– So to help give you some examples of using other peoples’
money and inspire you, how this works, I’m gonna get
a few people up on the sofa, to talk to, some case studies. So I’d like you to put
your hands together, please, for our first on the sofa, who is Graham Caldow. Graham, how are you? Take a seat, please. So, welcome, Graham, thanks for coming on. I’ve asked you to come on, and I’d like people to talk to a deal, because people love to see deals, and understand figures
and so we’ll do that, but this deal was you
actually did some of it, but you just raised some
of the money as well, and I wanted to talk
about that first of all. About how you raised that
money, because I know you, like many of the people that come (unintelligible) When, at first, think, “Well,
no one’s gonna lend me money,” or, “how am I gonna do that?” But you actually borrowed money from somebody you don’t
really know that well. First of all, tell us a
bit about yourself, sorry. I’ve had a caravan park
for the last 15 years, so I’ve kinda been
working on the business, and I decided that I wanted to
get financial freedom, and… – Yeah.
– Hence, joining Mastermind. – Yeah – I had one or two single buy-to-lets. Got my money stuck in. Didn’t really know how to get it out, which was a bit of a problem when it comes to further investment. – So you knew the
benefits about investing, but you kind of put money in it, and it was just kind of stuck there. – Exactly, yes, yeah. – Right, okay. So you got to a point
where you had some money, but you thought you didn’t have enough to do what you wanted to do going forward. – Yes, that’s right. I have a daughter, with additional needs, so one of the things I’ve
wanted to do was set her up for the future, when we’re no longer here. – Absolutely, and how do
you find as a motivator? Because I’m a great believer, if you have a really strong reason why, you’re gonna be more successful. And, sometimes, having a
family member, a child, a spouse, you want to get
them out of work, whatever. That, sometimes, motivates you more than just doing it for yourself? – It does, it does, and I sort of think that my property business has to be around for the long term, so I have to do things with integrity. – Yeah, absolutely. – Which allowed me, partly,
to get this investor, because he trusts me and
that’s a big part of it. – Yes, exactly. So let’s talk about how did you find this particular investor? – He was at my daughter’s school. My wife and his wife were doing something for the PFA, and she
just happened to mention that we do property, and we
offer investors a great return on their money. Not thinking anything would come of it. And they just said,
“actually, we’ve got money, “and we might like to invest.” – Yeah, so this was to the other wife. – Yes, of course, so I texted her husband, because I’ve got the number, and he said, “okay, let’s meet up for coffee.” So, straight away, I did it. I took immediate action. – Good. – Next day, met him for coffee. Kinda had my plan, I sort
of put a deal sheet together of what the deal was gonna be. How I was going to do
it, phase one, phase two. How I was going to give
him his money back, did all of that. Went with the idea of thinking actually, he might only accept 6%, because he’s not in property circles, but he ended up being a
lot more sophisticated, and said he wanted 12%,
so that was quite a lot. – Right, oh really, okay. And interesting, so
within property circles, you know, 8, 10, 12, you
know, the 1% a month, 12%, is a very common figure
that people look for, but in outside of property,
if you offered someone 12%, they’d “what do you mean? “Sounds way too good to be true.” And when we started Crown Property, we were offering 10% to the investors, and I had a number of people,
like accountants, etc., come and say, “that’s too much. “There’s gotta be risk,
gotta be junk bonds, “gotta be really risky.” And we lowered the rate,
more people want to lend. (laughter) Just remember that,
it’s really interesting. What’s his background, then? – He was an accountant, actually. – Oh, okay. (laughter) So, he was all over the numbers. – He was all over the numbers, yes. I thought I might have,
I kind of, sort of, went there expecting
to have to convince him to trust me, he was very analytical. He had a look at the numbers. I made sure that I put
in figures for voids, maintenance, even though the
property would be refurbished, because, if not, the numbers
wouldn’t be believable, for him, so. – Yes, so you’ve been very conservative, very realistic, on the figures. – Exactly, yes. – Okay, and then he could
say, and this is interesting, because if you have a good
deal, if someone’s smart, and you present the
figures, they’ll get it. They’ll say, “oh, I can see
you’re making lots, here.” They need to know you’re making money, because they need to know
how you’re going to afford to pay them back, and
they got to understand how that’s gonna happen, because that’s one of the biggest things people want to know, “how am
I gonna get my money back?” Really important. Okay, so, so how much did he lend you? – He lent 75,000. – Right, so someone
you didn’t really know. – That’s right, yes. – And was it on the first meeting, or did you have to build
a bit more rapport? – No, it was on the first meeting. – Which is unusual, by the way, but I guess there was
trust through the wives, and the connection of the school. – Exactly, yes. – So that all, kind of, helped. – I had met him once or
twice at sports days, that sort of thing, but
not really to talk to, we’ve never, sort of, chatted
about anything, really. – Well, let’s talk through
this particular deal. Take us through the numbers, please. – Okay – You’re not gonna rent
it out, in that state. It’s terrible. (laughter) Actually I needed to get his money, because I probably
wouldn’t have had the money to do the refinance, unless
I remortgaged everything. So, it was much quicker
to borrow the money, than it would’ve been to go
through the whole process. – It is, absolutely,
going direct to private, private lend is far more,
sometimes you might pay a slightly higher rate than
a traditional mortgage, but the flexibility, the speed, is kind of worth paying
more money, isn’t it? – It is, yeah. – Okay, great, so let’s see
the numbers, please, Graham. – Okay, so, I found this
one on the estate agents. I offered 280, first of all. It was rejected. I did the exchange
delayed completion thing, for the full asking price of 320. – Yeah. – But they were fairly straight laced. They didn’t want to,
it’s a deceased estate. I know somebody else had offered 285, because I had a good
relationship with the agent. So, it sat around for another month, and I just decided I’ll just up the offer, just a little bit above
this other person’s offer, and they excepted. I think that was partly
because of the relationship I builded with the estate
agent, who also trusted me. – Yeah, so again, it’s coming
to this relationship thing, isn’t it?
– It is, yeah. – So important. – So, I initially budgeted
75 for the refurbishment, but it’s an old Victorian house, so I wanted a contingency, as well. So, I budgeted 85,000.
– Okay. – And so the initial funds
to do the project was 167. So 75, I borrowed, the
rest I put in myself, yeah. – Yeah, okay, great, but
you wouldn’t have had enough cash to do this, if you
hadn’t done that loan. – No, I wouldn’t have. I would’ve had to try and raise money through remortgaging, and
would’ve been vacant for a while. – Okay, okay. – Okay, what I’m doing in Folkestone, it’s undergoing a huge
regeneration project. So, it’s becoming quite arty. So, I’m moving into the co-living, the good stuff that Stuart
Scott and Higgy House are doing. That’s what I want to bring to Folkestone. So, initially, I’m doing it
as a six bed, co-live in. I’m expecting 3015, rent. After I’ve got it up and running, so it’s licenced, and
then I’ll then move on to sui generis planning. – Right, so this is in
progress at the moment. – It is, yes, this is phase one. – Yeah, okay. – So, monthly costs,
after it’s up and running, expecting 3315 in rent, monthly costs, which also include maintenance and voids, which I’ll probably won’t
need, or I hope (mumbles) – Since you just refurbed it
– Exactly, yeah. – Hopefully not. – And good rooms, as well, so I’m hoping they won’t be vacant for the first year or two, at any rate. – Yes, yeah. – So, this is going to give
me a cash flow of 1682. – Who would be happy
with that, as a cash rate from an HMO? Pretty happy with that, yeah? That’s good, there’s money
in it, at the moment, so we wanna refinance,
take that out, yeah, okay. – That’s right, at this sort of rate, I think it’s only a 12% ROI, which is good for the southeast. It comes down to what Stuart
said yesterday, in the south, you have to add value in order
to get your money back out, which is why I’m taking it
through two phases of… – Yes, and if you’re
going through planning, it’s wise to do it in a stage at a time, because then that’s much easier (mumbles). If you try and go for the
biggest thing, straight away, often you get knocked back. So, doing a phase, obviously,
is the exactly right way to do it. – Right, okay, yeah. And, also, it costs an arm and
a leg, waiting for planning, got a vacant property, and
paying mortgage, and stuff. So, phase two is after
planning permission. I’ve, conservatively,
said another 500 rent, but, again, it’s going to be
a good quality ensuite room, so I’m hoping for 545, but
don’t want to count my chickens before they’ve hatched. – Right, yeah. – And the monthly costs
will go up a little bit, because we’ll be on a commercial product, so the interest rate’s
gonna be a bit higher, and there’s more people in the house. The actual cash flow will go down, but that’s because the costs will go up. – Yes, of course. – But, at this stage,
after I’ve refinanced, that’s when I can pay my investor back. And then I have that
trust and relationship, and hopefully (mumbles) – And he’ll probably want
to lend it back again, and he might have a lot
more than 75, next time. – Actually, he does. When he agreed to lend me this, he wanted to see it,
in my own name, first. I gave him a tour. The day after I completed, he came down and sort
of checked it all out, and it was on the back of
that, that he said okay, well let’s do it. Next day, the money was in my account, and he said there’s more
money if I had other projects, so he’s kind of bought into
it and he trusts me (mumbles). – And what’s the time
scale, do you reckon, of putting the money in, and actually getting it back to him? How long do you think you need it for? – Well, it’s a nine month loan, because he wanted a
minimum of nine months. – Oh, okay, right, that’s interesting. – But, it’d probably be six
or seven, at the earliest, I think, but nine months is fine. It can extend up to a year, as well. – And, at once, because
you found this one guy, who’s got more money, you know, once you’ve given it back to him, it might really open the floodgates. And once he’s trust you, you might be able to get a slightly lower rate. – [Graham] Yes, that’s right, yeah. As soon as I had this
house, I conducted tours, and showed other people, and I think it’s that
confidence that you get from having one investor,
I sort of, now, believe that I could get investors. And, by doing those tours, I’ve
got another couple of people who are interested in lending. – [Simon] That’s the thing
about that, believing. Before, did you really
not, kind of, believe that people would lend you money? – [Graham] No, I didn’t. – [Simon] I don’t think most people do. – [Graham] Yeah, oh, and that
first born end of Mastermind, when we do the, sort of…
– Four part presentation. – A few of us were rolling our eyes, yeah we can do it, find the good deals, but this bit is a different sort of thing. But, I think once you do it
once, then there’s like relief, and then, I think the not
having money’s been the thing that’s holding me back. Whereas, now I actually
believe I can get the money. – And the reason we get
you up here is, hopefully, you’re gonna be inspiring other people to think, “actually, maybe
this stuff does work.” – Yeah, it does, yes, it
definitely does work, yes. And, I think as long as
you have that integrity that you want to pay the money back. – Yeah, and looking after their money more than you would your own, absolutely, yeah, really important. Okay, excellent, so, any tips
you would give the audience, in terms of raising private
finance from people? – I think that’s tell
everybody what you do. – Yes. – Paint a vision, sort of
know what you’re gonna do, yourself, and have that large vision so that you know what you’re doing, and then you’re confident
where you’re going, and then that confidence,
people can sense. And know that this is the
plan you’re going to deliver, and that’s, I think that’s the main thing. – Yeah, fantastic, I
think that’s great advice. Graham, thank you, so much, for sharing. Let’s give Graham a
massive round of applause. Thank you, Graham, thank you. – Hey, it’s Simon, here. I just want to thank
you for taking the time to watch this inspirational case study. I’m sure you got a huge amount out of it. And if you want to learn more, about how you can use
this incredible strategy, I’ve prepared two hour, on
demand, online training, for you, completely free of charge. Teach you what you need to know to be a successful HMO
investor and landlord. All you have to do is
look in the description, below this video, click on the link, and register, to get access
to the free training. I suggest you do it, right now.

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