A-Z of Property Strategies | Part 1 With David Clouter

A-Z of Property Strategies | Part 1 With David Clouter


hi everybody i’m andrew roberts from the great property meet and welcome to this phenomenal series with mr. david clouter property expert of 40-plus years now this is going to be a video series so what I would say is there’s going to be 250 + property strategies that we cover in this series so if you like this video press the like button the subscribe button and the bell icon on the YouTube channel this video and you will be notified as we release each one of the videos in this series so David tell me a little bit give everybody here since this is video 1 in the series give everybody a real summary of your 40 plus years in property yeah I started as an accidental Landlord as a lot of people do I found I was quite good at it so I ended up leaving my day job and doing it full-time brilliant so let’s kick this off the A-Z of property strategies now where are we starting at a and where are we going to finish out with Z we’re starting with adverse possession which is pretty close to the front of the alphabet okay at the end we’ll get to zero voids which is how not to have properties empty costing you money but not bringing any income perfect so let’s kick this off adverse possession explain to me the type of strategy that it is where it sits in a property cycle the risk the reward cash versus equity time scale difficulty should I stop there and pause for breath and let you take over as the expert give me quite a headache now well adverse possession is basically taking control if you like of a property where there’s nobody that appears to be interested so it might be a sort of probate if you’re like where somebody’s died intestate and it’s a little triangle of land that has just got stinging nettles on it and nobody’s got any sort of interest in it it might be a house that is just completely rundown yeah and you go on the land registry just and you can’t find any record of it okay i was gonna say I’ve got a couple of those shall we call them land banked for the future where I have notices up on the site saying private property call this number and I effectively maintained that area so that’s the sort of thing we’re talking about where there isn’t an owner nobody can trace them it’s unregistered title generally at the Land Registry so it’s almost impossible and you’ve knocked all the doors locally to try to get hold of who it might have been so whereabouts in the property cycle would you use this you could use this at any point to the property of cycle to recap a property cycle kind of goes up so and it doesn’t really matter if you find one of these stick a notice on it or in the case of a piece of land fence it off yeah and and then after a certain period of time you could you can apply for title to be transferred to you so is this a high-risk strategy a low-risk strategy what would you say um I would say it’s very low-risk because it’s cost you one plastic wallet and a sheet of a4 paper and okay little bit of your ink on your printer yeah the rewards are quite high really because it’s some money for old rope and and and if if you’re successful which you will be in probably in the majority of cases then you can you can add to your property holdings so this is effectively an equity strategy here yeah and and takes quite a long time from from my experience you effectively have to put you notice serve ten or twelve years depending on registered unregistered title and difficulty why is this a newbie strategy is this a easy strategy or or it’s kind of medium because if I woke up one morning and somebody had put a notice on my front door I’d be a bit annoyed the way that my property might appear to be from the curb so it takes a bit of um tact and and having a right sort of approach yeah you you get to see the kinds of property that are suitable for kind of this and you can just drive around you’ll see them so um and its just something you stick with
so let’s move on to another strategy what what’s next on your a to z its airport parking so we’ve got another a an airport parking it is that an active or a passive strategy because cars move about a lot so that that’s surely active isn’t it they do know it’s kind of passive what you would do is you would give some money to the person controlling them that the parking area to control to take the revenue from one parking space in exchange for a down payment for you for a certain period of time so so you’re not there on the barrier collecting the money from the people on the ticket or looping which is quite a good thing but that the money kind of comes in and that the risk I suppose is that it’s an airport that isn’t very well used and and there’s all that your parking spot is in an obscure part of the car park that is a very long walk to the terminal that kind of things you’d need to be aware of that you will get cash flow you will get a return on your investment which will hopefully be sufficient to justify the cost of it it’s another long term timescale it’s not very difficult so it’s from what you described it’s a cash parking strategy that’s pretty hands-off so if you’re you have a job that generates a significant cash flow you can a effectively park your cash and back off yes okay parking in every sense yeah absolutely so medium risk strategy would we say this is I would say medium risk yeah and rewards again medium because you’re not going to get capital growth and you’ll get your capital back at the end of your lease you will so it’s a cash flow strategy that that’s medium reward is that what you would say yes it helps the owner or operator of the car park because it helps with their cash flow – yeah and then the money kind of trickles back to you at a much higher rate than it would do if you left it in the bank and it’s not something for a quick flip over of you cash and make a quick return it be a long term strategy would you say that’s right yes is it difficult to do this not difficult at all not difficult at all I mean okay at the point where you set it up you understand the risks you understand the returns you’re just um sign the cheque hand it over and then the money comes in yeah Oh brilliant so that’s two let’s go for another one is it another a this is another a we’re just doing a in today’s one we’re going to go okay we aged as it happens brilliant up to angels perfect angel investors in fact not the ones with wings on their shoulder they sometimes do they come in and rescue you as and you can either be an angel investor which is to say you’ve seen that program on telly Dragon’s Den yeah so it’s that kind of thing so you might be the person with the money who comes along and looks at somebody’s deal and then in return for a share of that deal you you invest and and at the same time as an angel investor you’re probably going to be taken taking an active interest in the project you’ll probably begin to be bringing your experience to bear yet so make sure that that project comes to fruition and produces a win-win outcome kind of for everybody on the other hand you might be somebody who’s really relatively experienced in experience but you’ve got lots of good ideas and then you’re looking for an angel investor to back you not only again as I say with money but with the share of those and just to clarify for those who are watching you go that’s a JV no an angel investor is not just bringing cash they’re bringing knowledge and expertise that you do not have just to clarify that point for the audience David that’s a very very important point because some JV is just what I’ll give you three percent or half of it or something we’ll do that in the J video so pulling you back on track angel investors can we do this in all parts of the cycle does it work or it the parts of the cycle where it might be a little bit more sticky yeah I do that we can certainly do it on the up we can certainly do it at the bottom where we’re trying to recover during this slippery slope bit angels tend to walk away down there risk adverse and widely so I think because well that’s why they’re angels they’ve got the cash because they got the knowledge in the experience that you haven’t got indeed so so that’s possibly the first of our strategies that we’ve discussed so far that isn’t really appropriate for all the cycle the miss the risk is some medium I suppose the rules kind of quite low for the angel but you know every once in a while I mean in the field of business or something you you’ll back a Reggae Reggae sauce or something like this but but yeah you get a diamond that’s you’ll get a gold when you’re panning that’s correct that’s correct so gold there’s a gold and silver event in our building here going on today and I wonder if they got their pans out absolutely um so so it’s obviously we’re looking at equity and the time it can be any sort of time scale this could be a quick in-and-out sort of project or it could be a much longer-term thing that the angel investor takes an interest in it could be a quick flip or something or title split or other things that we’re coming to later in the alphabet but so in terms of difficulty this is not a strategy for a newbie because you need knowledge you need experience in order to do this and you need cash to be able to put in that’s generally speaking the angel investor and strictly speaking okay there’s another strategy to the angel investi and that one is one for newbies I call an early stage investor early adopters that’s right and so let’s say I’ve just started out in property and I’m lucky enough to meet a person such as yourself then I will ask you to be my angel investor and to invest in my ice cream parlor and also to help me with the flavors and the subtle blends and nurses and the absolutely together because many businesses that we might think of as working in a completely different area one one one particular fast-food chain comes to mind which is franchise database yeah are in fact property businesses so that there’s more out there we might do that on another letter of this strategy so we won’t we won’t jump ahead day we don’t pull you back again if I make you article four that’s another a is that a strategy it is in a sense I mean it’s it’s it’s a kind of regulation there’s been brought into to Restrict if you like the spread of homes and multiple occupations in two areas which are well can I take that back one second David and just explained article four is a restriction of your rights under planning laws so it could be my office has an article 4 on it it’s not a HMO why does it have an article 4 it’s in a conservation area I have to get planning permission to change the color of my paint on the building to paint the windows because it might change the street scene so if I change it from the color that it is to a different color I need planning permission article 4 is a restriction on what you can do it’s a carry on David because you’re referring to HMOs which is this refers to a particular yeah absolutely that’s a strategy article 4 has wider repercussions but I think you know as property investors there’s possibly no way to monetize your restriction on being able to paint the outside a building unless you have a it’s a particular interest to us as a money-making strategy where there are restrictions on HMOs in a particular area which will have broad been brought into place by the local authority because they feel that there are perhaps too many of these and that we need to clamp down a bit so to put that into business terms in business effectively there’s a barrier to entry to you entering that particular marketplace and the barrier is you need to circumnavigate the planners who have put in place this restriction and basically are saying no I don’t want any more HMOs in this area or you have to jump hurdles to make the planners happy or there’s another way isn’t there that there are many ways yes in which you can you can address this well cover those in other strategies though we probably both just before Christmas last year you and I were taking part in a Facebook live where one we did a very interesting strategy from a very experienced investor an extremely experienced investor and very knowledgeable and very smart what was mentioned which is some that there are ways when we get to letter L will do land banking but what he effectively was doing was putting in applications for properties that he didn’t even own to get permission to have the to have planning for these to be HMOs which instantly to him raises the value of the item because scarcity raises the value of something and totally if something is restricted basically how it works for us is that if we have some of them and they’re restricted they’re worth more than in an area where anybody can just have them willy-nilly so to paraphrase what David has said there is this person was applying for planning permission to convert the property to HMO in an area that was not a HMO area currently but had a proposal to turn the area into an article for restricted area he was a friendly land banking potential HMOs that he could either develop and use for himself or uplift the value and sell on to other investors having secured the area and all of the HMOs in the area or potential HMOs in the area yes a preemptive strike as there goes but that’s a great way to do it if you’re if you have some HMOs in an area where in H aware article four is introduced instantly they’re worth more you’ve got more totally you’ve got more value there so this M value is will uplift your value as a result and lend you more money as a result absolutely so so so very often regulation for the smart operator can actually by reducing the competition and by increasing the scarcity of what you have it can increase the value of your product totally so works across all cycles it does it’s a medium risk because you’re having to apply for certificates of lawfulness or permit development conversions of your property so there’s some cash to spend but if you know the rules and the process and you’ve systemized it you can potentially go to town on this the reward is high would you say I would say yes absolute so would you describe it as a cash flow or an equity strategy this I would describe it as cash flow and it’s also important to distinguish and just while we’re here that getting a planning permission for a HMO where it’s very different from having an HMO license these are two very separate things that set in confuse and the planning one is the one where there are untold riches to be tapped into well it might actually be a video series we do separately which is about what is a HMO a bank has a different criteria to the planners who have a different criteria to the licensing authority the your insurance company will have a different definition again from an investment point of view and from a contract point of view so what is a hey we’ll do a video series on that just for you and don’t even get me going on sui generis there we go sorry very today we should move on so moving on give me another example of a strategy beginning with a day well I’m still thinking about that you’re building and the colors that you’re allowed to have on it and I think that you know if you did it wrong you’d have to paint it when you’d have to go outside scrapers that’s a good idea there’s another one which is called asset stripping before rewards now asset stripping might be for example if you were to buy and this happens in businesses yes as a whole and you’ve got far more experience of business coming I am I’m just a property dude asset stripping in terms of businesses is when somebody will buy a business and they will harvest the useful parts early and and and obviously this has a wider use in the world of property too because you might have your I don’t know insurance resale business or whatever it is working from an office and you can separate the elements and you might find for example regard that the actual premises from which this building is operated is perfect for converting into residential accommodation and then you might outsource the the actual business part of it to somewhere in the Philippines or something where it can be run at a much lower cost absolutely thing it’s not about kind of smashing everything but about rearranging would you say absolutely and we were having a conversation earlier today and I was sharing a little tax tip now I might do a tax tips around different strategies and there is a tax tip here where you can help somebody who is selling their business or their property with a business in it and reduce their tax bill very significantly and leverage that in your negotiation tactics now if you like that put a comment in the comments box below because I might just answer and feed you some information there in the comments box below this video because it’s a very very clever strategy and I think you know that as we’re going through this we’re going to find areas where we should step outside the box and make some separate videos about specific things I think tax is one area where we should do that because there’s a lot of little and in many cases are not very well known a bit nuggets that would be the word next nugget that’s what we’ll do so this is not a passive strategy then you’ve got to be quite active trading wouldn’t you describe it as that and does it work in all cycles and it will work in all cycles you’ve got to pick the right business and you’ve got to back the right horse and absolutely so absolutely tell you it’s a situation really where the parts are greater than the sum of the whole is it something along those lines you know where all these various parts when summed up are worth more is it risky um yes it is if you get it wrong if you get it wrong and then yes but provided you’ve done your due diligence at the at the start provided you have experience in this kind of thing and provided that the market for the thing doesn’t change very radically like there might suddenly be a lack of demand for property in the area where you bought the business or the fundamentals of the business might change these things can happen there are always bigger things going on in the world that can influence it but on the whole not too risky but okay be low unless there are big external changes so the rewards can obviously be high as well if you know what you doing so you do need knowledge and it’s a bit like being an angel investor if you watch them on Dragon’s Den this is what they do they de-risk by looking at how they can link what’s something else’s or strip something else out into their existing business so your spotting value that somebody else hasn’t spotted totally or being able to add value through your own skill knowledge and network that other people can’t or don’t have that’s right it’s a medium term strategy it’s not an overnight thing and it’s I would say it’s quite difficult because you need knowledge and experience and if you haven’t got that knowledge and experience it’s something you can gain over time but it is gonna be quite a bit well I’m just looking and we’ve shared 20 minutes of the first part of our A-Z of property strategies so if you liked this video please hit the like button if you want to see the subsequent videos hit the subscribe button and if you want to be notified instantly it’s released hit the notify button down here and we look forward to you joining us in part two of the A-Z of property strategies this is Andrew Roberts with David counter and join us at the great property meet see you next time thank you very much cheerio

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