Today I am in confessional mode. Listen up Jeremy Kyle, Rebel Property Coach is in the house.
I am going to come clean on one of my colossal property mistakes.
1. When you are in the game
When you are starting out in property, you need to bust a gut to chase after buyers, agents and brokers and spend ages on Rightmove to find that deal which will set you on the road to success.
When you are established in the game, once people know you are a player – in the nicest sense of the term – they come to you with the great deals.
And that’s exactly what happened one Friday night many years ago when I was having a quiet drink in my local minding my own business…
2. People are always watching you
I had seen him in the pub a few times – I knew him by sight, but not by name.
He knew my name and offered his hand.
I recognised the type – a typical East End Jack-the-lad type, but old enough and able to handle enough words to convince me he was not a joker.
3. Looking for an opportunity to sell
After a few pleasantries he got to the point. There was “a good property opportunity” he wanted to “put my way”.
It was just a short walk up the road – a petrol station which had closed about a year earlier. I knew it well. I had passed it countless times without giving it too much thought.
I noticed that there was no “FOR SALE” sign.
Bill, and that was his name, explained that he knew the owner and could swing the deal my way.
There would be some “tricky” works to be done to decommission the underground petrol tanks. On the plus side, the council were willing to allow the building of 6 storeys – 20 flats.
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4. You never have long to decide
We went back to the pub and Bill filled me in impressively on some key stuff: owner, history of the property, planning issues and purchase price.
But the thing Bill stressed most was the need for speed. The owner wanted a quick sale and would “talk” on the price which was £600,000.
5. It is easy to make the wrong decision
Now this is the confession…
I made a serious mess of that opportunity. My biggest mistakes included:
• Generally, did not move fast enough
• Was slow in carrying out a thorough due diligence analysis
• Did not work out the figures like my life depended on it
• Did not approach my mortgage broker at break neck speed
• Did not consult someone who had carried out a similar project in the past.
None of this is proof that I was a property idiot; but it was proof that I had no experience of that sort of development and did not move fast enough to get the right advice and surround myself with the right team.
To my shame, I remember having a chat with a general builder pal of mine. He thrashed the deal, telling me the likely cost of decommissioning the petrol tanks made the price “****”.
In the end, my time for making a decision ran out.
A few years later I walked past the old petrol station and saw in its place a bright, shiny, block of flats – 10 storeys high. My quick maths suggested the value of the building was at least £8m.
Of course what would have happened if I had bought the site will be forever unknown.
But one thing is undeniable; my slow, inadequate, inexperienced response probably cost me a deal of a lifetime.
Inexperienced…That is the key word.
If ever a great deal comes your way, and you lack the experience to give it a fair crack, surround yourself fast by proper property people who know the ropes.
Do you have a big fat property secret? Do you wish to share? Other readers may be able to learn from your story. Please leave your comments below.
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Rebel Property Coach
My website is: www.rebelpropertycoach.com