Dr James, 7s:

Cool, you got to know this before you obtain finance for property. It's the title of this podcast and it's also the subject matter at hand. To everybody that is listening to us this day, this fine day, welcome back to the Dentists Who Invest podcast, everybody. I'm joined by Mr Rob Bridgewater, who's a returning face, although it has been too long since we've done an episode together, Rob. So we need to do something about that. Let's throw that out to the universe just now. That's our vow and our commitment to each other, because you know what Property is a hot topic with Dentists and on the Dentists WInverse podcast. And what will be really helpful to talk about today is the need to know stuff whenever it comes to finance. Dentists should know, but don't quite know, before they go down the finance route. But anyway, before we talk about that, Rob, how are you?

Rob, 48s:

Good buddy, good to uh be back on and uh enjoyed the last one, so I'm excited for today hell, yeah, man.

Dr James, 54s:

No, they're always fun, and you know what I actually learned so much from these conversations as well, whenever it comes to specific areas of finance, and you know what? There's a? There's a thing that all we bang on about in the dentistry best podcast is specific knowledge. What is specific knowledge is knowledge that can be only known by direct experience and contained inside human beings head, and I feel like this is a classic example of that, because it's too dynamic. You can't write a book about this stuff, right, because it changes three months later. It's totally different, right. You can't make a youtube video about it? Well, you can, but it's just going to be out of date very soon. So that's why I love asking people who have a lot of expertise in a given area, because they can share that specific knowledge, and that's what we're going to talk about today, which will be fun. So, yeah, I'm excited, awesome, cool. So let's talk about actually, do you know what? Can we have a little bit of a recap about your story, Rob, for people who are well, they're, they're, they're hearing your voice for the first time on the dentistry invest podcast? Just a little bit of background and a bio, because, Rob, I actually thought you were a dentist, even though we've met before, before we jumped on camera today and I learned myself that actually you did something else surrounding that, uh, the dental industry, so to speak.

Rob, 2m 2s:

So yeah, a little bit of context, to be honest, yeah so my background is, uh, when I was 18, I started in dentistry, and um's, yeah, not a dentist, I was selling dental equipment to dentists, and so I did that, for I'm just about to turn 40 in the next few months, but up to about 33. So a good amount of time really. And most of my career in dentistry was spent working at a company called Optident, who most of you listeners, I'm sure, are quite familiar with, and so I really enjoyed that. But alongside that, I've always had a real interest in prophecy because, from a simplicity perspective, I sort of looked at property as a market in the UK and thought, from a very young age, house prices sort of tend to double every 10 years, or certainly they used to when I was younger, younger, and so I just wanted to be able to get onto the property market and, um, and just own, I suppose, a property within the uk, uh, an area I thought you know, living here, I can understand probably better than than abroad. And so it was actually when I was 17, um, strange, I was dating somebody that was much older than me. I was thinking, right, I need to get a house now and settle down. So I tried to get a house at 17, only to be told you can't get a mortgage until you're 18. So it was actually at the beginning of my 19th birthday. I spent a year prior to that convincing my parents to look at investing in a property 50-50 with me, on a buy-to-let basis, so renting it, it out. And so I did that with them and since then I started my goal was to buy one house a year. I bought another one with them and then I went off on my own, started to buy a few and then in about 10 years ago now, I started to take it a little bit more seriously and for the last eight years I've been doing it full-time and my model as a whole has always been to sort of hold for the long term. So, rather than a developer where you sort of buy and sell, I've tended to sort of use the model of buy, rent, refurbish, refinance and then rent out. So that's the model I've been using up to well. Currently I still use that model and we'll talk about it, I'm sure, today but I also now do do a small amount of selling as well hell yeah, man.

Dr James, 4m 17s:

Thanks so much. So the way life looks for you right now is pretty much solely reliant on the money that comes in from your assets, your property portfolio, if I've got that right correct yeah, I've tended to work on a model more of sort of build the wealth side of it.

Rob, 4m 33s:

So rather than just trying to get rich quick and have I've never really had the big capital lumps. I suppose it's always been reinvested into property. So gradually over the years I suppose as much as you can class it passive income has increased as I've increased the assets that I own, both on my own and with my business partner. So it's it's sort of a slow burner. I suppose you have to be quite patient, which is quite hard in the world we live in today when you know it's a bit harder with delayed gratification. We want the quick, quick wins and and the money quick. But it has been a slow process to sort of build up that gradually. But when things happen, like you know, we don't really talk about it now. But like COVID a few years ago, it meant I had some protection there of monthly income coming in from that and that's generally even now how I tend to work. I tend not to work on living off capital that are produced through the sales, but I live off the income that the rentals produce each month.

Dr James, 5m 34s:

Awesome man. So, in other words, you've reached a stage that a lot of people aspire to whenever it comes to property, and that is to be able to sustain themselves via that income, which is cool. So that's like the end game, so to speak, for a lot of people.

Rob, 5m 48s:

Yeah, absolutely, and I suppose it depends. You know, you've got to and decide for yourselves when you're starting out, I suppose, and that can, of course, change. But you've got to decide on what I call your number, and you know when people talk about, you know what. With regards to wealth or monetary terms, how much do you want to have? You know, and a lot of people tend to say, oh, I want five million, ten million. I think that'll be enough to sort of live on and and to sort of aspire to, to get to, whereas I actually prefer to look at a monthly number how much do I need a month, or how much do I want a month to live a lifestyle that's congruent to my values, if you like, to the lifestyle that I want to live, whilst also you know if it's, if it's important to have the freedom, the security etc. Things like that, um as well, then that's the number I prefer and and there's I always look at it in two ways. My goal initially was to get to that number, both a mix of passive income and earned income, so the money I'd obviously have from the property, the assets that it produced, and also a mix of earned income, so the money that I would pay myself, maybe to manage the projects, and then the next goal is then to get to the number where it's purely passive, so you don't physically have to work at all to bring in that monthly income. You can live off your assets, I suppose. And a book that I read quite young was Rich Dad, poor Dad, which I'm sure most of your listeners have listened to, which sort of led me on that path, I suppose.

Dr James, 7m 4s:

Yeah. So two things. First of all, you really got to dial in that number. You really got to tack it on right, because you can have as many assets as you like, you can have all the assets in the world and still have enough satiable, insatiable thirst for more assets. And you have to just ask yourself but why did I actually, why did I actually get these in the first place? Because this, this, this is, this is the thing, right, it's, it's not. It's. It's about the outcome, rather than just the, the quest to purchase and own more or at least it should be anyway because you want them to be able to sustain some sort of lifestyle that you want and that can be never. It has to be quantifiable in order to say that. So I'd actively encourage everybody out there to figure out what that number is. It sounds like such a small thing, but actually it's a big thing. And second thing, that book that you referred to, by Robert Kiyosaki. I love the asset quadrant in there, where he talks about employed versus self-employed and how that or no, sorry, employed versus asset owner. That's what the quadrants are right. And you, on the left-hand side, you've got employed, self-employed, and everybody thinks that when you are self-employed. The instant that that happens, you become an asset owner. But actually, if you're the only employee in your business, if you're the only asset in your business, so to speak, then you just own your own job effectively. So, really, you have to purchase assets or own a true business, a company in which things are delegated and it can run itself and generate income before you're said to be an asset owner. Easier said than done. It takes flipping time, but obviously, obviously that's the end goal and the outcome that everybody is seeking or desires. So, Rob in your journey, whenever it comes to learning about property, whenever it comes to living the lifestyle that you're presently living right now through all these investing investments that you made over the year, the years. Naturally, there's going to be a lot of learnings in there, and the one that we're specifically going to talk about today is the finance game and how that is done, when it comes, and also the need to know stuff that not everybody knows out there whenever it comes to obtaining finance on property, or the little hacks or the things that people are not necessarily aware of. So you know what? Here's the thing my knowledge on property very, very, very limited. However, you and I were catching up just off camera and we were talking about how obtaining finance looks for most people, and I won't even go down, I wanted to. I want to even start just at that level, like the very simplest, the first step. When somebody wants to get a property and they want to borrow money, either for a buy the letter or primary residence, how does that look? What do they do?

Rob, 9m 30s:

well, I'm a big advocate on leverage, so I like to find the experts in the specific fields that I'm looking to learn and gain that information from. So my first advice would be to find yourself a mortgage broker now. If you can get that through either a recommendation through friends, family, a course that you've been on maybe then that can always help because you know you've got people that you already trust within your circle, I suppose that have put that name forward so it can help you sort of like cut out the noise, I suppose, of people that might not be the most suitable and explain to them early on what it is you're trying to do. So, for example, what's the end goal? Are you looking to sell it on, or are you looking to keep the keep the property and rent it out, or is it, like you said earlier, a primary residence for yourself? And so from there, once they know they can sort of advise who are going to be the best banks to work with. And obviously the other thing with brokers are they do have their relationships with individual banks as well. So it's not so you're not always necessarily going to get with a broker, for example. They'll have a huge access to market, but they will steer you naturally down a direction that also works with them, because they've got good relationships, not from a monetary point of view, as in terms of getting back anders, but from a just over the years. You know, like we all have, we have people that we find easier to work with. We have relationships with people. So it's in our interest to get our clients, if you like, to sort of go down that path as well and you know, after this I'm happy to share in the show notes or if people want to reach out for me or whatever the you know certain contacts that I would use and have used, and I've stayed with them. I'm very loyal when I find people that I like to work with. It's not just about money for me, it's about being able to pick up the phone and knowing they're going to answer. So I have that with my solicitors, I have that with my mortgage brokers. So that would be the first route I'd go down with regards to looking at raising finance. But prior to that, even you need to decide what it is you want to do in terms of like. Are you trying to build a property portfolio, as I say, to rent out, or are you looking at trying to buy something and refurbish it and then sell it on for a profit? Because, again, even that alone, those two differences will be different banks and bridging finance, for example, that could be most suitable for the model that you're working from.

Dr James, 11m 42s:

Gotcha and you know what. I'd love to get into the nitty gritty of finances, of finance, rather, and the stuff that is helpful to know before speaking to a mortgage broker and during that conversation, but just before we do. Property once upon a time. If you ask our parents, there's a lot of property buffs in that generation, because that was what generated a lot of wealth for people around about that age and around about that era. With the way interest rates and everything is right now, how is the landscape looking in the property game? Do you think it's still profitable? It's still probable that you can get the right property and make some money, or is it worth just waiting it out, riding things out until things become a little bit more favorable?

Rob, 12m 23s:

yeah, really good question. I think that now is a very, very tough time in the market when you're trying to get into property, not only for being able to get started and make money, but also in terms of the leverage that you can get from the banks as well, because they're a lot more cautious. The rates that are out there don't necessarily mean, you know, make it so profitable, so they're often wanting you to leave more money in. And one thing with property is that it's a very, very long term game. You know anyone that wants a quick fix in property, you know, and that quick result from an investment perspective, it's just not the sort of property's, not the market I'd say to be in. It's definitely a long-term wealth building strategy and you have to, like any industry, adjust with the markets the way that it is. So right now I would say there are opportunities to be out there. But a very famous saying within property is you make money when you buy, not when you sell. So if you can buy, still at the right price because, as you rightly say, a lot of people are finding the property market tough right now You've also got a lot of old school landlords that have been in the game a long time. So they would have bought property very cheap. And they're getting to the point where they're saying now, you know, it's just not worth it for me. You know, they're either getting to the point of retirement age where they'd rather actually take the capital from their asset and start living off that rather than the rental income. And so sometimes, when that's the case, you can often get some quite, you know, below market value deals, some quite good but low market value deals, and if that's the case then it doesn't really matter so much what the property interest rates are. You can, you know you can either flip it and make capital appreciation as an investment or, if you're buying really low, if you're prepared to sit on it for a little bit, because you might not get all that value back instantly from when you purchase it. Because for a start, there's normally a six-month rule with the banks which I'm happy to go into where you can't refinance it straight away. But after that period of time, if you can sit on it for that time, then it will get revalued at its actual current true value. And if you bought it below market value, you will, you know, you'll be at a poor majority, if not all of your investment money back out. So then even if it makes you I don't know a very low amount, it's you're making money on an asset that you've bought you've put no money into, you've put no money into. So you're making a capital appreciation over the years which, as a rough guide, is 5% year on year in property in terms of the actual capital appreciation, just for it to sit there. But then if you're making I don't know, 100, 150 quid, which might be the low end of the profit in property, you're getting 150 pounds on something that you've not actually put any money into. So anything is free money, if you like in that respect. So that would be a key of buying below market value. But if you were to buy at the normal rates then, yeah, property right now is very much a long term game and it's not very exciting, I suppose. But if you can also look at a strategy where you're buying, for example, a property that's maybe a commercial and you're converting it into residential because residential is worth more, you would be finding another way. So a value add opportunity. So you would be adding value to the asset. So that's where you're making your money. So, again, it's not so much necessarily about the monthly income that that might produce if the interest rates are higher, which they are right now.

Dr James, 15m 29s:

It's more about the value add that you're buying so is it fair to say, in your opinion, that in markets like the way things are right now, and just to timestamp the date that Rob and I are talking on this is the 8th of august 2024 would you say that whenever it comes to markets being a little bit more, how can we say not as favorable, that that is where a little bit of expertise is massively helpful in order to still retain the ability to make profit, and maybe, someone who is new to the game, they maybe just want to think twice, a little bit more.

Rob, 16m 0s:

Yeah, I would say expertise. And if you are new to the game, then definitely find somebody that you can sort of really trust and piggyback off to utilise their expertise. And yeah, not. The problem is, I think, also when you are looking at getting in something new and you've got the money sat there waiting to invest you, you want to buy something. You want to you know, I'm guilty of that even now, you know, and it's very, very hard, uh, not to you know jump and and spend that money and then you know, two weeks later find that there was a much better deal out there. Because you know, as I say, I don't know about you, but certainly from my perspective, I've always, over the years I suppose, I've hated to see capital left in the bank. I want to see my capital working for me. But this is the first time and I'm fortunate to know some quite wealthy people. They've even said to me it's the first time even in their careers, that they've said actually having a bit of cash in the bank is probably quite valuable right now, just with the way that the market is. And yeah, so I'm trying to do that a little bit more, whereas before I've gone through periods where I'd be straight back out once the money comes into reinvesting in property.

Dr James, 16m 58s:

Well, it's sitting on your hands, isn't it? It's one of the hardest things to do in investing, because there's kind of people I find people's relationships with money really interesting and people tend there's kind of like the midline where we should hopefully be whenever it comes to our money, in that we're not too crazy whenever it comes to spending or investing, so we don't leave ourselves high and dry, but we're also not too reserved about having a big pile of cash in a bank. And I always find people are one or the other way too much, you know, especially people who've got a little bit of a taste of the the world of investing, because they genuinely see money in their bank account as wasted opportunities and they're like, wow, I could be doing something with it, right, but I think it was, was it? Whereas to actually strike that balance is very hard and it comes through experience. Are you with me? Because you have to have context, right? What's a crap market? What's a not so good market? You have to live through both really to be like ah, okay, this is not popping like what it once was. I've got some cash, maybe I'll just hold fire or sit in the sidelines. I think it was Warren Buffett. He said there's a quote from Warren Buffett. Something along the lines of sitting on your hands is a masterful skill, and a skill that few have. Yeah, I love that. Yeah, I think that I'll have to look that up. I'd have to fact check that one, but uh, some investors somewhere said it at some stage. The point is it's a good quote absolutely, absolutely, yeah.

Rob, 18m 13s:

And and, like you rightly say, with someone like warren buffett, look at where he's actually made his money. A lot of the time it's because he's sat on his hands, it's because he's sat back in it, because he's waited, and then he's until he's studied something. So he knows absolutely everything about it and he's that confident he can't lose. Then he's gone big, but he's only gone. I don't know what they said. Was it like that, trying to play the market? You know, and that's a little bit like wealth building. It's a case of like invest and then sit and don't, you know, don't do too much, don't panic. Sell when the markets drop, you know, because again, when the market drops, it's like any other investment strategy. That and you know better than me because property is the only thing that I do invest to sit and as long as you can sit it out through those times, and that's just by not over leveraging yourself the same as I'd recommend in any industry that you're in. So you know, not trying to keep borrowing maxed up to the amount you can in terms of property. Only ever, I only ever refinance a property once as in put any money out of it, so any equity. So when I was younger and I started investing, say in my early 20s you know, because I can you know times on my side at that age I'm I would I'd refinance it back to its 25% loan to value if it had more in it than that, so that I could utilize that money and invest in growing that portfolio and do more and more, whereas now I'm at the point where I like to see that loan to value ratio coming down. You know I want to get that. You know, certainly next few years where, across, my whole portfolio is no more than 50 percent.

Dr James, 19m 44s:

Hell, yeah, man, no, yeah, fair play, and that's actually an interesting rule that you have right there where you only refinance once. So a little bit of wisdom in there for the audience, because that will no doubt be a calculated thing, or, or you know you will have, you will have acquired the reasons over the years, uh, and experience will have led you to do that, uh, which is interesting, okay, cool. So let's pull this conversation back to what we were talking about at the start, which is finance, and especially whenever it comes to that conversation with brokers and whenever it comes to getting the best deal and just maybe knowing a little bit of few ins and outs in order that we might get a really favorable outcome for ourselves whenever it comes to that conversation. So let's make this spicy. Let's talk about buy to lets. Let's talk about that conversation about lets, maybe not so much primary residences We've definitely dealt with that on other podcasts. Let's talk about investment properties today and maybe, specifically, we focus on buy less, because that's the most correct me, if I'm wrong that's still the most common investment vehicle that people use whenever it comes to property. Have I got that right? Yeah, you have. Yeah, smashing, okay, cool. So what do we need to know, going into that conversation, as dentists who want to get a really good deal and want to put ourselves in the best position possible to grow an amazing property portfolio?

Rob, 21m 5s:

Okay. So first of all I'd say the way the markets are now and I won't go into too much detail about tax because that's not something I'm an expert in but they changed the rules not so long ago whereby you can't now offset any of the rental income on your tax, so basically all of it's taxable. So if you're a 40% taxpayer which I'm sure most of your listeners are, it's certainly to have buy-to-lets in your personal name. It's just not a good way of doing it now. So if you're looking, my advice would be if you're looking to invest over the years in more than four buy-to-lets, I would straightaway set up a company. And so once you set a company up and you're classed as a professional landlord, you'll think you're suddenly borrowing at a commercial level. So you will think that the interest rates are even higher and they're not so attractive as even if you were buying in your personal name as a a buy to let. But it's the sort of overall. It's the best way of doing it regardless of that. And so you just have to look at those rates and say well, you know, does this deal that I'm looking at still stack, rather than thinking, well, if I buy in my personal name as a buy to let, then, um, you know, I can get a better interest rate because, overall, what you actually you know, it's not about how much money you take, it's how much money you keep, and so that, from that perspective, it's important that, right from starting out, if you're looking at building a buy-flet-property portfolio from a finance strategy, you need to make sure that you're going to your broker saying you know, I've set up a company, I want to buy my limited company, and the reason you do that as well is because that will then obviously take the amount of banks that are open to you to be able to lend to you down. You will lose the amount. Not as many banks offer that service, but it's still a good range and they're becoming more and more competitive now. But what you'll also find is, once you start to buy those properties, once you get your first one, you start to build which is everything to me the relationships with that bank. So you'll start to build um through your broker, with your banks, uh, and as long as you do what you say you're going to do, etc. And it's a really good way of doing it. So I don't know how much detail you want me to go into today. But if you were to, for example, buy with finance, um, and you wanted to do the most popular, I suppose, on a buy to let uh property where you're adding value, so you're doing a refurbishment to add a bit more value, you might buy on what's called a short-term loan through the bank and they will release a mortgage to you at 75% loan-to-value roughly, at whatever rate it is, which will be a high rate because this is a short-term borrowing They'll let you then do the property works. So let's say you've got to spend 15, 20 grand on a refurb and then at the end of that they will come back and revalue it. If you've done what you said you're going to do, they will then put it onto what's called a term facility and then if you've created some extra value between those two the buying, the spending, the money on it and the refinance you will get that back out. So they'll then give you the money of the true value of the property. Rather than what a lot of people might think they'll do is they'll just buy a house on a mortgage and then they'll just do the works and they'll just have to sit it out and then it'll just be equity in the property. So that's one way of building a portfolio quicker, because you're able to get some of the capital that you created by adding the value to it, by doing the refurb work, back out to utilizing your next deal. So if you're building a portfolio, that's what I'd recommend you do.

Dr James, 24m 23s:

Boom. Okay, love that nugget. Any more to add to that.

Rob, 24m 26s:

Yeah. So the other thing that I suppose is a big one for me, and probably one of the hardest and the biggest questions I get a lot, is how to get the deposit money. So you know, some dentists will obviously have capital set aside. They'll have disposable excess but disposable income that they've earned that they can utilize to invest in the property. But sometimes, especially if you're wanting to start out quite early on, you know you might not have the capital. So then you can look to go out and I would advise you this is after two or three. So if there are any of the listeners that maybe I don't know got three, four or five properties already and they're like well, this is great, I've got. You know a few. But I want to take this to the next level now and really build a portfolio up and they could have already have them in their personal name or a company, but they might they don capital. That's when you can maybe go out and start looking at raising private finance. So I'll now have relationships with people that I've built over the years some include dentists, business owners, people that sold companies and things like that that can see what I've done over the years, and so then I'll go out and I'll offer people high interest rate returns on lending me the money to then take that onto my next project rather than borrowing it all from the bank, or certainly to get me the purchase, the initial purchase, because I'll buy stuff now maybe that hasn't got planning permission. So the banks at that point sometimes aren't necessarily interested because, you know, I suppose from a security perspective they've not, um, there's not much there for them without planning, and so I will often raise the private finance and also put money in, both myself and my business partner, put our own personal money in as well, and we'll borrow off people with personal guarantees and investor loan documents et cetera, and that's how we'll purchase it. So we won't always use a bank. So there's there's lots of different ways. You know you might have parents, for example, that are looking to look to help you out and stuff, and you might give them a return on on their money, and you know there's lots of different ways of doing it. It's not just the bank. So especially when you are starting out uh, it's it's better to maybe have a bit more of an open, open mindset on that never thought of that and you just acquired those connections over the years through building your own property portfolio correct. Yeah, I think that's why I say I think it's good if you've got three or four, because you know, if it was me, for example, I wouldn't necessarily want to give my money to somebody just starting out. There's got no proven um record of, of you know this model that they're saying they're going to do working or anything like that, whereas I think when you've got um, you know you've proven it, um, after a few, for example, you know you can prove it works and so people are going to be more inclined to sort of give you um, that sort of trust. And when it comes to who to go out to, I would first of all and it's much easier anyway is to reach out to your close connections. So I say it might be family, it might be friends, um, you know, friends of friends, that that that might be suitable sort of people that got some extra money and and I've literally borrowed money through people, through over a drink. You know, and I think I'm very much an old school person when it comes to a handshake agreement, everything does go, obviously in contracts and writing, but you know, once you've got my word, you've got my word, sort of thing. The good thing about property, I suppose in terms of an asset, when you're borrowing money as well is the asset is still there. It might go down in value, but if that person's money is going into property, at least they've got a bit of reassurance to know that it's still there. So even if the market dips or whatever might change, there's still something it's gone into, rather than you know. For example, just giving somebody money to set up a business and hoping it works, where this there's, the asset is the person trying to make that business successful. You know, that's that's what I love about property there's a tangible asset there yeah, that's everybody's.

Dr James, 27m 57s:

Uh, that's for people in the property game. They love the fact that you can touch it. It's bricks and mortars, right, and this actually. That might sound obvious. There's very few assets are actually like that, even stocks. You know, the majority of people's pensions are in stocks. Man, it's a paper asset and it's not even. It's not even a paper asset anymore, it's a digital asset, man yeah, yeah, absolutely, or at least there's some downsides to that as well, but yeah, yeah, well, this is it. This is. You know, the cool thing about paper assets is they're very liquid, as we all know. You know what I mean. But anyway, we're just interested in shooting the breeze, isn't it really? Okay, Rob, you've given us two blinders in terms of tips, and actually I was gonna go, I was going to ask for the hat trick just then. I'm pretty sure I feel like there's a hat trick on. We're on for a hat trick here. I'm sure you've got loads more knowledge and wisdom in that head, but before we do, I'm just curious to know you know the way you were talking about getting private investors. I imagine a lot of that came about through networking.

Rob, 28m 50s:

Completely, Absolutely yeah.

Dr James, 28m 53s:

Yeah, and networking is a hidden hack to life, hacked a life people don't realize. So what did, what did you do to acquire that network? Did you go to events? Did you just passively acquire them through people that you knew? How did that look well?

Rob, 29m 6s:

I mean it suits your audience, I suppose for me as well, in in terms of my other than family, my initial investors came through dentistry because I'd got relationships with the dentists that I'd established over the years, from when I first started when I was 18, and they'd watched my journey, I suppose as well, whether through knowing me, um, and speaking to me about it, or whether seeing it online, you know, on social media, and seeing some of the projects that we were doing and they've reached out when I've asked about it, or they've reached out anyway, um, you know, I've even got a company, and now a property company, with um, a dentist, and I'm building, helping another dentist build a portfolio. So it's, you know, it's very much about race ships and, and the great thing about dentistry is obviously it is a very well respected professional industry that you know there is quite a lot of money in it for the right people and the right connections, and so I think that, you know, for dentists, which is why this podcast is so good for them is they are looking at that security and protecting themselves over the long term, and so something like property often stands out for them. So, from their perspective, even if it's not, it's property related, let's say private loaning. But it's still. It's still not necessary to start with. They're just getting a high interest return on their actual money rather than owning the asset. But it's sometimes a good way in because you know some of them will actually come over see the project, see how the process it works, and it's a bit like they're buying. You know I'm very open to letting the investors come over and see what we're doing. So but network is key. But mine would be even in the gym. You know I'll be in the gym. And that's how another big investor came. It was his wife. You know her husband had just sold a business, knew we we did property, just said, is there anything we can do? And it ended up. He didn't want to invest in property, he wanted to invest in us and and get a return on his capital, because he'd already you know he didn't want the assets. He'd already got that side of it, I suppose through his other investments. It was more just a case of right. I've got this chunk of money that I've sold my business from now, what? What am I going to do with it? Some of it went to stocks and shares, some of it went into, you know, certain other areas and a certain percentage came, you know, to property, and me being one of them.

Dr James, 31m 3s:

You know what and shout out to the principals and future principals in the audience. That is the situation I've actually come across before, where someone sells their business at the end of the you know they've got their exit from their dental practice, get a couple million in the bank Not unusual, yeah and they find themselves in a place where they're like right, the only asset asset, so to speak, I've ever invested in is the only assets I've ever invested in are dental related. It's either been with dental practice or it's been the clinician themselves and it's like okay, cool, now what do I actually do with this dosh? And that's why, in my opinion, it's so good to explore these opportunities, not just wait until that end point, but actually explore them concurrently to where you presently are in life, because then you have a little bit more of that knowledge ready to go, or you can wait to the end point as well. I'm just throwing it out there. It can be helpful to understand assets for when that day comes. It can be helpful to understand investing a little bit more forward that day comes. Or potentially just work with people like Rob uh, that's also an option on the table. So we scored the brace, now we're moving on to the hat trick, which is what we were talking about just a second ago, I sense that there's way more than just three, uh, massive nuggets to share with the audience. Uh, today, Rob, I bet there's loads in there, but if you had to pick a third one just to round everything off, put the cherry on the cake what would that be?

Rob, 32m 20s:

I suppose in terms of advice as a tip, or in terms of what to watch out for.

Dr James, 32m 27s:

You know, I like that theme that we were on just then. It was more like how to get the most out of that conversation whenever it comes to seeking finance from a broker, from a buy to let. But if you feel like those two were really good and that kind of rounded things off, maybe we can just think more generally.

Rob, 32m 42s:

Yeah, I think I would personally highlight the short-term to term facility. So first quick tip would be, if you are starting out, start on a basic single let, buy to let, and the reason I say that is because that's your buy-in. I call it your buy-in as to learning the process of the way that it works, and then you can take that knowledge and apply it then to larger projects. So that means buying a residential property, going through the process of buying it, refurbishing it and then refinancing it. I think that that's a really good model to work for, because, look, we all want to maximize our investments, because, look, we all want to maximize our investments, and so the best model to do for that is to either find a way to source private funds, bridge it, so using a bridging company, or use a commercial bank that is going to do a short term facility for you that will be available through your broker as well. The bridging the private finance will come through your connections, finance will come through your connections. So one of those three once you've obviously sourced the property that you can add value to do the refurb work, refinance it out the back end, release some of that equity and put it onto a term facility and then take that capital, the excess capital that you got back out, and reinvest it alongside some extra funds to your next property. And that's the quickest way you're going to build a property portfolio. But don't try and jump in the deep end too quickly. Definitely go with a smaller one to start with, like a two, three bed semi-detached house that you know is not too hard to do but it's also very easy to dispose of as well, because they're in quite high demand if you needed to. And then don't also be afraid to sell some of the stuff as well. That's something that held me back for the last couple of years, I suppose, because I knew my model that worked and it was so hard to find a property where you could add enough to bring your initial investment back out of, so it made it very capital intensive. Now I'm also selling some of the stuff. So if I'm building out so I'm just about to build out 15 apartments they'll all go up for sale. I would estimate, within the timeframe I'm doing it to, I'll probably end up being left with five of them. So the profits that are made from the other 10 will mean that the five that I keep. Hopefully there'll be a little bit more extra left over as well will actually pay for that money left in, so it costs me nothing. So I've got five assets, five flats then, without having to invest any extra additional money, and then they'll continue to help produce that monthly passive income for me whilst I continue on to my next project.

Dr James, 35m 11s:

Wonderful. This might be a really basic question, but I've never actually known this about property. Do you know if you're investing in a limited company and you release a lot of capital because you sell those 10 flats, for example, how does the corp tax situation on that work if you want to reinvest it into further properties?

Rob, 35m 27s:

Yeah, that is a good answer. Unfortunately, I think I'm right in saying in America they can just reinvest it straight and you don't have to pay tax on it because it's going back into the property. Unfortunately, in the UK you have to pay your tax as you would in a normal business, so you're not paying capital gains tax as you would if you were selling it in your personal name. You'll pay normal standard tax, business tax. But, for example, if you were like, say, I don't know if I can say you made 100 grand, you pay your 20 grand tax and then it goes. Because you're not pulling it out of business, you're not paying personal tax on it, but if it's going back into another investment, you're just paying the 20%, whereas if you were doing it in your personal name and then you were to buy it and then sell it, for example, and make a hundred grand, obviously you'd be paying depending on how much you earn in your normal job. You would then be paying capital gains tax on it.

Dr James, 36m 20s:

So yeah, it's unfortunately just part of the process. Yeah, with that, gotcha just curious on that one. Well, listen, Rob. Thank you so much for being generous with your knowledge on this episode of the podcast today. Rob, if anybody wants to reach out to you off the back of anything you said today, how would they be best off doing that?

Rob, 36m 31s:

uh, the best thing would probably be instagram. Uh, I'm. I've cut down a little bit in terms of how active I am, but it's always the best way to get hold of me, uh, or on my email. I'm happy to share my email in the show notes as well, if anyone wants to reach out, um, and then I'm, then from there I can share mobile numbers, etc for those. If you've got any specific questions to help, wonderful.

Dr James, 36m 47s:

Yeah, I'm sure we can arrange that. And what's the handle on that instagram? Uh Rob bridgewater underscore Rob bridgewater underscore nice one top stuff. Well, listen, Rob, as I say. Thanks so much for your time, always pleasure, and I'm sure we'll speak to each other again.