Property Investors Academy student fast-tracks himself to financial freedom at 29!
In Samuel Leeds’ words, Property Investors Academy student Patrick Welsh is ‘on fire.’ In the past 18 months, the 29-year-old has created a rent-to-HMO business from scratch generating a profit of £2,700 a month. Patrick and his two associates have also earned £56,000 from packaging and selling deals and he is about to buy a couple of house shares to add to his portfolio of 27 rooms.
‘Property Investors’ training is immense’
The only way to achieve success, Patrick believed, was to be the best employee he could be and then to go through the stages that would lead him to where he wanted to be in life.
His opinion changed when he was offered a new position. He and his boss agreed on the rate, but the finance director rejected it on the grounds that it was too much for a blue-collar worker to earn.
That was when the ‘penny dropped,’ the father-of-one says, that he was going to be dictated by the status of the job financially and began looking at alternative ways of making money. Early in 2019, he started watching Samuel’s YouTube videos on investing in the housing market.
“I’d listened to some podcasts before I came across Samuel talking about no-money-down deals,” Patrick recalls. “I’d also heard about raising JV (joint venture) finance. Then he came to lease option agreements and I thought I’ve not heard that one yet. I’m going to do some more investigation on Samuel. I liked his energy and he’s a similar age to me, so I told my fiancée we’re going to the Property Investors Crash Course in June.
“The rest is history. I signed up to the academy on the day of the crash course.”
His fiancée Chloe persuaded him to join and he has never looked back since.
Patrick continues to thrive on the training from Property Investors which he describes as immense. However, he has learnt some lessons the hard way along the road.
Having educated himself through studying Samuel’s free YouTube content, Patrick felt confident enough to negotiate the purchase of his first investment property. It was fully let, which was a bonus to him because, as an inexperienced investor, it meant he didn’t even need to find any tenants.
The house was a student let with four tenants, but by the time he came to complete the purchase, two days before attending the crash course, it was only occupied by two tenants.
The assured shorthold tenancy stipulated that only those two people could rent out the house for the next 12 months.
“It washed its face in terms of profit, but the agent wouldn’t put me any more tenants in, so I was kind of up against the wall with it.”
The experience taught him that he needed to carry out more research to avoid a similar problem.
“I’m doing this second time round with buying another property that is tenanted. I’m having my solicitors work on it on a week by week basis to get a rent account update. This is to make sure everyone’s up to date and nobody is in arrears due to Covid, and that there is nothing in place that says we can’t run at full capacity which is what hindered me before.”
Patrick has agreed a purchase price of £83,000 on the four-bed property which is fully let and bringing in £1,200 a month. He sourced a house next door-but-one which sold for £99,000, so there is scope to make money on it, he explains.
His aim is to make a profit of £100 for every room he rents out. Before the coronavirus pandemic, the young entrepreneur had 32 rooms giving him £3,200 to £3,500 per month. Now he has decided to downsize his rent-to-rent business after certain issues arose.
“For some reason the troubles came from some of the lower end properties with Universal Credit tenants. It didn’t make sense because they get their rent paid. It was more hassle than it was worth. We started handing back some of the lower quality houses. It wasn’t really to do with the house, more the area, so now I’m keeping the ones that require less of my time, make the best money and don’t need any work doing.”
‘If you’re not embarrassed, the offer is too high’
After finishing the Launch Pad and Rent 2 Rent Revolution Property Investors Academy courses in August 2019, Patrick set himself up in business the following month.
He had learnt through his training that one of the ways he could source rent-to-HMOs was to submit a Freedom of Information request to his council for the local HMO Register. As a result, he received 300 addresses of registered house shares.
Using Docmail, Patrick loaded up a Word document pitching his suggestion for the level of guaranteed rent that he could offer a landlord and then sent it out to the first 150 addresses on the list. From that initial mailout, he got a reply from a property owner who had been a landlord since he was 18 and knew how to convert houses for multiple occupation.
“His standard of conversion was really high. I walked into this place like a rabbit [caught] in the headlights. He didn’t really care about my pitch, he just said, do you like it?’
“Just as I was going to seal this deal, I messaged Samuel on a voice note saying, ‘what do you think I should offer?’ It was a gorgeous house with seven bedrooms, all en suite. He replied and said insult him, so I played it to Chloe. She said, are you really going to disagree with a millionaire? I’m like no, so I insulted the guy and he nearly pulled it! But it gave me a benchmark to work from.”
Samuel points out that his exact words were, ‘if you’re not embarrassed, the offer is too high.’
Patrick says his advice would be exactly the same now. He went back with a higher offer which was accepted. The caveat was that if he took this house on, the owner would give him another one to rent out. So, by October Patrick had control over 16 rooms.
“That was very powerful in itself and those first two are the ones I’m keeping. It’s a five-year deal. They don’t require a lot of my time touch wood. Most of the tenants have been there longer than six months. I’m not really even sourcing tenants any more. Those two are making a profit of about £1,800 per month.”
After securing his first two rent-to-rent agreements, Patrick expanded his portfolio, building on the £10,000 worth of training he received on the academy about HMOs and buying, refurbishing and financing projects. All of his properties are in Hull, where he is from, and were already converted to HMOs when he took them on. He manages them alongside his full-time job, paying the owners a fixed monthly amount in return for being allowed to rent out the rooms at a higher rate.
Patrick has also been able to put down a deposit of £11,000 on a house which he is renovating while living there with his fiancée and two-year-old daughter. One option is to refinance the property, which he bought for £215,000, once the work is complete. In that case, he would expect to pull out around £40,000.
“I obtained a 95 per cent loan-to-value mortgage because I’m living there, and it doesn’t tie up a lot of cash which we needed for the refurbishment. There’s no point in dumping a load of cash into a house when it needs a lot of work. We’re doing it to a really high standard. There’s an element of us living there and just refinancing it, as opposed to selling it.”
However, if they sold the property, they wouldn’t pay any capital gains tax, so that would be a bonus too.
Despite the Covid-19 crisis, Patrick has continued to be active in the market. He is about to buy another seven-bed property in a prime location in Hull. The house is fully rented and is making £32,000 a year. He negotiated a purchase price of £159,000 and is going to run it himself.
Patrick branches out into deal sourcing
During the first lockdown in March 2020, Patrick also started sourcing property deals. He passes them on to co-sourcers who sell them to investors, and they share the commission. This has become his passion.
“I like working closely with investors. Over the last six months I’ve found lot of our business comes from overseas. They’re not here to be on the ground, but they’ve got a chunk of money and want to put it to work. It’s my job to make them understand how to do that, what to buy and what’s going to be coming out as the profit.
“Give me a deal and I’ll go and find it. I do truly believe I can find anything an investor is looking for.”
He proved the point during the ‘Covid March madness’ when tenants were disappearing. He found a deal in a week for a woman who wanted a buy, refurbish, refinance project which would cash flow £1,000 a month and allow her to leave in less than £10,000 of her investment in the property. He sold that deal through a fellow academy member.
It was Property Investors’ Deal Selling Mastery programme which accelerated him as a deal finder, he says.
“It’s amazing because you do it live. It’s not like sit down with a book, read it and tell me what you’ve learnt. It’s, I’m going to show you how to sell on stage. I think we sold £24,000 worth of deals over two days. I sold one deal which made me £3,000. Where else can you do that? The training speaks for itself. It’s a credit to Samuel.”
Patrick is also slowly bringing his 28-year-old fiancée Chloe into the rent-to-rent business. She was working two days a week until she was furloughed recently and made redundant. Now her wages have been replaced by the business.
“If we can get to the point where she is finding me leads, doing viewings and packaging deals ready for me to sell that would be ideal. It felt really good to be able to give her a job. We actually told our daughter mummy didn’t have to go back to work. I think that brought a tear to her eye.”
Patrick now has several businesses, all of which have been named after his daughter Eden – not that he intends to hand her his portfolio when she is older, he stresses.
“It’s just a way of her getting taught from an early age that this is what I’ve done, and this is an option for me to coach you down the right routes. I want to give my daughter an opportunity I never had and also provide a bit of freedom for myself and Chloe. We want to travel when all of this is over.”
- You just need to get started and invest in yourself if you want to become a property entrepreneur. It’s the biggest investment you’ll make. You’ll make that back tenfold.
- Remember this. If you’re not growing, you’re dying. You’re just stagnant.
- One of the most important things to acknowledge is what you are doing about reaching your long-term goals because implementation is the key to getting to where you want to be.
Samuel Leeds’ verdict
“Patrick is very good at finding deals. He’s proven to himself he can do it. Now he needs to start selling to investors. He’s also a very hungry person, always wanting to go to the next level. Most people wouldn’t dream of doing what he’s done in their twenties.
“He’s obsessed with growing by reading new books, taking more seminars and constantly stretching himself. It’s inspirational.”
Patrick’s details: https://www.edenpropertyinvestors.co.uk/
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