I share fun, interesting and actionable property related content on my channel, from my years of experience from owning property in the UK, US and Australia.
I built up a successful career in IT before deciding to quit the daily grind and work on my own terms, starting several businesses along the way and investing the profits into property. I'm passionate about property and started in residential buy to lets in London building a million pound property portolio in my 20's, that has since progessed to commercial property in the US and UK.
I know you try to find properties that have long-term tenants in place, but would be interesting if you could do a video about commercial properties becoming vacant. I imagine commercial properties are harder to find new tenants, and would be interesting to understand your insights on the landlord being liable for business rates. Honestly, it is these aspects that worry me about investing in commercial property.
Although the numbers may appear good as presented, let's face it, they're not realistic. There will always be some refurb costs, especially at this price point. Also, as the properties are flung all over the place, you'd have to allow for a management company, then ongoing repairs, possibly costs to bring them up to a 'C' rating, periods for un-occupation, cleaning / inventory at changeover etc. Not sure if 80% BTL is realistic, but many interest only motgages also carry hefty arrangement fees. Once all this is factored in, some of these deals no longer appear viable. It would be nice to see realistic and accurate budgeting. Otherwise, investors could be managing a large portfolio and not actually generating any income at all. Our money is for investing wisely, not viewing the world with rose-tinted spectacles.
I included all the numbers you need. If you’re refurbishing a property you would make sure it’s EPC C as a minimum. I was not advocating interest only mortgages in fact you should use repayment and own property debt free. It’s 75% LTV. Again if you have just refurbished a property it’s likely you will not have many repairs to do for several years. Thanks for taking the time to comment though.
Thank you so much for this video! My partner and I are London based and branching out into the US and are trying to figure things out on our own so this is priceless coming from a Brit. Here we have Zoopla sold prices to know values and sold prices on a road, down to the door number. Can you do a video on how to find this out in America? Stumbling around Zillow trying to find this info atm. Also there are loads of rental videos, do you know much about flipping out there?
I really like your delivery. It's calm and easy to listen to. I hate property people who shout and use stupid phrases like 'wads of cash' etc....instant distrust for me.
Wow interesting to hear all the detailed costs like that and also that guests expect a 24 hour on call service. I wouldn't do that, just have an email address and that is all. Is that possible do you think?
Great videos! If I invest in properties in multiple states, will I need an attorney/accountant/realtor for each state etc and will this make the investment less worthwhile?
No you can have one accountant for all your investments. I used a different attorney but it’s per transaction so it’s no different to using different solicitors here. Realtors help you buy/sell property - again per transaction. I hope that helps
Iv just come into roughly 80k my plan was to put that into commercial straight away but now youve said we need to at least have 1 BTL property for experience. thats nipped my plans in the bud😂, what ill have to do now then is break that down into 1-2 BTL re mortgage or sell then go from there i suppose🤔 am i on the right track?
Location it’s important as land values will impact capital growth. The rental income also drives the value and so can be impacted quickly, if for example you get a higher or lower rent.
Interesting video - I plan to move into commercial property in the not too distant future. In this market what interest rate are you paying for a A1 tenant? I’m finding the yields are pretty low for properties with really strong covenants. But I really need to get educated in this department
You'll find that the yield will vary by location, but you can find exceptions. I would be looking to get minimum 8% yield and you can still get great tenants such as the NHS on long leases in the south east at 10% yield but you need to spend more money on the property.
If the gross rent you make is the net rent you receive and you have no tenant hassles or concerns about legislation changes and there are future opportunities to manufacture growth either from capital appreciation of cash flow then it could be something to consider.
My favourite website to find commercial property are Zoopla and LoopNet. RightMove is making a come back though with commercial but the search has limitations.
Not unless the cap rates are over 20%. I can buy 15 year leases properties in the UK and earn GBP and understand the market dynamics better here. The reward would need to outway the risk.
I am looking to buy first commercial and I could get a decent cashflow with my 150k but then Ill be left trying to save up again but then I could do another live in flip with 50k + loans and then have 80k left of investing in commercial but that doesn't go far. Should I go all in for cashflow and then save up again or should I do another live in flip?
You can still manufacture growth with commercial simply by putting a tenant in a vacant property. You buy it for £150k get a tenant that pays £25k+ in rent, the new value can then easily be worth £300k, you refinance at 75% LTV and go again.
Hiya, whats the best way to purchase property in the US as a non-US citizen? As an individual or under a company name like here in the UK? And where would you start with in terms of lenders and securing financing?
What about tax? Have you calculated that? You would have to pay tax now on the full amount of rent regardless mortgage payments, wouldn't you? Wouldn't you get into negative return? Thanks
Stephen! thanks again for your continued teaching - you're very watchable. I just want to ask a question about qualifying a commercial to residential purchase...Is there a rule of thumb, or sum I can use for a quick assessment of something being a good deal....Say, is there a ratio I can use to show ideal difference between purchase price/per/sq/ft to end value price/per/sq/ft?...I'm asking because knowing the difference would tell me if it would cover rebuild costs and a profit...Many thanks!
Thanks for the kind words. There’s no ratio that would make sense across the country. Unfortunately at a high level, you need to analyse each deal on the local market price per sq ft/m for residential take of your conversion build cost per sq ft and then make sure you buy commercial below that per sqft and adding your profit margin.
@@StephenDuncombetv Thanks Stephen!.....sorry, could you just explain the second part of your answer again? '...for residential take of your conversion build cost per sq ft and then make sure you buy commercial below that per sqft and adding your profit margin.' ( My plan is to do a commercial to residential conv.).
Do you think the expenses go down over time or up? Likewise the rent will go up over time. But essentially this is my experience, everyone sees things differently and what seems less attractive to some, is fine for others. Try it and see for yourself unless you feel there is a better way to make more money in a quicker time with less risk and less aggravation.
Hey Stephen, would it not be worth getting a commercial property management company to manage the unit and the tenants, so you could just collect the rent and sit back? or is there a specific reason you manage them yourself?
I did get a management company to look after them! You can never sit back and relax with a management company unless the tenant and lease are right, and then you don’t need a management company.
@@StephenDuncombetv Cheers Stephen appreciate you getting back to me, so basically as long as you do your due diligence and have the right lease in place you can save yourself fees aha
I have a commercial warehouse similar to this, I use half of it for my company and rent out the other half and it’s been 2 years but lately they have been paying late talking like 2-3 weeks they are starting to have liquidity issues
Thanks, So you have to opt to tax all properties you are interested in at any auction? Even if you are unsuccessful with them? What if you are not vat registered at exchange of contracts (new SPV)? Does togc not apply?
