They just had so much to say! This is the first part of a panel discussion around finding funds, our second property core skill.
Join me, Bronwen Vearncombe , Nana Piesie, Dominick Hardy, and Anthony Boyce as we talk this week about institutional finance and a glimpse into alternative finance too.
There’s plenty of common ground and a few surprises too in this topic, so join us to learn more....
Podcast: Play in new window | Download
Resources:
Guest Contact Information:
Bronwen Vearncombe Instagram, Linkedin, Building Your Dream Life
Nana Piesie Instagram, Facebook, Linkedin, Pengaflode Podcast link featuring Richard
Dominick Hardy Facebook, Linkedin,
Anthony Boyce Instagram, Facebook, Linkedin, The Property Thing
to The Property Voice YouTube Channel
The Property Voice Social Media Channels: Facebook ¦ Linked In ¦ Twitter ¦ Instagram ¦ YouTube
The Property Voice Meetup Page & Eventbrite Page
How to Reach Richard By Telephone
Link to the Podcast feedback survey
TPV Apprentice Programme info HERE
Today’s must do’s
Subscribe to and review the show in iTunes…and while you are at it please help us to spread the word by telling all your friends too!
Property Investor Toolkit – here is the book link on amazon.co.uk & amazon.com in case you would like to get yourself a copy to accompany this series
Transcription of the show
They just had so much to say! This is the first part of a panel discussion around finding funds, our second property core skill.
Join me, Bronwen Vearcombe, Nana Piersie, Dominick Hardy and Anthony Boyce as we talk this week about institutional finance and a glimpse into alternative finance two.
There’s plenty of common ground and a few surprises too in this topic, so join us to learn more....
Property Chatter
Welcome to the property voice podcast helping you to navigate safely through the world of property investing, get the lowdown and updates, insights and outcomes on all matters property with a splash of entertainment along the way, the property voice or voice to trust among the crowd. Now, let's get started with your host, Richard Brown.
Hello, and welcome to another episode of the property voice podcast. My name is Richard Brown. And as always, it's a pleasure to have you join me again on the show today. Well, we're now well into the series on property core skills. We've covered off our first one over the last over the first couple of weeks of the series, which was finding deals and now we're into the second one, which is finding funds. Last week, of course, was what I call content week was it was just me. And this week, I'm joined by some friends in my community and contacts. And it's a panel discussion. And inevitably, as these things go with the positive voice podcast, in particular, the panel discussion was a little bit longer this week, so was a little bit borderline last time out. But they managed to squeeze it into one episode. Hopefully, you managed to listen to that in one sitting. But if not, maybe the dog did an extra couple of laps around the block, or you did an extra couple of laps around the block yourself if you perhaps got your gym shoes on something. But this week, yeah, it was gonna be stretching it a little bit. So what I've decided to do is make it a two-parter. So we're gonna have to part one this week. And we're going to pick it up clearly with part two next week. So in terms of finding funds, I kind of framed things last time out why, by saying we're going to look at three distinct areas, which is institutional finance, alternative finance, and creative finance. And this week obviously will focus primarily on the institutional and some of the alternatives. And we're going to get through, you know, quite an interesting array of topics, we talked about some buy to let mortgages, some bridging finance, and development, finance. And then we're gonna start to look at, you know, some more alternative financial structures and deals structuring really, in terms of joint ventures or private loans, or even land joint ventures, you know, a hybrid, if you like, in that sense. So, we've got the I've got the panel with me this week, they will introduce themselves for you in a second. We'll cover off the main topics, and then I'll do a quick wrap-up at the end. And then we'll call you in for next week, hopefully, so enjoy. So I think the best thing to do is we've got Bronwyn, we've got Nana, we've got Dominic, and we've got Anthony, who hopefully we're gonna make this quite a healthy, lively, vibrant conversation. And what I suggest we start with is just a quick introduction, actually, from each one of you. And I've probably given you a clue to running order, if that you'd like to follow that unless anybody would like to dive in and just steal a march. So who likes to go first and just give a quick introduction.
I'll go first. My name is Bronwyn burn, completely swear. So the Romans then can I'm a property investor, from Hampshire. So I invest in Southampton, Portsmouth, Winchester and Dover. I started investing in property about eight years ago now. And I had been a banker. So I was a career banker in the rat race, property enabled me to escape. And through various different strategies, I've been able to get the freedom to do other things. So the other thing that I do is I travel wealth now. But I wrote a book, I wrote a book, which published last year, and that's called Building your dream life. And building your dream life is all about how I escaped that rat race and what it was that I did, and my top tips and my case studies started. So if anyone's interested yet, that's a really good book. But I'm really pleased to be here because I've used so many different financing strategies along the way, because I you know, I escaped pretty quickly within two years, so I had to use different financing opportunities. So looking forward to sharing those with you.
Thanks, Bronwyn, brilliant, and yeah, we'll probably put a link to your book in the show notes as well. So that so thanks for sharing. So, thank you, Robin, who's up next time. And go next, Richard. Go for it. Donnelly.
Yeah, my name is Dominic. When a property investor for about four or five years now since 2017. I think when I first started investing seriously, I guess before that I was an accidental landlord. So I have a small, smallish portfolio mostly by HMOs and serviced accommodation And my financing for those has mostly been a combination of self-funding, some investors, and also my JV partners, a couple of JV partners, and a few deals.
Thanks, Dominic. That's great. Sweet as I was expecting, and who's up next?
I'll go. So I'm Anthony's voice. I'm based in the northeast of England, Darlington to be an exact, hot, hot market here at the moment with all the news. So what do I do? I'm an architectural designer, I own my own business. I'm a network host for the property thing networking group. I've been doing the architectural stuff for about 19 years, but only investing for probably just coming up to six now. And through that time, I've used my own funds, run out of my own funds, and then had to be a bit more creative with other people's funds. So yeah, I've in six years, I've gone from bites through my fingers. Other people have said, HMO and just coming towards commercial conversions and using larger chunks of other people's and creative ways of funding deals anyway. So hopefully, I can add something.
You can I'm sure you can. And I understand that your architectural practice is about to take off. Is that right?
Let's go with rockets. Rockets architectural design, but no, it's going well at the moment where we move in the office tomorrow. gone from sort of my bedroom just before locked down to run me and to have a staff now. So looking to recruit still so night. So yeah, it's taken off. It's going well, so far. Well may continue.
Do you forget to mention the firm? So it's just my face? Yeah, I'm not very good at the promotional stuff. And by the way, that's a really good networking meeting, if anybody's looking to you doing them face to face now, by the way. We, we were we the eighth of July, but obviously, Boris Johnson is is put the skids on that for the moment. So now would be probably August now. Yes. As soon as we're allowed, every time we sort of mentioned we're going to do one, the government locked down the country. So I was going to keep them until August now.
Say anything, please. Oh, yeah, the property thing up in Darlington is a good proper networking meeting. I can vouch for that. So check that out, everybody. And we must, you know, give nanner a warm welcome. Come on. Don't be shy.
So yeah, my name is Nana, as Richard mentioned, I'm based in Sweden. But invest in the UK I really don't have any like area because we have our rent to rents in fancy HMOs three, and then we have we're trying to compete harder in legal, one in Sheffield and one in Leeds by toilets. And we have done one flip. So we really tried everything I guess, in the lower level when trying to reach up besides that I'm still stuck in the rat race. I'm not as free as Richard and Bronwyn are, but I'm hoping that I'm getting there. Beside that. I will say I have a podcast with my fiance. It's called the Pangea flood podcast. So it's in Swedish, but we are in view. English guests. So, Richard, I've been on it was a pleasure. And yeah, I have two lovely daughters. That's me on having enough lovely women in your life now. Normally actually jumping, at least one of them is jumping all over you when you do when we're having our meeting. So I think Emily's making sure that she's, well looks after today, I guess. Right? Yeah. So she's calm? Well, so that's really great. So we've got you've probably got a bit of context. Now everybody we've got, you know, people towards the beginning, I wouldn't quite say you're a beginner and Nana, to be honest with you. But you know, and people who are further down the line, people have done different things, you know, in terms of finding funds, so hopefully good, you know, basis for a conversation. So, with that in mind, I kind of set things up with the episode, which would have gone into the air just before we did this panel discussion. And I asked everybody if they'd listened to it beforehand, and they all lied and said yes, but actually, thank you for doing that. That was really nice of you to enjoy. I mean, yeah, enjoy listening to me. So but I kind of was setting up to frame it that the way I look at finances is in three broad categories, which is what I call institutional finance. Some might call it more traditional finance. And then we've got alternative financing. And finally, we've got creative financing. And the broad difference being traditional or institution is what everybody knows about. It's the banks, it's the high streets, it's the mainstream lenders, you know, you might have heard of bought up by selling mortgages, you might have a residential mortgage, but we kind of can expand on that a little bit. And then I think it was Anthony was saying, When you've run out of your own money, then perhaps you look at alternative sources. And so alternative usually means coming from an alternative channel. And alternative means it could look like financing, but maybe comes from a different place. And then, I guess the third category is what I call creative finance. And it's not what Enron does, it's actually, you know, using contractual structures, to mimic what financing looks like, in many ways. So financing to me is all about deferring payment or getting some sort of financial contribution from a third party to your property investing activities. So it's a very broad definition, and which is why Bronwyn, I couldn't resist, I'm going to have to plug in the book, The Complete Guide to property finance. Actually, spoiler alert, has over 50 different financing techniques mentioned in it. So there we go, I couldn't help myself, I had to mention it. But I'll probably try and shut up mentioning the book now. But apart from the three broad categories, which we're going to get into, there's probably different approaches that we might consider, depending on maybe our level of experience maturity, level of funding to begin with, and what we do or don't know, and who we don't do and don't know. So let's get into the conversation, maybe we'll just start us off. So if we start with looking at more institutional financing, traditional financing, you know, is that where most people began kind of buy to let mortgages? And if so, have people ventured a little bit further, let's say to bridge finance or development, finance, was people's experience in that particular area?
I've got Yeah, I started with keeping it simple. Really, I think when you're starting out, it's, it's no, you don't really know what you don't know. And I think if you get a good education, that's really important. But finding, you know, finding that first deal that first, that first mortgage is what it's all about, really. And then once you've got that first mortgage under your belts, you know, most lenders say, well, your experience now. So you can start to shop around a bit more, and you can find that rates, rates vary. And, you know, if you've got a good broker as well, this network that you must have, and you build that up over time, then definitely, you know, you start to recognize that there are different ways of funding. So yeah, starting off, that's what I always recommend starting off with, with something fairly simple and straightforward. But of course, you know, sometimes your money doesn't stretch to beyond one if, if you're like me, so it's really, you know, you've got to start looking at alternatives fairly quickly. Yeah, so we can talk about those later that someone else might want to mention their experience, get into the alternative, and creative pretty quickly here. Because especially with the crowd around the table, but I'm just wanting to dwell on one or two things actually sent from and it doesn't, we don't all have to, you know, jump into every single comment, by the way, but two things I thought were really relevant with what you just said, One, everything we said was relevant, but I want to highlight, which was the fact of experience and know lenders, you know, look for landlord experience, often, especially if you want to get more advanced levels of financing. So sometimes you just need that biter let under your belt, you know, before you can, you know, move on to the next one. So that's the first, you know, the key observation you definitely made that I wanted to dwell on. And the second thing was the value of a broker. And, you know, a lot of people try and do it themselves. But I don't know what you found wrong when you know, is, do you think, think a broker is, is worth painful?
Definitely. Definitely is, you know, and I think, you know, my advice to the people that I teach, it's really about trying to find somebody that is perhaps also an investor themselves. So I'm not talking about someone on the high street here, I'm talking about someone that's got hold of the market. And ideally, and if they're also an investor, they understand the language, they understand the different mechanisms. Whereas if you went to a high street, you know, through the estate agent, you know, they just know what they get commissioned for. They probably don't have any experience themselves. So you know, chop around, there are plenty of different people out there and get someone that's recommended, perhaps with a from another investor.
absolutely perfect. Thank you. And so what about the other guys and really, so what about bridging Finance? What about development, Finance? Anybody looked into those sort of in this area of general institutional financing?
Yeah. So we do like Hey, runway mentor, we took the alternative. First, we bought our first one, we just cash investors. And then now two years later is the first time we take in the bridge. So we really hadn't done the normal bilateral we started with the more advanced things. But yeah, it's a learning curve.
But you've taken bridging finance. Yeah. Now Yeah. Okay, so what kind of project was that? If you don't mind me asking so that that's back to let normal bilateral instead of us buying just one property, we will buy two properties. So So money can go further.
And you're using bridging finance for one reason?
Yeah, because otherwise, our money would run out if we just did one deal. So now we can do two instead with the deposit
to really refinance them later or something, yeah. To buy to let, yeah. So to get into the deal, presumably, you're either adding value, or you got some sort of discount that you can realize, is usually why you want to take bridging finance, I'm actually trying to eke out what the purpose of bridging finance would be a fairly short arrangement, especially with the cost of borrowing on bridging finance. But just one thing on bridging is, you know, people do get a bit hung up about the interest rate, perhaps on bridging finance. But if you think of it as just the short term cost of doing business, where you can perhaps add some value or realize a discount, or potentially both on your project, then, you know, bridging has got to place, and obviously, it means you don't have to use all of your own cash, as you were saying a year.
And then opportunity, we have to figure that thing. Put that thing as well, the opportunity to do two projects at the same time rather than doing one and waiting. So I mean, it's the speed as well.
Yeah, yeah, it's a term I use deal velocity, it's just the recycling of your cash, if you can get in and out of projects if you can spread your cash across multiple projects, it allows you to do more with less. That's right, isn't it more with less Yeah. And, and say, I'm looking at you really because I know that you're into some more kind of conversion slash development start projects, if you've got involved in any of the sorts of upper end of the scale, you know, you have a bridging or development finance type of structures.
And we're just haven't got to the signing of the paperwork stages yet. But we're in the process. And like Nana's just said there, there's a deal came along, we needed to pay for it, we had another one in the pipeline already and it was the opportunity cost so we kind of in order to to get both deals, one is a commercial conversion the other one a buy to let refurb we ended up sort of buying one with cash, we're then going to apply for bridging so that we can then fund the refurb on the vital app basically. So as you say, do velocity it just makes sense. Rather than leaving chunks of cash tied up not having the money to do these things. It's it just keeps the snowball rolling rarely. In terms of other stuff, we've not had to use development finance yet we've been quite fortunate with investors, which is brilliant. But it will be coming very soon. There's a couple of deals we're doing which are just a bit bigger than we used to. Yeah, we need extra funds that's yeah Development Financial sort course. Well,
it's interesting I don't know if anybody or anybody here on the panel is used development finance from an institution Have you anybody got more Bronwyn has okay dama Brahman, just bring coming back into that. So if you've used development finance, opposite this, give us a quick snapshot of what you did and what the Sudan water?
Yes. So we bought a commercial property with land. We got planning permission for eight houses in the car park. So phase one, we got investors to invest for a fair amount of it. And we did a JV with a builder. So you know, there's a combination of strategies here. The JV with the builder meant that the build cost was capped at cost. But what we needed to do was to fund that build and pay the cost to the builder so you know that we went the traditional route. We did shop around a little bit we certainly would probably go down a slightly different route next time. But we had them ready to sell a year ago last March and we all know what happened last March and the showhome was beautiful. But no one could view that view it. So we've, we've, we've actually ended up having to pay a huge amount of interest on our development loan. And I know if I'd gone with a certain another crowd lender, we may have had a bit more flexibility there. But anyway, yes, we've paid that off. Now luckily, we've got to that. Just going through the last two is just going through conveyancing. It's just taken forever, but that's another story. Yeah, so development, finance, didn't enjoy it not flexible, huge, huge fees on rolling over because we have no choice. And I would certainly not go with them in the future. Right?
Well, it's interesting. I'm glad you brought that up. Because, you know, think development finance through an institution. So what I'm talking about here is, you know, people, you could just Google and you'd find, right. So rather than it being a friend, or you know, or even a, you know, a crowdfunding platform is the kind of alluding to, although that's borderline either way, it's, it's complex, right. And there's, there's a, you know, a lot of you need the experience to get the development, finance, but you can't get the development, finance until you got the experience. So it seems a bit of a chicken and egg situation. I found that myself and stepping out into development finances like, well, could you give me some development, finance, please? And I said, Have you got any experience in the development, exactly looking like the one you've just done, as well as the first time I've ever done it. So we'll come back when you've done one, and we might talk to you. And I was like, Okay, thanks for that. That's not very helpful. And then when you do start talking to them is okay, so we're going to send our IQs round, every time you want some money, and by the way, you're going to pay for that privilege. So you know, the fees are eye-watering as well. So, you know, I think just to paint the true picture, I think accessing department finance, as a newbie is a tough hand also, the level of fees and costs involved? Can you experience from my mother sound of it, not just the interest cost, if it if you roll over the all the fees going into it apps coming out of it, perhaps, you know, quantifying the works before the money is released to the builder? And by the way, they control who the builder is. So you can't just use your mate around the corner, necessarily, with an institution, because they will say, well, they don't have the right level of, you know, track record themselves. So it is, you know, it's good to have access to development, finance, but there's a lot of restrictions. And that perhaps, is maybe suggesting why many of the people around this table have gone away from that institutional sort of Route, perhaps? I don't know. But so why don't we Why don't we pick that up, then? So what is the alternative route? Now? Do you want to come back with that?
I have a question regarding that. So what do you suggest people? When should the, like, developers or investors use development? Finance? Is it like, do you like have a cap? Or should it be? Yeah? Well, I mean, the sort of the, I wouldn't steal ideas from bigger brains than myself. But, you know, people who tell me, there was Pyrrha Garcia, we had on the podcast a couple of years ago. And we've got Alice Williams, who, you know, has given me some advice recently, so I'm just going to pick on those two. And Virago basically says development developments define where you're substantially altering the structure of the land or the property. So it's in excess of 40%, you know, divert, you know, cost on top of the value of the land or the property would be where you start to step into development, finance, usually, there's like, rules, these rules are not hard and fast, they're kind of conflicts, but there's a substantial amount of value that you're sinking into the project. You know, rather than doing a refurb. You know, if you're doing a refurb, you might be spending 1020 30% of the property value on the refurbishment. But if you're changing, you know, if you're building something from the ground up, or if you're converting something from, you know, one use to another use, that would be where development finance kind of kicks in. That's the first thing. The second thing, though, would be what Alice was saying, she's got a good way of explaining things. And one of the things I picked up from her was the idea of experience again, so we talk about the experience. So I the problem I found is, you know, I'm an experienced investor, and I was experienced, I'd done conversions and, you know, Brr style projects and things like that, before I had my first development project, but I had my first development projects and the institutions we're looking at, you know, particularly. And so what he says is something you know, experiences relevant, you know, when you go for institutional development, finance, but you can borrow the experience and that's that She uses borrowed experience. And I thought that was really handy because you can borrow the experience by maybe buddying up. So it could be with another investor who's got the experience, it could be a builder who's got the experience, you could have the borrowed experience from the team that you're working with so that you learn more on them rather than yourself. You go what actually have all these professionals working with me. So that's the sort of main ways in which you can borrow the experience and perhaps gain access to development, finance, even if your own developer CV doesn't suggest that you have the track record to quantify. So thanks for the question. And that's why I would say, but the good news is, and this is where I'm gonna queue up really, even though the bloodied, I mean, the lenders wouldn't entertain the idea of development finance with me, there were some private individuals, and alternative platforms that, you know, we're happy to go, Richard, you're like a decent guy, you've got, you know, all this experience or these properties behind you. As long as you do it, right. Yeah, we're back here. And so that took me into more the alternative financing stream, that's where I want to go now with a partner conversation. So basically, if you've got a good broker, whether it's for vital Act, or bridging or development, finance, go and talk to them, they'll probably tell you much more than I certainly could, I can't speak for everybody on the panel. But what we can probably take us down now is looking at alternative forms of financing. So that's, it looks and feels like finance, but perhaps it comes from an alternative source. So who'd like to talk about what they've done in that area, and dominant men really got much from you so far. So what do we get you starting off here? If that's okay.
Yeah, sure. So I've on one project at funding from an investor. So a loan of about 50,000, if I remember, rightly, to help refurb purchasing refurb property. So obviously, that was a short-term loan with higher rates than you might get from a bank robber, it's a lot easier to access. And then as well as that, I've used JV partners as well. So I've gone and 5050 on some projects, quite a few projects, actually, a couple of JV partners. So yeah, as well as institutional investors, those two have been my main sources of Finance.
was what something you said that actually really resonated with me, you said easier to access?
Well, David, the lender was someone within my network. So obviously, someone who knew my track record and trusted me. So basically, based on my past history, they were willing to, to loan me the money, not without a kind of any security in place, obviously, when it was a lot less security than I would have got, you know, from a bank or from bridging lender or anything like that. So, yeah, yeah. So access to a network. And by the way, I guess it wasn't computer says no.
Exactly. So yeah. Pretty much straightforward.
Straightforward with any of the benefits you can think of. In what respects? Well, was it quicker was
Definitely much quicker, definitely much less paperwork. Yeah. I mean, I've had mortgages, like, just buy collect mortgages for taking months and months to complete. And this is obviously like, a couple of weeks. So a lot simpler now.
That's that was focusing more on that sort of more private loan by Sam. Yes, indeed. Yeah. And then you also said you've done joint ventures.
Yes, I've done some joint ventures with a couple of business partners. So we've basically gone in 5050 on a number of projects now. So again, that's people within my network, family and and work colleagues basically, with my day job. So they again know what I do looked at past projects and track record and have a great year to get to go in on a project and on a 5050 kind of split basis and profit and expenses.
So it's good I probably want to get into maybe some of the detail of like, how I found those people to invest with you but before we do, let's probably just bring everybody else into the conversation and just get through in terms of alternative financing. You know, what have other people done it? We've done similar things to Dominic or different things. You don't need permission now go for it. He's putting his hand up is so polite.
Yeah. Yeah. So we actually flip we did. We structured it si JV. So the person came in With the funds, and we said he will get 30% of the profit of the sale price done. And then afterwards, it's now gone on to a private loan. And now it was the term was, as long as we're not in a project, you won't get no interest. So we really structured really good on afterwards.
So you've done like a joint venture, you managed to get kind of payment, almost like a facility by the sound of it. So you will pay when you actually use the money in a project. Is that better?
Yeah. That's how we because we're not doing flips at the moment, or we wasn't, who knows with this current market? But we wasn't. And then we said, okay, so do you still want to invest with us? And he said, Yes. But then now, we will need to have when we find a project, then your money will start working. Otherwise, it will. And he said, It's fine, because he made a lot of profit on the other one. Sounds good.
Sounds good. Okay, and so Anthony, you're off, you're off mute. So you poised. Fingers in it.
We've just in the in the midst of trying to set up something creative with, with with an owner. So it's a it's a commercial conversion. Again, it's already got planning beside that out already got building regs, actually as well. The guy the owner is a bit of a developer handyman himself. So we've got him and said, Look, you know, at the end of the day, we're after 20 30% profit so that we can refinance at the end onto a traditional commercial mortgage, we're going to run needs a serviced accommodation. So that's how much we're gonna make four times, however, many flats, or sorry, 44 times flats, this is how much our development costs, we reckon. So this is how much we can afford, you know, after our profit. This is how much we can afford to pay you. So he's, he's happy with that. And even during the conversation, he's actually said, Well, I don't actually need the money now. So we can we can discuss that at a later time. So we're actually setting up an SPV at the moment a JV between us all will be where basically, his shares are paid off at the end of the project. So once the finances is gone, he gets his percentage plus, well, basically a percentage of whatever the the re ballasts he sails off into the sunset, and we keep them long term. And that's one of the more creative ones we've done. So far. Anyway,
that's like when a property slash landowner joint venture?
Yeah, yeah, yeah, as I say, just keeping him in the deal as long as he needs to. Just so it's what basically the benefit of doing that is, there's no charge on the property. So by bringing them into the SPV, the company owns the property, we can then apply for development, finance, or bridging, or whatever else, because they're gonna want the first charge on the property. So it just has a massive benefit when it comes to funding the development. Really.
Yeah, that's what I was going to ask. You said the actual development costs themselves, you're going to be funding through some form of financial structure. Right,
exactly. So as you've pointed out, we'll have fees and legals and they certainly have to pay. But ultimately, it's going to have cash flow from other things, it's going to be a relatively low money in deal, hopefully, by the end of it.
Okay. So that's an interesting structure. I'd love to dig deep into that. But beforehand, Bronwyn, I'd like to bring you back into the conversation in terms of the alternative.
Yeah, so I've been working with other people's money has been really critical for us in the first 12 months, really. So finding investors, friends, family, people, colleagues, you know, anyone who might be interested in, in perhaps benefiting? And that's that's the point, can they benefit from my knowledge, and get a better return than if they left their money in the bank. So that's very much the approach that I took early days. And then we've done some more, you know, once she wants you to do something, even if it's just a cash flow loan for six months, you know, you're building trust with that person, and then they get more interested. So I think one of the more interesting ones we did was a conversion of out of a house to six flats. And that was a special purpose vehicle SPV. And we brought investors in as Joint Venture Partners. But we were doing all the work, and they were the ones putting the money in. And then the plan was to sell the flats at the end of it. Now that was quite a big case study around this, if anyone's interested. I'm happy to share that with them. But, you know, the great thing there was that they were investors that had invested with us, maybe once Before, and then one of those investors brought another investor in with him. So their network is fantastic. But you know that in a JV, you're sharing risk. So it's a very different situation than a straightforward loan to you personally. And you know, there's all sorts of things, you've got to be aware of FCA regulations. Are they high net worth sophisticated lenders, sophisticated investors? And so, you know, you do have to be wary of that when you're borrowing from other people. But this six strategy? Yeah, it was. It wasn't straightforward. It was always complicated. They always are. There are delays, there are issues. But you know, when you've got investors that can come around and come view it, and maybe look at one of them looked after the bank account, he was an accountant. So I said, Great, you look after the bank for us, you pay the bills, we'll get them involved, then, you know, that worked really well. And, yeah, so we, I think, you know, with a complicated project like that, you've got to, you've got to pull it together as an investor pack, so that you've got something to give to potential investor so that they can see what the ins and outs are and the risks. So that's probably a more complicated example of what we've done.
Right? I'd say, I mean, I think you know, everyone's giving some really good examples about, I'm going to use the phrase, and then I'm going to give you a view about it. And I want to see your reactions as I use the phrase, which is using other people's money, right. So using other people's money, sounds very cold, heartless, ruthless, impersonal to me. But we know what we mean by that, right? We're utilizing other people's financial resources for a win win outcome, I think the other point was kind of came out. And it's also about relationship is also about, you know, giving something back to the other party and getting some kind of involvement doesn't necessarily have to be writing the checks or processing the bank payments, but, you know, just being part of something. So would you just take us into that direction using other people's money? What do we think, you know, is it about using money? Or is it about something else? can I build on that theme? I
mean, I think initially, I mean, when when you mentioned that, I think the first few times, we did it, when we'd kind of run out of money, we we've leaned on family members and offered them a return, it did almost seem like, like over sweet failed, or it was, as you said, a bit of a dirty way of saying it dirty words, you know, we've, we're using other people's money, what are we doing wrong, but once you get your head around the concept, and I think as Bronwyn, said, you are offering a service, you know, people some people like to learn. So you know, it's amazing when you go to site, even on just a buy to let refurb the things that they've not seen before. So there's, there's an educational part of it, some people just like, you know, like their return at the end of the year. If you're offering a service, and it's, as you say, they can be as interested as not as, as they want to be rarely. So yeah, it's Well, once you get over it's, it's, it's a good thing for everyone, I think. Yeah,
I mean, I agree, one of my JV partners, dad had like a lump of cash in a nicer zone. And I don't know what it was only like one, one and a half percent, something like that, I think major, so only too happy to, to learn how to make and to go 5050 on a project. And I haven't worked out exactly what the income has been on that, but it's a lot more than he was earning on his eisah. So when when for for everybody really?
Yeah, I think the important thing, when you're talking to investors is never really to ask for money. It's more about what is it that they want to need? And what are they interested in? You know, and if they're, if they're not interested in property, and they think property is really risky, you know, it's unlikely they're going to want to be involved, but the ones where their eyes light up, and I had a gas service engineers, as one of my investors, you know, he actually stopped his job on my boiler, and he said, Oh, you're doing property, I'm really interested in property. And I'm like, Oh, okay. And, you know, he became, is now a really good JV investor with me. But, you know, it took a couple of years, to get to that point when doing a JV was potentially doable for him. But you know, fantastic, you know, it's just, it's a real win for the other person. And that's the way to look at it, rather than thinking, Oh, my goodness, it's a big responsibility as well. But you actually, they are actually benefiting from your knowledge. And that's, that's, that's the great thing.
Yeah, that's just to dwell on that. I mean, it's come out a couple of times now from a couple of you. And, you know, I phrase it, you know, let me let me just put it this way. I remember somebody once saying to me, something on the lines of, but I'm, I'm putting all the money in, so I'm taking all the risk, you know, and words that effect, and I was like, well, it's not actually Like that, you know, there's there's an awful lot of value that I'm bringing to the to the party, if that person is bringing all of the money that's got to value, the contacts the deal, the know how, you know, actually managing acts, you know, the delivery safeguarding their their best interest is the network that I've got, etc, etc, etc. I'm sure wherever I can see from you're nodding, as I'm sort of relaying that. So there's a value beyond money.
There we go. That's the end of part one, sort of on a cliffhanger I, when I've actually done the Edit is going to start talking about part two, I was thinking No, no, I need to save that for the second part. So you won't know what I'm talking about here list part two, of course, but many, many things, obviously, to Anthony, to Dominic, Nana, and Bronwyn, who join me on the panel for this discussion. And it's really interesting to get other people's insights, not only because they have slightly different perspectives at times, but also they have some similar points of view at times. And it's really interesting to hear the differences are also similarities. And then that started to come out in part one of this conversation. And I think you'll find it'll come out more in part two. So we talked a bit about, you know, the the sort of more institutional finances some of the alternative financing. And let's face it, it's more interesting, as we get into more the alternative and the creative financing. And I think one of the cues was the get a good broker, basically, get a good broker, and then you can access most of the institutional financing options and find out what they are that way. But some of the unspoken stuff is around alternative and creative. So we're getting to the juicy bits now. And I've probably left you, hopefully wanting more. So please come back next week and listen to some more. As we pick up part two of this conversation, this panel conversation around finding funds. So the show notes are going to be over the website, the property voice.net. So you can find that along with links to some of the resources that I mentioned and some of the social media links for our panelists. So you'll find those there. And equally, if you'd like to talk about anything from today's show, or or have an introduction to any of the panelists, you can always drop me an email podcast at the property voice dotnet be delighted to hear from you and obviously make any introductions that are perhaps necessary, or that you'd like. But I guess all that remains to be said this week is thanks very much for listening once again to the property wars podcast this week. And until next time.
Thank you for listening today. Now head over to thepropertyvoice.net. For more inspirational content and get updates through our mailing list. Join us next time on the property voice podcast and if you enjoyed the show, please don't forget to rate us on iTunes.
Transcribed by https://otter.ai