Furious doesn’t even cut it.

How could my letting agent get the rental amount so terribly wrong that it obliterates my cashflow?! The worst part is I could have avoided this by doing one simple thing.

…I’ve just returned from an anger run (spontaneously going for a run to pound out the anger). It didn’t work. I am still angry. Or more accurately, I am still frustrated at myself for letting this happen.

The tragic tale

A nicely renovated rental property should have been let for £1175 per month. Instead, a letting agent let it for £775 per month. A painful £400 per month loss. It hurts me thinking about it. The amount doesn’t even cover the cost of the bedroom furniture.

Despite my repeated explanations of how much each room costs, it clearly wasn’t heard by this letting agent.

Now the letting agent and I have this disagreement. Neither of us have proof of what was said and agreed. I just my agreement with them and the rental amount was left blank. Therefore no one can point any blame fingers. We just have to accept the situation, and accept it sucks.

Today I learned how crucial it is to immediately email across all details of verbal agreements: always leave paper trails.

You are doing this to cover your backside. Do not assume people have heard what you have said. Do not assume you are being overly anal by following up important conversations with an email.

How to avoid this tragedy

Following up conversations with an email confirming the details is a simple, logical thing to do. In fact I bet everyone reading this does it. I feel like an absolute plonker for failing. Truth be told, another reason for failing to do this is sheer laziness.

After all my verbal agreements with this letting agent I had to rush somewhere else in the car. Obviously I can’t email and drive so here’s some practical advice to myself and everyone else who has every been in this situation:

• Explain I have to rush somewhere and ask them to confirm what we discussed VIA email. Then put a reminder on my phone to email them that evening in case they forgot.
• Email them straight away from my car, even if it means potentially being late to my next appointment. It is worth it in the long term.

I thought I could save time by cutting this corner and not leaving a written trial.

Nope.

I have caused more hassle for myself and need to spend even more time correcting my mistake; not to mention cope with the reduction of income. I never want to be in this position again and hope you avoid it too.

I don’t care how well I get on with an agent or how much verbal reassurance they have given me, I am leaving a written trial of what we discussed!

With one agent I had had a previous issue with (they didn’t pay my rent on time), I sat in his office and got him to send me an email there and then confirming the rental payment will be made within 7 days of the tenant moving in. He even fought this a little and said “It’s all good I will send it later.” I said “No. Give me peace of mind and send it now.”

And he did.

At the beginning of my journey I would never speak to anyone like this, it feels too pushy. Having been burned more times then I care to remember I do not give a monkeys how it comes across. I need to protect myself. This is my business. My livelihood.

To conclude: Leave paper trails and emails to avoid tragic tales.

If you found this article helpful and useful, please do share it with your friends and give us a comment below.

• Why do you hate yourself so much?
• Never Give Up – A short story from my property journey
• The truth about positive thinking
• 7 attitudes that cause success paralysis
• 5 more attitudes that paralyse your success
• 7 cures for self-sabotage behaviour
• Five simple actions that provide a major life boost
• WTF should I do with my life?

Yesterday I offered to take a new friend on some viewings with me. Viewings can be intimidating, especially at the beginning when you have no clue what the heck you are meant to be looking for.

The Aesthetics

I got really good at looking up, squinting my eyes (no Asian jokes please) and making inquisitive faces at the ceiling. Then I expanded my range and made an inquisitive face at the walls, the flooring, the gutters, the roof tiles.

But that’s the only face I had. I was like Derek from Zoolander, I only had one look (One look?!).

Must have looked like a right duckhead. Anyway, to look more professional I created a simple viewing sheet checklist which I am going to share with you here –> Viewing sheet.

From the checklist, I was then able to calculate rough renovation costs.

The viewing sheet helped jog my memory of the property once I got home and was doing my calculations.

Check out the sheet here. As time goes on you will want to amend it to suit your needs better.

I will now guide you through the sheet and explain why I think each point is important. This is based on my subjective experience and what I have learnt so far, so please ask others for their experience too.

How to use the sheet

Awesome. Now you have a few ideas of what to look for you have no excuses. Book three viewings, print off some viewing sheets and see what happens. Also, once you’ve got a better understanding of how the viewing process works, you can use the viewing sheet to help guide less experienced members of your team through property viewings. This will free up your time and you’ll be able to do even more work.

Good luck!

Jess x

Thanks for reading, you should join our 1,000+ member Financial Freedom coaching community, and share this article using the buttons below. If you enjoyed this guide I’ve written a load more, here are my personal favourites:

• A practical guide to answering the question “WTF should I do with my life?”
• The dumber-than-dummies guide to letting agreements
• How I was able to raise £250,000 in 7 days

In his previous post, Dean Morrison, director of the Athome group, revealed the inner workings of why banks won’t give you a mortgage. In this article, he shows you exactly what you can do to get one. 

It is not merely enough for you to know that you are of good character with a good credit record when you make a mortgage application. You need to actively assess your relevant “data” and understand how closely it matches what the lender’s algorithm wants. You need to get into this mindset.

So, what do we need to do to make us the perfect match for a lender’s computer? In the following paragraphs, I will outline what mortgage bank algorithms typically look at.

Before we start, it needs to be said that there is no such thing as a “credit score”. It doesn’t exist. “Credit Scores” were invented by CRAs (Credit Reference Agencies), such as Equifax and Experian, in order to sell their value-added services. Don’t get fooled and don’t waste your money. Remember, all that matters are the facts (or data) contained in your credit file and whether it matches the data that the algorithm is looking for.

7 key criteria of a lender’s algorithm

1.) Enrol to vote

According to the banks, someone who has enrolled to vote is less likely to be delinquent on a credit account. To the logical person, it makes no sense that the mere act of enrolling to vote should have an impact on how responsible for credit you are. The algorithm likes it when you are on the electoral roll.

Maybe you don’t vote? Disillusioned with politics? So what! It’s irrelevant. Remember, all they care about is matching your data (“enrolled to vote” or “not enrolled to vote”) with the millions of other customers that have been through its system and the correlation is that those who are enrolled to vote are less likely to be a credit risk. Go figure.

2.) Don’t move house

The algorithm loves stability.  It loves you when you stay at the same address for a long time.  Those that move frequently are more prone to credit issues.  This does make a little sense but, unfortunately, brings up a lot of false positives because some of the most successful people are those that relocate often. If you are one who constantly moves houses or flats, (like many in London) then you need to be aware that this is seen as a negative by mortgage lenders.

3.) Get a landline

I don’t even know the number of my own home phone.  I don’t even think I have a handset, and I can’t remember the last time I made a call from a landline but I do have one.  I do because, again, the algorithm finds something very positive about those who have landlines as they seem to be similar to (or correlate well with) those customers that have historically been less of a risk.

4.) Be boring and stick with the same bank account

Few of us think of our current account as being a credit tool, but as most current accounts allow for over-drawing they are legally considered to be credit accounts. So usage can affect your credit file. Don’t change current accounts willy nilly. Even if a new bank offers you cash back or other incentives, resist. Stick with the same account for years. Boring equals stability. Boring gets you credit. Boring makes the algorithm really like you.

5.) Don’t be a credit tart

Every time you apply for a credit account, the lender does a search on your credit file.  More often than not, this leaves a “hard footprint” on your credit file.  A hard footprint is an indicator that a lender has searched for your file and every other lender searching your file subsequently can see this.  Lenders (or more accurately, algorithms) don’t like seeing other lenders searching your file as it correlates with those who have previously submitted fraudulent applications. So don’t risk it, space all credit applications (even mobile phone applications) a few months apart to be safe.

6.) Get a credit card

How you use a credit card is a great indicator of your relationship with credit.  Lenders make money from you by giving you credit.  The ideal customer to a lender is someone who accepts an appropriate level of credit, uses this credit, and pays off this credit each month on time.  If you don’t like credit cards, then you need to learn to love them. They are your tool to a good credit file.  They are a means to an end, with that end being establishing a good credit file and not necessarily establishing an expensive lifestyle.  The correlation between those who are responsible users of credit cards and those who are less of a credit risk is easier to understand. Although the problem can generate a false positive on those who never use credit cards (because you don’t need to) being wrongly correlated with those who are a credit risk.

If you don’t use credit cards because you don’t trust yourself, then how can you expect a bank to trust you with a mortgage? Don’t let the algorithm screen you out.  Go and apply for a credit card, use it, pay it off at the end of the month. Rinse and repeat.  Then, after four or more months apply for another card as you remember not to have too many credit applications at the same time.

7.) Always pay on time

Pay your credit accounts on time ALWAYS.  If you have a dispute, pay the bill first and argue later.  Never, ever allow your account to be delinquent by even a penny.  This will flag up on your credit file and you will be shut out of 99 per cent of mortgages for years.  Once that red flag is there it is almost impossible to remove.  Make sure every credit account is on direct debit so you never put yourself in a position where you will be denied credit because you forgot to pay on time and were a few days late.

This is crucial.

Many applicants believe that they should have a good credit file because they have always paid their credit accounts on time.  Well, the news is that lenders expect this at the very minimum.  You get no positive points for paying on time but you get totally screened out if you ever miss a payment.

Monitoring Yourself

How do you monitor your credit file? Simple, subscribe to one or all of the three CRAs to keep an active eye on your progress and to identify areas of concern or mistakes. Sometimes an old or dormant utility account that has an incorrect entry may be the reason why you have been denied credit. Sometimes there is a problem with your address meaning that they can’t match you up with the electoral role. You should correct every and all mistake, aggressively.

Sometimes it can take a few months to prepare yourself, sometimes you won’t achieve optimal credit algorithm attractiveness for many years. Wherever you are on this journey, you need to start planning and doing now. More than that, you need to start thinking like the algorithm.

Finally, understand that your credit file is only one aspect in which the lender assesses you.  Your application and previous dealings with the lender are equally important.  So rather than making that mortgage application thinking that it will be a breeze because you have a good income and track record, make an effort to get into the right “mindset” of an investor. Look at yourself in the same way the lender’s algorithm will.  You may not have control over all aspects of your data but at least there will be no surprises.

For daily motivational advice, wealth creation articles, and a place to ask any and all questions you may have about becoming financially free, head over to our free Financial Freedom coaching group.

Never in my life would I have expected a tenant to demand I get him a smaller bed. Since when did randy students prefer singles to doubles?! I must have missed that.

Today’s article is a quick explanation to why every landlord should provide a small double bed over a normal or large size double bed.

Double beds are the bane of my life right now. A bad newbie decision on my part, here I am thinking student tenants love double beds.

Incorrect.

Like most (including myself), students want their cake and to eat it. Students want the reassurance of knowing if they have a student affair, there is a good amount of space in the bed.

As well as the comfort of knowing if they want to add an extra large desk, there is enough floor space to accommodate it.

To be honest, can’t say I blame them.

Learning and having fun is what life is about. How can us landlord’s cater to their needs when furnishing a small room?

Small doubles with under bed storage

Speaking from experience, here is why small double beds trump double beds in rental properties every time:

1. A double divan bed will not fit up the stairs (if the stairs involve a curve).

Even if you believe the powers of optimism will get it round the curve in the staircase…I promise you, it will not fit.How ever much you tell the Bed delivery team to push the bed harder around the curve… I promise you, it will not fit.Even if you ignore the bed delivery team telling you it will not fit and try to do it yourself… it. Will. Not. Fit.

This results in humiliation, a very upset bed delivery team, you wasting time, money, and finally returning the damn thing. Eventually concluding that the person who told you to buy a small double was correct.

2. Small doubles make the room appear bigger 

Who doesn’t love a big room? A place you can stretch out (so much room for activities) and enjoy. The increased floor space makes the room far more desirable and an easy sell to potential tenants.

3. Small double beds provide more space for tenants

This means that they can add more of their own furniture, making it feel more like their home e.g. a bookcase, more drawers, an additional desk. Making them far more likely to stay in the property, and avoid the hassle of finding new tenants.

4. Small double beds help prevent requests for more furniture

You get so much storage space due to the extra space either under the bed or the use of drawers if you provide a divan. This means your tenants won’t constantly be after you for wardrobes, drawers and the like.

5. Small double beds allow for the occasional “guest”

Let’s call a spade a spade. Students will have the occasional guest. Frankly, a single bed does not cut the mustard. More space is required.Yet, double beds don’t always fit up the stairs (if a divan) or allow space for other furniture. A small double is the perfect compromise.

Also note, a bed with legs allows you to see more floor space, as opposed to a divan bed. Seeing more floor creates the illusion of a larger room. From now on, I will forget my beloved easy-to-put-together divans and stick to the small double beds with legs.

Now you can rest easy

In conclusion: buy small doubles with legs. They are cheaper, make the bedroom look more desirable, and are more practical. I like to use companies like Sublime furnishings. They deliver and install all the furniture.

If there is a British Heart Foundation store near I like using them too. It is cheap, recycles good quality furniture, and the money you spend goes towards a good cause. They don’t always have small doubles on the shop floor, but top tip: ask if they have any in their warehouse.

If you found this article helpful and useful, please do share it with your friends and give us a comment below.

We’ve got some more on-the-ground advice on land lording:
The real problem with “problem” tenants is YOU!: How to make sure you get the best tenants for your property 
Achieve any dream with buckets of rubble: We look at the things you learn about life from being a landlord
How to make a fairy tale out of Utility Management: If you’ve ever had an issue with utility management, here’s a simple fix.

We write a lot about how and why you should have big dreams. Indeed, one of the most important concepts I coach people on is how to think big. Unless we force ourselves to set huge goals, we will consistently perform at the highest level of mediocrity.

But today we’re not talking about dreaming big. Today we’re talking about doing the small things. In the one small secret to achieve massive success, we looked at the importance of starting out small. But as we’ll see in this article, doing small is of equal importance.

Dreams are achieved by taking care of the small things. If you cannot take care of the small things, your big dreams are doomed to failure. The big dreams are doomed to failure because they are built on a foundation of small things.

Be awesome in the small things and the great things will follow. Be terrible with the small things and the great things will crumble. If you cannot be good at the small things your life, work, and business is likely to crumble.

Let me illustrate this point using the metaphors of  everyday objects such as ‘O’ rings and moss.

O-Rings and dreams

If you don’t know about O-rings, here’s the story. These little fellas live all over the place including in taps. When these O-rings are even slightly damaged, you potentially have a disastrous situation. For example, in one property, an O-ring in the shower had a minuscule amount of damage, which caused a large water leak in a shower, which splashed out onto the bathroom floor, which leaked out onto the kitchen ceiling below the bathroom.

Repairing the kitchen ceiling cost £600 and a lot of my time! If only the 50p ring had been replaced. Depending on the severity of the ‘O’ ring damage:

• If the ‘O’ ring is heavily damaged, the water destruction may occur over a few days
• If the ‘O’ ring’s damage is imperceptible, the water destruction may occur over a year and eats the wooden areas over that time

If any of the things we do in life is damaged (even by a small amount), this can leak out into other areas and have dramatic consequences.

The big problem of a little moss

What about moss? How can a little moss cause damage? Depending on the condition and quality of your roof, a little moss may grow on the roof. If that moss is not cleared, then over a year or two, that moss will fall into the gutter.

Whilst in the gutter, the moss out of sight. Over time the moss build up within the gutter will eventually block the gutter, and in some severe cases cause the gutter to collapse. Both conditions will cause water ingress into your properties which will cause discomfort to your tenants and ultimately you. Especially if you suffer from asthma or eczema.

You can see where the phrase a stitch in time saves nine comes from. By dealing with the little things as soon as you have time, you will save yourself a lot of time and money. So unless you can maintain your life’s grommets then your future could be in jeopardy.

But what on Earth are life’s grommets?! What are the small things that we can do to stop ourselves from obliterating our businesses, relationships, and health?

• Being courteous “Thank you”
• Seeking Instant gratification
• Work on something you love every day

Here are some small things that people miss. If you have time, write in the comments below. Write why the small things listed are important and the adverse impact they will have later in your life if you don’t deal with them today.

• Regularly backing up your computer data (which has all your photographs, videos and important documents).
• Working on something you love doing every day
• Remembering to say “thank you” to people
• Obtaining the keys for every property you buy (instead of leaving it to the estate agent to manage).
• Putting things back where they belong. Keys in the right place. Dishes in the right place. Pens, pencils etc all being returned to the right place.
• Drinking enough water each day
• Calling people back at the time you agreed
• Following through on your agreements
• Returning the small amount you borrowed rather than waiting for the person to ask or worse forgetting about the whole matter
• Passport in the right place. Not dumped in a drawer but placed in the right place and visible by you.

Today or tomorrow the small things don’t appear to have much significance. However, over time, the larger your success, your business, your awesomeness, the more essential it will be to have a good strong foundation of the little things in your life.

If you’d like new articles straight to your newsfeed on Mondays, Wednesdays, and Fridays, Like our Facebook page.

Here are some articles that we hope you’ll find inspiring:

• Achieve any dream with buckets of rubble
• The one SMALL secret to becoming a massive success
• 5 powerfully simple ways to increase your wealth and value

As I sip on my delicious warm soya Caramel Macchiato at the ever convenient M40 Oxford service, I reflect upon my day welcoming new tenants in Coventry.

If you assume a Welcome Meeting is where you introduce yourself, learn the tenants names, and then bugger off, I envy your innocence.

If you assume a Welcome Meeting is where you introduce yourself with a big smile, bring gifts galore and ask tenants if there is anything else they need. You are wrong. That is not a Welcome Meeting, that’s a suicide mission. Don’t do it.

As I have finished patching up my wounds from last year’s suicide missions welcome meetings, here’s some essential advice on how to conduct a successful welcome meeting.

Begin professionally

I have a bad habit of trying to be mother hen and see student tenants as my little babies. If they want the sun, I want to give them the sun, moon, and stars. Anything to see a smile light up on their faces.

Since last year I said to myself “Man up Jess. This is business.”

Gone are my days of greeting people with hugs and smiles. Now it’s all about a sincere handshake blended with a “pleased to meet you” and impassive smile. I can smile and be warmer later, once the professional relationship and ground rules have been established.

Let them warm up to you as the meeting goes on.

If you become their best friend as soon as you walk through the door it is going to be extremely awkward when they ask you to provide cleaning products and toilet paper in 30 minutes time.

If you begin stern, it is less likely they will ask you for things that they normally ask their mum for. It also makes it easier to say “no” in the event that they do ask you for stupid things. If you begin stern (but fair), they will respect you more.

Set the ground rules immediately

The best piece of welcome meeting script I got given by my business partner is:

“Hi X, Y and Z. Welcome to your new home. For both our sakes it is important we have a good relationship during your stay. So before we start I am going to advise you of my pet hates, OK? Do not do any of the following:

1. Ask me for additional furniture, lightbulbs, TVs, electrical items including microwaves and kettles
2. Rearrange the furniture, damage it and then request I buy new stuff
3. Let white goods get mouldy and then request we buy them new ones

This was all explained to you before you took the rooms and I am reiterating it now so we don’t have a problem in the future. Is everyone clear? *Pause and pray for silent head nods* Great. Now we can get to the good stuff…

Things I want you to ask me about:

• Issues with the heating or electrics
• If any leaks occur
• Repairs
• Anything you would call 999 for (but obviously call them first!)”

What you’ve done is plainly told them what their role is and what your role is. They now have a better understanding of what their responsibilities are and what you can do to ensure that they have an enjoyable stay in your property.

You teach people how to treat you

Whether you are self-managing or not, you want your tenants to understand when it is appropriate to contact you (or your agent) and when it is not.

When tenants contact you over trivial things it wastes your time. It also requires you to both, say “no”, and be branded an asshole of a landlord.

Or it requires you to buy new equipment. This costs you time, money and reinforces in their heads that if they ask you for something you will say yes. How many things can you afford to say yes to before it ruins your cash-flow and reserves?

Imagine if you have bought your tenants all the bits and bobs they have asked for and suddenly their is a disaster not covered by your house insurance. Where is the money left over to pay for the repairs once its all used up on presents and the minor things requested by your tenants.

You need to understand by saying no to certain requests you are protecting the tenants and yourself. Part of your net profit per month should be put in a separate pot for repairs, maintenance and emergencies.

If you accidentally spend this pot for example by purchasing a smaller bed for the tenants because “they want more space in their room” you are helping no one.

You may think by saying “yes” to all tenant requests you are being a good Landlord. You think it will make them like you. In return they will be lovely clean tenants. They will always pay their rent on time. They will never cause you hassle. Speaking from experience, this is a TERRIBLE belief. Get rid of it now!

Seriously, I know! Because in spite of constant warnings from my mentor, I thought I knew better.  I thought he was just being unreasonable by denying so many simple requests and I paid dearly for ignoring his warnings.

Here is the reality: You are teaching tenants to treat you like their doormat with an unlimited bank account. This treatment reinforces in tenants that it is OK for them to act like a spoilt diva and demand what they think they are entitled to.

Here’s the crazy thing… if tenants and in fact any one else does act like a spoiled diva further on down the line, we only have ourselves to blame! People only know what they have been taught. Teach people with your actions.

Teach people with your actions at the very start. It is much harder to change the dynamics of a relationship once it has been established. This applies to all relationships in your life, not just relationships with tenants.

Be two steps ahead with your finances.

I assume in my cash-flow that I will not make a profit in the first month. The first month’s rent usually covers my set up costs such as furniture, minor repairs/renovations, safety certificates etc.

My business partner, who has well over 25 years’ experience in property, budgets £2000 a year for repairs, maintenance, and emergencies (obviously this figure is dependent on the type of property).

Having a budget also helps understand how much to put into the maintenance pot per month. Yes it will reduce the amount of net profit you can use for personal spending per month, but if an emergency strikes you can relax in the knowledge that the cash to resolve the problem is immediately accessible.

Hopefully you will still have funds in the pot to rollover onto next year. The idea of this pot is not to zero it out each year. It should slowly build up over time so when the property needs a new kitchen, bathroom, boiler or windows replacing in three years time, the money is there.

To recap

• Begin professionally: It sets a precedent for the relationship
• Put it out there straight away: Do not allow them to have unrealistic expectations of what you are willing to provide. It is not worth the hassle.
• Teach them how to treat you: Actions speak louder than words. Do not be afraid to say “No” to their ‘it would be nice to have’ requests. It will save you a lot of hassle in the long run.
• Be two steps ahead of your finances: Put money in a special pot for repairs, maintenance and emergencies. Let this pot build up over the years. Again, it will save you hassle in the long run.

I really enjoyed writing this post. I cannot begin to describe the hassle it caused me when I naively did the opposite of all these points. If you have any questions about the above please feel free to post them in the comments section and I will do my best to answer them.

Good luck!
Is niceness really a problem or is our writer making a mountain out of a mole hill?  Does the phrase treat them mean, keep them keen only apply to certain dating situations or does it apply to other areas too?

How to deal with the uncomfortable “problem” of niceness takes the opposite approach and if you think you understand where you should and shouldn’t be nice then take our customer services boffin quiz to find out just how good you are at working with people.

For Further Reading:-
Danielle Lavieri’s insightful blog on people pleasing

Join the Discussion:-
Surprise! Being nice…..

So you’ve taken my advice and joined the electoral role (read part 1 here), you’ve registered at a stable address, you can send and receive post from there, you’re probably thinking “What’s next Jess?!”.

It’s as “easy” as getting a credit card!

Hilariously I thought getting a credit card would be easy, they were practically giving them away to fiscally irresponsible students. Now it’s a little different, I still have my rejection letter from Santander.

There’s a real catch-22 when choosing a credit card. Some credit card companies (which coincidently offer the best benefits) only accept those with a strong track record of repaying debits; and on the other end of the scale are companies like Aqua, that specialise in giving credit cards to people with bad credit scores (and pile ridiculous interest rates on top).

Martin’s Money Saving website has a great tool. I used it to find my beloved M&S credit card. You put in your details and it gives you a list of credit cards you are most likely to be accepted for. I chose M&S because it gave me 15 months of 0% interest and when I spend money it rewards me when M&S vouchers. Although beggars can’t be too choosey it is worth seeing which ones give you the best rewards.

Note: The tool does do a ‘soft search’ on you so don’t use this tool more than you need to. Lenders can’t always see soft searches but as a general rule it is better to have as few as possible.

More does not mean a better credit score

Every time you apply for a credit card, the company does a “hard search” on you. This search stays on your credit score report. If you have too many hard searches, lenders get suspicious and may refuse to lend money to you.

Lenders criteria’s are changing all the time, but when I was applying for credit card property investors advised to not apply for more than two to four  credit cards within a six month period.

When you get one REPAY IN FULL EVERY MONTH! If you are bad with money, only use your card for weekly shopping and don’t take it out with you. I set up a direct debit from my bank so I don’t need to worry about remembering to pay it off each month. If you miss a payment or are late in paying, it negatively affects your credit score.

BE ANAL ABOUT YOUR CREDIT CARD PAYMENT DATES! Set reminders a week in advance, put reminder post it’s in your room…or simply set up a direct debit.

Now get cracking!

To summarise, your job is to convince lenders you are a safe and stable lending risk. You do this by creating a good traceable track record lenders have access to. This track record consists of having a stable location and repaying debit.

Bad credit can be a killer when it comes to acquiring property. In part two of our interview with Dean Welch, property investors Marcela Hede, Naomi Marquis, and Francine Marquis, grill Dean further into how to obtain property funding even when the banks are unwilling to lend you money for your projects.

For those with bad connections, we’ve written up the interview in note form below the video. However when you have time and a stronger internet connection, listen to Dean Welch deal with our last minute interviewers (you may get more out of it).

The notes from our interview with Dean are below the video.

The best alternative source of finance

If you have bad credit, you need to look at other financing options. One alternative financing option is a lease option. A lease option has two benefits:

1. The lease option will help you to build good property credit
2. The lease option will help you to get into property with less up front finance

Remember, you need to ensure that you have the full property acquisition amount required when the lease term comes to an end. For example, if the agreed value of the property is £100,000 pounds and you acquire the property on a ten-year lease option at £1,000, then you will need to pay the full £100,000 at the end of the ten-year lease.

A lease is also a great option to help you build credit. If you spend a year paying a lease on the property, the banks will see that you can handle debt well.This means that you’re a good investment for them.

Lease options can be difficult to find in some countries. For example in the UK residential market, many sellers and solicitors do not have sufficient education to execute on a lease option. Conversely in the UK commercial property market, lease options are a great way for companies to sell and purchase their office blocks.

How to find your first lease option

To help with this particular challenge, Dean shared some great advice on how to find lease options in the residential market.

The first port of call would be to talk to family members. A family member may have recently inherited a property that they don’t know what to do with, or maybe they simply don’t want the hassle. In general, if you’ve got on well with your family members, they will want to do their best to help you in your life journey, so your bad credit rating will not be as relevant to them as an institutional lender.

Similarly, property investors may give you a lease because if you can’t keep up with the lease payments, then they get to keep the property and the lease that’s already been paid.

Millionaire by accident

Finally, Dean offered his perspective on becoming a millionaire. A huge part of becoming a millionaire isn’t actually about the bad credit or the money that you have. Becoming a millionaire is more about the skills that you acquire on your business or property journey. For example, if you buy a house to fix-up, you learn how to manage people and a property.

The secret in Dean’s book and talk millionaire by accident is that becoming a millionaire doesn’t happen accidentally. You need to change yourself and work hard at it every day. Focus on building your skills and the money will come.

Huge thanks to Dean, Marcela Hede, Naomi Marquis, and Francine Marquis for helping us create this video of Dean’s insights. If you found Dean’s story useful, do Like the video and subscribe to the channel for more property and financial insights and strategy.

And if you’re feeling super generous, do write us a comment and share the article with your friends to help them become motivated and inspired too.

In the meantime, if you enjoy reading about people’s property success stories check out the following articles:

• Property strategy and finding funding part one with Dean Welch
• Dean Welch’s property blog
• Property secrets of a 26 year old millionaire school dropout – Ryan Windsor
• 23 jobs to becoming a property millionaire by age 23 – Stephanie Brennan
• Money or Passion – Regan Anne Hillyer

If you are starting on your own financial freedom journey, you will find the following articles from our library helpful in spring-boarding you into your life’s dream.

• Achieve any dream with buckets of rubble
• Turn your dream into reality in four stages
• The seven deadly sins of business owners
• Five simple actions that provide a major life boost

Finally, if you are interested in the lessons from other successful people who attended the JTFoxx family reunion event check out the following articles:

• Bleeding is part of success – Paul Kanofski
• Fear induced obstacles to success – Damien Elston
• Solve this Japanese Multimillionaire’s Secret Riddle – Chris Okazaki
• Money or Passion – Regan Anne Hillyer

Hey guys, we’ve got a treat for you this week!

Five years to Financial Freedom had the chance to speak with Clive Wadham-Smith, a solicitor that specialises in commercial property sales, contracts, and buying commercial properties.

In this interview, Clive talks about the most common misconceptions about solicitors, how to find the right solicitor for you, and how to ensure that relationship goes smoothly.

Right Clive, let’s cut to the chase. When it comes to property there’s a bit of tension between buyers and solicitors/conveyancers. What are the most common misconceptions about solicitors that property investors have?

Like most things personalities tend to be the main cause. Many clients, not only property investors, look on a solicitor as a necessary evil rather than as an adviser and pay them for just doing the one job, and indeed rather think they get in the way.

Whereas in fact it makes much more sense to find the right solicitor, build a rapport with him/her and use them to guide you through the deal.

Ideally, the best way to find a solicitor (like any professional adviser) is through a recommendation. But very commonly now, a buyer will just look on the Internet, or go for the one promoted by the sales agent who is usually low priced and will normally work on a “factory” basis to make this low price work.

Nothing wrong with that! However, this is never a truly professional relationship, and it’s certainly not for a commercial investor who wants (or should want) more than a quick factory transaction.

With the right solicitor, there should not be many issues. Of course, the solicitor may advise one thing and the investor want to do another, but that’s fine. The investor is paying the bill at the end of the day!

I know a lot of people who have had… less than positive relationships with solicitors, what are the three qualities property buyers should look for in a solicitor? And how can they tell if the solicitor is right for them?

In my view, the solicitor should be approachable, speak intelligently about the various legal aspects involved and have an efficient office set up with modern technology. As part of that, he or his firm should be on as many lenders panels as possible.

As I said before, if you get on with your solicitor and involve him\her properly, the relationship will be good. The more a solicitor is instructed by a client, investor or otherwise, the more he will understand the investor’s mindset and what he wants.

Obviously, paying the bill promptly at the end helps and sets the right tone for the next transaction

Following on from that, there are a lot of specialisations in the solicitor field. And some general solicitors feel they can do everything, how can you tell when you need a specialised solicitor?

The whole point about a good solicitor is that they should be like a GP doctor.

A good solicitor should be able to recognise what is needed, and deal with what they can and know who to refer to (often to an outsider) in other cases.

In a large firm, as many now are, that is not as important as they will have people who deal with all of the most common aspects of the law.

Where property investors are concerned, there are two main legal issues. These two main legal issues will be conveyancing and relatively straightforward litigation such as boundary disputes and possession claims. If the investor has built up the rapport I mentioned earlier then he\she will be able to trust them to refer as necessary

I think it’s time to put the shoe on the other foot, property investors can also cause delays by not being prepared. What are the things every solicitor wishes that house buyers knew or would sort out before they engage with them?

Finances are usually the source of most delays. A loan in principle should always be agreed in advance. The survey and some technical issues may crop up as things move along and there is no avoiding that, but having the finance generally in place will be a great help.

The other issues that cause delays usually relate to moving, which an investor will not be concerned with

Finally, how should a buyer view a solicitor’s advice? Or to put it another way, when should a property investor make their own decision taking into consideration the solicitor’s advice?

There are pros and cons to legal advice.

The pros are that it will give you the bottom line and will be very cautious and safe. After all, the solicitor does not want to get it wrong and be sued. Your solicitor also has a duty to give the best technical advice.

The cons are… that the advice will be bottom line and cautious! It is rare that a solicitor will give advice on whether for example the property will be a good commercial buy. That’s because they don’t know more than the investor. If the solicitor is wrong they will be sued, and if they are right the solicitor will not benefit!

Seriously though, the commercials are down to the client after taking legal and all other advice. Even on technical matters, the time will come “to take a view” on how serious it is. The solicitor will set out the downsides and upsides but the investor will need to weigh it all up and make a decision.

If you have something to say that can help property investors or those looking to be financially free send an email to nate @ fiveyearstofinancialfreedom.com

Huge thanks to Clive for chatting with us, you can find him on Twitter @CliveSmith, or his LinkedIn profile.

We’ve got some more fantastic interviews here:

• Ryan Windsor reveals how to turn £6,250 into £1,500,000
• 23 jobs later: A property millionaire at the age of 23
• Property secrets of a 26 year old millionaire school dropout