#87 - Stories and lessons from my property journey

Hans Chan -

What I’m Reading

After watching Professor Matthew Walker’s interview about sleep last week I decided to buy his book: Why We Sleep: The New Science of Sleep and Dreams. It’s a very interesting read and not heavy at all.

Resource of the week

I recently discovered Jeff Nippard’s YouTube channel which focuses on fitness content. What I particularly like is how he takes a science-based approach, citing recent academic research to back up claims alongside his experience. 

My favourite so far is his video titled ‘How Much Muscle Can You Build With & Without Steroids?’ I found it massively insightful because steroid use is still quite hush-hush even today but he goes into specifics by comparing how many kg of muscle is realistic with natural bodybuilding vs using steroids, it’s staggering! Most surprising was that individuals who use steroids but don’t train (at all!) will build more muscle than someone training optimally, by a lot too!

Quote

Unless you want to have a life that is directed by others, you need to decide for yourself what to do, and you need to have the courage to do it.

Ray Dalio

Thoughts

So many of you may know that I’ve recently been working on Property Academy, and a number of you will be added this week from that mailing list (here’s the link if you’re not on it). If it's your first time here on the Edge newsletter, welcome!

As I’m working on Property Academy, it’s made me reflect a lot on when I started out, and the mistakes I’ve made along the way. So this week, I thought I’d share some stories and lessons learned from my personal experience. 

  1. Getting sold a massively overpriced property

After getting the idea to start investing in property through a conversation with friends I decided to start doing research. I bought a load of books and started reading up on property forums. It was a confusing time, I had no idea where to start and it seemed like there were so many strategies. It took a long time before I decided to take the plunge and despite the hours and hours I spent trying to learn, I was not confident. 

So I found this investment company based in Essex who were selling properties up north. It was a slick outfit, the guy who called me was very polished and they invited me over to their nice offices, they had glass partitions, designer furniture, the whole lot. I’m sat with their investment director or whatever title it was, and his assistant. They’re showing me these shiny brochures, ‘we’ve got this beautiful apartment in Liverpool and it’s only £110,000’. Considering I had only been north of the M25 a handful of times in my life at this point, it seemed like a bargain, I didn’t know they did apartments so cheap.

Long story short I decided to go ahead, paid the £2,500 fee, and arranged a mortgage valuation. When the valuation came back the lender said it was only worth £75k… Not so much of a bargain after all then. I called the director immediately, he tried to convince me the valuer didn’t know what they were talking about by sending me other properties in that price range, we had several calls but even back then I knew there was no way the lender was going to move that much. I asked for a refund, which was like pushing a rock uphill. He made all sorts of excuses and tried to convince me to go ahead, to add funds, and that 'there was no scam here' he was reluctant but after insisting he ended up sending the money back to me.

The lesson I drew from this experience was not to fully trust someone else you’ve never worked with, especially when it comes to your money and there’s no getting around doing the due diligence yourself.

  1. Dealing with incompetence

In the early days, I had this broker who used to annoy me. Just something about him, we would have a call and instead of answering my questions about the buying process etc, he would brush them off and spend the entire call just cracking inappropriate jokes and saying he’d email/send me the stuff, which he often didn’t or missed key info out. He also was incompetent as a broker, he’d send me product lists and ask me to choose. During the application process, he’d send me the entire pack from the lender and ask me to read through everything and fill it all out. He’d get me to call up the lender if he didn’t know something. I didn’t know any better back then so I thought that’s just how it was. 

The thing is even though I didn’t think he was very good, I stuck with him for far too long. Maybe it’s just inertia or maybe it’s just that risk-averse mindset that ‘I know he’s bad but at least it’s a known quantity, if I change there's hassle and the new one could be even worse’. Anyway, I went to a property event not long later and got introduced to my current broker through another property investor, the difference was night and day. I had no idea that all of these things I was doing should be done by your broker. I still use the same broker to this day.

So your team is vital in property. As with a lot of other things, trust your gut. If you don’t get on well with someone or not happy with something early on, don’t just suck it up, people don’t generally change. So don’t be afraid to say no and move on. It’s happened many times to me not just for brokers but estate agents (some I’ve dealt with in the past trigger me to this day when I think about it), solicitors, anything. 

Just by switching to a broker who was professional, organised and had my best interests at heart, not only freed me up to progress my business but I could also leverage their expertise. So be ruthless about cutting them out if you're not getting the service you need.

Hope that was helpful. If you have any questions or stories you’d like to share, just hit reply. Otherwise, have a good week!

Hans