Lewis - £6,000 Cash Flow From First R2R Deal

Meet Lewis!

Discover Lewis' Rent-to-Rent journey so far and how we have worked together to get his first deal which is set to cashflow him £6k per month…

I have been working with Lewis for a while now, and I have travelled up to Rochester to meet with him, see his new properties, and chat with him about his Rent-to-Rent journey to date. Lewis's first deal includes; four new-build apartments, two bathrooms, brand new everything, and fully furnished! He will be looking to Rent them out using the serviced accommodation model.

Lewis was originally a quantity surveyor by trade and worked hard in the industry for the last 12 years. Always thinking his talents could be used elsewhere, with a keen interest in the property, COVID, and the uncertainty that has come with it gave Lewis the push to take action and get educated on property investment.

Listen to this weeks episode to discover how Lewis has worked together with Simon to secure his fantastic Rent-to-Rent deal, how he plans to cashflow the property and what the next steps are for him and his property business…

Available on iTunes, Google, Spotify and others or click “play” on the player below!

Podcast Transcript↓

I'm Simon. And a few years ago, I decided I wanted to make a change. I wanted to create a passive reoccurring income to support me and my family today. And a legacy for the future, a future fast forward two years, and I've managed to generate over 10,000 pounds worth of monthly passive income. I've set up the business, scaled the business.

[00:00:29] I now have systemized the business to free up my time. So join me to find out how I've done it. How well does it do it every day and how you can give it to.

[00:00:54] Louis Simon, how you doing mate? Not too bad. Um, absolutely fantastic. I've just been on the all the way down to Rochester. Um, It's surreal. It's it's real. We're sat here in your first deal and it's a big one. Do you want to just tell us a little bit about it? Yes. Thanks for coming down. So I'm really appreciate it.

[00:01:21] So my first deal is for rates or service accommodations. Um, the actually apartments brand new build, um, from a developer who I met. Six weeks ago. And here we are, six weeks later, I have the keys and now you're sitting in front of me as my mentor. Um, and even you're surprised how could this do is may, um, um, um, it's surreal.

[00:01:50] So just to paint the picture we're in these amazing brand new development, four apartments, two bathrooms, brand new kitchens, brand new, spanking, everything. And. Open them furnishing give not to do a single thing, right? Nothing. Okay. Let's just rewind and go, you know, back from the star, Louis, you just want to introduce you to self and tell everybody and it will be a bite.

[00:02:16] Yeah. So, um, I'm originally a quantity surveyor by trade. I've been working hard at that for the last 12 years. Um, it's been a long, 12 years and I've always thought that my talents could be used elsewhere. Always fought that. Um, And a year and a half ago, I decided it's that I want to study property. The reason being I've always been that guy who whenever grand design comes on or whenever homes under the hammer comes on, voice said, one day I'll be that guy.

[00:02:48] And you know that guy, we see walking in homes that are Homer and you see him for no, for no reason whatsoever. Just turn the light off, turn the light on and just struck the wall and go, oh, I want to be that guy. I want to be that guy. So EVR a lot down the curves COVID in marks. I was thinking, gosh, I might be out of a job any day now, or I could use this opportunity to start another company.

[00:03:18] Well, that company was, I wasn't sure. So I did decide to sell a quantity surveyor business. So what that could do is free me up to be working more at home and have more flexibility studying for it this whole time on many different, many different aspects. So we're talking BIR we're talking purchase, lease options, et cetera, rents or rent.

[00:03:42] For whatever reason. I always felt that, oh, that's going to take up too much of my time. But I did learn winter rent. Once you secure that rental rent, you've got so much more cashflow to free up your time. Well, I think we've a bit our, our strategy. If you start doing that first, that's great. I think you're going to need a hell of a lot more time to do that.

[00:04:05] Hell of a lot more capital a hell of a lot more investment. So rents or rent is when often I'm just going to do it. I'm just going to start looking around mentors, et cetera. I'm going to find my investors. Um, if I need them, that was and Stan, I think November. Yeah. Well, I'm doing it now. I'm doing it now.

[00:04:25] There's never, we'll never thought Murray about the, uh, the pandemic. I think this is the best time because we have to do something during this time, you know, otherwise I think it will be, I would be wasting my time because when both of us go back to normal, I could be ended up doing a five day a week job in an office.

[00:04:42] I won't have the time to do it. Um, November is when I decided I'm going to start the rent to rent business now because I'd studied rent to rent the least out of all, uh, aspects in property, or I needed a mentor and I needed the mental fast. And then we met up and then we discuss what we going to do.

[00:05:03] Start with January. I then started the business. I got a joint venture partner. Um, that joint venture partner is very keen in the property world. However, he does not want to, he doesn't want to know the ins and outs of it. All he wants is just the end result and the money it proves. And that's great. What that done that joint venture partner.

[00:05:24] And give me so much time to sorry. So much money to upscale. It gives me a great opportunity rather than me trying to find investors. January is when we start it's we fast forward to maps. We've done so many, many deals, many deals during that two months. And we learned so much so quick. Um, at first I was a bit adverse to look at apartments or wanting to look at houses.

[00:05:48] HMO's I didn't really know renter essay market whatsoever or main goal was going to be rent to HMO's. But then I remember we spoke. And you said I'll be able to see more than you'll be able to see at times it was like, okay, open up my mind straight away. And I think within a week after discussing service accommodations, we secure towards the block we're sitting in now.

[00:06:13] It's been a whirlwind and amazing story. And I just need to just say how gorgeous not only the apartment is, but the area as well. Like tell us a little bit about it. It seems like there's loads of, you know, life, um, beautiful Victorian properties, you know, Rochester. Tell us a little bit about it. So Rochester is very famous for being Charles Dickens 10.

[00:06:35] Um, you know, the company's streets. This is where Charles Dickens from was originally. They have something called Dickens festival. Um, you have to register for federal Rochester. Castle. Christmas is more busy and Christmas than it is at the summer because it is a Christmas town. Um, the high street, the south that half a mile frequent is a mile long.

[00:06:53] You've got bars, you've got restaurants, you've got people, tourists coming down quite a lot, quite a lot. You've got around the corner from this. You've also got the university of creative arts. Um, not too far away. You have chat and maritime. Uh, university and kind of university or based in Chateau, excuse the name with that.

[00:07:17] You've got train stations around here. You've got hospitals around here. This is a very, very busy part of the midway towns. The, it sounds like, you know, a mini London, everyone goes out in Rochester. So is the place to be, um, obviously knowing these now on this. Yeah. No, and I don't blame you. It's it's really nice.

[00:07:42] So one thing that stood out for me, there's a couple of things I want to unpack on what you just said there. One of them is about the investor in you leverage in that finance, in terms of rent to rent. You know, what, what point did you decide on it and what did it take for you to actually start act acting?

[00:08:00] What changed in November for you or realize. That the deals I wanted to achieve such as our strategies, um, purchase, lease options, or even just flipping properties that would take a hell of a lot of investments to do. And I'm only tied down to one deal. And I think I was in denial for a long time.

[00:08:24] November hit me. Well, imagine I'm working so hard to secure a large investment. Rents or rent, look at the cashflow. It does bring in, look at once you secure one deal for a lot less money. Look how much money I can make. Not only myself, others, um, we've to investment or made it clear. You can spend X and you're only going to run an income of a thousand pound a month.

[00:08:53] Or you could spend the same mix and that same, it's going to you 10,000 pound a month. Mike, the coal. And that was my selling point to investors. And as soon as I bought that in my head, it was so much more easier to sell to investors because what I'm trying to drive into people's mindsets, they frown upon it.

[00:09:10] It is a win-win strategy. It is a win for your investors. It is a win for the tenants. It is a win for yourself. You're finding properties that they need to rent out. They won't guarantee rent. Um, for me, it seems like a no brainer. So once I decided my money is best spent doing the red Sorento than it is doing one investment a year.

[00:09:30] Sure. So let's talk about this deal then, because I can imagine properties around here. Aren't cheap. No, not I have one it's too expensive. Yeah. So what, what you're looking up to say, I know too bad department around here in this area.

[00:09:47] Yeah. So you first read through it there. Let's just unpack that. So if it's a full apartment deal, right? Yes. One apartment on each floor, floor, one floor to floor, three floor for all brand new. How did you source, how did you find, okay. So yeah, if every morning you look at rock moves, you have the obsession of right move.

[00:10:08] Um, scroll you scrub. I see an apartment come up. Brand spanking new for whatever reason. I put the blockers in my head minus nowhere. I'm going to get that for the life of me looking back at it. Now, I don't know why I fought that. I don't know why I fought that, but when I moved in, it was we're going to study Asian.

[00:10:27] Um, As soon as I saw it, a phone straight away, short shot burst for yourself in the deep end. If you've got a bit of a mad moment, just make that call. If it seems that you've got sending you or maybe I wouldn't get it, just make that call. They're the ones you're going to get, because now you've got you feel, you put yourself under pressure to get that deal.

[00:10:43] Um, I made the call and, uh, the estate agent said, look, we've got five viewings here's date. Um, okay, well I can get down in 30 minutes. Can I come and view it? That's fine. Um, you can come down. I couldn't see the outside of the building. I didn't know where this apartment was located. I've lived in Marsha for a long time.

[00:11:04] Where are these flats? Why haven't I seen him? He was just standing there. And, um, anyway, I drove down and then I actually knocked on the door to the wrong flats because I still couldn't find these flats. Um, then I stood that. So I said, where are you? I can see you. You're at the end of the driveway. What driveway is this on?

[00:11:26] Walks down, saw the estate agent before you know it, I'm looking at a brand new built, still under development as in the drive still wasn't done and I'm keeping deadly quiet, but inside, I'm going to tell you that there is a day when our Anzio at the time. Did you know it was four? Was it just one, one? So I've walked in, uh, there's buildings everywhere.

[00:11:45] The ground floor was done and I'm thinking it's, you know, it's just fantastic. The ground floor. Um, I did make a point at the ends. I've noticed that there's a lot of people that is in here today. Yeah, yeah, yeah. The others are not ready yet. We're going to put them in the market soon. Really? Okay. Well that's all I've got now.

[00:12:08] Let's just, let's just go see him now. You know, if you're going to put him up for ring who's to say that I'll be able to rent them off you. Um, you know what we do, we've said what our company does. We've explained it to them. Um, and you stated, you said, okay. Yeah, let's go. We looked at the other three apartments and, um, yeah, I couldn't believe I was looking at, I was just like this block in the location they seen in the prime location.

[00:12:35] You can't get much more private than this location. Um, I then went downstairs, spoke to apply the, and said, look, I love these apartments. Well, I'm looking to make an offer. It's a day on four. How does that sound? Well, four, they're not ready. I know I'm willing to make an offer for four here's a day. Yeah. I mean, you know, if you want to do that, that's great.

[00:12:59] Um, you're going to put it in today. I'm going to go back to the office. I'm going to work out the figures and I'll be with you within the hour. I did put myself under pressure, slightly button. I was walking to figures in my head. As I was walking around, went back, put it down on paper. We'll do 32 minutes.

[00:13:13] I've made the offer. Because using the templates, which I have the templates, which I have, um, it was just a no brainer just completely by itself deal calculator. Yes. It breaks even what sort of percentage? 50%. Now that 50% is based on conservative figures. Um, the reason we base our figures on a conservative is because that's how I calculate in post.

[00:13:44] Sure. A hundred percent. So basically just, just if you, if you're unfamiliar with, um, how to crunch your figures, Scroll back through the podcast. I'll link it below in the description. There's a whole podcast on how to crunch figures for rent, HMO, Hodgkin's to figures for rent to essay. So you used my deal.

[00:14:02] Calculator, you punched all the figures in, um, just to give us a summary of the figures. So how much a night are you? Are you going to be charging per unit? To start hundred pounds per night per unit. Fantastic. And what are your total costs or guaranteed rents on these? So, um, these 1200 pounds per property, uh, bills are around only 310 Pampa property.

[00:14:29] We have Wi-Fi built in. Which the landlord is covering as part of the rent. We don't pay for wifi or broadband dissolve, which is a result. Um, good Wi-Fi as well. We've had a bit of a touchdown. Nice. Um, now we've, we're coming in around, uh, say 1500 a month per um, if we let him out a hundred pound per night.

[00:14:51] Um, so within a full month to be at 3000 pounds, now, if we only have 50% occupancy at the conservative a hundred pen, right. We own 1500 pounds. We're at breakeven. Yeah, no, in this 50, my maximum one would in Scotland, a conservative figure. We've done it to see if we can get people in this building and it's filling up fast.

[00:15:14] All of a sudden, even some diabetes, each of a small note, someone has inquired about it again. So we're going to see that we get all of them for the next month. And after this month, if we start getting more bookings, all we've got to do is have a look at the other Airbnbs in the area or the other, uh, Platforms for booking and they're going for a, you know, a lot more than this at the moment.

[00:15:34] Cool. And how much have you invested in this deal? So we've invested 4,000, 200 pound per property for phone Toronto, no building whatsoever, nothing at all. Um, with that that's including everything. You can tell us this, you TVs. Yeah, quite furniture it's quite furniture bottom. Why would you agree? And so the furniture company came in, say all out for you.

[00:15:58] She was completely hands-off cause you're a busy lad. So just to summarize then what you've just said, my understanding is you breakeven on each unit is 1500 quid. You're charging a hundred pound a night. So you're first rent to rent deal. Four units, a hundred percent occupancy would be customer and your how much.

[00:16:19] 1500 pound net, quick muffs. Yeah. 59, Japan knit profit, six grand, six grand. Obviously we don't last, you know, that might happen. That might not happen, but the great thing is a hundred pounds conservative and we just spoke earlier. If we can lock a couple of long-term corporate or construction clients in two of these, we can push the price up for the other two to 150 quid.

[00:16:43] And before you know it, you could be creeping closer towards 10 K easily. Yeah. I mean, that is the mindset. I mean, we've already had a couple of inquiries for too long term. They're already starting off as inquiries. Um, once we had further focus on for the other properties, you know, uncomfortable, these are field.

[00:17:02] I mean, I've got to get a bit myself, to be honest, I'll have the ground floor with a patio. You can have the festival. Yeah. But yeah, mate, look, um, what our first deal. So just for everybody listening at home, Um, what would you advise them? What would a virus is as far as the self into the pen, quick for yourself into the pens?

[00:17:29] Because it's 20 minutes of just pushing a button. The sound goes south. The company's done. I'm thinking about it for 20 days or two months. I mean, yeah. You know, you're going to be thinking about it for that time. You're just wasting your time. So just set it up if you're unsure, make sure you get that mentor because that mentor, when you have a wobble, when you think, you know, you can't make it, you've got to try and assess that mentor is doing it live at the moment, which is my preference or for someone who's actually doing it live, not someone who's overly doing it for 10 years.

[00:17:59] That's just my preference. Once you're on it. If you have a wobble, speak to your mentor, make sure you build the people around you are in exactly the same boat. You got to have a wobble one day. The next day, when I must admit Simon, I was having a little bit of a wobble for a week, drinking hard, just not securing anything.

[00:18:17] You then call me down and said, have a look at the service accommodation within a week, we secured an absolute gem. I still don't know. Guys are cool to do like this for their first. I'm sure there are, but to meet them and go.

[00:18:33] is that? No, no. I mean, you should though. You should there, but brothers, if you've been a pleasure to work with, and one great thing about you is you've been consistent. You're very, very busy, loud as well. You know, I can see are hard, you're working, but you've. We set a timetable. We set structure. We consistently spoke.

[00:18:53] You consistently viewed properties. Came back. What about this? What about that? You've been knocking on doors. You've been making phone calls, doing all the principles that we've gone through. And what date did we start? January 5th. So January, February. So you're looking at what, less than free months.

[00:19:13] Pretty much to get into this though. I think he was, we was working on it for a few weeks as well. Weren't we, um, two months I was really confident that we'd secured it, but we still didn't. So I hadn't met on a dotted line just because the EPC starts as soon as they come in, signed it that day. So it just goes to show a couple months first deal for what what's next for Louis just before we wind up.

[00:19:34] Um, Where are we going? Next? 10 K 20 K. We're going for the 10 K as soon as we get at 10. Oh, I'm going to free up a hell of a lot more time. We all going for that big 20 Kelly. The reason we're doing that is because I know someone who's ran the bat and that's when he came. That's the target. That's what we're doing.

[00:19:50] Wait, wait, Louis. You've been an absolute pleasure. It's so good to meet you in person. Um, I remember the first conversation we had, and you've always been very certain about what you've been doing, and it's been an honor to help you do that. And as far as I'm concerned, this is the beginning of your journey, 10 K next 20 K after that.

[00:20:11] And you know, next take over the world. So thanks very much everybody for tuning in Louie. That's for joining any final comments, man told me up, man, it's on the up. Speak to you soon. Take care. Thanks. Cheers guys.

[00:20:39] Thanks for listening. For more information, check out Simon Smith, online.com. See you next time.