Categories
Blog

THE IMPORTANCE OF LEVERAGE

Leverage, along with and closely linked to Compound Interest/ Compounding Effect, is key to understanding how people make real money in property. In fact in anything. In fact it’s how people are successful. It is literally that important!⠀

“???????? ?? ??? ?????? ???? ?????? ?????? ???? ??? ?????? ?? ??? ?????? ????.” – Robert T. Kiyosaki ⠀

So we leverage our money by borrowing from the bank. That’s it isn’t it? No, No, No.⠀

We leverage absolutely everything all of the time and we HELP each other leverage.⠀

Here’s how:⠀
We leverage our Time by delegating and by employing quality people.⠀
We leverage our Knowledge by learning and having experts on hand to help⠀
We leverage our Abilities having others better able assist us.⠀

The list is endless⠀

Leverage does not mean risk, it just means we achieve more and get greater reach by using others. This does not mean exploiting others, in fact it almost always means employing and paying people to do the things they are good at.⠀

And the results are staggering when you get it right.⠀

– Andy Babbayan

Categories
Blog

We are in turbulent waters and they will only get more choppy

??? ???????? ?????? ?? ????? ?? ?????????? ?? ??? ??? ??????????; ?? ?? ?? ??? ???? ?????????’? ?????. – Peter Drucker⠀

If we are able to have clear strategy, master our market and, most importantly, have a RATIONAL APPROACH TO RISK, then there are great times ahead.⠀

Risk is sort of my thing. Some people think I am impulsive and risky in my actions, but I rarely make a mistake. Why? Risk management. If you can be rational, break risk down into component parts and mitigate and hedge against each component, then you can act deliberately and decisively with confidence! With that comes incredible competitive advantage.⠀

Most people are IRRATIONAL around risk. This is because they don’t understand the risk and follow the crowd. I have discussed making Risk work to your advantage in property, in more detail previously, you can review this by clicking the link https://buff.ly/3ahkyzJ

– Andy Babbayan: T5 Group Managing Partner & Acquisitions Director⠀

Categories
Blog

Multi Exits Identified

Following on from our focus on Risk is the need to assess your exit. If you do not have multi exits identified in the following key areas, DO NOT BUY!

  1. Use:  The more versatile the better. There will always be an A plan, the one that is projected to return the most profit, but B, C and D plans must also be potentially profitable. If only plan A is financially viable then DO NOT BUY!
  2. Rental Market: The critical R in BRRR (Buy, Refurbish, Rent, Refinance) in my view is Rent. If you are a long-term hold then it needs to produce good income. This means it needs to be robustly rentable and attractive to multiple markets. The best way to ensure this is spacious, well-proportioned and central properties. They are not always the cheapest but they are generally the easiest to rent! If you are banking on one tenant type to make money – DO NOT BUY!
  3. Sales or refinance: You have to ensure there is a market for your property. Too often people are over reliant on a commercial valuation to refinance a deal. Ensure you have a product attractive to multiple lenders and attractive to buyers. If it is not attractive to both then DO NOT BUY!

We will aim to do £30M plus worth of deals this year as we have each year for the past seven years. We are always looking for the best way for our clients to potentially achieve success through investing. Through our partnership with @LEOcrowdfunding we feel we have found an interesting and considered way to invest small and potentially build to bigger returns. We are excited to be working on our first project with them and although we are not quite ready to ‘lift the lid’ on that yet, we have some similar recent project case studies on their website now. (https://www.leocrowdfunding.com/property/detail/case-study-hmo-preston-street-brighton-by-target-five)

Get in touch to find out how you can get involved 01273 525656 or email information@targetfive.co.uk

Investment in property related assets puts your capital at risk and returns are not guaranteed. Past performance is not a reliable indicator of future success.  Please read the full risk warning at www.LEOcrowdfunding.com/risk before deciding to invest.

 

Categories
Uncategorized

What stage are you currently at in your investing in property journey?

What stage are you currently at in your investing in property journey? 

Seasoned Investor? 

Accidental Landlord? 

First Time Investor? 

It is not a ‘one size fits all’ industry.

Most of our investors have these common goals: 

  1. To achieve appropriate returns on the investment made, in line with market competition.
  2. To carefully consider the risks involved
  3. To look for financial freedom

How can we help you?

Through our various investing opportunities: 

  1. Passive Investing with our associates LEOpropcrowd
  2. Portfolio Review and Improvements
  3. Strategic Investing Opportunities 

Of course, there are no guarantees and that is a very important first lesson that we discuss in our initial meetings.  There is an element of risk that must be considered when investing in property and although we aim to invest well and offer the potential returns that we are asked for, it can sometimes not work out as planned. 

What do we do? 

Assess your needs

Find The right strategy 

Offer a few opportunities

Work with you throughout the process. 

We are always looking for the best way for our clients to potentially achieve success through investing.  Through our partnership with @Leopropcrowd we feel we have found an interesting and considered way to invest small and potentially build to bigger returns. We are excited to be working on our first project with them and although we are not quite ready to ‘lift the lid’ on that yet, we have some similar recent project case studies on their website now.  Take a look and ask any questions you have through the forum or message us directly. 

 

You can see an example here https://www.leopropcrowd.com/property/detail/case-study-hmo-preston-street-brighton-by-target-5

Risk Warning: Investment in property related assets puts your capital at risk and returns are not guaranteed.  Past performance is not a reliable indicator of future success.  

 

Categories
Blog

We often get asked how we find our new investors

We are proud to say that our existing investor clients have all come from recommendation or referral from clients who have invested with us and had proven results on completed projects where the target returns were met or surpassed.

It is not however always a fairy-tale ending and we have had our fair share of less successful projects too, but we feel it is a testament to our tenacity, resilience and consideration of an exit strategy that our clients continue to return to us and recommend us to friends, family and colleagues. Our model for conversion of large residential properties to form higher density houses of multiple occupancy to potentially achieve our clients desired yield return figures, has proven to achieve great results more often than not. You can see an example here https://www.leopropcrowd.com/property/detail/case-study-western-road-littlehampton-by-target-5 

Our client base has grown naturally since we founded in 2013. It is only recently that we have begun to promote our services and begin discussions with new and unrelated investors. We feel that our unrivalled knowledge and experience along with the unique service and opportunities on offer should be shared. 

Capital is at risk and returns are not guaranteed. Past performance is not a reliable indicator of future results. 

 

Categories
Blog

Making Risk Work To Your Advantage In Property

If you can master the risks by building expertise in certain niche areas you may make profit by treading where others dare not. Knowing the enemy can be the biggest commercial advantage you have.

My specialist area, when looked at my career as a whole, is risk and risk management. My MSc is in Risk Management. I am an ex Bomb Disposal Officer and I have held several risk-management positions in and out of the military. Then I moved into property full time. At first, it felt like a complete change; my favourite hobby became my vocation and I celebrated just how different it was to the slightly stuffy world of working in commercial defence or being an Army Officer. Then I started to notice the similarities.

Geeky bit. Risk is calculated as probability x severity/impact. How likely something is to happen, multiplied by how bad it will be if it does happen. Imagine it presented on an x and y axis; top right is high for both. Imagine playing Russian roulette with an automatic pistol (please don’t actually try this) – the severity, certain death, is as high as it gets. The probability – it’s an automatic which ensures there will always be a round in the chamber- is also very high. This is maximum for both. Bottom left is low for both; perhaps the nominal chance of a paper cut when reading the glossy section of the weekend broadsheet. Everything else is in between. The art to risk is understanding where each risk sits and finding ways to mitigate or reduce that risk. The commercial advantage comes from identifying risks that are viewed irrationally – where people perceive a risk to be higher than it is, usually because they do not understand the probability. Examples are easy – fears around shark attacks and air travel are mostly irrational, yet they are incredibly unlikely. It is these areas that you want to focus on, areas that people feel are so risky when in reality, they are not.

The key thing in property is risk versus reward. For many the perceived risk associated with property development is too great.  The papers and social media are full of failed ventures and people who got their numbers wrong. For others, the rewards of property, financial and in perceived status, draw them in and blind them to the risk. As with most things in life the key to success is about finding the balance. The more work you can do in understanding the risks associated with your area of property, the closer you can sail to the wind. The closer you sail to the wind the fewer people there are racing with you. You suddenly find yourself trading fresh ground. Some may consider you foolhardy, but if you are able to navigate choppy seas that others cannot, the crowded spaces of open houses, busy [pre-COVID] auction rooms, and Rightmove launches become a thing of the past.

Our areas of interest are High Yield centrally located properties to hold, and land and planning opportunities to sell. Fairly mainstream in many ways. The key for us is to carve out niches within that. For High Yield I love mixed use properties. Generally speaking, the upper parts are large and versatile; we buy everything on calculated sq. ft price, and the best value per sq. ft in our chosen area is almost always mixed use or commercial with Permitted Development rights. Also, there are numerous Permitted Development type opportunities both present and anticipated that can make them far more interesting. A lot of people don’t like them and a lot of lenders don’t like them. By understanding the risks involved you can manage them and then turn them to your advantage. One of our key strategies is taking mixed use properties, dealing with the issues, maximising the space and value and then making them attractive to both the rental market and future lenders. For example, hot takeaways built into properties on the margins of existing retail areas. They look horrible: pictures of Canton Dragon, last refurbished circa 1980 spring to mind. They are great! PD rights to convert to C3 residential and 2 further units above if the accommodation is ancillary. Centrally located too (or no one would have used the takeaway). We have tonnes of these little hacks.

Land is just the same. I dealt with my first Japanese Knotweed property 2 years ago. It was a headache and we spent almost £40k getting it sorted to ensure it did not hit end sales. Now I would actively seek those opportunities out. Why? Most people would be put off so the price at entry will be lower. We did not take full advantage of the tax advantages, but in many cases, you can claim back 150% of the remediation costs. PLUS, you then get a reputation for dealing with those issues so opportunities literally seek you out. A perfect scenario from a less than perfect starting situation.

I actively encourage you to understand the risks associated with your craft and rather than turning away from them, turn in to them. Master them and make them your friend. The cleanest air and the fewest people are at the top of the mountain. Why? This is because it is where the most risk is perceived to be. If you can overcome and manage those risks (risk never goes away) you can get to the top of the mountain in your area. Property is full of lots of mini mountains for you to master. If one looks crowded, find another and master it!

We are always looking for the best way for our clients to potentially achieve success through investing. Through our partnership with @Leopropcrowd we feel we have found an interesting and considered way to invest small and potentially build to bigger returns. We are excited to be working on our first project with them and although we are not quite ready to ‘lift the lid’ on that yet, we have some similar recent project case studies on their website now. Take a look and ask any questions you have through the forum or message us directly. ⠀

You can see an example by clicking the link – lhttps://www.leopropcrowd.com/property/detail/case-study-hmo-preston-street-brighton-by-target-5

Investment in property related assets puts your capital at risk and returns are not guaranteed. Past performance is not a reliable indicator of future success.

 – Andy Babbayan Director Target Five