(laughing) – So, you want to make your millions in commercial property? Well, let me tell you one thing, it’s not going to be easy. In this video I’m going to show you step-by step how I do it and how you can use some of my strategies to get started in property. I’m going to start to
reveal my property secrets. You’ll see how I identify properties that I think I can turn around
and how I turn them around to get them working for
me and making me money. (upbeat music) Don’t worry, this video isn’t
a property guru sales pitch; I’m not going to scam you
out of your hard-earned cash, I’m not going to lure you to a plush hotel and ask you to sign up for a course, I’m not even going to
try and flog you a book. All you have to do is watch
and learn from my experience. My group companies regularly
outperform the market because we operate a very simple but very successful business model. One of my most lucrative
property investment strategies involves what I call
under-performing basket case commercial property assets. What makes an asset under-performing? Well it could be a property
with a recent void, that’s property speak for it’s empty or doesn’t have a tenant, or it could have a poor management team. That’s property speak for
they just can’t be arsed. Or it could be due to
depressed market conditions. This could be a general economic slowdown or short-term uncertainty
because of an event like a general election or a referendum. It could even be a result
of investors losing favour in a particular sector of the market. So getting back to my
basket-case properties. They have the potential to
generate significant value through clever asset management. You have to take a risk to make money but you also need to mitigate that risk. I’m going to show you exactly
how we do that in this video. We’ll look at the first
stage of my formula; I’ll explain the downsides and pitfalls so you can avoid them. Warren Buffet’s number
one rule in business is never lose money. His number two rule is never lose money. Remember this rule! If you apply it to commercial property and maximise your upsides
quickly and efficiently, you’ll soon be on the path to success. Right, let’s get the boring
bit out the way first. Property can be a risky business and I don’t want to promise you the earth. If you do this wrong, you will lose money. There’s no doubt about it, you
have to mitigate your risk. Do your research, do your
homework and try to learn as much you can about
property before you jump in. Ask the property professionals, read books and have a look online. Before you do or sign anything, take professional advice from a qualified property professional, like a chartered surveyor,
and always, always, always use a specialised property solicitor. Remember, I am not offering
you bespoke property or legal advice and I
recommend that you always get professional advice and help before entering into any transactions. Okay, so back to me and my success! My team and I are commercial
property investors, entrepreneurs and asset managers. We source and asset manage
property to maximise its value and therefore investment returns. If you’ve not seen my previous video, stop right there and go back and watch it. Do it right now as it’ll
explain everything, there’s a link in the comments to make it super easy for you. So what’s our goal? We want to transform
problem, basket-case assets into stable, low-risk investment products. Sometimes we keep them
but often we sell them on. My successful business model
has four steps and they are: One, stabilisation of assets. Two, capital improvement. Three, amortisation. Four, reinvestment. To make explaining my methods even easier, I’m going to give each
section its own video. I’ll take you through a step-by-step guide to my business model and show you exactly how we get this done. Today, let’s look at
Stabilisation of Assets. I’m going to break it
down into smaller chunks of aggressive leasing,
innovative marketing solutions and cost-cutting measures. The biggest problem we have
when buying distressed assets or basket cases, is
dealing with the unknown. We aren’t going to be handed all the crucial paperwork we need, we know there will be huge gaps. There will be holes in the rental history, there will be arrears, the buildings will probably be
in need of repair and tenants if there are any, will be
fed up and dissatisfied. So where on earth do we
start with these issues? Well, I’ve always found the best way is to use a personal touch. As soon as we decide that
we’re buying a property, we have a chat with the tenants. We go and see them, discuss their problems and find solutions. We build a rapport with
them and as soon as all the legal side of things is wrapped up, we’ll meet the tenants
again to go through it all. It costs nothing to
keep tenants up to date but what a difference it can make in a professional relationship. So what happens if we take on a property and there aren’t any tenants? That’s when we turn to aggressive leasing. On average it can take up to six months to get a tenant for a commercial property. All our cashflows and models
have a void of six months. If you cut this down to three months, you have outperformed your
business plans by a whopping 50%. And the best way to do this? We employ top agents to find tenants but we also do many lettings ourselves. Here are some tips to remember. Keep a database. Yes, we use agents to do leasing for us but we also have a database of tenants we have previously let
to and potential tenants who have made an inquiry to rent a unit. Let’s say my team are
at a networking event and I’m chatting to someone
whose business is doing well. It stands to reason, they may
well expand their business and need bigger commercial premises. Or perhaps someone is looking to downsize as part of their restructuring process. We can help them with that. If we sell an investment property, we still keep in touch
with former tenants. At some point they will
want to expand or relocate and we will be the first port of call. Remember the name Dress Up America. They were existing tenant
who wanted to expand. First though, I want to tell
you about Project Contempo. We purchased a vacant building in Mill Road Industrial Estate in Linlithgow, West Lothian. We planned to refub the existing building and split it into trade counters. In the adjacent yard, we planned to build our
Project Contempo development. This a hugely ambitious
and revolutionary project. Have a look at the links below and you’ll find out why we
were so excited about it. And by the way, it wasn’t
just us who were excited. There was huge demand,
and a certain Donald Trump even wanted a piece of the action. Before buying it, we were going to split the main building into trade counters. But while we were applying
for planning permission, Dress Up had started speaking to us about finding larger premises. We decided to let the building to Dress Up as it would mean our capital
outlay in splitting up the building had been
substantially reduced. This process is called pivoting. If you want to know more about
pivoting, you’re in luck! Check out my earlier video
in my #speaklikeshaf series. It was a win/win deal for us and Dress Up. We agreed a 10-year lease and
didn’t have such a big outlay, and they had shiny new premises with excellent transport links to both Glasgow and Edinburgh. Crucially, they had a
much greater capacity to allow the business to grow. This example shows the
importance of keeping a database. Another way we aggressively lease is offering a finder’s
fee for a great tenant. Stay tuned you could bag yourself £25,000. I’m totally serious, stay tuned to find out
what you have to do. Let’s look at a finder’s fee. We attract great tenants
by offering a finder’s fee to agents and/or incentives to employees if a suitable tenant is
found by a specific date. We have used this strategy successfully on a number of occasions over the years. To see how this works,
let’s do an experiment. Normally, I’d only do
this with property agents but anyone can take part in this. We recently bought a 32,000sq
ft building in Huly Hill Road in Edinburgh for £1.9 million. I’m going to offer a £25,000 finder’s fee to anyone who introduces
me to a suitable tenant. You heard me! You’ll need an introducer’s contract pack so make sure you download it
from the link in the comments. You might think I’ve lost
it by offering that much, but let’s take a closer look at the maths. The current value of the building, remember that it’s vacant, is 1.9 million. If we get a half-decent tenant at our asking rent of 200,000, the yield could be around
8%, or perhaps even better, which puts a value of 2.5
million on the building. Our retained agents would
normally charge us 10% of the quoting rent. But by offering an incentive
we are speeding the process up. For the avoidance of doubt even
if the tenant was introduced to us by a third party
as in the above example, we would still pay our retained agents. If you want to see a real life
example of investment values, have a look at our wee
investment on Gorgie Road which is featured in the
previous video in this series. What are you waiting for? Download an introducer’s
pack, get your brain in gear, and see if you can introduce
a tenant to me for £25,000. How else do we promote our assets? Well, I’m a fan of innovative
marketing solutions. The most essential part of marketing is to take advantage of technology. It’s simply not enough to stick to boring old brochures for a property. You need to think outside the box. Remember Project Contempo? When I was trying to gauge interest, I did a spoof video for
Linkedin of Donald Trump trying to buy it from
me and the video alone resulted in 90 letting enquiries. You don’t need to do spoof videos but good quality videos are essential. Have a look at these
previous videos of ours, there’s a selection
popping up on your screen. (upbeat music) They’re a great way of getting your message
across than a brochure. Your marketing toolbox isn’t complete without video marketing, statistics show that 51.9%
of marketing professionals worldwide name video
as the type of content with the best return on investment, while 76% of business
to business marketers say it helped them increase sales. Next step, you have to build a brand. A couple of years ago, we
bought an almost vacant industrial estate in Central
Scotland for £400,000. This was a real basket-case asset. There were a few odd things
that stood out about this place. We couldn’t find it online, it
seemed to have several names, and the location was contradictory. Even while we were doing due
diligence on the purchase, we had already started
the rebranding process. The first thing we did
was to rename the estate to Bow Mains Industrial Estate. It seemed the most obvious thing to do. If we couldn’t find it, what hope did potential tenants have? Naming the property
makes it more well-known and will increase its value. I’d advise you to do your research when it comes to coming
up with a suitable name. Consider the local area,
community and history. Once you’ve sorted out a
name, think of your branding. The first thing most people
will see when they come to the building or industrial
estate is your branding. Update or repair your signage,
make sure it’s not obscured from the road or difficult to read. Keep your signage up to
date and consider different sign styles, materials,
sizes and placements. Of course, no marketing
strategy is complete without a website. As simple as it sounds, I know loads of industrial
estates that don’t have one. It’s crazy! A website is a calling
card that will help promote available buildings, services
and other key advantages to prospective tenants. Plus, once a tenant is in, it will help make finding
the estate easier, encouraging footfall if required. I’m not going to talk too
much about this estate in this video, as I am using it as a case
study for a future video. But suffice to say we made a 68% return on our investment within 14 months. You really should watch this
case study when it goes live on my YouTube channel
in a couple of weeks, so hit that subscribe button
and notification bell. If you want to know more
about building brands I have several videos on
the subject on this channel. There’s again a description in
the comments so take a look. The final part of my
stabilisation of assets looks at cost-cutting measures. Again, this could do with
a video dedicated solely to my techniques but
we’ll have a quick look at Bow Mains Industrial Estate again. This estate had a very
high turnover of tenants and the two things that stood out were legal costs and agents’ fees. Let’s take these separately. Agents are typically paid
between 7.5 and 12.5% of the first year’s rent. Bearing in mind the average tenant was in the estate for around a year, we had to find a solution
for reducing this. The idea was simple; we built a website for the estate even before we purchased it. By the time we had acquired it, the website had generated
sufficient leads for us to have the estate full
within weeks of acquisition. The best thing was our cost
of client acquisition was nil. When it came to legal costs, the key factor that decreased them was to stop issuing leases
and instead adopt a simple non-negotiable two-page licence. A licence to occupy is generally only appropriate for short-term
letting arrangements. So that’s how we take the first
steps of stabilising assets when we buy basket-case properties. Aggressive leasing, innovative
marketing and cost-cutting are all part of a tried and trusted method that I’ve used for nearly two decades. In this period of time,
I’ve done over 500 million worth of property deals, so I
know what I’m talking about. Want a piece of the action? Then don’t miss the next steps on my asset management commercial property business model videos, hit that subscribe button
for my free YouTube channel and the notification bell, and you’ll be kept bang up to date. Let me know what you think,
and get in touch if you reckon you’ve got a chance of bagging
my £25,000 finder’s fee!