Ultimate Auctions Program

Ultimate Auctions Program

 Ultimate Auctions Program
 Introduction
Property auctions are a method to transfer wealth from the uneducated over to the educated.

What do I mean by that? People lose a lot of money at auctions. They lose money buying

bad properties and selling properties too cheap when they could have sold it for a lot

higher. I see so many times people losing money at auctions or they'll bid on a property

and they've got to buy it now within 28 days and then they go and get the finance, they

apply for the mortgage and they don't get the finance in time and they end up being

stressed and they end up having to get me involved and who makes most of the money in

that situation? Me. Why? Because I'm educated and they were uneducated.

So through this course, you are going to become educated in auctions. You're going to understand

how to buy from auctions, how to sell through auctions, also how to do things like underwriting,

pre, post, understand legal packs, what due diligence you need to do when buying a property,

how to handle auctions. So this is going to be an absolute crash course on all things

auctions.

Now what I will say is please don't get really excited a few videos in and then just go and

start bidding on auctions because auctions, you can lose a lot of money. So go through,

complete the entire course and then start cleaning up in the world of property auctions.
  Eliminate the Risks
I would be doing you a huge disservice if I did not also talk about the downsides to auction, the risks,
the horror stories that could potentially happen.

Now, this will only happen to you if you are uneducated.

As I said before, property auctions is a great way of transferring wealth from the uneducated over to
the educated.

So this is where people get stung in auctions.

The biggest problem with auctions is once you bid and your offer is accepted, you have to buy.

If you bid £100,000 on an auction, boom, and your offer is accepted, you now have, generally
speaking, about 28 days to buy that property.

Now, what happens if you change your mind?

What happens if you can't get the money?

What happens if you realise that the property that you bidded on was actually a terrible investment?

You got that investment, but you just got carried away and excited on the day of bidding?

What happens is you are screwed.

And I'm going to be going into, throughout this course, exactly what happens and how you can
potentially navigate your way out of it.

But it's very difficult and you will be stung badly.

That's probably the biggest issue with auctions.

Another issue with auctions is you can get carried away with emotions and excitement.

I mean, listen, I've bought a lot of properties from auctions.

I've also sold a lot of properties from auctions.

Generally speaking, there have been online auctions.

But if you're going to bid on an auction, you've got to be very careful.

If you're going to bid on an auction, you've got to be very careful.

Even if you're not in a room, even if it's an online auction, people get very emotional.

I get very emotional. I'm like bidding and I see people outbidding me.

They say when emotions are high, and you're attached and emotional.

Intelligence is what? Thinking your intelligence goes high as well?

No. When emotions are high, intelligence is low.

So unless you're really educated and really strict with your formulas,

So unless you're really educated and really strict with your formulas,

I'm sure, another bit or two, you probably will get super carried away,

and they will deliberately use methods in auctions that will get you emotional.
And I'm going to be talking about that later on in the course.

There are tried and tested methods of how they do it.

Another downside of auctions as well is, I know I said problem properties are an opportunity, which
they are.

But also, there are some types of problem properties, which are not an opportunity. They are a
disaster.

So an example of that would be, a property that has got a mind span of 21% and isn't successful,

shaft underneath it and there's no way of getting rid of that mine shaft and now it's unmortgageable

or a property that's got high flood risk and there's nothing you can do to get rid of the

flood risk. It's near water. It has a high flood risk. So that type of problem is not necessarily,

oh, an opportunity. No, it's terrible. It might be that there's a legal problem. It might be that

there's an overage on the property or an option on the property, which you didn't know about.

I'm going to be going into great detail about how to spot these things later on in the course,

but problem properties are good if you can spot the problem and you know how to fix it and the

numbers work. But if you're a beginner in property and you're not educated, this course is going to

educate you so much though. You have no idea. But if you're uneducated, there's a lot of sharks out

there in the auction world. There's people out there in the auction world that deliberately
rely on people being stupid and uneducated.

I know a guy who makes his money. He buys properties from the high street, right? He just

buys random houses from the high street that have got all kinds of problems riddled with structural

issues, legal issues, terrible problems. He does nothing to them. He just boards up the windows

and then sticks it straight on an auction and hopes that an idiot will bid much higher than

he paid for it. That's his strategy. Relying on idiots.

Imagine if your whole strategy, you know, how are you a millionaire? I just rely on idiots at auctions.
Do not be that idiot. If you want to get into auctions, cool. I make a lot of money from auctions, but
you've got to be educated. So those are the risks and downsides to auctions. But of course, I think
that the upside far outweigh the downsides if you are educated like you are through this program.
  £1 Guide Price
The basics of auction. So you've got to understand guide price, reserve price and purchase price.

What does it mean? How does it work exactly? This is the 101 stuff right now. We're going

to get more complex later. So guide price, what does a guide price mean? If you see guide

price on Rightmove, there's a house that's selling it, it says guide price, 200 grand.

What that means is that means that that is the rough guide. It's not quite the asking

price, it's the marketed price. That's how much they're marketing the rough price of

the property at. Now if it's an auction property, you've got to understand this because the

guide price does not mean what they actually want to get for the property. A lot of people

go, oh my gosh, it's 50 grand guide price and it's worth 100 grand. It's like, that

doesn't mean anything because the next thing you need to understand is the reserve price.

What does the reserve price mean? The reserve price, which you will not know, the only people

that will know the reserve price are the people who are going to be buying the property. And

the people who are going to be selling the property are the seller, the person selling

the property and the auctioneer. They are the only people that will know the reserve

price. The reserve price is the absolute minimum that the seller is prepared to sell for. Now,
let's say the reserve price on a property is 100 grand and the guide price is 90 grand.

90 grand is how much you'll be advertised at on the auction. 90 grand guide price. Everyone

gets interested.

Ooh, 90 grand. That sounds cheap. It's worth 150. That gets people registering to the auction. I
mean, sometimes you see properties that have a guide price of one pound and usually those
properties end up in the newspapers. Imagine that. 100 grand house, 200 grand house, guide price
one pound. Come to the auction, one pound guide price. What happens is it makes the newspapers.
House in auction for a pound and everyone's like, a pound?

Yeah.

Buy a house for a pound? No. That's just marketing. There's no way that house is going to sell for a
pound. They know it's worth 150 grand and people are going to bid and the person who's going to
buy the price is the highest bidder. And that's the third price, which is the purchase price. The guide
price, that's how much it's advertised at. The reserve price, that's how much the lowest that they'll
actually accept will be. And then the purchase price, which is how much it ends up being sold for.

Now the reserve price, let me talk to you about the reserve price. Number one, the reserve price
cannot be within 10% of the guide price. So it's not possible to advertise your house for a pound, but
then the reserve price is 100 grand. That is completely not allowed. It's illegal in the laws of property
and auctions. So if you see the guide price is 90 grand, that means that the reserve price has to be
less than 100 grand.

Right? Because it can't be 10% either side. I mean, sometimes I've heard some auctioneers say that
they might have done it slightly above and I'm not quite sure what the repercussions would be. I've
never heard anyone being put in prison for it, but they will be checked. And I guess trading standards
would not be happy at all if they misadvertised it. The rules are 10%. Why is that important? Because
if I see a property that's guide price of 100 grand, I know that the reserve price is 100 grand.

I know that the reserve price is probably going to be a maximum of about 110. What does the
reserve price actually mean? It means that if I bid in the auction, and my bid reaches the reserve
price, they have to sell the property to me, because I met the reserve price, which is pretty exciting.
So when people put their house, gold,
and I bid in the auction, and I get a guide price of a pound, they're being very risky. Because if I came
along and offered £1.50, and no one else turned up at the auction, even if the house is worth 200
grand, they would have to sell me the house. Isn't that nuts? Now that realistically would never
happen. Because people would be like, oh, it's a pound. I'll go along and offer two. But lots of people
think that and then they end up getting carried away and it ends up selling for 100 grand. It always
happens.

So if you're looking for a house that's going to be low guide price, don't think, oh, they're really
desperate to sell the next. Not necessarily. They might just be marketing. Some of those houses that
you see for 50 grand guide price end up selling for 150. It's important that you understand what can
your purchase price be? What would you be prepared to offer on the property? Work out that bid.
That's what's important. The guide price is not super important. It's just what it's advertised at. So
guide price, reserve price, purchase price, you've got to get those three.

Three definitions really clear if you want to go ahead and succeed in auctions.
  Types of Auctions
There's three different types of auctions that you need to understand. So if a property's

advertised at auction, it might be a modern auction, a traditional auction, or an online

auction. Now, generally speaking, my experience is mostly in traditional auctions and online

auctions. Modern auctions, let me explain the difference. A modern auction is when a

property will be advertised at a price. So it might be advertised at 100 grand. And the

modern auction will have an expire date. So it will just say, right, it's advertised

at 100 grand, come and see it. It's online, it's on the market, we're doing viewings.

But by the 28th of July, we are going to be looking at all our offers, and then the highest

offer, that's the win. The person that offered the highest before the expiry date of the

modern auction. So unlike a traditional auction, where it happens real fast, traditional auctions

is where they'll get a bunch of people in a room. It could be 100, 200, 300. I've been at auctions. I've
spoken at auctions where there have been 500 people, and everyone literally puts their hands up
and bids. And then there and then it's just like, right, okay, so 100 grand, yeah, 105, 110, and people
will just put their hand up and bid. And then the highest bidder, 150 grand, going, going, and sold.
Hammer goes down, under the hammer, right? Sold. And then that person now has to buy it.

So a modern auction, you can bid any time until this date. You go and look at it, you

think about it, you talk to your wife, talk to your kids, you pray about it, and then

you put in your bid. So that's modern auction. Online auction, I like online auctions. I've
been doing a lot of bidding on online auctions recently. I've bought quite a few properties

on online auctions. I quite like online auctions. Online auctions is very similar to, I don't

know if you've ever bought from eBay, where you're in an auction and something will go

on and it will say, right, guide price or reserve price is 100 pounds and you want to

buy some trainers. And then you'll be like, oh, 102. And then you'll be waiting to see

what happens and it'll be a deadline in the next few hours. And then it will be, okay,

someone just outbid me, someone outbid me. And then you'll see the time ticking and then

right at the last minute, that's what happens with an online auction. Online auction, the

auction will start, the day might be, okay, on Monday we're going to run the online auction.

And then on Monday everyone comes and the first person will bid. What I tend to do with

an online auction is I'll just wait. I've got my maximum bid. I'm not prepared to pay

more than 100 grand. And then I'll just wait. And then the last sort of 10 minutes, I'm

not going to spend all day. Some people spend hours there watching it. Oh, oh, oh, and it's

just emotional. I'm just like, look, I'm just going to jump in the last half an hour. Just

have a little watch in the background, see what's happening. And then usually at the
right last minute, you'll put your bid in. It is a real buzz.

When you win a bid, it's a real buzz. And more times than not, my experience, when I

bid at an auction, generally you don't buy it. You end up bidding and someone outbids

you and it's a bit annoying. That's annoying. And that's why you can be really tempting.

Let's say your maximum bid is 100 grand and then you wait and you wait and it's on like

92 and you're like, ah, and 10 minutes left of the auction. You're like, I'm going to

get this. I'm going to get this. A few minutes left and then someone bids 94, 95 and you're

like, oh, I'm going to do it. I'm going to do it. 96. And then someone bids 98 and then

you get 100 and there's like two minutes left of the auction and someone says 102 and you're

like, ah, I'm not going to let this deal go for the sake of three grand. I'm just going

to bid 103. And you bid 103 and then bang, someone bids 104. Oh, do it. And very easily,

you can spend five, 10, 15 grand more than you would have done. That, you don't want

that to happen. Okay? You don't want that to happen. I'd rather feel a bit like, man,

maybe I could have gone a bit higher. Oh, wow. I missed out. I'd rather that than get

too carried away on the day. So that's the difference between online, traditional and

modern. Traditional is fun. It's fun. Also with traditional, it's even more emotional.
It's even more pressure-y. And the auctioneer, the person that's taking the bids knows the

game. The auctioneer will literally say things like, if you've bidded 100 and someone just

bids you 101, they will literally call you out on it. They'll be like, come on, 102, 102.

And they'll point at you and they'll be like, come on, you're not going to let this go just

for the sake of a couple of grand. And they'll push you. They'll also make it really, they'll

talk really fast. They'll make it really emotional. At a traditional auction as well, there are

tricks that they do. So for example, they're allowed to pretend that someone bidded even

when they didn't. So they can literally say, all right, we'll start the auction off, 50

grand. Anyone at 50 grand? Yes, sir. 50 grand. But there was nobody that would just point

to the air. That is very common. And then they'll be like, okay, 52. Anyone going to do? Yes, sir. At the
back, 52. And there is nobody. They're not allowed to do that after it meets the reserve price. That's
something that they'll do just to sort of get the energy high and get people thinking, oh my gosh,
there's a lot of interest in this property in the early stages of the auction. So I love traditional auction.
I love auctions just generally, but those are the different types of auction that we have in some ways.

Yeah.
  Registering to Bid
Registering for an auction. Now, when you're partaking in an auction, it's really important

from the auctioneer's perspective that you are not just a randomer that just walked into

the auction. In fact, imagine how much of a disaster that would be. Imagine if anyone

could just bid on an auction, whether it be a traditional auction or an online auction,

and you were in a situation whereby you were selling your property, there was 100 people,

they're all bidding, but they're all anonymous. They're anonymous internet trolls bidding.

And then the highest bidder bids a million pounds, congratulations, you won, and then

the bidder goes, yeah, well, I'm anonymous and I'm not going to buy the house. It just

wouldn't work. So when you're going to be bidding in an auction, you have to register

your details. You have to provide them with your finance details. Sometimes you even need

to pay a deposit, which they pay you back if you don't win the auction.

Speaker 1.: Yeah.

Speaker 2.: You need to give them your passport details. So let's say you see a property and

you say, okay, this is registered with such and such an auction. You will have to sign

up. Now you can register for free where you can just see all the auction properties, but
if you want to actually enter an auction room and bid, then they're going to ask you to

provide your passport. They're going to ask you to provide your details. Now, another

really important thing I want to say on this is you need to think about who or what entity

is buying the property.

Speaker 1.: Yeah.

Speaker 2.: And that's the thing. I think it's really important to think about that.

I have messed up with this myself where I've thought, oh, I registered for an auction and

I've registered and then I've bidded and I've won the bid and I thought, ah, brilliant. And I'm

really pleased with the property and I really want it, but I don't want to buy it. I want it to go

in one of my companies. But now who won the bid? Samuel Leeds. But Samuel Leeds wants the
property

to go into Samuel Leeds Limited. You messed up. Right? This is how important it is when you're

registering to go to an auction room. You got to think, hold on, who's buying this.

Is it me or is it my company? And if it's a company, well, which company is it?

Speaker 3.: So don't just register for an auction without thinking this through. You

got to think, okay, is this going to be a company sale? Am I going to by this through
my pension? Am I doing this as a joint venture? Am I buying this personally? Because if you

register personally and then you want to go to a company, you can't. You won the bid,

you have to buy it.

And potentially, if you want to transfer it to a company, now you're going to have to buy it and then
sell it to your company.

Which means you're going to get hit with stamp duty twice, legal fees twice.

So registering for an auction is important that you do it properly.

It's normal.

It's normal to have to give your passport details and everything, of course, from the auctioneer's
perspective.

Once you've registered into an auction and you've provided them with all of your details and your
status goes to ready to bid, it's a pretty good feeling that.

So that is how you register for auctions.

  Buying Blind
A lot of people think about auctions that just because they're buying it online and

they're bidding online or they're in a room, in a hotel room somewhere bidding for a property,

that they're buying the property blind because they're not actually at the property. They

can't see it. They're just bidding blind in faith. That is absolutely not the case. Everybody

that bids for a property at an auction should have actually seen that property already because

if you've not seen the property, it's very dangerous. There are exceptions. I have bidded

for properties that I've not seen because either I've sent a surveyor to go who I trust

and there's already been a survey on it, or if I'm bidding on a commercial property where

there's a fixed 12-year lease with a good tenant, I might not necessarily have to see

it. But generally speaking, you will be expected, it's normal, to see the property first. So

what auctions will normally do is they'll say, right, the auction date is going to be

on the 5th.

It's 1st of July, but in June, they'll open up dates where they'll say, right, we're doing

an open day on this day, this day, this day. And then you can go and you can look round.

It's quite inconvenient for me with a very busy schedule because sometimes they'll limit
you on when you can go and see the property. I think auctioneers quite like you not going.

I did a talk at an auction. I still don't speak at auctions. And one of the things I

said is I said, never buy a house without looking at it. And I can see the organisers

of the auction like a bit like, oh, don't say that. I'm not going to buy a house without

looking at it. And I can see the organisers of the auction like a bit like, oh, don't say

that.

Because they don't want people to not bid. But my guidance to you would be to always

view the property. View it before you bid. Go and have a look round. There was a guy

that I knew once who was a student of mine who he got really carried away at an auction,

and he bought a house for really cheap, like 40 grand. And he said, look, it's 40 grand.

What's the worst that can happen? But the property had subsidence. It had flood risk.

It was just terrible. And then when he went to actually see it after he'd won the auction,

he said that walking inside the property was like he was in a boat. It was so wonky,

the structural subsidence, it was just terrible. And he ended up, he just didn't buy the property,

and he ended up losing the deposit that he put down and some fees and things. So always
view the property. When you view the property, what are you looking for? Well, you're generally

looking for cracks. If there's structural problems, you'll generally see cracks. Looking

at the roof, does the roof, has it got missing tiles? Is it bowing? Looking at the fuse box,

when was the...

When were the electrics last tested? It might be that the property is a complete rundown

disgrace and you just accept that you're going to have to get a rewire and a new roof. If

you don't know much about property structure and you're a bit of a newbie, I would say

you should get a survey on the house. Send a structural engineer or just get a building

survey on the house. That will cost you a little bit of money. It will cost you maybe

a few hundred pounds. But if you're serious about a property and you're wanting to bid

for it, I'd rather lose 300 pounds than...

I'd rather lose 300 pounds in vain than potentially buy a property for 300 grand that is a complete

lemon and now I've just spent 300 grand that I shouldn't have. So it's one of those. You

can't be getting surveys on dozens and dozens and dozens of houses if you're constantly

bidding. But if you're constantly bidding on properties like me, then probably you've

got a bit of an eye for property when you go and view it yourself. You can kind of see
what it looks like. Another tip as well you can do when viewing properties is you can

just do videos.

So you can film around the property. And then if you're in a network or a property community,

you can show that to builders and surveyors and say, oh, what do you think? And they can

have a little look, a little glance. But ultimately, you've got to look at the risk versus the

reward. If you want to be belt and braces, then really you should just get a building

survey on every property before you bid. That is the safest way to do it. Of course, is

that practical? Not necessarily. But if you're buying loads of properties and bidding on

loads all the time, no, it's not. So you've got to weigh up with your skills. You've got

to be skill set with the risk of the property. Are you going to get a survey? I'd probably

suggest that you do. But at very least, make sure that you view the property yourself before

you put forward a bid.

  Pulling out after Winning
What happens if you want to pull out of a deal? If you bid on a property and then the next day you're
like, oops, shouldn't have done that. What happens? Is there a calling off period? No, there's not a
calling off period. Auctions are for big boys. It would not be fair for you to be in a room with 200
people and you bid. In fact, I had this happen to me. I was at an auction and I was bidding and there
was a guy that was also competing against me and the two of us were bidding and it got to my cut off
point.

And he bidded slightly higher and I lost the auction and I was very disappointed. And then the next
day I had a call from the auctioneer and the auctioneer said, the guy that won the bid has pulled out.
He can't get his money together. So do you want to buy the property? And I did and I ended up
buying the property, which was great. But what happened to him? Well, let me explain. For a start,
when you bid on a property and you win in auction,

generally speaking, you have to pay a 10% deposit straight away. Now, if that property is an
expensive property, like the one that I was buying, it was just shy of a million pounds. So potentially
he had to put down 100 grand. Now, I don't know exactly where he got up to. Maybe he pulled out
straight after. But imagine if he pulled out the next day, how's the seller going to feel? And now
everyone else that was at the auction that was also bidding and excited, they're not there anymore.
It's just not fair to bid at an auction and to win and then to expect to change your mind. No, it's not
fair.

That's how it works. So you pay a 10% fee, which is not a fee, sorry, a 10% deposit. And if you can't
buy the property you want to pull out, then you lose that 10%. That is what happens in auction. My
friend that I told you about, Glenn, that bought a property and it had subsidence and he wanted to
pull out, he lost a 10% deposit. Now, as it happens, his 10% deposit wasn't that much because it was
just a cheap house, but it still stung. You may also, depending on what the terms and conditions of
the auction say, like,

he never bidded and had to pull out. So I'm not super familiar with the process, but I know that you
lose the 10%. You may also have auction fees. And my lawyer tells me this, and this is really
unthinkable, but this is what my lawyer told me. So it must be true. If you bid at a property, let's say
you bid for a million pounds on a property, and then you pay a hundred grand deposit, but then the
next day you decide, actually, I want to pull out. Not only do you lose your hundred thousand
pounds, but also worse than that.

If the seller then resells the property auction and it doesn't sell for a million, it only sells for 900
grand. They're now a hundred grand short and it's your fault. So they have grounds to sue you for the
shortfall, which means that you could end up 200,000 pounds down with no property. So what's my
point? What's the point of this lesson? The point is never bid a property in auction unless you're a
seller.

The point is never bid a property in auction unless you are 100% that you are going to be actually
buying the property. Just don't bid. And I'm going to go through the due diligence that you need to
do before bidding. I've bidded in properties in the past and then I've regretted it and I've just took
one for the team. It happens. But if you are just starting out in property, you've got 50 grand in the
whole world, that's all your money, and you're about to go to an auction, just make sure that you are
very, very careful not to get carried away and to do due diligence correctly. And throughout this
course, I'm going to be talking about all the things that you need to do before bidding.

to look for the red flags, the showstoppers, but pulling out once you've won the bid is serious and it
should never happen to you. What happened to the guy that bidded and then pulled out? I don't
actually know. I don't know whether they were gracious to him and whether they let him off the
hook. I don't know whether he said to the auctioneer, look, I can buy it, but I really don't want it. Can
you try and sell it to somebody else? I don't know what happened. I don't know him. He was just at
the auction. He just outbid me.

You're not going to go to prison.

or anything, it's not criminal, but legally you will just lose a lot of money. So make

sure it never happens to you. I'll see you in the next video.
  Tricks of the Trade
Some of the things I've learned about auctions are it's not just a way to buy properties,

it's also a great way to network and to be in with people. I'm going to talk later about pre-auction

and post-auctions, where some of the best deals that I buy are from auctions, but I don't even

buy them actually in the room. They come after the room if properties fail to sell, or they come

before they even go to the auction. Another massive tip that I've got for you is if you're

going to a live auction, when you go ... Now, I'm also a deal sourcer. I'm just a property

entrepreneur. I do lease options and joint ventures and commercial developments, everything.

So I love being around property investors. When you're in a room and everyone's bidding,

everyone in the room is a property investor. What a great opportunity to network.

If you're a deal sourcer, okay, and a deal sourcer is someone that finds deals

and then sells them to investors and charges a fee, it is like dream

room ever, because you've got all these people bidding, and I'm standing at the back of the

room. I'm always going to be standing at the back of the room in an auction if it's a live auction,

because I want to see what everyone's doing. You know when the auctioneer said,

yes, sir, at the back, and he's making up stuff. I'm just like, I know what he's doing.
I'm at the back. I'm watching. I'm not going to be sat at the front. I'm at the back. I want to see

everybody, see everything, read the room, feel the energy. I'm looking, and if someone bids 100

grand, and then someone bids 105, and then someone else bids 110, and then someone bids 100,
and then

120, I'm paying attention to who's bidding, because at the end of the auction, only one

person's going to win that house. Now, sure, there might be multiple houses, but if I'm saying, okay,

that person bidded, that person bidded, that person bidded, but they didn't actually get a

property. How are they feeling right now? If they bidded and didn't get a property, I'll tell you

how they're feeling. Disappointed. Oh, I didn't get a property. So they've got a big fat wad of

cash in their bank, itching to invest in a property. They didn't get the property.

They've got a perfect opportunity for me to now approach them after the auction and say, hey,

I saw that you bidded, ah shame. Listen, I'm actually a property deal sourcer. If I can find

any juicy properties, would you be interested in me dropping you an email? Now, you've got a bunch

of really hot investors that are ready to go, ready to take action, and you've got their details.

Now, every time you find a decent deal, maybe you find a deal that doesn't quite work for you,

you email it to your list of hot investors.

investors. When you get to the auction as well, there might sometimes be some last minute

deals. Two days before the auction, there's something like there's three extra properties

and the way the auctioneer speak about it is like, oh, some exciting last minute opportunities

have come up. Don't bid for those. The reason they've come up the last minute, two days

before the auction, oh, is usually because the person that's selling the property knows

that it's got some serious problems and they don't want you to view it. They don't want

you to have time to read the legal pack because there's so many red flags and showstoppers

in the legal pack. So if suddenly a property comes up last minute, just be focused. Remember

what you're there for.

Also, if you are going to bid as well, if you're going to bid at an auction, you're

going to work out the maximum bid that you're going to offer. You need to be really, really

regimented to that bid. So if I know that the property is going to be worth 100 grand

at the end, it's a little cheap property, it's guide price is 25 grand, I'm going to

work my numbers backwards straight away.

My profit is going to be 25 grand. So 75 grand minus the refurb. Refurb is 10 grand, 65. Minus
all the costs and everything, it might be 55 grand. So in my mind, I can't offer more

than 55 grand. Now, I don't want a round number because a lot of people when they go to auctions,

they'll be thinking, oh, I'm not going to bid more than 50. I'm not going to bid more

than 60. So generally, I don't know if it's just my superstition because I tend to have

good luck, but I like to have a number like 50 grand.

So I'm going to bid 56,000 or 56 and a half thousand. I'm going to bid 56 and a half thousand.

222,500 pounds. That's my cutoff. And I'm always going to go slightly higher because

I know in the room I'm going to get a little bit emotional and I'm going to be like, I

wish I'd just gone a little bit higher. But you need to set the amount and you can't go

any more. So in your mind, you're thinking I wouldn't do more than 100. In the cold light

day, just actually, could I do 100 to 500? All right, great. That's the absolute max.

And then when you go,

Or if you're bidding online, that's your max. It's a specific number. Another thing as well,

is to make sure you've got a good power team. So generally for your power team for auction,

there's really just three people for auction specifically. Of course, if you're doing a

big development deal, you're going to need builders and this, but just generally for
auctions, you're going to need three people. You're going to need somebody to sort out

your insurance, an insurer. That's really important. You're going to need a broker to

sort your finance out and you're going to need a conveyancer or solicitor to actually

deal with the...

So that's going to be the legal pack, which we're going to talk about, but then also completing

the property. Insurance is one that a lot of people forget about. You will need to have

your insurance covered from when you exchange on the property. Because even though it's

really fast at auction, sometimes that's the kind of thing that can get missed. You just

forget about insurance. But what happens if you exchange contracts? Yeah, we exchanged.

And then the following day, the house burns down. You're like, oh crap, you're screwed.

So you need to have insurance.

Yeah, you need to have insurance. You need to have insurance. You need to have a good

deal of insurance in place. It doesn't cost a lot and it's just something that people

can forget. Your finance broker, if you're planning on buying with bridging, the finance

broker needs to be really on board. He needs to understand what you're doing. Okay, have
a good look at the auction. I mean, how it goes, they're ready. They've done all your

checks. They've got your passport. They've got your finances. They've given you your

decisions in principle. They're ready. So those are some tips on auctions. So be specific,

build your list, network well, and make sure that you have the right power team in place

for your insurance and everything like that. It's really important when doing that. So,

thanks for watching. I'll see you next time. Bye.

And I'll see you next time when doing auctions.

  How to Buy Pre-Auction
One of my favourite ways to buy properties are buying them pre-auction. Now, this is genius,

and if you get your head around this, this could revolutionise your property business. Firstly,

let's put ourselves in the shoes of the person that's selling their house at auction. Now,

I can relate to that because I've bought a lot from auction, but I've also sold properties in

auction. In fact, when we went into lockdown in 2020, I needed cash, right? Because I had

500,000 pounds a month overheads with my businesses, 46 members of staff, offices,

mortgages, and suddenly, boom, lockdown. Closed down my office, closed it, and I needed some
cash.

And I remember putting about 10 houses to auction, and I remember being a bit like,

this is weird. Now I'm on the other side, and I learned a lot about being on the other side

of what it's like to be someone selling from auction. Because you always think when someone's

selling from auction, they're just there like, oh, I wonder how much I'll get. Oh, exciting,

bidding, how much I'll get. I'm like, oh, I'm going to be a big, big, big, big, big, big, big, big,

big... Haha, let them bid. No, it's actually quite stressful. When you're putting your house

on auction or multiple houses, you're feeling scared. Because if the property doesn't sell at

auction, you're a bit screwed. I mean, the reason that you put your property on auction in the first
place is because you need the money, right? All right, I got in the house, it's going

on auction on the first of April, April Fool's Day, and I need my money.

I need money by the end of April or by May. Once you sell it in auction, it's going to take you a

month to get your money, right? Maybe a little bit longer with the grace periods and stuff.

So you put it on auction. If it doesn't sell, you're now stressed. It's going to put things

right back. Not only are you not going to be able to get your money quickly like you hoped and
maybe

you bagged it for, but also if you put a property on auction and it doesn't sell,

it's a really bad look. It black marks the property. Now, if it goes to auction again,

and in the description, this property failed to sell in auction previously,

it's black marked the property. It's a seller's worst nightmare listing their property on auction

and the property not selling. And sometimes they'll be badgering the auctioneer and they'll

be saying, is there much interest? How many people have downloaded the legal pack?

Things like that. When I put my property on auction, I had quite a few people come to me

before I sold the properties and they said to me, hey, we can give you a pre-auction offer.

Normally, I don't do that. I don't do that. I don't do that. I don't do that. I don't do that.
Normally, I'm the guy that's offering pre-auction offers, but I was actually quite tempted. I didn't

do it in the end just because I wasn't that desperate. But think about this. Let's say you

see a property and it's got a guide price of 100 grand. You know that the reserve price is 110 at

max. So they're prepared to sell it at 110, worst case. That will pay off their debt, pay off their

110, because you'll normally set the reserve price. If they need the money, they'll set the reserve

for the lowest that they can accept, but still live with if they absolutely had to. So that's

the reserve. So you can see the guide price is 100. The reserve price, you know, is going to be

110. Let's say the value is 150. They're going to want 150. They're going to want even more,

but they're happy with 110, worst case. Well, if you contact them and you say to them this, look,

I can see you've got your property on. Guide price is 110. Fine. I'll buy it for 120

outside of the auction, pre-auction. If you say no, that's fine. I'll come to the auction anyway,

but I'm just only going to offer 110.

Right. But I'm happy to buy it pre-auction before it goes to auction. Save the stress,

save the potential embarrassment. Have a guaranteed offer now. Let me offer you 110,000

and I'll buy it now. Under auction terms, potentially still. That's quite tempting for
them because even though they know it's worth 150, and even if they just wait a few weeks,

they'll probably get much more. What happens if they don't? Having that,

guarantee to know that, you know what, it's going to be sold. I'm not going to blacklist the property.

It's something that a lot of people are open to. You'd be very surprised. So offering pre-auction

is something that I do a lot. You can see when you go online as well, if you're doing online

auctions, they'll often even let you do pre-auction offer. This is something that's very, very common.

You can call up auctioneers and you can say, hey, I'm interested in such and such a property.

Would that be open to a pre-auction offer? It's something where you can often bag a bargain.

Before it even goes to auction, you're getting them out of the pain and the misery of the stress of it
going to auction. I mean, it's very stressful going to auction. Let's say that moving house is one of the
most stressful things that you can do. Imagine moving house or selling a house on auction. You don't
know what's going to happen. It's the unknown. So they'd rather say it for a bit less, but they know it
meets the reserve and they know that they don't have to worry about the auction day. So that's pre-
auctions. It's a brilliant way to bag a bargain.
  How to Buy Post-Auction
I said that pre-auction was one of my favourite ways to buy properties. You know what arguably

my most favourite way is? Post-auction. Post-auction. Oh, this is good. Okay, let me explain to you
how

this works. Now, when properties go to auction, some sell, some don't. You can actually see,

you can go on online auction houses and you can see the ratio tipping that they have,

how many sell, how many don't. And there's a fair amount of properties that don't sell at auction.

Last time I looked, I think London Auction House, I think it was about 70-30, 30 houses didn't sell.

That's a lot. 30%, sorry, didn't sell. That's a lot. So how are you going to feel? Put yourself

in the shoes of the seller again. You put your house on auction for 200 grand. It's worth 250,

but you put it on a guide price of two with a reserve of 220. And not one person bids 220.

It doesn't meet the reserve. It doesn't sell.

How are you going to feel? You're going to feel extremely stressed and heartbroken. You're going

to feel sick. Like, what is going on? Now, you've got two choices. Choice number one is you can have

the delay and the embarrassment of having to put it back in an auction again, probably considerably

lower to try and get more interest and hope that it sells with a nice big caption. This did not

sell last time it went to auction, right? That's not good. Option number two is you can accept
my offer, my post-auction offer, where I come in and say, hey, I know it had a guide price of 200.

However, it didn't sell. I'll buy it cash right here, right now for 175. Now, this is a very good

way to bag bargains. It's not always going to happen. They're not always going to say yes. Some

people will say on your bike and they'll just put it back in the auction. And it might just be that

they got unlucky. Some of the problems that don't sell at auctions because they're right at the very

beginning. So, auctions, even online auctions, there's quite a lot of properties. In person,

it's crazy. Towards the end of the day, people are lagging, people aren't as interested. So,

there may be many reasons why the property might have not sold. I mean, I did this. There was a

property that went on auction. It went on the guide price was 60 grand. I worked out the end

value was 100. It needed a big refurb, about 35 grand spending on it. So, I thought, it would

probably work at around about 55 grand. Didn't sell at auction. I then contacted afterwards and

offered 40 grand and I ended up getting it wrapped up at 43,000 pounds post auction. Spent 30
grand on

it, now worth over 100. That was post auction. So, if you can have a relationship as well with an

auctioneer and they know that you are serious, my auctioneer friends, they text me. If a property

doesn't sell and they know that the seller is going to be good, they'll just drop me a text,
oh, this didn't sell. You can go online and you can see all the properties that don't sell. It's

failed to sell at auction. This failed to sell at auction. This failed to sell at auction. And target
specifically, those properties. This is a

great way to deal with extremely motivated sellers. You're not even being

cheeky, really. If you didn't sell at auction and it was on, guide price was 200 and you

sell, I'll have it for 175. The auctioneers will love you because the

auctioneers are also equally disappointed when it doesn't sell. If the guide price is 200 and it doesn't
sell, they

They'll be feeling like, oh, the seller's like, oh, everyone's like, oh, and then you come along.

Hey, look, man, I'll get it for 175.

Let's get this wrapped up.

The auctioneer is probably going to advise the seller, you know what, just do it.

Because they want to get their commission as well.

They don't want the seller to just say, I'm not going to sell then.

I'll just leave it.

You know, this is where you want to be, man.

Why go to Dixon's when everyone's gazumping each other and it's high street?
Why not go to where you know there's seriously motivated sellers?

Because it's just the way, it's the place to be.

Of course, you need to still do your research and get your legal packs read, view the property as
always.

Another thing is this, when you buy post-auction, you don't have to buy auction terms.

They will usually want you to.

I'll buy 175 subject to a survey, which I'll get done in the next seven days.

Over the next seven days, you get a lawyer to read the legal pack, get a survey on it.

Cool, done, boom.

You can do that.

There's absolutely no reason why you can't do that.

I mean, they won't like it if you put an offer on a property and then you pull out.

That will always upset people and relationships are really important, but you don't have to make an
offer according to auction terms.

Post-auction offers, it's just the best.

I'm about to do an interview with a specialist that will go into more detail on post-auction offers.

Enjoy
  Understanding Legal Packs Interview
Legal Pax. Now, I have a good eye for Legal Pax because I've been in the game for 15 years.

I've bought a lot from auction. I've sold a lot from auction. And I've also got in-house

lawyers that work for me. But most people don't have that. Most people have this issue

of they want to go to auctions, they want to start buying from auctions, but they've

got to, what, pay a lawyer a grand or hundreds of pounds at least to just understand Legal

Pax. But then they're going to bid and they might not even win the bid. So I think personally

it's really important that people, number one, have a good understanding of being able

to read Legal Pax themselves because then any big red flags, oh, there's charges, there's

an overage, there's an option, they can just disregard it and they're not wasting their

money on lawyers. But number two is being able to get a relationship with somebody,

a lawyer or somebody, where they can get Legal Pax read quickly for pretty cheap, like, you

know.

Maybe 100, 200, 300 pounds quickly. So I wanted to go through with you, Sam, how to understand

the Legal Pax first, and then we can talk about potentially who they could pay to get

some institute for them. So how do you understand the Legal Pax?
Okay. I think Legal Pax, before I talk about

Legal Pax, I like to disperse some myths that people have about Legal Pax. I've come across

people that bought properties from a company saying, oh yeah, Savo's been going for 100

years, it's all sops, so the Legal Pax must be good because of the company. Now, the auction

company has no input in the Legal Pax. The Legal Pax is put together by the vendor's

solicitor. So it's the equivalent of you buying a second-hand car because it's listed on AutoTrader.

You say, well, it's on AutoTrader, it must be a good car. So do not buy a property, do not think that
because it's listed with a

particular auction company, the Legal Pax is better because auction companies do not

look at the Legal Pax at all unless someone raises an issue. And that's where most people

get it wrong. They think that, oh, it's Savo's, it's all sops, it's auction houses put the

Legal Pax. Some people say, oh, I don't like auction parks from Savo. I say, why? Savo's

does not have any input in it. So that's the most important thing that you get from here

to not trust the Legal Pax because of the auction company.

Then now, Legal Pax. When I ask people, have you looked at a Legal Pax? Yeah. So what's,

what are your thoughts? It looks okay. It's not a beauty contest. It's not. A Legal Pax,
when you approach a Legal Pax, it's not, it is okay or it's not okay. Because what most

people tend to do is that they look at a Legal Pax and they say, well, it's okay. But that's

not your approach. The way I approach Legal Pax is that I have

an...

You should go into a Legal Pax with an expectation. I sell and I buy. So if I'm selling, what

do I want in that? What do I put in that Legal Pax? If I'm buying, what do I expect to see

in that Legal Pax? If you are selling this house, I expect a few documents because I

just want to see that you own this property. This title is fine. It's good enough. If you

are selling a HMO, I expect to see the ASTs. I expect to see your license. I expect to

see X, Y, if it's an Article 4 area, I expect to see your planning permission that you have

planning because in HMOs, you can have a HMO license when you require planning, but you

haven't got the planning because the two departments are not taught. So you have to look at it.

That way, when I look at Legal Pax, I go in with an expectation. I go in with... I'm walking

towards what I call a checklist.

Okay.
This is it. If I'm looking at a development site, I look at Section 106. What is the Section

106 document in there? Because if you are selling it, if you bought a site and you look

at the GDV, then there's Section 106 that's 200,000. It's like, there's no profit in there.

If it's like in Hackney Borough where they're 150,000 per unit, you keep that Section 106

out and sell that site. Someone takes the back of FAC or back of an envelope, do a calculation,

wow, very profitable. They haven't seen 106. They're buying it.

Mm-hmm.

Once they buy it, then they say, oh, what's the 106? Then they call the council. Then

it's too late. You've bought a site. So when you approach a Legal Pax, you should have

your expectation. What do I expect to see in there? There's something that I always

do where I say, what's the most important document in a Legal Pax? And then everyone

lends all sorts of questions. Then I tell them, the most important document is, if you

don't read anything else, you must read the special condition.

Special condition, because in terms of football analogy, the special condition is at the midfield

of the game. They control the game. Special condition document tells you, sets an expectation

of what you're going to have. The charges, if there's anything that's on the list about
the property, if there's any issues, that tends to have it. One of the things I always

ask on my slides is, what is the second most important document? And everyone that's never

listened to me gets it wrong.

Until one day at one of your events, some lady got it wrong, right. And I was embarrassed

because I always offer a big price, hoping that no one gets it right.

Yeah, you offered like a thousand pound property.

No, I offered that I would pay for that academy fee. And this lady, she got it right. I was

like, gee. And she didn't. She just thought about it. She's a genius. And I asked her

afterwards, have you been to any of my talks? No. I gave everyone this chance to answer.

Everyone said, title, this. And she just put her hand up and said, you know what? I'm going

to give you a chance to answer.

I'm going to give you a chance to answer.

I'm going to give you a chance to answer.

It's a property. It's a document that should be in the legal park that's not there. I was

like, gee, how did she get it right?

The one that's missing, right?

The one that's missing. And no one ever gets it when they've never been to my talk.

Yeah. So, yeah. So, I stopped now making any big offers on that. But that is the most important

document. So, the advice is if you're dealing with legal parks, you have to have your own

checklist. If I get instructed by a client to look at a legal park, I don't just take

it and then look at it.

I just say, okay. I put a checklist together. And apart from just knowing a checklist, you

need to understand that's where I will say I have a working knowledge of all strategies

because I do this, the job I do, I need a lot of knowledge. I had a client that was

buying something that looked for them like the best deal in the world. It's a HMO. She

came to me. I didn't even look at the whole, I just look at the legal park. They didn't

have floor plan. I requested, I said to her, ask for a floor plan. I need a floor plan.

That's all. I didn't even spend my time. As soon as I look at a legal park floor plan,

I said, don't buy this side. She said, why? I love it. The yield is fantastic. I said,

Doncaster Council has reduced our minimum room size to 10 square meters. There were

few boroughs in the UK. In Harrow, in Brent, it's 6.5 square meters minimum. And it used
to be 6.5 is a national minimum. But councils can increase it. A few councils have increased

it.

So when you buy this HMO, six rooms, there are two rooms that are under 10 square meters.

When you go to re-register, because when you buy a HMO, you cannot use it without license.

You have to register. You will lose two rooms. She said, really? I'm not buying it. But that's

150. The best 150 she ever spent. So apart from just looking at it, you need to understand

your strategy. You need to understand the risk. You need to understand what are the

future changes.

So what's the checklist then? If it's development, what's the checklist?

  Conclusion
I've really enjoyed delivering this course on auctions and I hope that you found it useful

and enlightening. So in conclusion, when you're buying from auction, yes, you can bag some

bargains at auction, but make sure you know what you're doing because auctions are a really

good way to transfer wealth from who? From the uneducated over to the educated. Now that

you're educated and you understand the due diligence processes to do, how to calculate

your offer, how to do pre-auction offers, post-auction offers, underwriting, how to

get your head around what a legal pack is, I'm really excited about you being educated

and going and making some serious money in auctions. When you make your first chunk of

money in a property auction, don't forget to hunt me down and tell me the story because

your success is my oxygen. Good luck. See you soon.