
and she's actually physically held and read from the original Book of Wealth. The
opportunities that we have today because of the internet, because of eBooks and audiobooks,
are truly mind-blowing, or at least they are to me.
The third test that all wealthy people need to pass: Multiple streams of income. This equals
“Wealth Sustainability”. Even if you satisfy test number one and two...you are not truly
wealthy yet. You have a huge degree of risk because one stream of income could be
removed at a moment's notice.
Think back to 2020, think about coronavirus, lockdown, how many fantastically strong
companies around the world suddenly went bust because the environment changed. Over the
course of history technology or macro-economic events have fundamentally changed the
value of assets. Having a huge business based on supplying gas-lighting was once valuable.
The internet has created many billions of pounds of wealth through companies like
Facebook. In a world aiming for zero-carbon emissions is oil exploration as lucrative as it
once was?
Anyone reliant on a single income stream for their wealth, is at very high risk.
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Wealthy people on average have seven streams of income.
How many streams of income do you have? Are you temporarily rich? Do you aspire to be
temporarily rich or would you rather work hard for a few years and become genuinely
wealthy?
Income without exchanging your time for it.

Expenses lower than income.
Multiple income streams.
I want to reinforce this notion that being “rich” is temporary by offering you a few
examples.
It's difficult to get exact numbers, but if you search the internet, how many lottery
millionaires are still millionaires a year later? You’d find that the majority of lottery
millionaires are no longer millionaires one year later. The figure that seems to be a
consensus on the internet is 70%. That’s 70% of lottery millionaires who become rich
overnight are poor or even bankrupt a year later….12 months...52 weeks.
Being wealthy is an acquired skill, it's something that you need to learn. To do it right, you
have to seek, the education, learn how to create and retain wealth from someone who has
done it before.
It's somewhat ironic that more than 80% of the UK population plays the National Lottery.
Their dream is overnight riches and millions and millions of pounds in the bank. They
believe that all their money problems would be over.
In fact, through no fault of their own, the vast majority of people when confronted with that
amount of money misspend it. Because our Educational system doesn’t teach us about
wealth, they don't understand the difference between assets and liabilities, they may give
away far too much, don't invest in assets that provide passive income and massively shift
their lifestyle expenses to a point which even with their initial millions of pounds it becomes
unsustainable.
They fail test number one: they are not receiving income without exchanging their time for
it. The highest interest rate I can find for £1,000,000 plus “invested” in a savings account I
can find at the moment is 1.2% per year. There are headline rates of 5% but if you read the
small print this is only for the first few thousand pounds . After that the rates plunge to
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fractions of one percent. Inflation as I write this is much higher than 1.2%, the value of their
money, even if they spend nothing is being destroyed by inflation. This erodes the value of
their cash-pile.
They fail test number two because their expenses are higher than their income. Expenses go
up massively which means the amount of available cash plummets.
They fail test number three. Often they don't have any sources of income, never-mind
multiple streams of income. As a result of their winnings they walk out of their job and stop
working as they are now “rich”. Crikey.
If I gave you a different example, I'm sure we can agree that English Premier League
footballers are fabulously well-paid. Hundreds of thousands of pounds a week, some even
£500,000-£600,000 per week, which is £30,000,000 million pounds a year as a salary.
The professional footballer’s association quotes this very sobering statistic: “Within one
year of finishing a professional footballing career, 40% of professional footballers are not
hard-up, they are bankrupt, they have lost everything.”
With a 10, perhaps even 15-year footballing career, earning millions of pounds each and
every single year, 40% of professional footballers easily able to afford support, guidance, (if
only they would take it), fail to do so and they bankrupt themselves. This is not a passive
decision this is an active choice. Why do so many rich people not learn how to become
wealthy?
A huge part of wealth is the mindset of wealth, it's the behaviours that wealthy people adopt.
This is why it's so important to study the mindset of wealth and wealthy people's behaviours.
Many, many people that are rich are motivated by money.
Wealthy people are typically not.
Wealthy people are typically motivated by time.
If I were to put to you “time is your most valuable asset”, you would probably agree with
me.
If that's true, why do we burn so much of our lives working a job that we don't like because
we "have to"? You don't “have to” do anything. Life is about choices and I do not like the
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choice forced upon most people, which is the 40, 40, 40 : Working 40 years of your life, 40
+ hours a week, in order to retire on 40% of what you couldn't live on in the first place.
That's just horrible. I firmly believe that none of us are born to pay the bills and die, that is
not why we were put on this earth. All of us have a higher purpose.
Increasingly over the years I've come to realise that just like my parents, my grandparents, I
too am a teacher. I'm not a schoolteacher, I’d like to think that I'm a wealth teacher. I focus a
huge amount of my time and effort on educating people in the art, in the knowledge, in the
mindset of how to become truly wealthy. I believe we need to reframe the price of whatever
it is that we want.
The true price of anything is the amount of our lives we exchange for it…..
Rich people aspire to have money whereas wealthy people aspire to have time. For a
wealthy person it is not actually about the money, it's about the choices that the money
creates.
It's about the opportunities to use your time for whatever you want to use it for because you
have financial freedom. You don't have to earn a salary, it's simply not necessary.
The TUC (Trades Union Congress) did a study a number of years ago now. If you add
together the hours that people (typically) work in the UK, (this is blue collar and white
collar). Then add on the commute times, then add on their unpaid lunch breaks, add on
household chores and so on and so forth… The average person ends up with less than two
hours a day of discretionary time for themselves or for whatever project or higher purpose
they wish to pursue. Is that not a truly shocking statistic to have only one twelfth of your life
to actually do what you want to do with it?
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A number of studies show that most people are so stressed about money, or specifically lack
of money, and they're so tired by all the other things that they've had to do that they decide
to use their precious 2 hours just collapsing and watching TV or going on social media....
They don't actually have the energy to do anything constructive.
A wealthy person on the other hand, if they literally don't have to exchange their time for
money let’s assume they sleep for eight hours a day. Now let's say that they choose to spend
two hours a day on bathing, grooming and eating, that's a total of 10 hours a day. All of this
time is constructive and stress free.
They've now got 14 hours each day in a completely refreshed state to use completely at their
discretion.
It goes far deeper than this for me. Cooking, cleaning, shopping, all the household tasks are
a choice: you do not have to do them. Once you have sufficient wealth others can do these
tasks for you. Imagine the extra time that will generate for you.
I want to help to put you in a position where literally everything you do is because you want
to and nothing you do is because you have to, with the help of Property Investing.
Each of my homes can be used as investment properties when we're not living in them by
renting them out as furnished holiday lets, holiday homes. Financially we don't need to do
that but it is a wealthy behaviour. Why leave them empty when others could enjoy them and
we are very well rewarded in the process?
As an example early in 2021 we received a booking for Duneira, our Scottish home, for
£11,900 for 2 weeks in August 2021. The mortgage we have at Duneira is £1,330 per month.
Even with the costs of utilities, housekeeping and the other expenses just 2 bookings like
this pay the mortgage for the whole year. If we choose to welcome guests to Duneira for
more than 4 weeks a year we are in profit.
This working-class kid has now got three incredible homes as well as our property
investment portfolio. I'm so excited that each and every one of you, regardless of your
current situation, can have what I have, and you can do it a lot quicker than I did because
I’ve developed a system to guide you through each and every step of the way.
"The true price of anything is the amount of your life you exchange for it”.
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What do I really mean by this?
Early in your career you are earning £20,000 per year or around £10 per hour after tax and
you want to buy a £50 table lamp. You want this table lamp for your nice new rented flat
where you are moving into with your partner. Well this lamp actually costs five hours of
your life.
Roll the clock forward a few years. You've got yourself a management position and your
salary is just over £40,000 a year. You now earn £20 per hour after tax. You decide that you
are going to buy a new desk because you have gone up in the world. It's a nice Walnut desk
with an inlaid green leather top and gold foil trim around the edge of the leather and it costs
you £2,400 including a new leather chair. £2,000 divided by £20 per hour is 120 hours.
Working 40 hours per week the true cost of this desk is three weeks of your life. Does the
desk still represent good value if you have to exchange three weeks of your life for it? This
principle applies whether you're buying a cup of coffee in a coffee shop or whether you're
buying a new car.
Now, let's look at it differently. Let's say that you own an office like I do. Here it is:
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It is occupied by our own group of companies. According to our RICS (Royal Institute Of
Chartered Surveyors) valuation the market rate if I rent it is £96,000 a year or £8,000 a
month.
From this £8,000 per month from rent what do I need to deduct, what are my costs as a
landlord? We'll come to this in future chapters. It's a commercial tenant so you're not as a
landlord responsible for maintenance, insurance and you have no empty periods for the full
term of the lease. The tenant has to pay all the operating costs. This is called an FRI (Full
Repairing and Insuring) lease. The average FRI lease in the UK is 8 years.
As it is a commercial property you are also entitled to specialist tax allowances, tax breaks,
if you like. called capital allowances. It's entirely possible if you are set up in the right way
that the £8,000 per month is going to be tax-free for a long time.
The only cost you bear as a landlord is your finance cost. The monthly mortgage interest for
this building is £1,500 leaving a net income of £6,500 per month.
If you now want that same desk and you're earning £6,500 a month, well, that's 10 days of
income from that one property. Of course if you have a property business the desk would
also be tax-deductible as a legitimate business expense.
How much of your time has buying this desk consumed? The answer is nothing.
That desk is now to all intents and purposes free because you haven't had to exchange any of
your life for it.
Whether we're talking about family holidays to Kyoto to experience Cherry Blossom
Festival, sunny summer days at sea in your private motor cruiser in the Mediterranean,
swimming, watching dolphins, having dinner at private islands or whether we're talking
about the groceries from your local supermarket: This same principle applies to everything.
Let's say just like many people you go into a coffee shop once or twice a day. Maybe you
have two £3 coffees plus a sandwich or panini, on average you're spending £10 a day in that
coffee shop.
If you're working for 48 weeks of the year, five days a week that's £2,400. How much of
your annual salary does that coffee shop habit cost you if you're exchanging your time for
money? I'm not saying that you shouldn't go and drink coffee and enjoy paninis by the way,
what I'm saying is calculate the amount of your life you’re paying with.
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Now let’s say, you spend £500 on a property education course that teaches you how to make
money using somebody else's property (This is the essence of Rent to Rent Serviced
Accommodation) . You now make £1,000 per month per property, hands free… How much
of your life would you have to exchange to do the course? How much of your life have you
regained now you’re making £1,000 per month per property? How many of these properties
would you need to be able to stop exchanging your life for money?
Over time, as you become wealthy, it’s increasingly likely to be experiences. Wealthy
people invest in wonderful memorable experiences.
Warren Buffet famously said this - "Things don't matter so much."
Well, things clearly don't matter so much when you're a wealthy billionaire. Things matter
very much to people that don't have enough things, especially if that thing is called
accommodation, food, warmth, the basic human necessities. Sadly, even in this country of
ours, the sixth richest nation on the planet, we still have very many people that can't afford
the basic necessities. To those people things matter very much.
The BBC did a survey which shocked me. The results of the survey were that 25% of the
UK's population, if something went wrong in their lives, did not have access to £100 to fix
it.
If you're unfortunately in that 25% and you're reading this book, well done. This is the most
powerful way that you're going to extract yourself from that position that you're in. Society
has conditioned and taught you to do things it’s way; but you are now choosing to learn a
new way. You will need to build a pot of savings so you can learn the skills to become
wealthy. Aim for £500 and work out a way to save that amount. As soon as you have done
that you have the choice to become wealthy.
If you're in the 75% that has access to investment via credit or savings you are in a very
fortunate position because you can afford to invest money in your education to become
wealthy through property immediately.
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To start drawing this chapter to a close some final thoughts about money. It's not about the
money itself, it's about the choices that money gives you. Money in my mind is very much
like oxygen. If you've got enough of it then it is never an issue. We don't actually think
about it, we breathe on autopilot. If on the other hand you're trapped somewhere and the
oxygen is running out suddenly it's the only thing on your agenda.
Money is very much the same. As long as you've got enough money to meet your needs it's
never an issue. You live your life with your head up, shoulders back, you make good quality
of decisions, you feel no or little stress.
Lack of money is one of the main causes of stress, one of the main causes of divorce and
many other problems in life. Often people will say it is the main issue they have to deal
with. Let's work together on solving that problem so that you've got enough money and you
don't have to work for it. How different will your life be? Please pause and give some
thought to that.
What would you do with your life if you didn't actually have to do any work? We are all
different, you may want to play the piano, paint or simply home school your children. What
matters to me is you choose how you spend your life. William Wallace, the Scottish freedom
fighter said: “Everyone dies but not everyone truly lives…'' There is much truth in this and I
would invite you to reflect on it.
I know that anyone can become wealthy. I know that because this working-class kid has
done it. My lovely wife, Aniko, has done it. She's Hungarian, why is that relevant? Well, she
was brought up in communist USSR-dominated Hungary. Virtually no money at all, almost
a subsistence existence. She was 19 years old when the Berlin Wall came down. That was
the first time at which she was exposed to free market thinking. Everything she's done to
build her wealth she’s done despite the system she was brought up in and despite having
literally zero capital to begin her adult life.
To cement that and to show you how wealthy people create wealthy environments and
wealthy families, Becci, is my oldest daughter, along with her husband Kenny she bought
her first house when she was just 23 years old. We gave her education, support but we did
not give her a deposit or financial support.
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Jack is my oldest son. He bought his first property when he was 20 and he bought his first
investment property when he was 23 years old. Same again support, education but no cash.
Ben is my middle son. He bought his first property when he was 21 years old. In none of
those cases did we give them any cash, we simply helped them. The help we gave was
education, knowledge, network, support, access to finance, but what we did not do was buy
a house and give it to them. We could have done but we didn't because I'm a firm believer
that if you give a person a fish you feed them for the day, if you teach a person to fish you
feed them for life.
Jude is my youngest son, he bought his first property through his limited company at the age
of 12. He was inspired by Warren Buffet who famously said “I wasted my life until I was
11. I did not make my first investment until I was 12 years old…..”.
Andrew Carnegie famously said “90% of all millionaires become so through owning
property”, that's as true today as it was 100 plus years ago when he said it.
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2
CHAPTER 2
Temple of Wealth
In this chapter is the model that I've used for many years now to build our “Temples of
Wealth”. As I go through each of the elements of the Temple of Wealth, please refer to the
graphic so you can see which part of the Temple of Wealth I'm talking about.
Like every building, every structure that survives the test of time, it starts with a solid
foundation. I modelled this on a Greek temple that is thousands of years old, similar to the
Temple of Athena Nike, Goddess of Victory. Clearly such temples demonstrated the wealth
of the civilisation that was able to afford to build them.
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Every building or wealth legacy that's going to stand the test of time has to be built on a firm
foundation. The critical element of that foundation is actually mindset.
Everything to do with wealth comes from mindset. If a person thinks there's a shortage of
money, if a person thinks they can't find any deals, they're probably correct. I love the Henry
Ford quote, "If you think you can, or you think you can't, you're probably right”.
Critical to becoming a successful wealthy property investor is having the right mindset,
which is why we have a complete two-day course entirely online, focused on getting your
mindset correct to become wealthy through property.
Warren Buffett has some fantastic rules for success. One of his rules for success is ‘If you
do not value yourself then nobody else will’. Let’s just dig into that a little bit before we go
any further. What percentage of communication is non-verbal? Experts are not a hundred
percent aligned as to a specific number. They are all aligned on the majority of
communication between humans is non-verbal.
Whether it's 70%, 80%, 85%, body language they all agree a relatively small percentage of
communication, 15 perhaps 20% is actually verbal. Why does this matter? Huge amounts of
communication are conveyed by your eyes. Whether you're looking up, whether you're
looking down, whether you're avoiding somebody's gaze… if you don't believe you can buy
a property from an estate agent, if you don't believe that your project is good and a joint
venture investor should trust you with their money, your body language will betray you
every time.
How long does it take for you to decide whether you like and trust somebody you have just
met?
Less than two seconds.
In these moments the person that you're communicating with can not have said very much.
One, two words maybe. We've decided whether we like, trust, appreciate that person or not
in under two seconds. How? Because we've been genetically engineered for millions of
years to pick up all sorts of signs. Are they sweating? Are they holding our gaze? Are they
confident? Are they standing up tall? Evolution has created non-verbal communication
systems that will tell us whether we like, appreciate and trust other people or not very, very
fast.
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Why is this important to you specifically as a property investor? Well, here's the thing, if
you don't believe you can do it, your body language will betray you to finance brokers,
estate agents, private equity investors, all sorts of people, your partner, your business
partner, your life partner. It's absolutely critical that we have an appropriate mindset to be a
successful property investor.
What do most people need in order to be confident that they know what they're doing? They
need a combination of education, network, experience, and support. These are all critical
elements of mindset. Mindset is the absolute foundation of becoming wealthy, of being
wealthy. If you believe that you are going to be a wealthy person, you probably will be. If
you believe you’re likely to fail, then you probably will...
So, where were we, the first pillar in your Temple of Wealth is property and property
strategies. To become wealthy through property, you need to master more than just property
strategy. You need to know about finance, you need to know how to refurbish your property,
then to successfully sell it, flip it or rent it out. How to stage it for the best possible price,
how to get the best valuation, how to put a good tenant in it. There are far more elements to
property and wealth than simply buying houses cheaply or for good value.
What are the three areas in which we add value to any property strategy? Number one,
acquisition, purchase, control. Did we do a good deal? Warren Buffett says, "Price is what
you pay, value is what you get." They're not the same thing. It's not about being cheap, it's
about being good value.
Number two, what do we do with it? Do we refurbish it? Do we add bedrooms? Do we split
rooms? Do we convert the garage to an extra en-suite bedroom? What do we do with the
property once we've got it?
Number three when we “exit” the deal. Acquisition, repurposing or refurbishment and
disposal.
I don't suppose for one second anybody is reading this book that doesn't know it's possible to
actually buy a property in the UK? The first property I ever bought was 269A Roman Road,
East Ham, London, a one bedroom flat.
I paid £9,000 for the flat in 1982. It's currently, the best part of 40 years later, worth around
£300,000. Is it important whether I bought the flat for £9,000, £10,000 or £12,000? No.
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Is it really important whether I spent £2,000, £3,000, £4,000 on the refurbishment? No.
What's important is that I bought it: Don’t wait to buy houses, buy houses and wait.
The most expensive mistake you can make in property is to not invest, to not take risks, to
play it too safe. A friend of mine described property investment (or more specifically bad
property investment) as being like a bad haircut. If you go along to the hairdressers or the
barbers and you have a bad haircut, at the time it's not fun, but over the following weeks and
months, it grows out and you can correct that mistake. Property’s a very forgiving asset
class: Hold it long term and it will go up in value. Hold it with the right monetisation
strategy, with the right BTL tenant or other property strategy you will get a monthly profit
and the underlying asset goes up in value massively over time.
The value of the loan, somebody else's money, the mortgage, you use to buy the property
with goes down over time as inflation erodes the value of your debt. Even if you just keep it
and simply make a few hundred pounds every month by renting it out to someone, the value
of the property goes up and the value of the debt (mortgage) goes down. You've got an
inflating asset, a decreasing debt and a monthly income. The most expensive mistake you
can make in property investing is to not do it.
The second pillar in our Temple of Wealth is your pension. You may never want to retire,
but you need to be able to. The state pension is not enough. Sadly, so many people in the
United Kingdom have either no pension plan or an inadequate one.
My personal pension plan is actually based on property. I want to open your mind to the
possibility of using your property, your wealth in an intergenerational way that is also your
pension. Many people reading this book will have a company pension, and most of us will
also be entitled to a state pension maybe. Most people are shocked when they discover how
little their total pension income will be and very often they find this out as they are about to
retire.
Can any of us live on the state pension alone? Now, I don't know when you are reading this
book. You could be reading it years after I've written it. So let's say for argument's sake the
state pension is £200 a week. Can any of us actually live on that? You've got to pay for all of
your accommodation, all of your bills, insurances and food and heating from that £200 a
week. I would not like to try. I would not want my worst enemy to try. I think this strategy,
relying on the state to look after you, is doomed. Every single year, it horrifies me to see
pensioners in the UK starving to death and freezing in what is supposed to be a very wealthy
economy. It's not good enough.
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Most sources say that the average private pension pot at the time of retirement (65 typically
in the UK) is about £100,000. What most people do when they retire is take 25% of that
pension fund as a lump sum tax free. So lets say, £25,000 tax-free. Happy days, relax, live
life a little, you've worked hard, £25,000 tax free! Now what does that get spent on? Maybe
home improvements, change the kitchen, change your car, go on holiday, etc. Most people
do not invest it, they spend it.
I want to be clear that I'm not criticising people spending money on themselves, I just want
to highlight that once it's spent, you can't count on it as part of your pension plan.
That leaves the “average” person with about £75,000. How does this £75,000 normally used
to provide income in retirement? The majority of people end up investing into an annuity.
Happy days for the financial advisor, they get some more commission. For you, the
pensioner, you are typically going to get an annuity rate of between2% and 3%...... (Again,
this is at the time of writing, it could be different by the time you're reading this). It's going
to depend on a number of factors. How old are you? Is it guaranteed for the next 10 years, so
that if you pass away after one year (god forbid), your family will still get the pension
income for the next nine years? Is it going up with RPI? Are you a smoker? Because
curiously ... you actually get paid more if you're a smoker. Why? Well, because you're more
likely to die sooner. The average annuity rate is 2% or 3%. Let’s say you get 3%. To
calculate pension income you need to take 3% of the average £75,000 “pension pot” which
is £2,250 per year, or £187.50 per month.
Does that really move the needle? It's almost as if the average person gets an extra one-week
state pension per month. Instead of trying to get by on £800/mo, they've got to try and get by
on £1,000/mo. Which of course is better, but it's still not good.
Alternatively you could transfer your company pension into a SIPP or a SSAS. SIPP is for
one person (Self-Invested Personal Pension). A SSAS (Small Self-Administered Pension) is
for up to 11 people, it's linked to a company, it has to have a “sponsoring employer”. In
order to have a SSAS you need a level of technical competency, you need to have a
company, there's more rules, there's a lot more flexibility, but there's a lot more
responsibility.
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A SIPP, (Self-Invested Personal Pension), anyone can have, you don't need a company.
When I was 40 years old, (early 2000s), I asked for a “transfer value”, a magical phrase you
might want to write down. Transfer value is the amount I could move to my SIPP in return
for surrendering my various company pension scheme entitlements. I had several “frozen''
pension schemes. I had worked for Cadbury's, then Whitbread then Allied Domecq. I got
transfer values for all of them, and I put them into a SIPP. If I had not done this, the
combined income I could have expected when I was 60 years old from the three previous
pension schemes in total was just over £8,000 a year. This is £667 per month which is over
three times the average private pensioner but still hardly a huge amount. This of course was
if I contributed nothing from my early 40’s until retirement. By “average’ standards I was
already doing pretty well but how could I do better still?
I gave up my right to three different pension schemes, giving me a projected combined

income of £8,000 a year when I was 60 years old. Instead, they gave me a lump sum of
£396,000. I took that £396,000 and bought a commercial property into my SIPP. That
commercial property I still own today. My SIPP paid £250,000 for the shop so my SIPP still
had £146,000 in cash.
That commercial property from day one has consistently paid my SIPP £25,000 + a year in
rent, compared to the £8,000 per annum my original pension would have paid.
Here's the next scary thing about an annuity, it dies with you. You can't pass on your
annuity. If you've got for example £100,000 or £1,000,000 in your pension scheme, and you
convert that to annuity, your cash is now gone. Your children can't inherit it and you can’t
pass it on to your loved ones. The income dies with you.
Here's the deal I did. Instead of £8,000 a year when I was 60 (if I lived that long), I started
getting £25,000 a year, 20 years earlier, with surplus cash after purchasing the shop of
£150,000 in the pensions bank account. Regardless of what happens to me, I can pass that
shop on to my children, my wife, my loved ones, whoever I want to.
With the correct education and support you can use property to create a tax-free legacy. The
private pension limit per person, referred to as “life-time allowance”, the amount of money
you can have in your pension pot by the time you retire (it may be different by the time you
read this) is £1,073,100 at the time of writing. Let’s round it to £1,100,000, because it tends
to go up with inflation every year. You can have up to 11 people in your SSAS. If you've got
friends, family, work mates, you could reasonably expect (again with education and
support), I'm going to use a figure of £10 million in the family or in your group of loved
ones or work mates over your life-time.
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Here is a simplified version of what happened with my private pension:
I had the shop rent of £25,000 going back into my pension tax free. After 4 years this
amounted to an extra £100,000 cash. I still had £150,000 of pension cash spare after buying
the first shop. I could now go and buy another £250,000 commercial property.
At the age of 44, I bought a second commercial property into my private pension. That
second property doubled my pension’s income from £25,000 per annum to £50,000.
At £50,000 a year, five years later, I bought another one. I was now aged 49. My pension
income then jumped £75,000.
By the age of 53, I now had 4 commercial properties in my pension scheme and a pension
income of £100,000 per annum.
Now my lifetime pension allowance is £1,073,100.
In reality, you’ll appreciate the model I’ve shared with you is simplistic. Not all commercial
properties are £250,000. By the time I was 50 years old, I had used up my lifetime
allowance. I now needed to learn and apply more advanced techniques which are beyond the
scope of this book.
The current state pensionable age is 67 years old. My previous company pensions that I
transferred to my private pension would have allowed me to retire at 60 years old.
As I now have a private pension, mine is a SSAS but it could be a SIPP, this allows me to
start drawing my pension at the age of 55. Not only are the returns far higher, the age of
which I can draw that income if I need it is 12 years younger.
I'm currently 56 years old and I haven't “retired” yet, I haven’t started drawing my pension
income.
Did you know that you can contribute thousands of pounds a year completely tax-free,
completely legally to your children? I'm building my family's SSAS instead of drawing the
pension income because I frankly don’t need it. My intention by the time I pass away is to
have a fully funded SSAS with 11 family members in it. As a reminder, a SSAS is a trust
and therefore never subject to inheritance tax.
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I’m blessed with six children, plus my wife, my wife’s sister, plus our niece, they all work in
our businesses. If we do the maths, 11 SSAS members at £1,073,100 each lifetime
allowance is £11,804,100.
Round this to £12,000,000 for simplicity, even at 10% rental yield rather than the current
12% I am achieving, gives an annual pension income, without consuming the assets ,of
£1,200,000 per annum for future generations of my family.
Astoundingly this is £100,000 per month. The seed of this wealth was my decision to ask for
a transfer value, give up the projected £8,000 a year when I was 60 years old, and accept a
£396,000 transfer to my private pension.
How did I know to do this? Knowledge and education.
The only money we have to pay tax on is pension income we choose to draw from our
SSAS. I'm not particularly going to go into more detail in this book on pensions and pension
planning. I do go into more detail during the courses that we offer as we have two property
strategies that are particularly well suited to offer synergies with private pension investing.
This is how the pillars in your temple of wealth share the load and ensure your temple
survives the test of time.
When it comes to trading businesses, I strongly suggest that in addition to pure property, you
have some trading businesses. Some of mine are property related, some are not. I'm
expecting you in the next six weeks to understand how to build your temple of wealth. It
might then take you six years to actually do this, but I want you to have a plan in the next six
weeks.
My trading businesses are an estate agency, a letting agency, a project management division.
As you can see, these are property related.
On top of that I write books, generally about wealth, wealth creation and property. I also
have a training and education company. I don't have all of my eggs in one basket. Warren
Buffett says that the average millionaire has seven streams of income. How many streams of
income do you currently have? For most people it is just one. It's a job, or maybe they have
their own small business, which is often effectively a job.
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A true business is a successful thriving commercial enterprise that operates without you.
If you and your time is in any way critical to the ongoing success of your business, I’m
afraid, it's actually a job.
The fourth pillar is cash. What I mean here is, stocks and shares, bonds, ISA’s and similar
investments that are highly liquid. This means you can turn them almost instantly into cash.
Access to cash is critically important but holding cash at very low interest rates means you
are actually losing money when you account for inflation.
Cash (or near cash) is critically important to support your pension, support your trading
business and support your property strategies. It supports everything else.
Between 30% and 40% of properties in the UK each and every single month are purchased
for cash, without mortgages. Those are the bargains. Those are the good ones. Those are the
below market value deals. If you haven't got access to cash, (doesn't have to be your cash)
you will miss out on these great property deals. This could be your liquid investments (near
cash) or it could be a private investor's cas. You need fast access to cash to accelerate the
construction of your temple of wealth. We buy multiple properties per month, always for
cash. (The £1,000,000 + properties we invest in, we will sometimes buy with a mortgage).
When my wife and I started out, we were buying one or two properties a year using only our
personal cash. As you start to make more money, as you begin to be able to purchase a
property, refurbish it, add value and then pull out more cash than you put in by mortgaging it
at the higher end value, now you can start to build a reservoir of cash.
Our deal packaging business last year sold more than 200 deals. We’d package the deals we
didn’t want to or couldn’t invest in at the time and sell them on. The average price for an
investor to buy one of those deals from us was more than £5,000. That's an extra £1,000,000
turnover with a huge profit which we are using to buy more and more deals.
That’s a sizeable cash reserve, to buy properties using cash, refurbish them and add value,
then mortgage them at the higher end value, recycle all our cash and repeat the process.
When you start generating serious cashflow from your various trading businesses, that also
goes into your cash reserves. You want as much cash as possible, but you don't want cash
just sitting there, you want to be using it either in property deals, developing or acquiring
trading businesses, adding to your pension or waiting to pounce on great new deals in your
cash & near-cash investments pillar.
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Our core model is to buy property, refurbish and then mortgage. Buy for cash, refurbish for
cash, and only then put a mortgage on the property. Very often releases all that cash back
ready for the next project, sometimes we will pull out more on the mortgage than the total
cash cost of the project which is nice, sometimes we will leave a few thousand pounds in the
deal. We have multiple streams of income and we can afford to buy, refurbish and then
mortgage a property on a weekly basis. I want you to get to that stage too.
I am now going to share with you a huge and often overlooked insight.
Assume you've got one pot of cash sufficient in your area to buy a property, refurbish it,
mortgage it, and pull your money out. If you can get the total cycle time to six months or
less, then one pot of cash can buy two properties per year. Four months or less, suddenly
that pot of cash can do three properties per year. Three months or less and that very same pot
of cash can do four. Speed is critical to portfolio growth. “DIY” is the enemy of speed….. so
many people think this is “saving money”…..
Investors who are not educated I see breaking their backs. They've often got a day job, and
there they are in the evening, DIY, decorating, putting in new kitchens, trying to do things
they have never done before (sometimes badly) all to “save money”. Total financial suicide.
With your one pot of cash, if you're lucky, you'll complete your DIY project in 12 to 18
months.
What you're actually doing is instead of four to six properties using your one pot of cash
over the same period, you have got one instead.
If the project is not profitable enough to pay professionals you should not be doing it. The
average house in 2021 is worth around £250,000. On average property increases in value by
7% per year. So each house increases in value by £17,500 per year. By saving a few
thousand pounds and burning up your life doing DIY you lose, lets say, 4 houses that you
could have had if you paid professionals. £17,500 times 4 houses is £70,000 capital increase
you lose plus all the rent too! Do not ever discount the importance of speed.
Okay, let's put a roof on your temple of wealth. There are three elements to the roof. The
three keystones, if you like.
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One is leverage.- Leverage other people’s time, pay tradesmen and other skilled property
professionals. Do not use your own time, leverage other people's and leverage other people's
money. These are the core concepts that I want you to embrace.
Two is to have systems - You can't possibly do one property a week or even two properties a
year without having systems. Do not reinvent the wheel. Make sure you systemise your
business. Use a limited company. Build a good relationship with your commercial mortgage
broker. Make sure that for each and every decision you make, you've got a system in place,
because when you start adding people to those systems, you've got the complete package.
Suddenly you've now got a business because you've leveraged other people's time and
money and skills and experience. You've got systems in place that you know work.
Einstein says, "The fundamental definition of insanity is to do the same thing and expect a
different result." Well, the fundamental definition of sanity then is to do the same thing and
expect the same result. This isn't rocket science. We as a human race can do wonderful
things, we can send rockets to the moon. I'm sure you'd agree that in the context of human
achievement you can buy a house!
Congratulations you've got a business, because you're no longer required you just made
yourself redundant. What are you going to do with the rest of your life? Have you ever given
yourself the luxury of asking that question? Spend some time now reflecting on this
question: what will I do with the rest of my life when I have become wealthy through
property and I do not need to do anything? What will I choose to do?
These elements in combination we refer to as the Temple of Wealth. I hope you found this
chapter useful and interesting. Let's continue…
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3
CHAPTER 3
How many income streams do

you need?
You may have heard people talking about multiple income streams, and maybe you know
what that means, maybe you don't?
Having been made redundant once when I was 22, I was made redundant again, and then I
was made redundant again. These were company take-overs and site closures. None of us
can rely on a job for life, on just one single income stream. Whether it's global competition,
whether it's COVID, whether it's lockdown, so many people have discovered, to their cost,
that despite doing everything society asks them to do, despite going to school and working
hard, despite getting qualifications, despite being good citizens, it just isn't enough.
How many streams of income do you have? Would the loss of any one of those streams of
income financially cripple you? If it would, you're in a very dangerous place. How do you
know that your stream of income, the place where you get your money from is secure
against all situations that you may face? The hard fact is, you don't. There are so many
things that can change and do change in this world of ours that none of us can depend on any
one single stream of income.
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My strong advice to you, perhaps my strongest advice to you, is to develop multiple streams
of income.
Warren Buffett also says, "To become the 1% you can't follow the 99%." That is simply the
truth. The average landlord in the UK has got one property. But even to become an average
landlord, you need to be in the top 3% of all the population.
To get to the point where you've got five or more properties, you need to be in the top half of
the 1% of the population (i.e one in two hundred people). Only one in six landlords have
five or more properties, which is the absolute minimum to be a professional landlord, in my
opinion.
Just remember, anytime anyone is telling you, ‘Sounds too good to be true’, or, ‘No such
thing as a free lunch’, or ‘It's going to end in tears’, just quickly assess if they are a
successful property investor, and if not, they've got no right to be talking to you about what
it takes to become a multimillionaire property investor.
In order to become part of the 1%, you cannot follow the 99% of the population's advice.
Let's look more in detail at this whole concept of multiple income streams.
As you can see here this central mountain has got a stream flowing from it, and that single stream of
income flows away in liabilities and expenses. It's your job or it could be a small business that you own.
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At the end of every month, for most people, there's too much month left and not enough
money. There's no surplus being built up. Whatever they do, however they earn that single
stream of income, it's all gone by the end of the month. It's flowed away.
Let's now get into some specific property strategies.
Property investing fundamentals. I'm going to talk about this in the next chapter. This is
about getting your first buy to let, your first investment property. It's going to give you an
extra stream of income, an extra stream of wealth.
As soon as you've got two or more income streams, you've got some assets. What's an asset?
An asset is something that gives you money every month that you don't have to work for and
it goes up in value over time. What do those assets become? They become a dam, that holds
back that cashflow and starts to build a pool of wealth. You now have control.
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I’m 100% recommending you keep your job or business until the money flowing in from
your other income streams is twice what you currently earn through your job. As soon as
you've doubled your income passively through assets, feel free to leave your job, but not
before.
In which order should you do these strategies? That depends on your resources. How much
cash have you got? Have you got a pension? How much time have you got? How hands-on
do you want to be? For instance, commercial property is very hands-off and you can put it in
your pension. Your first buy-to-let, is probably going to be reasonably hands on, but it's an
asset, it's an investment strategy. Deal packaging on the other hand is an income strategy
because you don't own any assets when you do deal packaging, you sell deals to other
people.
Don't worry if you don't know about these strategies, there is a chapter on every single one
of them coming up. “Property investment fundamentals” is the key to your first residential
property. Commercial is your first non-residential property. It could be a shop. It could be an
office. It could be a factory. You can put it in your pension, they're very, very different. I
would argue that most people fear commercial property investing, but it’s far simpler than
residential for lots of reasons that we'll go into when we get there.
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Deal packaging, that's not a property strategy per se, it's a property business strategy. It gives
you income. What you then do is find, package and sell deals to other people, you receive
income, and once you have the reservoir of cash, you can use it as deposits to buy
properties, to buy assets.
Joint ventures, (JVs) - using private finance, this could be loans, joint business propositions.
So many people think that the number one thing stopping them in this world of property and
property investment and becoming wealthy through property is lack of money.
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Absolutely, completely untrue.
I have never seen a good investment proposition that doesn't get funded if it's presented in
the right way. Every time I do this, live on stage to hundreds of people, or to thousands of
people on the internet, there's at least 200% funding available for every good deal.
Because of “quantitative easing”, i.e. world governments printing money, bank deposit
interest rates are at an all-time low. Interest rates are very close to 0% in the UK. If you've
got £1,000,000 in cash what are going to do with it? If you don't understand property,
literally, what are you going to do with it to see the cash generate a return assuming that you
want it to be safe, secure investment. The stock market, bitcoin and all the rest are simply
too risky for you.
I was recently talking to an international investor and in Switzerland, the bank interest rate is
-0.7%. Not surprisingly, he has chosen to invest £500,000 in UK property with us which we
are paying him 6.5% interest on (£32,500 per annum). His investment is protected by “first
charge” on our property. This means he has bank grade security, as if he was providing us
with a mortgage.
If we do not pay him in line with the loan terms he can repossess our property. If he took
that same and put it into a Swiss bank, it would cost him £3,500 per year to have the bank
look after it. For the avoidance of doubt, this means that his £500,000 would actually
become £496,500.
Now this isn’t a just an issue for Switzerland, this applies to the whole of the Euro Zone.
The stock market can be risky for the untrained. Warren Buffet famously said ‘The stock
market is simply a mechanism, but transferring money from people that don’t know what
they’re doing to people that do’. Bitcoin? Not for me. Warren Buffet's view is that Bitcoin
will eventually collapse to zero.
Property, bricks and mortar, in our language “as safe as houses”.
The attractiveness of property as an investment should not be underestimated. Once you're

trained, educated, supported in the network, you will learn how to present the deal in the
right way. You'll be overwhelmed by offers of private finance.
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Lease options. What's a lease option? A lease option is where you rent a property long term
with the option of buying it at some point. That means you have the right but not the
obligation to buy the property. It's just like a share option really. For example – A property
that is currently worth £200,000 you might agree upon the option to purchase for £220,000
anytime in the next 10 years. To the vendor of a property worth £200,000 now £220,000 in
the next ten years appears very attractive, especially as you will be leasing (i.e. paying
monthly) for the property every month that you do not buy it.
Over my property investment career, properties have doubled in value every 7 to 10 years. It
would be quite normal for a property worth £200,000 today to be worth double that in 10
years’ time. Purchasing a £400,000 property for £220,000 is clearly very attractive to you.
During these 10 years in this example, if for any reason the property price did not go above
£220,000 you would simply not exercise your option and not go on to buy the property.
During these 10 years you would pay a lease for the property. Typically, this is just a small
amount more than the mortgage payment the current owner is responsible for. Effectively,
you take over the mortgage payment which means when you rent it out to a tenant you will
make a couple of hundred pounds profit every month from the tenant in the property. You
may well ask “Why an earth would the current owner not do this? “ – Very simply they
don’t know how to or don’t want to. We need to keep reminding ourselves that only 3% of
the UK population are Landlords. Over 70% of people own their own property, and they are
absolutely obsessed with paying off their mortgages.
We have a specific skill set that focuses on using other people's money, mortgages or loans
from private individuals. We call this “good debt”. When we learn how to achieve better
returns from property than we have to pay for the property, we keep the difference plus we
get capital appreciation too.
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Now let’s consider buying properties from auction. Should you avoid buying properties
from auction? Absolutely not. Should you blindly buy properties from auction? Absolutely
not. You need to learn how to buy properties from auction safely.
Before buying at auction, I would like to ask you some questions. Do you know what a legal
pack is? Do you know what “reserve” means? Do you know what “on sale means”? Do you
know what taking bids off the chandelier means? Unless you know the answers to these
starter questions please do not buy properties from auction, just yet. We’ll pick it back up in
the auctions chapter.
Limited Company Essentials is critical. We are going to make the asset dam higher. I'm sure
you'd agree with this, it's not about what you make, it's about what you keep. How do you
optimise tax? How do you make sure that you are tax efficient when you are purchasing
property? How do you make sure that the ‘Anti landlord Taxes’ & ‘Section 24 do not apply
to you? It's all about using Limited Companies smartly.
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Next we have mindset. I've already talked about this in previous chapters. Mindset in this
model is the atmosphere, it's the environment that you put yourself in. It's the clouds, it's the
sky. All of these rivers of wealth flowing down from the mountains will soon dry up if it
doesn't rain. Unless you permanently nourish your ideas, operate in the right network,
invigorating yourself by the people you're working with, your mindset can not be negative.
Your mindset is the foundation of everything.
Serviced Accommodation. This strategy was transformational for me. At the time I adopted
it, I had a number of buy to lets bringing me a profit of £3,500 per month. When I
implemented SA, the same properties suddenly started bringing me a profit of £15,000 per
month. I simply used the same properties previously making a profit of £3,500 per month…
I found a better way to generate more income and profit through the same portfolio! I
already owned the properties that would make me completely financially free, I needed new
knowledge to use my property differently.
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Rent2Rent involves renting a property from a landlord, typically by the month. Then rent
that same property out per night as an SA for much more than it costs you. Alternatively,
you could take that property and rent it out by the room, by the week. That is an HMO
model. You may be familiar with these as Student Lets or House Shares. SA or HMO can
dramatically increase your cash flow… if you know what you are doing!
It’s important to note before we run away with these principles that before executing any of
these strategies, we need to work together to ensure you are legally compliant and protected
as a business, so I encourage you to take the principles on board, then we can plan together
your route forward.
Now, let's add all of these streams together, you've got more money; you've got more wealth
to enjoy and to pass to future generations. As well as liabilities and expenses, you've now
got sufficient wealth in a controlled way to enjoy luxuries and to “give back”. By this I
mean charities, your special causes, the things that mean the most to you. This is the
multiple income stream blueprint, and I'd encourage you to study it.
I want to finish this chapter by going back to Warren Buffett again. He says there are 10
things that people learn too late:
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1. Everything is temporary. We ourselves are temporary. In the context of time, the

whole history of the human race, or even more broadly, the planet, we're a flash in the
pan. Dinosaurs were wandering the earth hundreds of millions of years ago.
Everything is temporary. Seize the day. Make the most of every hour, every minute,
every second that you have on this planet.
2. Life isn't fair.. Is it fair that we were born in a civilised Western country where we
can become wealthy? How about if we were born in Sudan or Eritrea or North Korea,
our lives would be very different, wouldn't they? Life isn't fair. Let's use the tools we
have and get on with it.
3. Family matters more than friends. We all form very close relationships with very
few people. Don't go chasing ‘friends’ and ‘friendship’ and trying to get people to like
you.
4. Others treat you the way you treat yourself. Unless you respect yourself, nobody
else will respect you. I covered this in a previous chapter on body language and
communication. Unless you give yourself permission to love yourself, nobody else
will. That might sound very deep and strange for a book on property investment, but
it's a simple truth.
5. Beneath anger there's always fear. As you become more and more successful, other
people will become more and more critical of you, or at least some people will. Some
people will love you; some people will hate you. Acknowledge the fact that some will
behave like crabs in a bucket, they will try and pull you back down. Their anger is not
about you. It's about them. What they want is the success and wealth you have
achieved. They are scared and angry because they feel they can not do it.
6. Happiness is a choice and requires hard work. Choose to be happy, and then do
whatever it takes to make sure that you and your loved ones are happy.
7. A lifetime isn't as long as you think. When we're 15, 20, 30 years old, we all think
we're going to live forever. Please don't come to the end of your days, 70, 90 or even
100 years old and think, “I wish I'd done this, or I wish I'd done that”. Bronnie Ware
famously said "People do not regret the things that they did. They regret the things
that they didn't do." I want you to die with memories, not regrets.
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8. The biggest risk is not taking any risk. The only 100% “safe” way to do anything is
not do it. If you don't buy property, you will not become wealthy through property.
9. Things don't matter so much. That is fantastically deep. This guy is worth tens of
billions of pounds. Things certainly don’t matter so much if you’re worth 80 billion
dollars. Things matter enormously if you have no money and can not afford what you
need. Money is like oxygen, if you've got enough it's not an issue. If you haven't got
enough, you can’t breathe. Do what you need to do to become wealthy so that things
don't matter so much.
10. Finally, you played it too safe. Again, the biggest risk is not taking any risk. The
number one guaranteed sure-fire way to not make any wealth through property is to
play it safe.
In my experience spending time with and learning from the wealthy people that I’m now
fortunate to call my friends I have learned this: As people become wealthier, they invest in
memorable experiences, not things.
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4
CHAPTER 4
You Don’t Need To Be Great To

Start
Property Investment Fundamentals
Let’s address what stops people from getting started? In this chapter, we will take a closer
look at the first three elements of the Multiple Income Streams Blueprint.
I often ask people at our 2 day online Wealth Through Property course how long have you
wanted to be a property investor?
The answers are staggering: 3 years, 10 years, 20 years. I have even had the answer for 50
years! Why is it so hard for most people to start and become a property investor?
The three Blueprint elements for this chapter are Job, Property Investment Fundamentals
and the Assets dam. I also want to give you the first live example, of an actual property deal.
Theory plus practical action steps that you can take to get yourself started on this journey.
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I'm sure you'd agree, the vast majority of people in the UK have got a job. Perhaps they're
self-employed, perhaps as a small business, perhaps they work for someone else. On a
month-to-month basis they’d normally receive income in exchange for their time. That
income typically flows away in liabilities and expenses, whether it's the rent, the mortgage,
paying for the car, groceries, all the necessities of life, and hopefully… a few little extras as
well!
Most people struggle to get month to month on just their salaried income, they rely on their
credit cards, or perhaps an overdraft, or a personal loan. We need to break that cycle if we're
going to be wealthy. That begs the question - how do we do that?
That's the whole basis of the Touchstone Blueprint. This isn't about giving up the day job or
sacking the boss in the first instance. This is about increasing our income by using multiple
streams, in order to add to that flow coming from our job, because as quickly as possible, I
want to get you out of the 40/40/40.
Please don't sack the boss, or give up the day job until you are receiving double your current
income from assets, investments and property. Once you've tripled your income, feel free to
sack the boss, if that's what you want to do.
Some people actually never want to give up their job. Some people simply want to have
additional income streams, additional money for retirement, because they love their job.
Touchstone Education is not about encouraging people to sack the boss, cross their fingers,
hope for the best, and become a property investor. It's the exact opposite. I'm encouraging
you to maintain your work, job, self-employed income stream until you've at least tripled it
by receiving double from other sources.
So how do we start?
The first thing to do is find the property that you want to buy. Property investors will
generally refer to this as finding a deal. How do you find a deal? There are many, different
ways. (All of this is covered in our two-day online course, Wealth Through Property).
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I want to introduce you to Abi, until a few years ago, she was not a property investor. Within
just two years of becoming an investor, she built a portfolio worth more than £2,000,000,
which gave her an additional profit, of £6,000 per month. She is living proof that it can be
done. She did this as a single mum with two lovely little children and a very demanding full
time job as our Managing director.
She was worried about her financial security, having just been through a divorce, so she
used these pressures as rocket fuel to propel her into the world of property and property
investment.
I want to talk to you about a deal that Abi found in a place called Filey, North Yorkshire.
How did she find it? You're probably thinking there's various tricks involved, algorithms and
computer hacks. Nope, far simpler than that.
Very, very simply, tell everybody you know, what you do: That you are a property investor.
Aniko and I have a joint investment company with Abi and her partner, Gordie. We just
took those four initials, Gordie, Abi, Aniko, and Paul, and we now have GAAP Investments.
GAAP Investments, in December 2019, bought a property, 81 Queen Street, in Filey. Abi
was at the property, deciding on the refurbishment schedule, and so on.
Exactly one year later, December 2020, GAAP bought the property next door, number 83.
How and why did that happen? Did we use super clever techniques? No, it was on the
market.
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Abi knew it was on the market because she saw a “for sale” sign outside of it when she was
visiting our property next door, 81 Queen Street which is a 4-bedroom townhouse. 83 Queen
Street was a 2 bedroom flat. Abi simply spoke to our neighbour when we bought our first
property in Filey.
"Lovely to meet you. I'm Abi, we've just bought the house next door. We're going to be
renting it out as a holiday let. If any of the guests ever cause any nuisance, please call me on
my mobile. I notice you've got your flat for sale”. The conversation simply started there.
In March 2020 Lockdown started. Everybody found it difficult for all sorts of reasons with
regards to the economy, jobs, health issues. Unfortunately, our next-door neighbours had
health and family issues, thankfully nothing critical. Ultimately, they wanted to move… and
they were increasingly unhappy with their estate agent.
As the end of 2020 approached they’d been in regular contact with Abi. “Is everything
alright? Are our guests next door to you behaving themselves?" As a result of these
conversations, Abi got to know them.
To truly find a deal, find a good deal, for an investment property, almost always you must
get to know the person, get to understand their problems, solve those problems. If it’s a win-
win, you'll get yourself a deal.
Our neighbours at 83 had not owned it very long. There are simple techniques you can learn
to show you what properties previously sold for.
In August 2018, they purchased the property for £180,000. For family reasons, they wanted
to move to a new house. They needed to leave Filey and move to a different part of
Yorkshire. They were getting increasingly desperate as they hadn't sold their flat due to
lockdown. As a family they decided they wanted to move by Christmas 2020 at absolute
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latest. They were very unhappy with their selling agent; lockdown had made it very difficult
for them to sell and knowing we were property investors they approached Abi and asked us
to purchase their flat. They did this in November 2020.
The eventual price that was agreed between our investment company, negotiated by Abi,
was £140,000. You may be surprised the vendors were willing to accept £140,000 in
December 2020 for a property they purchased in August 2019 for £180,000. It was a deal
that suited everyone.
It was specifically on the condition that we had to complete on it before Christmas. This was
agreed in late November. We had to transact this deal within a few weeks. We are very used
to completing fast as this often brings very good deals to property investors.
The model we typically use is, buy for cash, refurbish or remodel in
some way, and then put a mortgage on it once we have increased the
value. This is critical. Please make sure you fully understand this
concept.
We refer to this technique as “BRR” which means Buy, Refurbish (or Remodel) and
Refinance. You might think why Refinance not Finance? You are replacing your cash
financing with mortgage financing.
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There are many reasons why people want to sell their property fast at a very good price. A
few examples include divorce, impending repossession, selling properties from an estate to
pay inheritance tax. I could go on, all of which have the same result, they need cash fast. If
you've got access to cash, and the ability to buy in cash, you'll get fabulously better deals
than if you're doing it the slow, traditional way of buying with a mortgage.
83 Queen Street was clearly valued in August 2018, at £180,000 because that's what was
paid for it.
It is clearly a good deal at £140,000 in December 2020. According to Rightmove, property

prices in Yorkshire went up by 6.6% in the year 2020. If we simply apply a 6.6% increase to
the £180,000 the previous owners paid for it, this means the price should have gone up by
almost £12,000 during 2020. A reasonable estimate of this property's value at the time of
purchase is approximately £192,000, as long as the vendor could wait to sell it.
That is clearly good business, even if you were buying it with a mortgage. If you were trying
to buy this one with a mortgage however, you would have been unsuccessful because they
would not have had time to wait for you. They were totally focussed on moving by
Christmas. Critically, as this needs to be a win/win the vendors were delighted too! So
pleased was the vendor that she recorded a video saying how pleased she was
recommending our services to other people.
Next: Always focus on the floor plan. Why focus on the floor plan? There are three areas
where we can add value as property investors:
ONE is the purchase price, buying well. Price is what you pay, value is what you get. It's
very clear, in this example, how we added approximately £52,000 of value, by the purchase
price alone.
TWO is the refurbishment or the remodelling of the property. Maybe add an extension, put
a conservatory on it, change the kitchen, there are a myriad of ways which you can learn
with Touchstone Education. In this case it was in pretty good condition already. So how do
we add value to this flat?
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Please just look at the floor plan for a minute. Imagine how you could add value to that flat?
See what ideas come to your mind.
You can look up online the size of the property. Properties need an EPC, Energy
Performance Certificate, in order to be sold. The EPC, amongst other things, tells you how
big the property is.
Why is that relevant? Well, once you've done this a few times, you'll get to know the
average sizes of two-bedroom flats, three-bedroom flats etc.
So back to our floorplan, imagine a wall being built between bedroom two, and just to the
right of the front door. We spent £1,600 to put up a stud wall and a door. We also did some
slight electrical modifications, and we turned it into a three-bedroom flat.
It’s still a very good sized, three-bed. A three-bed flat is obviously worth more than a two-
bed. How did we add value in this case? We split the lounge to create a third bedroom. How
often do you think most people look at floor plans when they're considering buying a
property? Not nearly often enough!
The modifications cost £1,6000 and were completed in just two days, 20th & 21st January
2020.
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Almost always, having the experience of looking at the floor plans, you will be able to work
out a way to add value. If you add together the purchase price, legal fees, stamp duty (this
was actually doing a stamp duty holiday), and the modification costs, our total price
including modifications was £146,500.
You remember I said there are three areas where you add value to a property?
Three is the exit, what are you going to do with the property when the project is complete?
To master Property Investment Fundamentals, you need to learn how to use commercial
lending, not the far more common buy-to-let lending. Buy-to-let lending has something
called the ‘six-month rule’. If you've bought the property in cash, or with a mortgage, they
won't let you put another mortgage on for six months. Hence, the six-month rule. Even then,
buy to let lenders will typically add purchase price and refurbishment cost and they consider
this to be the true value rather than the actual market value.
In this case, we bought this property for cash, and we were able to re-mortgage it as soon as
the works had been done, because we didn’t use buy-to-let lending, we use commercial
lending. Well, that might sound quite scary, and quite advanced and complex, it's really very
simple. We mortgaged this property in February 2020.
It just means you don't go to the Halifax Building Society (or similar) and get a buy-to-let
loan on it. You go to a lender like Shawbrook Bank, (and there are many of these types of
lenders), it's still a loan, for the purposes of using it as a buy-to-let, or a holiday
accommodation or whatever you chose, but there's no six-month rule.
During the Christmas period, it was almost impossible to get tradespeople out to do the
minor modifications. In January soon after, we had that stud wall built. A stud wall just
means a timber frame with some plaster board on it. Very, very quick to put up, put a door
in it, decorate it, move a couple of power sockets. All done in two days. “Hey presto”, we've
suddenly got a three-bedroom flat, instead of a two-bedroom flat. The mortgage application
process we started in early January.
By early February, we had our commercial mortgage valuation. As we expected, the

valuation came back at £210,000. For loans of this type, 75% is the normal L.T.V. This
means “Loan To Value” is 75% of the property’s value. 75% of £210,000 gave us a
mortgage of £157,500.
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I can hear you asking this: “Hold on Paul, you only spent £146,500 total yet your mortgage
is £157,500… so you’ve got all your cash back plus £11,000 more than you put in and a 3-
bedroom flat with zero of your cash tied up in it?”
Fabulous question! You’re absolutely 100% correct. This property has got none of our
money in it, and we’ve got £11,000 tax-free cashback as well.
Welcome to the magical word of professional property investing!
Here is a summary of the numbers for you:
The mortgage is 3.5% interest only costing £459.38 per month.

I have rounded up all figures to ignore pennies.
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The property was tenanted within a week, a number of tenants were competing and the
rental is £850 per month. It was very helpful for the valuation to have a signed tenancy
agreement: The valuer could not argue with the likely rent which is very important to
get the mortgage lending you want. Lenders use it to “stress test” the mortgage
payments. They look for the rent to be perhaps 135% of the mortgage cost, sometimes
even higher.
I'll come back many times to the importance of cashflow and capital growth, as we go
through these various chapters together.
But let’s just pause a second to reflect on what we achieved in this project and more
importantly how you could do the same. We now own a flat, with all of our initial cash
investment back, plus £11,000, tax-free. Why is it tax-free? Well, we haven't sold it. There's
no capital gains tax.
To analyse the monthly cash flow in addition to the mortgage you have to add other costs.
Typically, these might be 10% letting agency fee and an allowance of a further 10% for
voids and maintenance and insurance. We allow a total of 20% of the rent - (unless you
manage it yourself of course) for total other monthly costs as you can see above.
Do you like this property deal and are you prepared to learn and work hard so you can do
similar deals?
How many of these deals would you need to be completely and absolutely financially free?
Imagine each one recycles all your cash, maybe with a surplus like this one, and adds £200 a
month to your income.
Now your task becomes, being able to find deals like we did at Filey, being able to manage a
refurb quickly and simply, being able to see how you can add value. All of this we cover
during our Wealth Through Property two day online event.
We created Touchstone, to help people like Abi to become wealthy. We’ve been doing this
for a very, very long time. I would actively encourage you to learn how to do this, but just a
couple of quick tasks first.
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IPlease write down, please commit to paper, your “financial freedom” figure. I don't know
how much money you want per month to set you financially free. Most people tend to put
down either £2,000, £3,000 or £5,000. If you're particularly successful in your job, career, or
business, you might put down £10,000 a month. I don't mind what your figure is. I mind that
you have a figure, and that you've thought it through, because then, you can work out how
many deals like this you would need to do.
Of course, if you need more capital more quickly, you don't need to keep the property. We
could have bought it, added the value by adding the third bedroom, and then sold it for
£210,000,
What is the best time of year to sell a property? Well, January, February, March, springtime.
People move to a new house in the new year. The worst time to try and sell a property is
November, December, the vendors knew that, and they were happy with their choice. They
were happy with the price, and they were delighted with the speed because it allowed them
to get on with their lives.
If we had sold this property (property investors call this ‘flipping’), £210,000 minus total
costs of £146,500 gives a profit of £63,500 minus a few thousand for costs, legals and estate
agency and of course, taxes.
You may be thinking, "That's fine for you Paul, but I don't have £150,000 in the bank, so I
can't do projects like that." Well, later in this book, in the chapter on joint ventures, I'm
going to be sharing with you how to raise private finance.
Let's come back to the fundamentals here. You need to be able to find deals. You need to be
able to buy well. You need to be able to identify how to add value, and you need to
understand how to refinance or sell.
As soon as you have your first investment property you have an asset. You have started
building your asset dam. You now receive money in exchange for none of your time. Your
income streams behind this dam will start to fill your pool of wealth. With just one average
property (as I write the UK average value is £250,000) your wealth will begin to build.
Property values in my investment life-time have doubled every 7 to 10 years on average.
The capital growth from simply owning it is likely to provide £20,000 plus of wealth per
year. Plus you get rental profits.
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I hope you've enjoyed that introduction to the world of property. I hope you found that
specific example useful. Remember to talk to everybody you know about what you do.
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5
CHAPTER 5
Commercial Reality
When a Baby takes their first steps, their mum, their dad, their relatives are all delighted.
"That's incredible. What a clever child," and they get supported. They get nourished. They
get helped. Every time they stumble, nobody criticises it. They are praised for taking those
first steps.
Why do I say this? I say this because commercial property is regarded by almost everyone
as being complicated, difficult, advanced and technical. This could not be further from the
truth. It's as natural as learning to walk. Once you've learned to walk or ride a bicycle it's so
simple, isn't it? You can do it without even thinking about it. Even driving a car. Sometimes
I'll jump in, turn the engine on, radio on, I'm thinking about other things and I'm literally
driving on autopilot. I'm aware of the surroundings, but suddenly I'm there, and the whole
journey hasn't been about driving. This skill is so deeply embedded, it’s now almost
subconscious.
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Compare that to your very first driving lesson "Oh, you have to turn the engine on, make
sure the car is in neutral." It's complicated and needs your full attention doesn’t it? Now, I
promise you, if you can learn to drive a car, you can more than adequately learn to buy
commercial property and make a fantastic profit out of it.
Let's go back to the statistics again. In the UK, there's around three million people who are
property investors. Almost all of them are residential property investors. In the mid 90s, the
banks coined the phrase, "Buy-to-let mortgage," and the buy-to -let market was born, public
interest surged.
There's never been an equivalent for commercial property mortgages. Buy-to-let is just for
residential properties, and the banks, in their wisdom, decided to offer them only for
residential properties and not for shops, offices, wind farms, and all the other different types
of commercial property.
Over this chapter, I want to share with you just how incredibly simple commercial property
is and despite this why so few people do it. The fundamental reason why so many people,
comparatively, do buy-to-let residential investment is because it was publicised. There were
multiple major marketing campaigns from 1996 onwards. That same thing has never
happened with commercial property.
I promise you; it really is far, far simpler than residential property. In fact, I'm about to make
a bold statement. If I had actually started with commercial property, it's entirely possible I
would never have invested in residential property. Residential property is comparatively
complex, tax inefficient, and the tenants have far more rights. Frankly, if you compare them
side by side, almost always, pound for pound, you'll get a far better monthly cash-flow from
commercial property than you will from residential property.
That said, you will almost always enjoy better capital appreciation from residential property.
Having thought about this a lot over the years, the optimal strategy is in-fact to invest in
residential and commercial property. Very often in order to optimise the return, a good grip
of residential and commercial property investment is required. To give a very simple
example; many commercial shops have residential flats above them, and these properties are
sold on one free-hold, literally a mixed use property.
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Anyway, let's take the first steps into the world of commercial.
I want to make you aware of the huge tax advantages that commercial property possesses
over residential property, tell you about the pension opportunities and help you understand
how operationally simple it is compared to residential property.
Let’s get started. First up, let's consider the tenant and the tenancy. When you rent out your
property to a tenant on a residential basis, they're going to have a residential tenancy
agreement, which is going to give them all sorts of rights. Of course, (and quite rightly so),
they should have the right to quiet enjoyment of the property, their home. You, as the
landlord, should not harass them.
However, if we now look at other rights that they have. If anything in the property breaks or
stops working, they have no responsibility to fix it. You might be making £200-£400 a
month profit (from the difference between rent, mortgage and expenses on a residential
property which is great). Then, perhaps, you need to change the central heating boiler. If you
don't know what you're doing, that could cost you £2,000 maybe even £3,000. One boiler
could potentially cost you a years’ profit.
However, when it's a commercial tenancy, almost always the tenancy is based on an FRI
lease. That stands for Full Repairing and Insuring lease. Specifically, this means if anything
goes wrong with the property, it's not you, the landlord's responsibility to fix it, it's the
tenant's responsibility to fix it. This is the first huge difference between commercial property
and residential property.
Imagine you just received rent and whatever happens with the property you never have to
put your hand in your pocket for any maintenance issues because it's the tenant's
responsibility.
Which is fair? Well, you could argue neither. One is better for the landlord; one is better for
the tenant. Which do I prefer? Commercial. If you're reading this as a residential landlord,
I'm certain that you will agree with me.
Second… let's now look at voids (that means empty properties) and length of tenancy. With
a residential tenancy agreement... It's different in Scotland, but in the rest of the UK the
normal tenancy agreement will be for a minimum of six months, and then on a rolling
monthly basis thereafter.
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Which means, in theory, a tenant could move in then move out six months later.. Almost
always, there's a gap, a void period between the old tenant leaving and the new tenant
coming in.
With commercial tenancies, the average length of an FRI lease in the whole of the UK at the
moment is eight years. That means for the next eight years you have certainty and you will
not have the costs of finding a new tenant and during that time you're not going to have any
voids.
Maintenance is better with commercial. Voids are better. Insurance is also better because on
residential property, you the landlord, have got to pay for the insurance. On a commercial
tenancy, the tenant pays the insurance. There's advantage, after advantage, after advantage.
By now you're probably thinking, "Mm. How come all these residential landlords are not
smart enough to go and invest in commercial property?" The answer is because they don't
know anything about it. They haven't got the first clue. They don't understand the valuation
basis. We need to cover the valuation basis so that you understand how the value of the
property and everything else is calculated.
I hear people say, "Oh, commercial lending is so much more expensive, and you can only
borrow 60% of the value”. Mortgage interest rates are actually very similar with commercial
lending, and 60% of the value is on a completely different valuation basis. It’s not a bricks
and mortar valuation, It's something completely different.
I'm going to share with you that completely different formula.
Experienced residential landlords will make an allowance of about 20% of the rent to cover
the letting fees, maintenance, and voids. Net rent is therefore approximately 80% of the
gross rent for residential property.
Commercial landlords need to make no such allowance. If they provide the letting service,
they've got no responsibility for maintenance, no voids, and they can charge the tenant any
letting fees that might be involved. Gross rent is therefore the same as net rent for
commercial landlords.
I don't know if I've convinced you yet to become a commercial landlord, but I'm sure we're
heading that way.
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Let's now look at the tenants’ rights if they don't pay you. This is very interesting in
Scotland because a change has already happened that is likely on its way for England/Wales.
When a residential tenant moves into a property in Scotland, they are committed for a
couple of months, and after that initial two-month period they can move out pretty much
whenever they want by giving you the landlord a month's notice, which is fine. Effectively,
in Scotland, tenants now have lifetime tenancies.
However, you, the landlord, as long as they're paying their rent and not breaching the
tenancy agreement, can't ask them to leave. They can stay there for the rest of their lives.
You've got the right to increase the rent. But they can challenge that and take you to a rent
tribunal. Some professional tenants will do exactly that. Many residential tenants know how
to make landlords' lives a misery, and some, sadly, do.
Even worse, many tenants know that it's very difficult to evict a tenant these days. As long
as they know how to play the game, the costs for you, as a landlord, to evict them are
enormous. If for example they cannot pay the rent. You, then, have to take court action to
evict them, which can cost thousands of pounds.
Next, worse than that, if they know how to manage this situation, they can prolong that
eviction process for six to nine months, perhaps even more.
Look what happened during COVID and lockdown. Landlords were banned from evicting
tenants for approximately for a year, which means the landlord couldn't even begin the
eviction procedure for twelve months. In some cases, it required another six to nine months
to evict the tenant. Imagine someone isn't paying your rent. Worse still, potentially
damaging your property, big legal fees, huge maintenance costs, and no income at all, for
eighteen months. That's not a good combination.
On the other hand, if a commercial tenant doesn't pay the rent, something called ‘CRAR’
kicks in. This stands for Commercial Rent Arrears Recovery. Worst case, 21 days and
they're out, because they are a business and it's not their home. They don't live there. They
get none of the protections of a residential tenancy agreement.
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The first commercial property I ever bought is this one here. This
Shelter shop.
It was an empty building when I agreed to buy it. Before I go any further, you might be
thinking ‘death of the High Street’, dangerous… Why is he buying shops? Well, most of my
commercial properties aren’t shops. They are offices, factories and warehouses. I always
make sure that my investments are ‘Amazon proof’. i.e., Amazon can't destroy the business
of my tenants. These days I make sure they are Lockdown-proof too.
A charity shop is, I think, the epitome of everything that makes commercial property a solid
investment. Charity shops don't pay their staff, they are volunteers. They don't pay for the
stock. It's donations. They don't have to pay business rates. I think it would be one
spectacular project management cock-up if they managed to send a charity shop bust,
because it has virtually no costs.
Amazon is the very thing that supplies households with new appliances, new clothes and
pretty much anything else your heart desires on demand. That is the very thing that causes
donations to go to the charity shops. For example, if you buy a new dining table, your old
one may well end up in a charity shop. My charity shop is actually fuelled by Amazon!
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Whatever property you purchase, make sure you believe it to be occupied by a good, viable,
long-term business. When we purchased this property, we actually purchased it from a guy
that I knew in my network. I was in the Chamber of Commerce. He was one of the directors
of the Chamber of Commerce, and his family had run this shop for generations as a school
outfitter. If you remember (back in the day), you'd go along to the school outfitters and you
might have to pay £50 for a blazer and £20 for school tie. Then Tesco came along and
ASDA and all the rest of them, and you could buy a complete school uniform and get
change out of £20. All of the specialist school clothing shops went bust.
Now he could see this coming and he knew I did property, he had a problem and saw me as
a potential solution. Many years later I am happy to report it has all worked out very nicely.
This property was on the market for in excess of £350,000. The true market figure was
assessed by the vendor's RICS surveyor at £375,000. It was the shop that you can see next to
Costa, plus the first floor which the shop had used as its stock room.
How did I come up with the cash to purchase it? I used my pension transfer value that we
discussed earlier!
I now had £396,000 in my SIPP in cash. The shop and upper was on the market for
£375,000. I engaged a commercial surveyor, a guy called Gregor, who acted on behalf of my
pension fund and Gregor went into negotiations.
They were closing the business down and selling off the property. We needed to line up a
new tenant and we ended up with Shelter.
The price agreed was £249,000 for the shop. Let's call it £250,000. That's roughly the same
as it would cost me to buy a residential property in Doncaster to give me £1,000 a month
rent. My SIPP bought the shop.
The stock room above it was 50% into my wife's SIPP and 50% into my SIPP. The agreed
price on that was £39,000. SIPP’s can collaborate to buy commercial property.
I just want to focus on the shop itself. The agreed rent was £25,000 a year, upward-only rent
reviews on a 10-year FRI basis. I'd just spent a quarter of a million pounds in order to
purchase something that was giving me £25,000 a year. This is an incredible return, and this
money went back into my SIPP tax free every year. I was now getting £25,000 added to my
pension fund tax free whilst making no personal contributions! Amazing…
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The stock room upstairs, we converted to offices. The SIPP’s spent £15,000 to achieve this
and the offices were then rented for another £6,000 per year.
I still had £129,000 cash in my SIPP. My SIPP’s income was £25,000 for the shop and 50%
of the office (shared with my wifes SIPP) giving £28,000/pa age 40.
As I write this, I'm 56 years old. I haven't, but I could have "retired" at 55, which SIPPs and
other private pensions allow you to do. It doesn't mean I can't work. I could have started
drawing from my pension at 55, but I did not need to. I'm letting it build up in value because
as I said to you earlier, my objective for the next many years is that, by the time I pass away,
and Aniko passes away, we want to leave an £11 million legacy inside a SSAS (Small Self-
Administered Scheme for up to 11 people) that's tax-free, it is a trust, no inheritance tax,
ever, for all the future generations of our family.
I want to draw this chapter to a close now, and I hope you found it fascinating. Pensions and
commercial property was certainly transformational for me in my wealth journey. During
our Wealth Through Property online event, I go into further detail about how the two work
together in harmony to create true wealth for not just myself but many of our students.
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6
CHAPTER 6
Deal or No Deal?
In this chapter, I want to deal with a relatively new concept for many people. It gets referred
to as deal packaging. I'd like to use two examples in this chapter. The first example will
define what deal packaging is, the second example for me, is a bit more interesting, to
demonstrate the sort of the simple, straightforward version and then the more advanced,
complex version.
The first thing I’d like to do is have a look at an investor pack. We have a company called
Diamond Estates. An estates and letting agency, and we send out deals to our investors.
Now what's a deal? A deal is a property, flat, house, commercial property, factories, shops,
all sorts of things. It's a deal by the standards of a property investor. We send out twice a
week what's called an investor pack. If you just review this first investor pack, you can see
four pages. The first picture is just a picture of a house and you can actually tell from that
picture, whether it's an end of terrace or whether it's a semi. You can see the front garden is
slightly overgrown. Looks to me like nobody's been living there for a while, but you can see
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even from that picture it's double-glazed, and it's a perfectly acceptable family home. This is
not typically for someone to live in. This is an investment property.
That's the first one. This is just a standard format that we used for packaging deals. Then
page two, we've got a slightly blurry picture or not slightly, very blurry picture. You can just
about make out that it's some sort of maybe lounge diner or something with some double
doors coming into it.
First, let's talk about the phrase, below market value. You might hear this expression in
property circles, BMV. In other words, it can be purchased at less than its true market value
as defined by recent transactions within the last six to nine months for similar properties in
the same area.
The deals that we send out, we always get our experts to go around and take a look. This one
doesn't need a full rewire. It needs a new fuse board, also known as the consumer unit, a new
bath and some internal doors, theres also some decorating required. Now that's just our view.
If someone was going to live there, they might spend an awful lot of money on it.
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Next, some more pictures, and you might go into why some of these pictures are okay, and
some of them are slightly...dodgy.
Well, it's because these deals typically are direct to vendor. They're not coming through a
traditional estate agency route. I'll talk, after we've been through this brochure about how
you might find such deals, but this is where a property owner could be a homeowner, most
often is a homeowner, but it could in theory be another landlord, I guess. They'll just send us
whatever pictures they've got. These are not professional pictures that we've taken, our
estate agencies taken.
You can see, well, what looks to me like an upstairs bathroom, a bedroom with some sort of
fitted bedroom furniture, a picture of the kitchen, the back garden, which, again, just needs
the grass cut. Then what looks to me like the downstairs landing and the upstairs landing,
but we can only use what the pictures that the vendor sends us.
The final page of the brochure, we're saying what the vision is for this particular deal. We
have negotiated with the vendor that we will achieve 68,000 for them. Now we will then
charge a deal packaging fee, a sourcing fee, of £3,000 to the investor who wished to take the
deal from us. The legals (assuming that there is some sort of stamp duty holiday) we've
calculated is £2,720. We've said that if it was our property, we would estimate a total spend
of £81,000.
The end value of it is looking, we believe, will be £91,000. Assuming that you then put a
75% mortgage on a £91,000-pound property, 91,000 times 0.75 equals £68,250 plus minus.
£91,000 means that a deposit would need to be left in the property of £22,750. That's the
amount of cash that the investor would need to leave tied up, but it's of course possible to get
an 80 or even an 85% mortgage. If you went the whole way and got an 85% mortgage on
this, well, 91,000 times 0.85 equals £77,350. You could end up leaving maybe £5,000 -
£6,000 in it as an investor.
It's a £91,000 house, which would actually cost you £81,000. Even after paying for the
work, paying for the packaging, the sourcing fee, all the other bits and pieces, there's still a
profit there of £10,000. We sold this very quickly on the same day for £3,000.
We never ever package a deal for less than £3,000. To give you a feel for the size of our deal
packaging business, we sold more than 200 deals during the last calendar year. The average
package price, average packaging fee that we charge is £5,000, but the cheapest is £3,000
and on the higher end, £10,000.
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If you are interested in learning how to package deals, how to source them, what they're
actually worth, how to work out the refurb costs, what you should and shouldn't do as a deal
packager, then I'd like to invite you to join me on our two day Wealth Through Property
online event where we’ll cover this in more detail.
Again, what is important is that you do not run off with any of these strategies and “have a
go” you must get guidance and you must do things legally. You’ll need to be part of at least
one professional association. You’ll need professional indemnity insurance. Just make sure
you seek the guidance.
Okay, let's give you some further insight into packaged deals. There's three elements to this.
Finding the deals.
Finding the investors.
Monetising the deals.
In terms of finding the dealsI would never recommend that you try and use Rightmove
because they're publicly available. It needs to be off market, direct to vendor.. How else do
people advertise properties these days? Well, increasingly people try and do it themselves,
especially if they don't know what they're doing or they're a bit desperate. You'll see many,
many properties for sale on Gumtree or Facebook Marketplace.
Go and have a look in your area and find out how many properties are for sale within say, I
don't know, a five-mile radius of where you live. Last time I did that for Doncaster, there
were more than 1,000 properties available for sale on Gumtree, which, more often than not,
sometimes agents use, but then you'll see a company name or number. However, if it's to
call John or call Paul on X, Y, zed number, that's probably a person.
What we'll then do is we'll market to those people saying, "Would you like a quick cash
sale?" That's typically how we might get a package deal. It's all systemised. Separate from
that, we've got a different process. Over the years we have built an investor list. Now you
don't need thousands of people. In practical terms you should have a more than adequate
deal packaging business with just 40 or 50 people. What you want is a good amount of
people that will buy many properties from you. It's often the case that once you've got a
good deal packaging customer, they will buy many, many deals from you.
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The third element that I said I wanted to quickly mention was how you monetise those. The
broad process we use is our minimum price, regardless of the actual deal, is £3,000. We ask
for a 50% non-refundable deposit upfront to secure the deal. In that case, £1,500, and then
we've got a set of legal documentation. (we can provide you with all of the documents). We
spent thousands of thousands on various legal documents so that you don't need to.
Deal packaging, for me, is not a property investing strategy. It's a cashflow strategy, but it's
a cashflow strategy linked to property that enables you to build up huge amounts of cash that
you can then use to buy properties in cash or use as deposits or whatever you want to do.
You require very little capital upfront, but the other massive synergy or benefit is because
you've got all these deals coming through, the ones that you like, that you think are the very
best deals for your strategy in your area, well, you buy them and you don't have to pay
yourself a packaging fee, do you? The absolute fabulous deals that you really can't want to
look past, well, you buy them.
How do you buy them? Well, using all the packaging fees. Even if you're starting with
nothing, or let's say £700, because £700 for your insurance, for your registration fees, even if
you added in the cost of our training, you're still going to be talking roundabout the 1,000-
pound mark. For £1,000, you've got a business in a box that you can just plug in and start
making money. Then over time, they gradually develop the other elements of the processes
to become a full deal packaging business.
Okay, let me cover a second more interesting example. You'll recognise the format the
second time we go through it.It's that property that you can see over the wall there, it's all of
it. You might think, "Well, why's he got two front doors?" Well, it's actually four two-
bedroom flats in one block. It's a purpose-built block of four two-bedroom flats. There it is
from the back. This is below market value again.
Here's the deal. There's a road at the front that you saw previously. There's another road at
the back that fronts onto this building plot and it's all of it. It's the freehold to all of it.
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It's four flats on one freehold title, each of which are two bedrooms, then you've got an
opportunity to build another four flats at the back, or a couple of bungalows, something like
that. This was sold to one of our more sophisticated investors. Someone who is actually
going through our Mastermind Mentoring Programme.
Let me show you the figures. These are in South Yorkshire. If you've got any idea about
property prices in South Yorkshire, what do you think the flats should be worth? How much
do you think the package deal is? Have a guess and make some notes.
The purchase price for all of it, for the four flats and the building plot at the back is just
£190,000. This is obviously direct to vendor again. The sourcing fee that we charge for that
is £10,000 + VAT. Yes, we charge VAT on everything because we're VAT registered so we
have to. The investor paid £12,000, but if they're sufficiently sophisticated, which this one
is, they're also VAT registered. So, they recover the VAT.
The sorting fee itself is an expense for their business. They don't pay tax on it. We're going
to talk in a future chapter about limited company essentials. This is all sorts of stuff that you
need to learn if you want to be tax efficient, because I'm sure you'd agree, it's not about what
you make, it's about what you keep after you've paid the tax man and HMRC.
The legals and stamp duty quote we got from our lawyer for this one was £7,600. The refurb
estimate was £15,000 to bring them up to A-1 condition. The rental income would be about
£550 per flat. (If you do choose to do them up and make them nice it would be about £600.)
That was obviously at the time that this was sold, and this was sold in 2020. The further you
are from 2020 in reading this, the more likely it is that those figures have gone up.
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In total, those four apartments would bring you an income of £2,200 - £2,450/mo. Even if
you wanted to go and buy that with a mortgage, the deposit you’d need to put down would
be £40,000 - £50,000. This investor actually bought it for cash and by the time they've done
the refurb and built the properties at the back, the mortgage they'll put in place will more
than return all of their cash.
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7
CHAPTER 7
Can you really get a house with

none of your own money?
When people see claims like “you can buy a house using none of your own money” they
quite often have closed minds. Perhaps they’ve seen something on Facebook and their
instant reaction is, no, you can't. What they actually mean is, “I can't”. Well, with the
knowledge in this chapter, both you and I can.
In this chapter we're going to be discussing joint ventures. Now, in itself, is this a property
strategy? Not really. It's a strategy that enables all of the other property strategies. I put it to
you that however much money, however much cash you've got now, if you buy enough
property you'll eventually run out, unless you learn how to do three things.
1. Recycle the money. In other words, buy it, refurbish it, and then put finance on it or
refinance it depending how you've done it, to enable all of that initial investment cash
to come back out, and what's left on the property is a mortgage that's equal to or
greater everything you've spent on it.
2. If you want to do enough of these to get seriously wealthy, you're going to need
access to serious cash. Now there's lots and lots of cash in the world, it just probably
isn't all in your bank account. Learn how to work with other investors and use private
finance. Either, investors simply give you loans or they lend you money in exchange
for an agreed amount of interest.
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Now when it comes to investors, you do all the work, you find the deal, you manage the
project and you split the profits or ownership with them. For example, in the deal packaging
chapter, I dealt with an example property that was a block of four flats. It could be that a
deal like that you might agree, "Well, Mr or Mrs. Investor, you fund it, I'll sort it all out.
Then when we put the mortgage on it, we'll have two flats each" could be one solution. Or a
different solution might be, "We're going to build some four more flats or some bungalows
or something in the back garden. I’ll keep the old block of flats and you can have the new
block of flats" or whatever. The fantastic thing here is, there are no rules.
Whatever you agree, and you need to document it and make sure it's legally watertight. But
whatever you agree and shake hands on with an investor, either for a loan or some sort of
working together on a project hence the title joint venture, is perfectly legal because there's
no rules to stop you doing anything.
There are a few rules to stop you advertising for cash or for joint venture partners to the
general public unless you're FCA registered. What you can do, however, is reach out to
people that you know, and specifically you can also reach out to high net worth and
sophisticated individuals.
If you want to know more about that, I suggest you Google FCA 13/3. That's the financial
conduct authority 13/3. There's far less restrictions for anyone dealing with high net worth or
sophisticated individuals because the law says, effectively they should know what they're
doing. The law exists. I think it's great that it's there to protect people from just knocking on
doors and trying to embezzle money from people.
With that said, what I'd like to focus on in this chapter is raising private finance, and
specifically, why it's attractive, just how much money is out there, and the kind of rules that
we have internally. This isn't the law. This is the procedure that we have and how we do it.
As always throughout all the rest of these chapters, what I want to do is I want to use a real
live example.
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Here is a picture of number 84 Elm Green Lane, Conisbrough, South Yorkshire. Many of
our properties are in South Yorkshire because it's where we live. Unless there's a very good
reason for you not to invest where you live, I strongly suggest that you do. You will know
the area, you will know the property prices, you will know everything else.
Number 84 is a nice, well presented, double bay windowed house, with two floors, it's a
traditional turn of the 19th to 20th century. Nice big windows. Door in the middle. Large
front garden, well presented rear garden and a garage.
It was on the market with a company called Martin & Co. Locally. The asking price was
£200,000. The process that we went through with this one was to buy it, refurbish it, and
then refinance it. Now, just to explain briefly, it gets shorthanded to BRR, buy, refurbish, re-
finance. Now, even though we bought it for cash, (I'll give you the figures through this
chapter) it is still referred to technically as a refinance. When you put a mortgage on
something, even when it hasn't got a mortgage already in place, the mortgage company still
calls it a refinance. Because they say that every property has a mortgage on it, it's just this
one has an unencumbered mortgage, which I thought was all sorts of gobbledygook the first
time someone explained that to me years ago now.
What we decided to do with number 84 was to refurbish, keep it, then put tenants in it.
Because as well as the monthly cash flow, we also like the ongoing capital appreciation. We
occasionally do it for specific reasons, but generally we keep everything that we buy for the
very long term.
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Before I go on and talk to you in detail about how we raise the private finance, and what the
costs are, and all the figures for this particular property, I'd like first to just show you
around, show you a few pictures. Here is the kitchen:
There is a dining table there, but it's quite a big house. You can see that it needs a fair level
of refurbishment. I mean, it is functional. It's fair to say that the person that we bought it
from was relatively elderly. I think they're in their 70s. I believe they inherited it from their
parents, from their mum and dad. I don't think there's been much work done to this in the
last 50 years. You can see the very old-fashioned gas fire in that very old-fashioned tiled
fireplace against the back wall there. It's just very, very dated.
Okay, so I'm not going to show you pictures of the whole property, but this one picture
hopefully gives you a feel for the level of refurb needed.
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There's nothing really structural required. It's more a question of an overall, a redecoration,
new kitchen, new bathroom, and there's one or two other bits and pieces to do as well. But
like everything else, getting private finance is easy as long as you've got good deals.
This next picture is the floor plan, this really shows why this was such a good deal.
This is a detached three-bedroom house. On the left-hand side we've got the ground floor.
Two massive reception rooms on the left and the right of the entrance, hallway then kitchen.
On the ground floor what we're intending to do is add a downstairs toilet and put a nice
French door from the kitchen out into the lovely garden. Just the addition of a separate toilet
and which will add value. Adding a separate toilet, if there isn't one in a property will
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typically add 6% or 7% of the value, especially when I tell you the next thing that we're
about to do to it. Obviously replacing the kitchen, making it a nice new modern kitchen, just
redecorate simply the two reception rooms. It is really going to add a lot of value to the
property.
Now let's look upstairs. You can see that we've got a reasonably sized back bedroom, there's
a bathroom, but you can see it's in the bedroom. To have a three-bed detached house where
the only toilet is in the bedroom ensuite by modern standards is not really acceptable.
You've got two huge bedrooms at the front, either side of the staircase. Then you've got an
office, which is only five foot six by four foot eight. It's too small to be a bedroom.
We wanted to turn this into a 4 bed rather than a 3 bed so we converted the office. The cost
of two walls down and a couple of stud partition walls up, in total came to about £3,000.
We’d suddenly turned a three-bedroom house with a little office to four very generous sized
bedrooms upstairs and a brand-new bathroom, kitchen with en suite downstairs.. There was
some other work to do but in total, the refurb came to just under £25,000.
Let's talk about how to find a deal to approach an investor with. Well, as you already know,
this property was on the market for £200,000. It has been lived in for a long time by the
same people and it's very dated. Now after viewing we discovered that this particular vendor
was in his 70s. He decided to remarry someone in Brazil. He was understandably in a bit of
a hurry to get out to Brazil to be with the new love of his life. Because he didn't want to
leave it until he sold it. He'd had incredibly poor service from the estate agent, and he felt
terribly let down.
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We said, "Okay, well, if you want to get yourself out to Brazil, sharpish. What price would
be acceptable to you?" They just talked. Very often a good way of getting deals is doing
viewings in the evening or on Sunday afternoons, because these are times when estate agents
won't want to show you around. Very often then you'll meet the vendor. You can't guarantee
it. But if you ask for a viewing at seven, eight, nine o'clock in the evening or four o'clock on
a Sunday afternoon, the chances are you're probably going to meet the owner.
The deal was done. Literally shook hands on the spot, £163,500 cash. This gentleman had no
mortgage on the property. He'd lived in it forever. He inherited it from his parents when they
unfortunately passed away. £163,500 cash when he'd been messed around for months and
months and months by the agent, fantastic deal.
We then worked with him on his timelines because we actually purchased this one towards
the end of 2020. It was a bit stop start because he thought he was going to sell it to us really
quick and then locked down, COVID, whatever… It was difficult for him to get out to
Brazil. Long story short, we purchased this property towards the end of 2020. We were
really, really flexible in terms of working with the owner.
So, that's how we found the deal, but how did we find the investor? Now this is beautifully
simple. We have a number of investors that we work with regularly. On our 2 day Wealth
Through Property online event, I’ll talk you through some of the ways you can get your own
network of loyal investors.
We knew what the end value of this deal would be so we offered that investor mortgage
grade security on it, because everything was paid for using the investor's cash. Now, because
there's no mortgage on it, we offered the investor first charge security. That meant if we
didn't repay the investor, he could take the house off us, and he would have a house that was
fantastically more valuable than the amount of money that he'd given us, and it would all be
his.
Often, we hear people being nudged towards using bridging finance as opposed to joint
venture, but here is my view. Bridging finance might typically cost you somewhere between
0.65 and 1% a month, 2% in, 1% out, and you can bridge 85% of it. But the costs are
horrendous. There'll be 15% per annum. You're often locked in for a minimum of six
months and it's just horribly expensive.
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Whereas, if an investor has cash available sitting in a bank, what are they going to do with
it? How do they stop inflation destroying the value of their money? You will know people,
there'll be people in your network. Abi for example has done private investment with her
dentist. They're not necessarily your best friend but people that you just naturally would go
to, doctors, dentists, chiropractors, almost always start to talk about what you do. Naturally,
property comes up in conversation and that's fine. You're not breaking any FCA rules if you
do that. If your dentist then decides to invest a few hundred thousand pounds with you,
happy days, because what's that dentist going to get in terms of return on their £200,000?
I hope you're loving the idea of joint ventures, because I do. Joint ventures are a way of
financing, property strategies, creatively.. You could use JV finance, private finance, you
could use it for commercial properties, for buy-to-lets, for service accommodation. You
could use it for any of the property strategies that I'm talking about. Learning how to raise,
use and legally document joint venture private finance, is a critical skill to have if you're
going to be a successful property investor.
What's not to like? This is a genuine win-win. The investors got first charge security, 6,5%
interest on their money, which just happens to be £6,500 on £200,000 over six months. We
end up with a free house using literally zero of our money through our GAAP investment
company. There's the four of us, at GAAP. We've got a free house using none of our money
at all, plus £15,000 cash back. Plus, we make a monthly profit on the rent because the rent
obviously pays the mortgage, pays all the bills, all the bits and pieces, and we make a decent
profit. Of course, we've got a capital appreciation on that lovely house for all the years to
come. 100% win-win. Happy investor.
What does the investor want to do? They want to do it again, don't they? They gave us
£200,000 of their money and they ended up with £206,500 six months later. Only this time,
they want to give us more money. And they tell their friends, now what do their friends want
to do? They want to give us money because they love the model. That, is how you build an
investor network.
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8
CHAPTER 8
Using Other People's Property

In this chapter, I want to discuss lease options. A lease option is where you rent or lease a
property for a number of years, from somebody else. This is with the option, but not the
obligation to purchase it at some point (at a pre-agreed price) during the agreed lease option
period. These agreements also get referred to as purchase lease options, PLO, PLOs. The
right to sell or the right to buy. It's the same with lease options, you can do it both ways.
What is critical to a lease option? It's critical that the owner can't sell it to anybody else
during the option period, other than you, because not only do you pay on a monthly basis,
but there's a “consideration”. Often the “consideration” will be £1 because there has to be
some exchange of value, this makes it legally valid. You now have the absolute right to
purchase that property for the next seven, 10, 15 years (whatever you agreed) to the
exclusion of all others. That means we need to put a restriction in place so that the landlord,
the owner, can't sell it to somebody else during our option period.
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Now a restriction at Land Registry is an “RX1”. This is just a Land Registry form that gets
filled in, it's very simple. To register and it's hardly expensive to do either. That means
there's a restriction which prevents the current owner from selling it to anybody else without
your agreement, during the option period.
To turn this from theory to practical, what I'd like to do is talk about a particular property on
which we have a lease option in the North.
It's a three-bedroom terraced house and as you can see, there's nothing wrong with it. The
current market value is somewhere between £100-£110k.
The Landlord had a particularly difficult experience with the current tenant (who was in the
process of leaving) before we put a lease option on it. They had rent arrears plus a little
damage to the property. The landlord was in their seventies, and they were simply fed up.
When we did the option, there was a little over two years to run on their current mortgage.
When you get to 70, 75, 80 years old as an individual, as opposed to as a limited company, it
becomes impossible to get another buy-to-let mortgage because when you're older than 75 it
will be incredibly rare to find a bank to lend for one.
The current mortgage on this particular property was £99,917, a rather unusual figure. The
interest-only mortgage payments on that particular property were £139.88/mo. The
agreement that we struck was, we will pay off essentially your mortgage and we will buy the
property from you at the outstanding balance of the mortgage, sometime within the next two
years, because that's when your mortgage will end.
The landlord didn't want the hassle of trying to deal with tenants, was fed up with that, and
was happy to hand it over to us. There is a technical process that you go through to take over
the mortgage responsibility from somebody else, because clearly, you don't want to just give
the mortgage money to the landlord in the hope that they will then use that to pay off the
mortgage, because what if they get into mortgage arrears? What if they spend it on a car or a
holiday or whatever, and the house gets repossessed? You need to legally take over
responsibility for the mortgage from them. There are some forms and legal agreements that
you’ll need, we will touch on this at our Wealth Through Property event.
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Let me share with you the figures on this one. The agreed lease option term is that “we
would purchase the property for the value of the outstanding mortgage sometime in the next
two years”. Now remember, this is an option, we are not legally obliged to go through with
it.
The outstanding mortgage is £99,917 (also the pre-agreed purchase price) we then pay the
remaining interest payments for the next 24 months at £139.88/mo. Now, the market rent for
a three-bedroom terraced house in that area is £625/mo. With buy-to-lets we recommend
that you allow 20% for letting fees, voids, maintenance, and that sort of thing. So our net is
£500. Minus the mortgage, we make £360 per month profit for the next 24 months, that's
£8,640 over the term.
You can do many things with that. You could spend it, put it into a separate account or save
it up as a deposit towards that property. The property is currently worth around £110,000
and typically properties on average throughout the UK go up by 4% a year. If we take a
starting point of £110,000 and times that by a 4% increase by the end of the first year, it's
worth £114,000, then by the end of the second year, it's worth close to £119,000.
So how to buy the property. If you put an 80% buy-to-let mortgage on the agreed purchase
price of £99,971, this covers £79,976.80. We've made a rental profit of of £8,640 during that
period, we just need to top the deal up with a further £11,354.20. Now, we’re in a position to
be able to access the additional funds for the top up, but if you were not, you could consider
arranging a lease option deal with a longer term, or you could use your Lease option for
Serviced Accomodation to make £1000 a month profit as opposed to a BTL. There's lots of
creative ways to self finance the purchase of a property during a lease option agreement.
A lease option is a perfect solution if you want to acquire lots and lots of properties for little
to no money. We cover examples and talk to some of our students about Lease option case
studies at our Wealth Through Property event. If you think that lease options might be a
good fit for you then I’d definitely recommend joining us.
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9
CHAPTER 9
Don't Tell Your Partner?

What are you talking about in this chapter and why shouldn't we tell your partner? Well, this
is all about buying from auction.
Before we start, I'd like to tell you a precautionary tale. We have in our mastermind, a gent
who lives in Luton. Before he joined our mastermind, he was attracted to the idea of buying
properties through auction. He decided to go and buy some property in Middlesbrough. He
went along to the auction and saw these two properties in the same street from the same
landlord, separate lots and he was determined to bid on both of them. He secured the first
house for £28,000, and he secured the second house for £30,000 (an average price of
£29,000, what he hadn't done, was read the legal pack because he'd never bought from
auction before and he didn't know what one was .
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What he didn't know was, there was a special contract in there that had a legally binding set
of terms that would go with the auction purchase. This particular student was expecting to
pay on his two properties about 10% in auction fees. With his £60,000 worth of property
that would come to £6,000 worth of fees. BUT the auction packs both specified that in
addition to the purchase price at auction, he would pay to the vendor all of the rent arrears
and the refurb costs from the last time the tenants damaged both properties. When you add
this together with the actual auction and legal fees, the actual figure was £60,000.
He was walloped with a bill for an additional £60,000 that he wasn't expecting...
Please don’t be discouraged from buying at auction, but please make sure you know what
you're doing first. There's an awful lot of sharp practise out there, especially at auctions.
I want to talk you through an actual auction deal and show you how much value you can
create if you do know what you're doing. This is a case study from a very, very good friend
of mine, Bhavin. Bhavin for a couple of years was one of our students. He's now one of our
mentors and he's a very experienced property investor. Before he even joined us at
Touchstone, he already had £10 million worth of property. He's based in London and his
approximate portfolio is split between North London and Essex.
One morning Bhavin decided he was going out to an auction and he didn't tell his partner,
she went off to work in London city centre, and Bhavin went and bought a property at
auction.It was absolutely fabulous.
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So, this is Mill Hill, very close to where Bhavin was living at the time with his wife and
family in North London. That is the property that Bhavin had his eye on to move into. His
notion was to buy this one, do it up, reconfigure it slightly and move in. He would then turn
his existing house into two serviced accommodation units by splitting it in half. That was
broadly his objective. Now he'd had his eye on this particular property for 18 months prior to
the auction. But if you can see the picture, it looks a bit like two separate properties. You've
got this unusual staircase going up the middle. Then in the driveway, in the foreground,
you've got a detached home office. That's what the previous people used it for.
Here's the floor plan.
You've got a detached studio, which is nearly 27 square metres. The ground floor at 208
square metres, a swimming pool, all sorts of things, it's almost like a leisure floor. Then on
the first floor, there’s a further 195 square metres of accommodation. This is more than 400
square metres, even ignoring the studio. Dining rooms, television rooms, large kitchen,
breakfast room, mature gardens, streams, that sort of thing, so a very nice property in North
London.
The asking price was £2.25 million. For Bhavin, that was too much. He established the top
price he wanted to pay was £1.66 million. Obviously the asking price at £2.25 million, it
didn't get very far. Before we go on to the details of what he paid for it and how he did it, I
just want to show you the auction contract that he signed.
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This is in the legal pack. It's always in the legal pack. Please do not ever go and buy an
auction property without viewing it, without knowing it local to you, you know whatever,
good knowledge of the area, what it's worth, et cetera. Also specifically having sight of the
auction contract. Now, if you don't know how to do this, make sure you pay a lawyer a few
hundred pounds and do it the right way. Bhavin didn't make any errors because he knows
what he's doing. But this is the actual auction contract for this actual property.
You can see there, the address - it was lot number 21 in this auction for Auction House
London. It's called Sandpiper, is the name of the house, 75 Hendon Wood Lane, Mill Hill,
London, NW7, 4HT. You can see the names of the sellers there. It looked like a, I don't
know, presumably a married couple Gary and Lenear's Spiro and the buyer Mr. Bhavin
Thaker and he's given his previous address. You can see that he's agreed to buy the property
for 1.66 million. He paid a deposit when he bought the property of £166,000. He put down
10% on the day and that was purchased on the 31st of October 2017. Bhavin is then signed
it, there's a signature capacity on behalf of myself and my wife, purchase price 1.66 million,
deposit paid 166, balance due 1.494 million.
I admit readily, it's pretty unusual to go and buy a 1.6, 1.7-million-pound house without
telling the Mrs. It's not something I would do. Very well, brave man, off he went, and he did
it.
Bhavin's a smart guy, he actually got the auctioneer to agree. He said to the auctioneer
before even started, "Look, I'm interested in this property. If I buy it,"... look line through
the special conditions, 16-week completion agreed from the day of the auction and the
auctioneer signed that because it was acceptable to the seller. Even before he began bidding,
Bhavin knew that he had 16 weeks to complete not 28 days. This is the sort of stuff that
discriminates between or separates the exceptional property investor from the novice.
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If you've seen homes under the hammer or auctions and this and that and the other thing,
you're thinking, "Oh, well, you know, it's fantastic. I'll just roll up at the auction and I'll
make millions." No, you won't. You are probably to have the trousers pulled down if you
don't know what you're doing. Okay. Bhavin does know what he's doing. You want to learn
about this stuff, you need to do the two-day online auction course that I've recorded for you.
These are actual slides from that actual course. This is just a few slides. You'll see at the end
of the chapter, how many slides there are, how many hours of content and everything else.
It's huge. Is it vacant or let, vacant possession, et cetera, et cetera.
There's nothing alarming here but the smart thing that Bhavin did is he said, "Well, if I buy
it, I want 16 weeks complete," because he wanted the ability to put a mortgage in place to
buy it. He didn't want to have to buy it quick in 28 days. Well, I'll tell you what he actually
did shortly, but I really hope you're enjoying this because I think this is a fantastic deal.
You'll see shortly why I think it's a fantastic deal, but that is the bit that you need to focus
on, to suit himself Bhavin moved it from 28 days completion to 16 weeks, (from one month
to four months effectively).
On the left-hand side is what Bhavin bought along with the actual architect’s floor plans, on
the right-hand side is what Bhavin's done to it. It's a big house, and on the first floor you've
got your live-in accommodation and four bedrooms. On the ground floor, the basement
floor, you've got a dining room, a family room, a big pool area and so on and so forth. So
that's what the property was before Bhavin bought it.
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What's he done to it? Well, he's modified the front and I'll show you a picture of the revised
elevation at the front. He's taken away that funny staircase and he's turned it from what
looks to me like two semis into a proper detached, premium detached property, which is
what it is. He's reconfigured the first floor a little bit... I don't know what to call it really
cause you kind of go in at the floor level and then there's a lower floor. He's reconfigured
that a little bit, but he's reconfigured the ground floor a lot.
Downstairs - he's now got a cinema room. He's got lovely dining room, stairs going down
into what was the pool rooms, plant room he's now got a cellar down there with a bar in it.
He's put an office or guest room and then at the back, you've got a massive lounge area. He's
taken out the swimming pool. He's taken out the sort of leisure floor and he's turning into
much more of a coherent big house. I think by doing that, he's added an awful lot of that...
Well, you'll see how much value he's added.
This is what it now looks like. Instead of this kind of funny L-shape staircase going up to
what looked like a pair of semi's, he's now got a proper big front door where you go in at the
lower level. Then at the upper level where the staircase used to go to, he's got a fantastic
balcony with views over the garden and everything else and then you can see the rear
elevation as well.
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This is what it now looks like. Instead of this kind of funny L-shape staircase going up to
what looked like a pair of semi's, he's now got a proper big front door where you go in at the
lower level. Then at the upper level where the staircase used to go to, he's got a fantastic
balcony with views over the garden and everything else and then you can see the rear
elevation as well.
He's bought it from auction and then he's reconfigured it because he's a smart property
investor. There's the property and there's the new configured... Sorry, there's the original
property and there's the reconfigured property per the architect's drawing. The asking price
18 months prior to the auction was 2.25 million. Bhavin went to the auction and pre-agreed
a 16-week completion if he was successful. The highest bid at auction where it was unsold
was 1.69 million. Now you recall Bhavin didn't want to pay more than 1.66 million so he
stopped bidding at 1.66, some other person went to 1.69, it didn't sell and at that point you
may be thinking, "Well, he sort of left in tears. He didn't get his dream property. Maybe he's
going to have to tell his wife what he's done."
But Bhavin then went back to the auctioneer and said, "Well, I see it didn't sell at auction."
This is a real pain point for people that haven't sold at auction. He said, "It didn't reach the
reserve, so it didn't sell at auction for 1.69 million. I'm prepared to offer you 1.66 million, as
long as we stick to our pre auction contract to a 16-week completion." The auctioneer
phoned the seller and long story short, the seller agreed. What Bhavin then did, because you
remember Bhavin already had a 10-million-pound portfolio. It wasn't even 50% mortgaged.
What Bhavin then did over the next four months is he released equity from his pre-existing
portfolio. He raised cash of 1.66 million by pulling out extra money on his various buy-to-
lets and other things that he owned. He converted equity to cash because what he didn't want
to do was buy with mortgage. What he wanted to do was buy for cash, then refurbish it and
then put a mortgage on it at the end.
This is a slightly bigger buy refurbish, re-mortgage than you've read in other places in this
book, but it's exactly the same principle. This is a fabulous price for this piece of raw
material, but this is not the finished article. What Bhavin's now going to do, he's going to
turn this rough-cut diamond into a brilliant, brilliant jewel and he going to put it in his
crown.
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If Bhavin had bought it on the open market for 2.25 million versus the actual auction price
he paid at 1.66 million he would have given away £590,000. He's actually saved 0.59
almost... That's 0.6 of a million he saved on the purchase price. Auctions could be fantastic
as long as you know what you're doing, as long as you're disciplined and as long as you go
in with a clear plan and you know what you're doing.
What did he do next? Well, to move it from, as I've shown you on that previous diagram of
what he bought versus what it is now, find together all of the architect's fees, the legal fees,
the stems, you know, everything, and the refurbishment costs, he's actually spent another
£340,000. This is still all cash. Although I appreciate not everyone listening to this, of
course can do a 2-million-pound project for cash. That's not the point. The point is how
much can you achieve as a saving versus the open market value if you go to auction and
how much... remember the three areas where you add value, what price do you pay? Price is
what you pay value is what you get. He's bought this at a really good price, and he's used the
auction mechanism to achieve that.
Second, what do you do to it? How do you add value? Well, he's added a huge amount of
value, and I'm going to show you how much precisely value is added, because I'll show you
what it revalued that. He spent £340,000 in total plus his 1.66 million. To round numbers, he
spent a total of 2 million pounds. Because I didn't want to fill this entire book with £100,000
- £200,000-pound deals. I want to give you some bigger deals as well. This is a 2-million-
pound deal, bought it for 1.66 spent 0.34 on it. Its total spend, but I've rounded it by a few
thousand pounds, but only a few thousand pounds, he spent 2 million quid. Now he had the
firepower to do that because he's generated wealth through property over a long period. Over
20 years, Bhavin came here to the UK roundabout, the year 2000, and it's actually 1998, I
think.
He came to the UK in 1998, by 2003 he had his first property, by 2005 he had his first
investment property and he's just kept doing it. Over a 20-year period, he built a 10 million
pound plus portfolio. At the end of that, 2017 or whatever it was, he then used his equity, the
blood, sweat, and tears that he's worked for over that previous 20-year period to actually do
this flagship project. Now, the valuation after works, look at that 3 million pounds. He's
generated 1 million pounds worth of value of equity in one project. His total spend is 2
million. The re-evaluation after works is 3 million, which is fantastic. He's then put a 2.25-
million-pound mortgage on it. But remember, he's paid for all of this in cash. This is a 75%
residential mortgage, incredibly cheap, sub 2% interest that is. He's now got 2.25 million
tax-free cash to go off and invest in property. That still gives him £750,000 equity and an
absolutely gorgeous home.
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I've brought many properties at auction over the years. I mean, it doesn't matter if they're
£100,000, £500,000, a million, or as in this case, a 2-million-pound project. The point is you
can buy a fabulous discount below market value. You can then add value. Obviously Bhavin
could have sold this. He could live there for a few months, for a few years and then he could
sell it. If he did that, he would make 1 million pounds profit clear and clean because if he'd
actually lived there as he found what... He is living there as his family home so if you
dispose of your PPR, your Primary Principal Residence, your home, there's no capital gains
tax. He's generated a pure 1-million-pound profit that he could liquidate at any time. He
doesn't want to do that because he actually wants to live there and enjoy the property.
I invite you to the world of auctions. If you want to add buying smartly at auctions
as a skill to your property repertoire, please read the next two pages, which is
where you're going to find everything's that's included in the online course and
whatever. As normal use the links, use the QR codes and make sure you claim your
150 pounds discount. For just again, a few hundred pounds, you could do what
Bhavin's done, one deal, a million-pound profit. I really don't know why anybody
wouldn't want to master the skill of buying auction because to not do that, to go back to
the beginning of this chapter, you think you've bought two houses in the Northeast of
England for £58,000, but then you discover the special conditions and then you've got to
pay another £60,000. Oops.
Assumes the person that did that made that mistake they came straight to us, straight to
Touchstone education, and they invested £15,000 and literally bought every single course
we've got plus a year-long mastermind because they did not want to make that mistake ever
again. By lacking the education in one deal, when one day two deals, they wasted £30,000.
The good news is the amount of money they've made since then, since they'd been part of
the Touchstone community, since them being part of our mastermind, since they've done
every course that we've got, is they made an awful lot of money.
I want you to become wealthy through property. I don't want you to make other people
wealthy through property by making horrendous mistakes at auctions. Hope you've enjoyed
that chapter. Love to be sitting next to you in an auction room someday, somewhere. I'll see
you in the next chapter. Goodbye for now.
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10 CHAPTER 10
Salaried vs Owning a Business?

In this chapter, we're going to be discussing limited companies and the various ways in
which they can be extraordinarily helpful in legitimately reducing your tax bill. I want to
compare earning a salary versus drawing the equivalent of it as a dividend from a limited
company.
There are many, many reasons why people that are getting involved in property should
develop a good understanding of limited companies and partnerships, but because this is just
an introduction, I'm going to focus exclusively on limited companies.
I first began to learn about limited companies when I did my first degree, which is almost 40
years ago now (and at the age of 18). From that age onwards, I've been absolutely fascinated
by companies, company structures, efficiency, and various ways in which you can, as I said
at the start of this, 100% legitimately use company structures to your advantage.
A limited company is named as such because your liability is limited to the company. So as
an individual, when you set up a limited company in the first instance, you'll need to decide
who are the directors, who are the employees, and who are the shareholders going to be.
One set of people, the directors and employees, are responsible for running the company.
The other set of people, the shareholders, are the owners of the company.
Can you pay a salary to a shareholder? No.
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Can you pay a salary to a director? Yes, you can because they're working there.
Can you pay a dividend to a director? No, because dividends get paid to shareholders, not
directors. It's essential that we understand the difference between a shareholder and a
director, but it's also essential that we understand that one person can be both a shareholder
and a director.
For this example, I want to do some numbers with you for a company that can afford to pay
a salary of a £100,000 to one of its directors.
I now want to look at the differences between choosing to receive £100,000 of income as a
salary, versus if using a limited company in the way they're designed to extract your money
so that you can spend it on whatever you want much more efficiently.
(The figures I'm about to share with you are true, but they're true specifically for when I
recorded this, which is January 2021).
£100,000 as a Salary :
I've taken this from the salary calculator, which is a free website, you can just go on it and
put in your income and it will break down your tax and so on as per the current tax year
allowances and everything else.
I’ve added an income of £100,000 which is £8,333.33 per month. Now, if we turn that into a
taxable income, which is the next line, you'll see that at the moment, people are allowed to
earn, each individual is allowed to earn £12,500 a year tax free. So, the £100,000 becomes
£87,500 because the first £12,500 is the zero-rate tax band.
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The tax then on the balance is £27,500, and national insurance is £5,860 - which gives you a
take-home pay per year of £66,640. It's pretty close to £3,000 per month in tax.
£100,000 through a Limited Company :
Now, if this limited company employs you as a paid worker on a £12,500 a year salary, that
is tax-free, there's no income tax on it. Granted, a small amount of national insurance at
£360 or £30 a month.
You want to pay national insurance because if you don't, then you won't qualify for the state
old age pension. For me, it's well worth paying a few hundred pounds a year in national
insurance. You could choose to pay yourself less salary so that you didn't pay any national
insurance at all. However, I think it's such a nominal figure, £30 a month, that I personally,
want to pay that so that I then qualify for my old age state pension from 67 years old
onwards.
“Ok Paul, but I can't live on £12,500. I need the rest of that £100,000”. Okay, well, here's
how we're going to do it then. We can pay ourselves in dividends as long as we're
shareholders.
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This is from the HMRC website, you can see here that over the years, there’s a dividend
allowance. For the tax year 2021, there is an allowance of £2,000 pounds per person. So that
means you could pay each person £2,000 pounds in dividends, and there'll be no personal
tax. The company has to pay tax, but that's a separate thing. I just want to focus on the
impact on the individual here. The first £2,000 could be paid and that would be tax free for
the individual.
This graphic is from the HMRC website that shows the tax rate the individual pays on the
amount of dividend. So, you understand this is a £2,000 allowance now is 7.5% through a
basic rate tax pay, 32.5% if you're a higher rate taxpayer, or if you go over £150,000, it's
actually 38.1%.
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This is a dividend tax calculator, another free online resource. I'm now choosing to pay
myself £37,500 of dividend income and £12,500 of salary income. Now, what you could do
to amount to your £100,000 is employ your spouse or partner on the same structure, drawing
£50,000 each would amount to that £100,000. In this example, your total tax bill on that
£12,500 is not subject to any income tax, and the £37,500 of dividend is subject to just
£2,662.50 of dividend tax.
Now, there are ways in which we can reduce that tax bill even further and there's ways in
which we can reduce the company's tax bill, all using completely legitimate above-board
government accepted HMRC endorsed resources. For me to teach you this however, we’re
going to need to work together in a more in-depth environment.
And another great thing about owning a Limited Company is that you can indeed, run your
property business through it… I’d like to encourage you to join me at our Wealth Through
Property 2 day event to learn more about how Ltd companies can help you.
If you’re planning on setting up a property business, through your new Ltd company, you
can even claim the VAT back for any training with Touchstone as it's a legitimate business
expense in the same way that buying books or manuals training courses are also legitimate
business expenses.
Another helpful snippet for you. Many property investors that I meet don't fully understand
that if they're driving around, if they're doing viewings, if they're meeting estate agents,
they're going out to meetings with joint venture partners, private investment. Then it is all
part of your business activity. And if you're doing all of these things, then what you're doing
is company mileage.
If you're going for a meeting with your business partner and perhaps your business partner
lives a hundred miles from here, that will be a 200-mile round trip… for a board meeting.
Well, that's a legitimate business expense. You should be claiming £0.45 a mile, for the first
10,000 a month. So, each individual can claim £4,500 from the company. It's an expense to
the company. It's totally tax free for the company, but it's an extra £4,500 tax-free in their
pocket. If you use a mobile phone with a fixed tariff for company business, even if you use
this for personal calls, as long as you do not go over the monthly tariff.
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Do you use a room in your house as an office? That’s just one prime example, and there are
so many things that people should be charging to a limited company to reduce your tax bill
and what we teach at our 2 day Wealth Through Property event will vastly help with this. I
believe it's our duty as citizens to pay the appropriate amount of tax. It is wrong if we were
to pay too much tax and it would be wrong if we were to pay too little tax.
I love the fact that we have the society that we have, that it tries to look after people. We've
got a welfare state, we've got the NHS and I fully accept that it's got to be paid for. What I
do generates huge amounts of economic activity. Every time I buy a house, there's work for
builders, there's work for people doing double glazing, there is work for decorators. They all
pay tax. We use a load of materials. There's VAT paid on that. Then when it's all finished,
tenants move into it. It's a lovely home for people that wouldn't otherwise have a home. I
think that's a good thing to do. Those tenants then pay money to us, and that money that
comes to us has to be taxed if appropriate.
The activities that I participate in generate massive amounts of revenue for the government,
for the Exchequer. The fact that I choose to use my knowledge to minimise the amount of
income tax and corporation tax I pay, well, that's what the system is designed to do. It
incentivizes me to do it this way.
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11
CHAPTER 11
Mind Over Matter

In this chapter, I'm joined by my lovely wife, Aniko. Aniko is very much a driving force
within our property investment businesses, professionally, she's a qualified accountant but
more relevantly for this chapter, she is a fully qualified, Dr. John DeMartini facilitator. If
you haven't yet heard of Dr. John DeMartini, by the end of this chapter you most certainly
will understand who he is
Throughout this chapter, I’d like Aniko to help guide us through the secrets to harnessing a
“money mindset” and what that means for an individual. So we shall work through this
chapter interview style.
Q1. Why in your view, Aniko, are most people not Wealthy Through Property?
Aniko:
I see it so often that people have fear. Now, fear can take different shapes and forms, but the
number one thing holding people back from their true ability is fear.
If you look around at the various property strategies, even just the ones in this book, there
are various ways you can earn money from property and each and every one of those
strategies is working for somebody.
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The key is finding which one will work for you. This doesn’t mean there aren’t other fears
still holding you back, many people will need to overcome their fears as well as identifying
the strategy that will work, however the only way to do this is belief, understanding and
doing.
Belief in yourself to make a change, understanding the change you’re about to make and
how this works, then doing. Understanding is not enough, you must be prepared to do the
work, and most of the time, this is where people fall down.
Q. There are two types of fear. Fear that you won't get something you want (i.e to become
wealthy through property) and the fear that you'll get something that you don't want (i.e a
lawsuit or bad tennant). If you look at it in the context of property investment, in your
experience, which do you see most often?
Aniko:
People are more often than not afraid of failure, not becoming wealthy and therefore, don't
even start. Procrastination is not your friend. People understand why it might be beneficial,
but they are just so afraid to start.
If something goes wrong, that's learning, you’re trying something new but until you embrace
that you’ll remain static. More people are afraid of something they never experienced
themselves, and when peers around them echo the same fears, it is magnified.
Identifying what you are fearing is so important. Some people will fear that they will be
ridiculed if they are not succeeding. Other people will be afraid of losing their savings and
some people might be having the problem of becoming wealthy, so they think it's not for
them or they don't deserve to become wealthy hence they are subconsciously sabotaging
their progress with property. The first step for me would definitely be identification.
Paul: What about scepticism? The “too good to be true” angle. You mention peers here, we
see a lot of people joining Touchstone whose friends and families think they’re “mad” or are
taking a “gamble” but there’s many people who won’t even get to the stage to join us after
having been beaten down by these peer views, what would you say to them?
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Aniko:
Henry Ford had a famous saying, "If you think you can or you think you can't, you're
probably be right." and the harsh thing about this, is that as humans, if we feel this about
ourselves, often it’s easy to apply that opinion to others.
There is also a large class system that gives people the impression that you have to have a
specific background in order to achieve one thing or another and often these unspoken
“rules” or “expectations” we live by until we die.
Q. What was your background? Did your parents have a lot of money?
Aniko:
I came from the communist Hungary with my parents not having too much to their name at
all. I had a lovely upbringing, a loving family, we didn’t struggle as such, but money there
wasn't really too much of.
Q. And you’re now a multimillionaire many times over. How on earth did you manage that?
Why did you decide to go from someone with no money to suddenly become a
multimillionaire?
Aniko:
Firstly, it was not an overnight thing. I needed to shift my mindset and beliefs (which
everybody can do). The beauty of it is, once you understand that it's your perceptions
holding you back and your self-belief, you can also have what everybody else who's been on
this journey has, and to become wealthy through property.
Q. Now let’s look at someone’s first steps. They’ve found a property that they know is
financially a sound deal but they are hesitant. What do you think they're actually afraid of? I
mean, they know property is going to go up in value, they've got the money, but they don't
do it.
Aniko:
People are really afraid of making mistakes and not achieving things so a huge part of it is
knowledge.
I know you say they “know” it’s a sound deal, but fundamentally if you don't believe you
can, you are not going to spend time or effort to really figure out if something would work
for you or not.
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I recall it wasn't too long ago when I was in the seat where I was really afraid of, what if we
can't get the mortgage, what if we have a bad tenant, what if the tax regime changes and
then... I was very fast to come up with the reason why NOT to do it, why we shouldn't even
consider investigating things, never mind doing them because of the various things you hear
in the media and from the people around you.
It's a typical crabs in the bucket, we have many people around us who are not “succeeding”
and if you are hanging out with these people, they will pull you down to the same mindset.
Let’s quickly use an example of somebody afraid to lose a £50,000 deposit. If you are aware
of your fear, how can you mitigate it? Let’s translate this into “what's the worst that can
happen?”. This is a very useful question when handling fear. If it all goes wrong, what's the
worst that can happen? Because once identified, we can mitigate.
This however needs to be a careful balance, if we focus too much on the worst outcome, this
can throw us off track just as easily. I can remember back to a certain project, I was reeling
off all the “why not’s” of the project, thinking of everything that could possibly go wrong,
and you stopped me to say “What if it all goes right?” Now to start with, it was difficult for
me to even just hear that, what if it goes right? But it balanced out my view, my panic,
allowed me to plan for what could go right and mitigate what might not go so well.
The easiest or the best way to balance yourself out is literally with a pen and paper. Just go
and sit down and make a list of 10 to 50 drawbacks of you going and doing that property
deal and 20 to 50 upside of you doing that and don't stop until you feel that both of them
have an equal number of good quality objections or potential upside because that means you
are balanced. If you say that you had it easy, I can find 20, why not but I can't find the 20,
what would be the benefit of me going into property investing? Until you can find that to
balance yourself out you will not be able to look objectively and quite likely that you are
stopping yourself from succeeding and becoming wealthy through property.
Q2. I know you talk about values often, but in regards to property investing what do
you mean by values and how do they impact us?
Aniko: It's literally, what is the thing you love doing and no matter how many potential
challenges thrown at you, you still persevere because you just enjoy the outcome of it,
something you are prepared to go through both the upside and the downside to culminate in
your life.
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Somebody could say health and well-being as a value, that could mean different things to
different people. To one of our colleagues this means starting every day with exercising,
they don't like the exercise itself, but they know that a healthy state of mind will set them up
for the full day to perform their best. I personally have health as one of my values but for me
it means something totally different. From a young age, I’ve had psoriasis. I would go
through any diet, try all sorts of different remedies to go and find the solution of managing
that health problem.
You can have multiple values too, but what is it, that you literally don't mind what it takes to
push through because it's so important for you.
Dr. DeMartini has a website you can access, for free to calculate your values. You go
through an exercise where he asks certain questions to identify what your true values are.
Many people would say to others for example, their highest value is family because they
believe this is what society wants to hear. However, what you will learn is that the question
looks at evidence of how much time and effort you are spending with the family.
For example, somebody who is working from 6:00am till 10:00pm and maybe have, half a
day here and there at the weekend with the children, for that person to say family is the
highest value, is probably kidding themselves. They must be enjoying what they are doing
and there is a driver there, but is family their highest value?
I do remember I had a challenge with this in the past, thinking family was important for me
and I thought family was a blanket category and that I should do everything and anything to
support the family, I thought I would be seen as a good Mum if I picked up the children
from school but what picking up the children from school meant to me was a 15, 20 minute
drive, parking, small talk with the other parents whom I had nothing in common with
nattering on about soap operas and gossip, then the children came out of school, the next
five, 10 minutes to drive home. It was lovely, I could catch up with what's happened to
them, I appreciated that part of the journey and I was just wondering, why am I doing that 5
days a week?
So I stopped doing it, now I do not pick them up, I feel if somebody does that journey for
me then when they get home, I can spend half an hour with them rather than 10 minutes! If I
spend my time purely talking to the children ( the only part of that whole exercise I enjoyed)
that's for me is more support for my family and in line with my highest value. But of course,
that meant some people for whom family as a highest value means something different,
judged me for it and felt that I “couldn't be bothered” to go and pick up the children. It isn’t
great that they think that, but I'm happy in my own skin and that’s okay.
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My biggest advice would be, go and understand what your highest values truly are, the
things that make you go and do things in your life and the closer you are getting to aligning
with your true values, the easier it will be to design a life in which you are only dealing with
the stuff you love doing. When you are at that stage, you are going to be enjoying yourself
and going to be creating enormous wealth around yourself.
Q3. Many people will wait for the perfect moment, they'll want all their ducks in a row.
“Yes, I will buy property, but I just want to make sure that the market is stable or soo
if there is another coronavirus lock down”. What would you say Aniko to somebody
that is procrastinating and waiting for the perfect moment?
Aniko:
Quite often, people are not taking action because they don't want it strongly enough. Their
“why” is not big enough. This could be because you’re not letting yourself imagine what life
would look like or you don't truly believe that you can do it the same way other people are
doing it, whatever the reason in your head. You may feel it is a reason that you can't but it is
quite often, it comes down to not being strongly aligned or linked to your highest values.
You must be able to see the link between that particular action (becoming a property
investor) and your values.
I am a perfectionist, and I am still a deep-down perfectionist, but what I now have is a much
more balanced view on things. I'm no longer somebody who wants to be 100% right, deep
down I still do, but I have just learned to manage that which means I can still be myself but
have a much more open and balanced mindset towards achieving the goals I set myself.
Q. There are always risks. There are political risks. If Jeremy Corbyn had got in at the
election when Boris Johnson had got in, he was talking about a wealth tax. He suggested
that if somebody had £10 million in assets, there would be a wealth tax of £1 million, 10%.
However sound your business strategy is, there's always a political risk that the rug gets
completely pulled from under you. I tend to deal in not the absolute “is it perfectly safe” but
with the more the relative “ it is as safe as it can be”.
If somebody wants to make absolutely certain that they don't die in an aeroplane crash, the
only way they can do that is to NOT go on an aeroplane. But what can you achieve if you
solely focus on the risk.
Aniko I know you are also an advocate of Darren Hardy’s “Darren Daily” would you tell us
more about that?
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Aniko: His book The Compound Effect is brilliant but I do love the Darren Daily series.
Every day he offers people who subscribe to him a 5 to 10 minute video, he talks about
positive things to think about. I remember many, many years ago one was called the 20
seconds of courage. The whole idea is to literally make the decision and push through
because your fear is literally just 20 seconds... Whatever it takes, close your eyes, jump,
decide and push through. When you make a decision, then your logical stuff will kick in,
suddenly you are going to find the solutions to whatever problem or challenge might
manifest itself in that process.
He uses an example of an American university and a study they did with Skydivers. They
were monitoring their heart rate and the higher and higher the plane was flying the higher
their heart rate was, this is literally what's happening to us when we go to make a big
decision, the more fearful we get.
Now, as soon as they jumped out, the heart rate very quickly dropped back down to normal
and that's what's happening interestingly enough in everyday decisions as well. We work
ourselves up from the fear of, oh my gosh, what's going to happen? Am I really crazy
enough to be doing this? If we could master that 20 second and cultivate courage to push
through despite our fear, it would be amazing what you can achieve.
Darren said “ just imagine what you could achieve in life if you pushed yourself three times
a day out of your comfort zone into the feeling like you're jumping out of the aeroplane and
push through your fears.” That for me, I could buy into. I started with small things, every
day I pushed myself with slightly bigger things and before I realised, we were talking about
£1 million properties where you said, "Let's do this." And instead of my natural instinct of
why not, I was imagining what would I need to do to make it happen?
The single biggest thing I could encourage anybody reading this to do would be to work on
their mindset.
Something that will make a huge difference to you now is to just give yourself permission to
fail. Failure is our partner here, it's helping us, it basically means just not yet. When
something doesn't go to plan, it's just helping you to become a better version of yourself
rather than “fail”. The perception of failure, what I used to have, became the desire to fail so
I can get it even better than I would without failure, whatever I'm doing, and once you’re no
longer afraid of failure, it releases so much pressure and opens so many opportunities.
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Paul: Perfect. Thank you Aniko. I'm going to draw this chapter together now, and I fully
endorse and support the logic that, show me a person that's never made a mistake, and I'll
show you a person that's never done anything. And the final thought I'd like to give you is
that there are some people in this world that do things and there are some people in this
world that criticise other people that try to do things. I would just like to remind you that
there's never been a statue erected to a critic. Statues get erected to people that do things.
Whatever you're doing in life, working on your mindset and improving your mindset is
going to be of massive benefit in any walk of life. See you in the next chapter.
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12CHAPTER 12
Ordinary Properties, Incredible

Returns
What I would like to talk to you about in this chapter is something called Serviced
Accommodation. Some people refer to these as holiday lets. Serviced Accommodation is
any property listed on sites such as AirBnB, Booking.com, Sykes cottages etc, the list goes
on. A property that you can rent on a short term basis.
Now it is important here to highlight that these properties are not just there to serve Holidays
makers, they also attract customers with a range of booking reasons, such as contractors on
projects away from home, travelling professionals, people with home damage that need
short term relocation. These customers, due to circumstance would much rather opt for a
Service Accommodation unit as opposed to a hotel room.
The brilliant thing about this strategy is that you can, if you own one, use your own home
and almost any property can work (as long as you do it legally!), all the way from a one
bedroom flat or studio, right the way through to an eight-bedroom house (like ours in
Scotland). If you have a rental property already, one of the benefits of transferring it to a
Serviced Accommodation unit is that it won’t be subject to Section 24 (Anti-Landlord Tax),
you also enter a tax benefit called Capital Allowances which means if you structure it
correctly, you personally can pay zero income tax on the amount of the capital allowance
that is determined by a specialist for your property (because you’ve converted a residential
property to a commercial one).
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Now if you don’t own a property just yet, this doesn’t mean the strategy is off-limits. We've
a number of “Rent-To-Rent” serviced accommodation units. This means we’ve taken a
regular rental property from a landlord and agreed a management agreement through our
Limited company (covered by our insurance) with the landlord, meaning we can go ahead
and use their property for Serviced accommodation, as long as we pay the rent on time and
look after the property. Now, I must stress that we're very, very clear with them what we're
going to do so you mustn’t go ahead and rent a property from a landlord and do this without
their consent, that you can get into a lot of trouble for.
In this chapter, we’re going to focus on one key example of a property we purchased in
December 2019, renovated and then had operational for Summer 2020. I'm sure you'll
remember that in March 2020, UK got put into lockdown because of COVID-19, and did not
emerge from that lockdown until (in the case of Filey) July 4th 2020.
Without further ado, let's take you to our North Yorkshire Unit. Before we do anything else,
let's look at some pictures. Please refer to these pictures as you go through, because it's
really, really important to understand the standard of accommodation as well as some of the
more technical aspects. So, we'll focus during this chapter on the aesthetic finishes and the
financials. But you, (I'm sure), appreciate there are many other elements to this.
For instance, marketing - how do you make sure guests know about this? How do you
make sure you're nice and busy?
For instance, operations - how do you make sure that you know how to take money off
people?
You can let the guests in and out, you've got the cleaners organised. So again, not difficult,
but there are a range of things to consider before we just jump in and do it. This is the
property that we acquired in winter 2019. We bought it in just a few days from somebody
that was really needing to sell the property quickly.
Well, it's not the topic of this chapter at all, but we bought it in seven days for cash. The
actual purchase price (I believe from memory) was £108,500. You can see in the first picture
there, that white three story (actually four story because it's got a basement as well) has quite
a lot of work to do on the outside. If you look closely, you can see the paint is flaking. Well,
you couldn't necessarily determine this from the pictures, but the three windows you can see
on the ground and first floors as we look at it from the front, were essentially, falling out due
to the rotten wood. The two windows on the second floor were UPVC but very old. There
was also a fair amount of cosmetic work to do on the outside, as well as replacing all
windows on the front and back of the house as well.
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This is the kitchen, which is basement level. It's got a window as you can see from the back
and it's below ground from the front. It's lived in, it's dated, so it needed to be replaced with
a totally new kitchen.
This was the lounge on the first floor. Now it's got some nice features like the fireplace for
instance, but again, quite a lot of work to do to bring it up to a desirable modern standard.
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This is quite nice; this is the attic room on the top floor. It's got a very nautical theme to it,
(which we maintained).
I hope you'd agree that we've improved it, but this was probably about the best, most modern
bedroom in the property. But what we didn't need to modernise at all was the view. So, let's
just hold onto that thought for a second, because this property is predominantly aimed at
holiday makers and tourists as well as families, afterall, it is a four-bedroom house.
So, amenities, beaches, proximity to tourist attractions and desirability of the area are all
critical if you want to run holiday let type Serviced Accommodation. The North Yorkshire
Coast (after London), is the second most visited tourist destination in the whole of the UK.
Indeed, with all of the unfortunate consequences, both economic and health wise of
coronavirus in 2020/2021, there were far, far, far less visitors going to London,
unfortunately, and far, far more going to places like the Yorkshire Coast.
At the time of writing this book, I don't actually have the 2020/2021 figures to hand. Those
are not released yet, but I wouldn't be at all surprised if the North Yorkshire Coast won over
London (simply because of the lack of foreign visitors), and all the other things I'm sure you
can imagine.
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The first thing that you need to do is check your comparables. This is a buy, refurbish, re-
mortgage, and we could have just used this as a buy-to-let… or sold it. Before we decided to
buy the property for a £108,500, we checked the comparables in the street. There were four
of them all together. So, the flat next door, which is a leasehold two bedroom flat, sold in
Summer '19 for £180,000. It's a long story for a different day, but a year and a bit later, we
bought that one as well.
Just to see the power of understanding how to invest in property properly, that was a
gorgeous investment. It is a gorgeous flat. The previous people had paid £180,000 for it in
winter '19, we purchased it in winter’ 2020 and the price that we agreed, (and they were
happy with because they needed to move fast), was £140,000. The property had gone up in
value, but they still sold it to us for £40,000 less than they'd paid for it a year before. As I
said, another story for another day.
Then we've got three more, three-bedroom houses in the same street that had sold in 2017.
Depending on the condition, anywhere between £167,000 and £215,000 was achieved per
property. To purchase a four bedroom, freehold for £108,500 is really, really good value. So
yes, it did need some work, I'll share those figures with you.
This part is about buying below market value and then refurbishing to add value.
However, the second element of due diligence of comps that you need to do, is you need to
understand the average night rates. I've just picked out a couple of apartments relatively
local to ours, both of these, I've given the URLs, if you want to type them all in. One is a
three bed, the other, a four bed, the same size as ours. You can see the winter and summer
rates in this table here. The winter rates for the three bed cottage is £140 per night and four
bed is £170, in the summertime, £156, and £250 respectively. What we've done here is
we've calculated the two averages, £148 for the three bedroom per night across the different
seasons and £210 per night for the four bedroom. So that is the information which we used
to put together the deal analyser to test to see if our property would work as those
accommodations.
Now instinctively, having done this for a long time, I of course know that if you buy a
property for £100,000, spend £20,000 to £30,000 on it, will it work at £210 a night? Yes, it
works big time and I'll show you some of the numbers as they are really quite stunning.
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The purchase price, (as I said), was £108,500. Now, what I've done is I've added together the
refurb, which was the kitchen, bathroom, decorations, electrical works and heating work.
I've lumped in the stamp duty and the legal fees. The total for everything, all the costs,
everything to do with this property was £27,500. If I add on the purchase price and our total
spend, (which was all in cash), didn't have to be, but that's how we chose to do the deal, it
came to £136,000.
When we finished the RIC Surveyor, (Royal Institute of Chartered Surveyor), came in and
gave us an official bank valuation of £215,000. Essentially what we've done is we've taken a
very rundown, tired, cheap, four bedroom and we turned it into a very attractive, four
bedroom with good comps in the street. Remember this is a four-bedroom house. Remember
the two-bedroom house, which you can see in that picture. We’ve got a property that (just
the two-bedroom flat) on its own sold for £180,000 in Summer 2018. So, when the valuer
came to value this nice finished four-bedroom property in 2020, he put a value on it of
£215,000.
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We then put a 75% Serviced Accommodation mortgage on it. This is a specialist mortgage;
you need to learn which mortgages you can, or you can't use. That mortgage released back
from that property (£161,250) which was £25,250 cash back.
Now, what do I mean by that? What I mean is we did the entire project for £136,000. When
the mortgage came in, the mortgage gave us £25,250 more than we put in the first place. We
got 100% of our cash back and on top of that £25,250, tax-free. Why is it tax-free? Because
it's an increase to the debt. It's an equity release, so it's not profit. We didn't sell the property.
It's £25,000 tax-free, cash back over and above the cash that we started with. Maybe you can
perhaps begin to understand why we do these things for cash...
We then have it operated for us, (I'll come on to the management company shortly). We
don't actually touch it. We pay a portion of money to have it managed completely hands-
free.
We literally give them the keys, they let the guests in, they let the guests out, they manage
the bookings, they get the bookings for us, they deal with the VAT. They do the cleaning;
they organise the cleaners & laundry. They do everything! On average, we make £1,500 per
month from a property that literally owes us nothing because we've taken out £25,000 more
than we spent in the first place. So, we've had a refund from this property of £25,000
already. On top of that, we're making £18,000 income a year.
Let me show you what it looked like after the refurbishment.
I've done a bit of a closeup here of this picture, so you can see we've changed the windows,
we've painted it nicely. It's cream with a contrasting light blue, which is a theme that we've
carried on inside.
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You can see it's the same fireplace, but there's very little else in here that's the same.. There
we have a nice, large flat screen TV above the fireplace which makes for a very cosy
evening for a big family to gather around after a day on the beach.
There's the kitchen. So again, if you compare and contrast the two kitchens, this is now
bright, airy, colour-coordinated modern, things like that. So, we've spent some time and
effort, not only to refurbish it, but to do the interior design such that it's somewhere that
people actually actively want to come and stay.
Here's one of the bedrooms, as I said a few times, this is a four-bedroom house.
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This is Ocean Queen Cottage. It’s number 81 Queen Street, Filey, North Yorkshire. I
mentioned previously in the chapter that COVID and the lockdown from March onwards in
England as a reaction to coronavirus meant that we couldn't actually open this unit until July
the fourth to regular customers. We were allowed to accommodate key workers and so on,
but I want to focus on what it was here for - you guessed it, holiday makers.
When we opened it up early July, we took £2000 worth of bookings, cash in pocket on day
one. There was literally only one day empty in the whole of July.
We have a Serviced Accommodation management company called Pillow Partners, and they
manage many operational aspects of the business. You can see here; we've got a statement
that covers the bookings between the very last day or two days in July and the end of
August. When we get a monthly statement, it's often not exactly a month because they give
us the whole booking. You can see Emily (our Marketing Director) stayed there between the
30th of July and the 3rd of August.
Then you can see someone called A Tricker, (whoever that is), moved out after their little
holiday break on the 31st of August. The total income during that period, (remember the
£200 a night is £4,644). That 4,644 figure, divide that by 33, (the sum I did is 4,644 divided
by 33 which equals £140).
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This is Ocean Queen Cottage. It’s number 81 Queen Street, Filey, North Yorkshire. I The
reason I wanted to demonstrate that to you, is because we were actually given it at a reduced
rate. Now, bear in mind, we only opened up on the 4th of July. We had no track record. We
couldn't have any repeat customers. There were literally no reviews. What we'll very often
do is we'll reduce the actual long-term night rate by about a third to make sure that we're
really good value and we're nice and busy. Therefore, instead of £200-£210 a night, we
actually reduced the night rate to £140, as a result, we were full all the time.
The reward for that, is that we've now put it back to the proper long-term night rate after the
opening month of business. We’ve got repeat bookings from a number of those families who
have come back once or twice since then, and we've got some fantastic reviews.
The last thing as I move towards the end of this section on Serviced Accommodation is the
importance of reviews. If you have no reviews, 50% of the people will not book you. If you
don't have good reviews, a further percentage of people again, will not book you. Do not
ever underestimate the importance of reviews and work very hard to make sure your
property is absolutely spick span so that people will love it. Give them little extra treats,
maybe welcome baskets, things they're not expecting. Check in with them the day after
they've arrived. Just to make sure they're having an absolutely fantastic experience.
If you want to take your knowledge further on Serviced Accommodation… A number of

years ago now, I wrote a number one, Amazon bestselling book. If you want to go and just
get it, it's full title is Serviced Accommodation Success Manual by me, Paul Smith. It’s a
whole book about Serviced Accommodation. Plus, I always find it interesting, at the back of
the book, there are a number of case studies, not of our properties because we'd be doing this
for quite a while now. But I think it's really interesting to see some really fantastic case
studies from some of our really inspiring students. If you want the added cashflow, the
added tax benefit and the feel-good factor from giving people a top class vacation or
Accommodation while they're at work experiences, then Serviced Accommodations for you.
You are six to eight weeks away from that. If you want to pursue this further, well, maybe
check out all the facts and figures in this serviced accommodation course. It’s a two-day
intense bootcamp. You can see here, all the chapters, all the modules, all the exercises, and
you can also see the detail of what's included. I hope you've enjoyed this example led
chapter on Serviced Accommodation.
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I will be absolutely delighted if you joined the increasing army of people making really good
money and making a lot of people happy due to benefiting from the staycation boom.
Another word I learned the other day – Holistay. That's an interesting word, isn't it? - A
Holistay is usually a vacation spent at home, visiting attractions and participating in leisure
activities that can be completed within one day. However, like STAYCATION, HOLISTAY
is now also generally accepted to mean any vacation that does not involve overseas travel.
I think as this lockdown world of ours could well continue, it could be an awfully long time
before UK holidaymakers are able to venture abroad again like they did in the past. So that's
just one of many, many reasons why you might want to help everybody out, cheer them up,
and make some money in the wonderful world of Serviced Accommodation. See you in the
next chapter…
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13CHAPTER 13
Ultimate Leverage
I want to build on what we've just talked about in the previous chapter with regard to
Serviced Accommodation.
I want to introduce a new concept. It's called Rent-to-Rent. Now, what this means is you
agree terms with another landlord, property owner or even a developer perhaps, and you pay
them a monthly rental for an agreed number of years, typically between three to seven years.
The previous chapter where we talked about Ocean Queen Cottage, that was a great example
of Serviced accommodation, but that is where we had sufficient funds to actually go and buy
the Serviced Accommodation property and set it all up. Doing it that way, requires capital.
However, if you don't have any capital, Rent-to-Rent is a great option.

Now, Rent-to-Rent can be done as a normal family home, perhaps a three, four bed house
that you might want to turn into a four-or-five-bedroom HMO where you're renting the
rooms by the week with all the bills included (We call that rent-to-rent HMO's), but I want
to carry on with Serviced Accommodation first... In this chapter, we’re going to talk about
rent-to-rent Serviced Accommodation but be aware you can use the rent-to-rent strategy for
other property strategies as well.
Let’s get one thing straight, Rent-to-Rent isn't a property strategy in itself.
It's a way of acquiring properties that you can then use for other property strategies without
owning the property itself.
Okay, so I know that's a bit of a big concept for many people, and you're probably thinking,
“oh well, does my lease allow it?” Well, if the lease doesn't allow it, you can't do it.
113 | PAGE
So does this work everywhere? No, but if there is no lease because it's freehold, then there's
not going to be a problem, is there?
“What about insurance?” Correct, you need to get the right insurance.
“What about property liability or indemnity insurance?” Correct, you need to make sure you
get the right insurance.
“Does the planning permission allow it?” I don't know. You need to check.
“Will this work everywhere?” No, it absolutely will not.
“ Does this strategy work with most properties in most parts of the UK?” Yes.
Now here’s a question… Why is it that landlords or other property owners may be open to
offering you their property on a long-term basis?
Well, there's a lot to be said for hands-free, zero hassle Landlords.
Maybe they've had a bad tenant experience because if a tenant breaches a tenancy
agreement, doesn't pay the rent, is antisocial and so on, it often takes months, if not a year to
get them out.
What did we see during coronavirus and lockdown? There was tenant eviction ban after
tenant eviction ban after tenant eviction ban… Yes, this has carried on and on and at the
time of writing this book, it is still in place today.
There were people that hadn't paid rent and the landlord still could not evict them because
the courts weren't open again, or because there was a ban on evictions for a year and a half.
Just imagine for a second that you, (as a landlord), are being caught in that sort of situation,
and you were offered the opportunity to Let it to a company, (perhaps your rent-to-rent
company).
The difference between renting it to an individual on a short-hold tenancy and renting it to a
company, (perhaps a limited company) is that a company has no rights as a human being.
It's not a family home. If you don't pay the rent, they can evict you using something called
CRAR, (Commercial Rent Arrears Recovery), because you're not a person. I've seen some
people say, "Oh well, yes, let's just use a corporate AST." Well, that's nonsense because one
of the first tests of valid tenancy is that the tenant has to be a person.
Now, clearly a company is not a person. Therefore, if you've signed a corporate AST, what
you've actually signed is a piece of meaningless paper.
114 | PAGE
I don't want to get too far down that legal route...But the point is that many landlords have
had bad experiences with tenants. Many landlords have had rent arrears. Many landlords
have had damage. Many landlords have really, really struggled to get their property back
when they're being taken advantage of by people that are living there, but not paying the
rent. So, I'm not saying all landlords, but many landlords will be attracted to the idea of
renting, not to a person, but to a company. I'm going to talk you through the numbers and
make sure you know how they all work, but here is the concept you will be using...
You are renting somebody else's property on a very long-term basis, three to seven years,
even more. Typically, you'll pay per month (you'll pay the rent on a monthly basis). You
will then rent that property out by the night.
We have a two-day online rent-to-rent course. It includes all the templates, all the legal
documents, the guidance and the insurance you need. In short, it talks you through it all.
Now, if as a result of this chapter, you decide “well actually, yeah, rent-to-rent serviced
accommodation or rent-to-rent as HMO's, that's absolutely what I want to do”… you might
be thinking “well, you still need some money, Paul. Because if you rent an unfurnished
apartment, you've got to furnish it. Don’t you need money?” Short answer? No.
You could go and buy the furniture, you could rent-to-rent the furniture, you could even
lease the furniture via specialist companies.
The typical cost for a one or two bedroom flat, (if you rent everything) I’m talking the
furniture, the TV, the fridge freezer, the beds, everything that you need for a whole one or
two bedroom flat, you're probably going to pay somewhere between £100 and £150 a
month.
Then you might think, “well, what about deposits for the landlords?” Well as for deposits for
us in rent-to-rent, we teach you all about it in our rent-to-rent course (it’s a showstopper).
It's essentially a deal breaker. If a landlord can't see the benefits of guaranteed rent, no
tenants to deal with, no voids in a rental period for the next three, five or seven years and
they insist on a deposit of one month rent, it's quite simply, a deal-breaker.
Then you might think, “well, what about deposits for the landlords?” Well as for deposits for
us in rent-to-rent, we teach you all about it in our rent-to-rent course (it’s a showstopper).
It's essentially a deal breaker. If a landlord can't see the benefits of guaranteed rent, no
tenants to deal with, no voids in a rental period for the next three, five or seven years and
they insist on a deposit of one month rent, it's quite simply, a deal-breaker.
115 | PAGE
In fact, quite often we require, (because it's such a long-term benefit to the landlord) a one,
two, or even sometimes three months’ rent-free period. This is normal, in the world of
commercial property when you enter into a long-term agreement. So, we don't pay deposits.
We do sometimes buy the furniture, but that's because we happen to have the cash. If you
didn't, you don't have to. You can rent or lease the furniture or do a rent-to-rent on the
furniture.
You will need a few hundred pounds for the correct insurances, the correct registrations.
“Can you do this with absolutely zero money?” No, you need a few hundred pounds, but this
is one of the lowest entry cost strategies to acquire property and then make a lot of money
out of it. I’d say that it’s easily one of the best investments a person can make in property.
I'll say one final time, you can obviously do this with HMO’s. But I want to focus on
Serviced Accommodation, so we can build on what we learned in the previous chapter.
Okay, so let's get started...
Ultimate leverage rent-to-rent. Is your mind ready? Because many, many people have told
me when I've shared this example with them, their mind was absolutely blown.
I hope you’re prepared, as I'm going to take you all the way down to the south coast to
Southampton. It's a block of six flats that we leased from a developer, and you can see some
of the pictures here. They are gorgeous new build flats, if I do say so myself.
116 | PAGE
So why would a developer lease a block of six flats to a Rent-to-Rent Serviced

Accommodation company, instead of letting them out to buy-to-let tenants? The answer is
pretty simple. More cash flow, more certainty, less aggravation. Would you rather have all
of your six flats let to one developer that pays you every month on time, in full, who doesn't
cause any damage?
Any minor scuffs, scratches or damage that the Serviced Accommodation guest does, I’m
talking things like bikes scraping the wallpaper going up the stairs or scraping the paint with
their suitcase or something, as a Serviced Accommodation operator, we've got to fix that.
We don't think it's fair to ask the landlord to pay for that, so we do.
Typically, if it was let to a normal buy-to-let tenant, (in addition to all the other problems
I've just described - rent arrears, damage, long time to evict them, and so on), if anything
goes wrong in a buy-to-let property, the landlord's got to pay for it.
Typically, there's a 10% letting fee. We set that to one side, (depending on the property),
between 20% and 25% of the gross rent every month to cover voids, maintenance, letting
agents’ fees and damage. So simply put, Rent-to-Rent should give the owner, (in this case),
a developer, 25% more cash flow. Very often by the time they've taken off their funding
costs (which might be around about half of the total monthly rent) they end up with 50% of
the gross rent as profit instead of 25% of the gross rent as profit. Meaning? Yes, they just
doubled their profit.
“How much money do you make?” Well, we'll get to that. But I just want to reinforce this
point as to why Rent-to-Rent Serviced Accommodation, in this example is a really, really
attractive thing for a developer.
So, we agreed a long-term lease, a rent-to-rent lease for five years for these six flats... The
developer was absolutely delighted. Now, because we also knew company structure, we also
knew the tax breaks, and we were able to arrange a capital allowance survey for the
developer.
If you learned about Serviced Accommodation within our Serviced Accommodation

Bootcamp, you’d know that with the tax breaks, these flats were roughly a quarter of a
million pounds each in value. That's 1.5 million pounds worth of flats.
117 | PAGE
The developer had never heard of capital allowances. We arranged a survey, and the
developer would not have been entitled to any capital allowances if they were down as buy-
to-lets.
However, they're not buy-to-lets (because they'd been operated as serviced apartments)
meaning the developer was entitled to capital allowances.
Typically, capital allowances are anywhere between 30% and 40% of the value of the
property. So, £1.5 million worth of property. Well, 30% will be £450,000, 40% will be
£600,000. This one was smack in the middle. It was £525,000. Meaning? The developer's
company did not have to pay tax on the next £525,000 worth of profits...
There are so many reasons, (when you learn about Rent-to-Rent in combination with
Serviced Accommodation), that developers & landlords will be absolutely desperate to give
you their property and go and find some more properties to give you as well. You might
never have heard of Rent-to-Rent Serviced Accommodation. However, there are a plethora
of reasons why you will never ever have a shortage of rent-to-rent properties. In fact, the
problem will be the other way round once you learn how to do it. The problem will be you'll
get offered far too many properties, and you're going to get really picky. You're only going
to want to choose the very best ones.
As you can see in the pictures in this book here, there’s a picture of the kitchen diner. Here's
a closeup of some of the kitchen surfaces. Now, we call this dressing, and this is a critical
skill if you're going to be either a Serviced Accommodation owner or a Serviced
Accommodation Rent-to-Rent operator with your property or Rent-to-Rent. It's very, very
important to make the property feel homely and lived in. You can see we've got a range of
herbs and vegetables there. It's important that the property feels lived in, so that it feels
welcoming.
118 | PAGE
Imagine that same picture with absolutely nothing on that work surface. The same thing in
this picture of one of the bedrooms. These are two-bedroom flats. We've got them set up as
one double and one twin. (I'll come to that before the end of the chapter) Even here, you can
see we've got towels on the bed. We've got the lights on. We've got a tray with some juice
and some extras. It's important to make everyone feel that they would just love to go and
live there.
119 | PAGE
In addition to that, we've got a sofa bed in the lounge as well. On the weekends, it tends to
be more of a family type destination, and during the week, it tends to be more of a
professional/contractor destination. At the weekend, you could have up to six family
members sleeping here because the sofa bed is actually a double sofa bed. Or two couples
coming out who want to spend a long weekend in Southampton. Based on our understanding
& research of our customers, that is how we set this apartment up.
If you're not sure and you want to cover all your bases, then zip and link beds are a good
idea. These, (as they sound like), are beds that can literally be zipped together or unzipped,
(so you don't need any tools or anything). This is one of the bathrooms, all very modern and
nice, with a different picture of the lounge. You can see the open plan kitchen, lounge, diner,
and separate bathrooms. There's an en suite in the family bathroom, and obviously the two
separate bedrooms.
Okay, so when we rented the six flats from the developer, we then turned them into Serviced
Apartments. I'm just going to take a random set of numbers for October 2018. The gross
income for those six flats, (this isn't per flat, this is for all six of them) baring in mind
October is a moderately quiet month, the gross income for serviced apartments for October
2018 in Southampton was £18,347. The lease costs, which we'd agreed with the developer
for all six flats per month, was £5,000, so clearly that's our cost. We have to pay for that.
As for the booking fees, because we took these bookings through various agents
(Booking.com, Airbnb etc) their fees were £2,637, which you might think “blimey, that's a
lot of money!” Well, it tends to be, depending on the website, between 10% and 15% and
Southampton just happens to be an area where most of the bookings come through the 15%
type website. In the trade, we call them ‘booking engines’.
120 | PAGE
Now, we need to add on the cleaning and laundry. Every-time one set of guests leaves and
the next one comes in; we need new sheets. We need pillowcases, duvet covers, bath towels,
hand towels, bathmats and so on. So, the combined cost, (because one firm does this for us),
all the housekeeping and all the laundry totalled £2,103. Obviously, if you were doing less
business because it was a quieter month, then your booking, cleaning and laundry fees could
be dramatically lower as well. So those two are proportionate. They vary according to the
revenue. The lease cost doesn't because it's obviously a fixed cost. Now, we put everything
else together, (we call it monthly operating expenses). This is the Wi-Fi and gas, the electric,
the insurance, all those sorts of things. That was another £1,064 which left us with £7,543 in
one deal… in one month.
Now isn't that stunning? Because remember, these are properties that we do not own. We've
gotten them on a long-term lease. You might think, “Well, how on earth can you do that?
How is it possible to make money from property without even owning it?” Well, consider
restaurants. They don't own the property. Normally they rent it from a landlord. They
operate the business from there, and that's how they make money. Consider hotels. Virtually
none of the hotels like Travel Inn, Travel Lodge etc all rent the building from landlords.
This is no different. This is a Serviced Accommodation, which is similar to hotel
accommodation.
So why would it be required that in order to make money out of it, you own the property?
It's simply required that you lease the property long-term. Again, in the trade, this is known
as a Rent-to-Rent. But imagine £7,500 times 12 (then) add another £15,000 for the other two
months of the year). That's £90,000 from one deal per annum for a property that you do not
own.
Just think about that. You're one deal away from a property (a block of property in this case)
that makes £90,000 of profit in one year. That is the majesty and power of Rent-to-Rent,
Serviced Accommodation, but there's more…
Again, I just want to repeat and reinforce you to write this number down because writing it
down burns it into your brain. Net profit after all costs, £7,543.
Next, write down that this is based on one deal, because yes, it's six flats or six serviced
apartments, but it's one deal. One contract, with one developer for six flats.
121 | PAGE
Now, you need to know enough, which is why we put the course together, to make sure
they're in the right place and you're paying the right amount of money. You're going to get
the bookings come through and you’re going to know what the night rate is. You’ll know
how much your cleaners and all your other overheads are going to be. If you understand
these simple, simple secrets, in one month, from one property that you do not own, you can
make £7,543.
How do I know? Because I did it.
In November 2018, we decided to cash in. We decided this strategy was going so well, we
would cash in our chips and sell it. “Now, hang on Paul, you can't do that. Now I am feeling
like this is some sort of magical world that I don't understand. How can you sell a property
that you don't own?”
We didn't. We sold the rent-to-rent business. The Six flats, (right from the get-go were in a
limited company). The limited company, (not me or my colleagues,we personally didn't
have the right to rent and operate these properties as serviced accommodation) but the
Limited company did. So, when I say WE sold it, what we sold was Above Bar Limited
(Above bar, being the name of the flats) that had the operating lease to run those properties
for the next three years. We renegotiated with the developer an extra two years. We sold it
with a track record of plenty of profits, a brand-new five-year lease, a brand-new five-year
rent-to-rent operating lease so what the purchaser was buying was an established business. It
had been there for a couple of years, making £90,000 profit a year, with five years future
certainty that they could continue to occupy those premises. Typically, when a business like
that is sold, it's sold for between two and three times that multiplier.
If you did that annual profit, plus the assets and if you bought the furniture and maybe you
had around £20,000 worth of furniture across those six flats, those would-be assets. You
would normally add together two to three times the £90,000 plus any assets. Let's go in the
middle…
Let's say 2.5 times. £90,000 times 2 is £180,000. So times that by 2.5 is £225,000. Let's
pretend there's £25,000 worth of furniture, TVs, and whatever in your version of our 6 flats,
£225,000 plus £25,000 is a quarter of a million pounds. Why, I hear you ask, would you sell
a business that's making £90,000 a year? Well, often with property with multiple streams of
income, you’ll do certain property strategies to create cash flow and deposits. Then you'll do
other property strategies in order to buy assets and enjoy the long-term capital growth.
122 | PAGE
Because what I've given you, of course, is the benefits of Rent-to-Rent Serviced Apartments.
What's the major downside? The major downside is well, because you don't own them, you
get no capital growth. They will go up in value, but that belongs to the developer, not you. If
you were to do this for a couple of years, starting with no money, a few hundred pounds
maybe for some insurance, you built the business up for two or three years and you then sold
it using this as a typical example, for quarter of a million pounds, you could then take that
quarter of a million pounds and put it as a deposit on roughly a million pounds worth of
property, because generally it's a 25% deposit. So, a quarter of a million pounds would allow
you to go and buy one million pounds worth of property.
But here's the other thing, just because you've sold this block of Rent-to-Rent Serviced
Apartments, what's to stop me doing it again in the next town or the next street or the next
county? Because once you've mastered that skill set, the government might pass a law to do
something and take money off or increase your taxes. But what they can't do is take your
skills, intelligence, network and education away.
If you know how to make money from Rent-to-Rent property, that is a skill that will serve
you forever in any country of the world, because every country of the world, well, with the
possible exception of the communist countries, it's possible to rent property that you then
operate a business from and you make a profit. So that's all I'm talking about here. Think
about that.
I guess many of you are probably just falling off your chairs... “Hang on, Paul, you built a
business in two years that made £90,000 profit a year from property you didn't own. Then
you sold that business for a quarter of a million pounds, and you've bought a million pounds
worth of property with the proceeds, and you did more rent-to-rent?” Yeah, that's a fair
summary of one of the things that I've done. So, if you too would like to do those kinds of
things, I would encourage you to do more research, more reading on Rent-to-Rent both
Serviced Accommodation and HMOs.
Now my very good friends, business colleagues and business partners, Abi Hookway and
Gordie Dutfield have written a book. It's called Profit from Property You Do Not Own.
Again, if you want to find out more about Rent-to-Rent, just jump on, order yourself a copy,
download the e-book or even access the audiobook version. It's all about Rent-to-Rent. If
you like this chapter, then their book is an entire book on the subject.
123 | PAGE
I'm going to draw this to a close now. I've titled this chapter unlimited leverage, ultimate
leverage? More like unbelievable leverage. There's a whole plethora of title headings I could
have chosen because of all the case studies, of all the strategies that I share, it's fair to say
this is the one that probably blows people away more than anything else. Here are all the
details of our Rent-to-Rent two-day course. If you're online, you want to do it. Within just a
few weeks, you can have a Rent-to-Rent serviced apartment.
How do I know with such certainty that that's possible? Well, many years ago now, Gordie
(my business partner) came on my Serviced Apartments course. At the time, it was a
Serviced Accommodation masterclass. It was two days of in person education, before
coronavirus and lock down came into play. Within two weeks of completing my Serviced
Accommodation masterclass, (and it was just an hour's section on Rent-to-Rent), Gordie had
landed his first two Serviced Apartments. He now has more than 60 Serviced Apartments on
a Rent-to-Rent basis, and he uses all of that cash flow to go and buy other properties for his
portfolio.
If you like the idea of generating huge amounts of profits that you can use either to spend, to
invest in goals, or user as deposits for property, whatever it is that you want to do with it, my
request is that if Serviced Accommodation and Rent-to-Rent Serviced Accommodation in
particular is of interest to you, and I've managed to pique your interest, go and get my book,
Serviced Accommodation Success Manual.
Okay, you might need a rest after that chapter. And when you're ready, I will see you in
Chapter 14... Goodbye for now.
124 | PAGE
14 CHAPTER 14
What's Next?
Well, I hope you have enjoyed this collection of property strategies, together with my key
supporting strategies including mindset and Limited Company essentials... I really do hope
that this book inspires you to take that next simple step and actually become wealthy
through property.
If you do, what are the next steps?
Well, at various points throughout this book, I’ve invited you to consider which of these
strategies might be right for you, in your current situation. I appreciate each and every one
of us, of course, is unique. Some of us might have well-paid jobs and so we have a surplus
of money on a monthly basis that might make us more suited to particular strategies. Others
might have just been made redundant (as I have been on two occasions) so, whilst we don't
actually have any income, we've got plenty of time and we've got a pot of cash. Yes, it's
important that we don't waste that cash, but it's equally important that we do something with
it – so that our money ends up working for us, rather than us working for money again in the
future.
125 | PAGE
Perhaps you've got equity in your house. Perhaps you've got a substantial sum in your
pension. Or maybe you've got no money at all and are just starting out. Whatever your
situation, what I'd like to do is give you an absolute, complete, and total reassurance that
wherever you're starting from, you too can be wealthy through property. Over the years with
many thousands of students of ours, we’ve seen almost every conceivable, imaginable
situation: from being caught out by the anti-landlord taxes and needing to save £200,000 a
year in income tax, through to care assistants on minimum wage discovering the delights of
Rent2Rent Service Accommodation – with literally none of their own money.
Whatever your situation, please know that the Touchstone Education family does not judge.
We welcome, we help, and we try our absolute level best to do whatever is right for you.
Now, because we're all unique, and because there are a wide variety of choices, we’d like to
invite you to join us and develop the best way for you to create wealth through property.
This is your next step.
Simply type this link into your internet browser:
https://shrtlnk.co/yd6oP
to sign up for our UK leading Wealth Through Property training event.
To congratulate you for taking the first step in your property education journey, if you sign
up using the link above, I'll also give you a complimentary £100 voucher. That's how much I
value education.
Now, a caveat here. This does not mean that you book a one-to-one expert consultation and
then the next week you'll suddenly be wealthy. It doesn't work like that. Very often, the
process of becoming wealthy through property takes 12 months. But in my view, even if it
takes 2 or even 3 years to become wealthy through property, you don't have to do anything
to earn money ever again. In the scale of most people's working lifetimes, that is still a very
short period indeed.
I'd like to offer a final few thoughts…
126 | PAGE
Age is no barrier. The youngest student who partook in our courses, and did very well, is 15
years old. Whilst the oldest was well into their eighties. So, within reason, age is no barrier.
Available cash is no barrier. Available time is no barrier. The critical thing that everybody
who succeeds in becoming wealthy through property with Touchstone is determination.
They don't flinch from taking action. They're part of a community, part of a network. And an
active part of what they want to do is reach out and help other people. Now, that very act of
helping others allows others to help them.
We are a very open, collaborative, trusting community, so as long as you come with that
determination to succeed and the acceptance that 12 to 18 months of hard work will be
required, you will quickly gain the trust of our community.
As I sign off this book, I'm thinking about my journey to becoming wealthy through
property. I pinch myself… A working-class kid, who grew up in a Yorkshire pit village.
And now I have a choice of 3 million pound homes, supercars, power boats... But most
importantly for me, it's not about the money, it's not the wealth, it's the freedom that wealth
allows me.
I consider myself wealthy rather than rich, because as well as an abundance of money and
physical resources, I have an abundance of time. And that allows me to reinvest my time in
the things nearest and dearest to my heart: my family, memorable experiences, and of
course, certain charities close to my heart. More than anything else though, my
overwhelming desire and ambition is to educate others. My drive is to act as a bridge and a
conduit between the lives that my students have now, and the life that I know they can have.
A life of freedom, a life of happiness, a life of abundance.
I know with absolute certainty that once you're in that position, you'll be able to help others
too. So, by helping you, I'm helping many who are the future students of Touchstone, or
rather, the students of our students. Before I finish as I always finish, I want to say one last
thing. You are a unique, perfect human being. So many people in this world want to be
taller, shorter, thinner, heavier, more muscly, less muscly, be blonde, be brunette, have curly
hair or have straight hair. I want you to accept yourself just as you are and then everything
else will follow. Now perhaps you'll understand why I say...
You've been wonderful, I've been Paul, see you next time.
127 | PAGE

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Touchstone Education Ltd

We co-own an estate agency, a letting agency, various property investment companies, a

Literally anybody can do this, with the right guidance.

Do you want to be rich or

2. Wealthy people's expenses are lower than their income.

3. Wealthy people have multiple streams of income.

Wealthy people on average have seven streams of income.

Income without exchanging your time for it.

Many, many people that are rich are motivated by money.

Wealthy people are typically not.

Wealthy people are typically motivated by time.

What do I really mean by this?

Warren Buffet famously said this - "Things don't matter so much."

Less than two seconds.

I gave up my right to three different pension schemes, giving me a projected combined

Here is a simplified version of what happened with my private pension:

Now my lifetime pension allowance is £1,073,100.

How did I know to do this? Knowledge and education.

How many income streams do

Let's now get into some specific property strategies.

Absolutely, completely untrue.

Property, bricks and mortar, in our language “as safe as houses”.

The attractiveness of property as an investment should not be underestimated. Once you're

1. Everything is temporary. We ourselves are temporary. In the context of time, the

You Don’t Need To Be Great To

It is clearly a good deal at £140,000 in December 2020. According to Rightmove, property

By early February, we had our commercial mortgage valuation. As we expected, the

Welcome to the magical word of professional property investing!

Here is a summary of the numbers for you:

The mortgage is 3.5% interest only costing £459.38 per month.

I'm going to share with you that completely different formula.

Can you really get a house with

Using Other People's Property

Don't Tell Your Partner?

Here's the floor plan.

Salaried vs Owning a Business?

Can you pay a salary to a shareholder? No.

£100,000 through a Limited Company :

Mind Over Matter

Ordinary Properties, Incredible

Let me show you what it looked like after the refurbishment.

If you want to take your knowledge further on Serviced Accommodation… A number of

However, if you don't have any capital, Rent-to-Rent is a great option.

Well, there's a lot to be said for hands-free, zero hassle Landlords.

Okay, so let's get started...

So why would a developer lease a block of six flats to a Rent-to-Rent Serviced

If you learned about Serviced Accommodation within our Serviced Accommodation

How do I know? Because I did it.

If you do, what are the next steps?

This is your next step.

Simply type this link into your internet browser:

to sign up for our UK leading Wealth Through Property training event.

I'd like to offer a final few thoughts…

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