Lock-In: Landlord to Developer

On this week’s webinar, we brought on portfolio landlord, commercial and residential property developer and Your Property Network Co-Founder Ant Lyons. Ant has been in the biz for 15 years and ventured into property development after initially gaining an income as your standard BTL landlord. And like many landlords, it was this idea of a recurring hands-off income stream that attracted him to property.

Fingers in Pies

Pound signs may flash in your eyes at the idea of developing property at a huge profit margin. But it’s rare that’s where anyone’s journey begins.

Ant started off buying 1 and 2 bedroom flats that needed a bit of love, refurbishing them and then putting them on the rental market for a greater margin. These earlier properties in his portfolio are low-risk steady earners which provided the foundations for the bigger projects.

These sorts of properties provide a safe entry into the market and building this initial portfolio spreads the risk.

But there are still two key takeaways from even these low-risk investments. 1. Know your budget 2. Know your customers

Run out of either and you’re in a sticky situation.

Hey Big Spender

With an extensive property portfolio and several successful development projects, it begs the question – does Ant have a magic money tree in his garden?

Only a small amount does come from Ant’s own pocket and his business partners’. Often, the funding comes from a variety of sources. This has included bridging finance and private investors, but perhaps the most unconventional was crowdfunding.

CrowdProperty was co-founded by property guru Simon Zutshi. It does what it says on the tin, it splits the cost between a range of people to fund property developments. It was set up because property professionals are struggling to access the finance they need solely from traditional lenders.

And what’s in it for investors? They earn up to 8% per annum return on their investment backed by first charge security. It’s also a quick and easy way to finance – through this means, Ant raised hundreds of thousands within hours.

Cash in The Till

When things really got going, Ant took us through his develop-to-sell projects. You should anticipate that cheaper properties need a more extensive refurb, but the potential profit margins make it all worthwhile. Ant’s case study was a conversion of 4 one-bedroom flats into 2 two-bedroom flats. In a shrewd choice of location with suitable demand, Ant had the option to let the flats to add to his portfolio, as well as selling them.

In this case, each of the flats were sold. A top tip that was provided, was to split the title in order to create a lease for the flats. Ant also set up a freehold sale which meant the properties were sold to another company and taken straight off his hands.

An in-and-out deal with cash straight in the bank.

Golden Oldies

The highest earning case study in the webinar was a very grand listed building in Plymouth – the returns largely matched our expectations, but what about the purchase price? In a situation which left us all keen with intrigue, Ant invited the viewers to hazard a guess. Even the more experienced property investor couldn’t get anywhere near how cheap it was.

However, this was not to say that there weren’t some difficulties along the way. In its previous life, the property was a care home and is still part owned by a charity. Part of the purchasing agreement was that no one under the age of 55 could move into any of the flats. In this age bracket, there aren’t many looking to rent which really left selling as the only exit strategy.

Despite some obstacles, the flats all sold resulting in a sizeable profit, which ultimately is the real reason you go through all the effort in the first place. It was so important for Ant to share the challenges that he encountered with each of his projects, as well as the successes. So often, developers can sell a dream to prospective investors. But we heard it warts ‘n’ all this time round, which left us with the important reminders that you need to make intelligent investments, choose your partner/s wisely, and work hard.

Your Property Network

Ant may have said he wasn’t coming on to sell anything, so we’ve decided to do it for him instead! There’s no way he could come on without us mentioning the magazine he co-created – Your Property Network (YPN).

Founded amidst the backdrop of the financial crisis in 2008, the magazine is all about learning what people do in property and how they make their money. And contextually at the time of launch, how they were adapting to the changing economic climate.

In the early days of LNPG, YPN were huge advocates of our business and gave us such high praise to a wide audience of active property investors and developers. We really wanted to repay the favour by promoting the magazine on this webinar, which always contains such expert advice and knowledge on how to run your property business.

Don’t like reading things on paper? Well, with your subscription fee you get the whole magazine available in a digital version, along with exclusive interviews and podcasts online. YPN have a dedicated page on our website with all this info and don’t forget – the first issue of the subscription is free!

And that’s your lot! You can learn more about Your Property Network here