Property Investors Academy Student turns around R2R business after Covid wipeout!
The last few months have brought their challenges for Chris Jaap, one of Property Investors’ most successful students. The coronavirus pandemic wiped out around £10,000 worth of bookings for his serviced accommodation early on in the crisis. Despite this setback, he has picked himself up by adapting to a changing market. His portfolio includes 20 rent-to-rent deals in the North West. He also runs a successful deal sourcing business, working amongst others with wealthy investors in London and Dubai.
‘I went into property to give me more family time’
As a busy contractor who installed communications systems in air traffic control towers, Chris was hardly ever at home. He travelled a lot up and down the country and also abroad before that with the Royal Air Force as an electronics engineer.
Then came marriage and the birth of his son Charlie in 2017 and his priorities changed. He decided ‘enough was enough’ and looked to property as a way of giving him a more settled lifestyle.
One advantage of being constantly on the road was that Chris got to stay in hotels where he could use his leisure time to read up about investing in the housing market. There was plenty of information out there to absorb, including the huge amount of free content Property Investors’ founder Samuel Leeds shares on his YouTube channel.
Chris immersed himself in the subject. He watched Samuel’s videos and read his books, listened to podcasts and then enrolled on the Property Investors Crash Course. After attending the two-day event, he signed up for the company’s Deal Finding Extravaganza course.
“I thought this is it for me. I knew I was the sort of person who would keep going to make something successful,” he recalls.
So, he took a leap of faith and gave up his work to join the Property Investors Academy.
It was a courageous move, but he thought if his focus was on property full time, he could make a success of it with the help of the academy’s comprehensive training modules.
Covid-19 cancellations ‘hurt in the chest’
After a year Chris had clinched rent-to-rent deals on six HMO properties in Chester and two in Deeside – with between five and nine bedrooms each – in addition to eight, furnished en suite rooms in Bold Street, Liverpool, which he let out to short stay visitors.
In each case, Chris negotiated a rent-to-rent agreement with the owner. As part of the deal he pays the landlord a guaranteed monthly rent for the accommodation and then lets it out at a profit.
In return, he agreed to take over all the management and maintenance of the property, including finding and vetting tenants, collecting rents and dealing with any problems. He also gave the rooms a fresh lick of paint, had new carpets fitted and brought in furniture to create a high-end look.
Three of the properties alone were bringing him in a monthly profit of £2,500, while five others were earning him around £3,600 a month. With the studio apartments in Liverpool also generating thousands of pounds a month, his financial independence was secured.
“I systemised the business once I got to the point once where I’d got more than 10 properties,” Chris explains.
Having a property and lettings manager, freed his time to set up a sourcing company which increased his knowledge and experience of the market substantially, he says.
However, like many other investors, Chris and his business partner, Patrick Welsh, who he met on the academy, have had to take an eye-watering hit because of the Covid-19 crisis.
“Our studio apartments in the city centre were generating £2,000-£3,000 in a good month just from weekend bookings. We picked up a lot of custom from football traffic and stag do’s.
“Covid wiped it completely. It cancelled every booking we had and that was back in February. We had bookings worth £8,000 to £10,000 gross up until September. We knew back then we had that ready. Then it was gone. It hurt in the chest.”
With Airbnb restricting UK bookings to key workers and essential visits during the lockdown, they knew they had to act quickly to replace the income.
“When you’re doing a rent-to-rent an empty bed is profit loss, so you need to be on top of your game. We’ve changed the clientele to contractors now, but we really had to push to get them through marketing campaigns, Facebook and Instagram ads – everything we could think of to do. We even went as far as visiting some of the sites in the local area where contractors were working, just to promote the business and show them what we could offer.”
They also had to lower their charges in response to the new situation. “Liverpool has quite a lot on offer in terms of serviced accommodation, so we’ve had to look at bringing the prices down to reflect this. It’s been a difficult time.”
In spite of the difficulties Chris and his partner have had to face in 2020, their rent-to-rent portfolio now also includes four flats – bringing the total to 20 properties owned by 13 separate landlords.
Chris credits his support network in the Property Investors Academy for helping him to negotiate a better deal with the owner.
“The landlord wanted quite a large amount for the block because he knows they’re nice flats. He also knows the area and what rent he could get. It was members on the academy who suggested I lower the price but offer to do the furnishings. You can always offset the furnishings on finance or lease them.
“I had to pay a little more upfront, but that allowed me to have a lower rent for a longer period. Now we’re taking about £1,500 a month on this one deal alone.”
The whole deal, he says, came about because of a set of fortuitous circumstances.
“I get on well with the carpet fitter who fitted the carpets for me for one of my first jobs and has done other work for me. He was passing by whilst this place was getting refurbished by the vendor and just walked in to see if he could sell carpets to them. He ended up passing my details to the landlord and we negotiated the deal.
“Since then we’ve created a good friendship with this vendor who has asked me to look at another property in the city centre. We’ve not been able to agree on anything just yet but again you don’t know where these leads are going to come from.”
Homing in on solutions not problems allowed business to prosper
Chris’ sourcing company, Nordic Property Solutions, is also going from strength to strength, bringing in finder’s fees of £3,000-£5,000 on several deals.
“We send out deals quite regularly,” he says. “Recently we had a fantastic deal which we’ve packaged and are project managing for one of our investors. That’s going to be an almost all money out deal and cash flowing over £1,000 net a month, so they’re happy.
“We charge a separate project management fee if the client wants it. Some of the investors we work with are based in Dubai and London. One investor says he wants to build up a portfolio aggressively. So, it’s people who want to move fast. We’ve got the criteria for these guys and we’re ready to move.”
Chris describes his journey in property as a rollercoaster with massive highs and lows, one of those being the Covid crisis – but he has also had to grapple with mental challenges.
“I am a very strong-minded person. I was in the military for 13 years before I came into property investing. I’m quite confident in my abilities and myself as an individual, but there was a time last year when I had some problems.
“I’d just taken on three or four deals at the same time and it overwhelmed me because I didn’t know how I was going to pay for them or get the refurbishments done. I broke down, but relying on the people around you and the friends you make, that pulled me back into normality.
“Finding solutions to the problems I had back then allowed me to progress as a business. You can think, I just can’t do this. It’s not going to happen, I’m ruined, but if you just stop and think, what’s the solution, find that, then that helps you. The experience made me grow as a person so that I could be a bit calmer.”
Since becoming a property investor, Chris’s life has changed beyond recognition. He is in control of where and when he works.
“I probably work longer hours now as a property entrepreneur. You’re constantly looking at deals, packaging and working on something to do with on the business, but I don’t mind that because I know where I’m going and what I’m trying to achieve.”
He adds: “It’s a collective bunch of situations which has made me glad I went into this, like family time. Last summer I was able to take my boy to the beach on a Wednesday afternoon and I can say, what are you doing today? I can play with you in the park. It’s those things I’m thankful for. Property has given me space and time, and the financial freedom that comes with that. Now it’s a case of making sure I keep going. That’s where my goal is, to go higher and higher.”
- Set yourself realistic goals, to start with, and then something that will take a long time to achieve but it’s a dream. For me I wanted to become financially free and quit my job. There are so many strategies you can do. I narrowed it down to rent-to-rent, understood the ins and outs and took action.
- Look at yourself and find what you want. Where do you want to be in five years? Do you want to be in the same job or be your own boss? Start finding out what that passion is. Get the knowledge and act.
Samuel Leeds’ verdict
“Chris has faced some tough challenges, but he has come through them by knowing the market and the price point. Now he’s moving on to bigger sourcing deals and developments. That’s the transition I recommend people to do.
Connect with Chris: https://www.nordicpropertysolutions.c…
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