Young Property Investors student recovers in style from disastrous first deal!
Graduate Nigel Dube lost £8,000 on his first rent-to-rent deal, but with training from Property Investors is now a full-time entrepreneur making a monthly profit of more than £3,000. Still only in is early twenties, Nigel has a promising future ahead of him as he seeks to build on his mixed rental portfolio which includes lease option agreements – the ‘golden ticket’ for any investor.
‘I knew it wasn’t right to blame Samuel for my bad deal’
Zimbabwe-born Nigel came to England with his parents when he was 12. They emigrated here for work and opportunity and, like them, he too has found it in his adopted country.
After leaving school, Nigel moved from Luton to Birmingham to study mechanical engineering at university and his prospects looked good. However, he soon found that he was dissatisfied.
“When I was at uni, I didn’t really like the life. I always thought I wanted something different, something more,” says Nigel looking back.
So, he took a full-time job while still at university after reading Robert Kiyosaki’s best-selling personal finance book Rich Dad, Poor Dad, which advocates investing in real estate.
Nigel’s plan was to save as much money as he could from his work as a stock controller in a warehouse and put it into property to build wealth.
“It was a decent job, but it was very intense,” he explains. “There were 12-hour shifts sometimes.”
Despite this, he managed to find time to start watching videos about property and came across Samuel Leeds’ YouTube channel after a recommendation from an American investor.
“It explored a whole new world, like rent-to-rents, and I began binge-watching Samuel’s videos. I was still at work, so even though I was getting all this knowledge, I wasn’t doing anything about it.”
With that in mind, Nigel paid for a VIP ticket to get a front-row seat at the Property Investors Crash Course in November 2018.
“It was a special moment for me. I wanted to get as much knowledge as I could. Samuel had inspired me so much before with his videos. I paid less than £100 for a course that lasted two days. It was well worth it.”
Feeling ‘super-motivated,’ by the Property Investors Crash Course, Nigel then booked himself on the Deal Finding Extravaganza in the new year. But he couldn’t wait to get started and so went on some viewings straight away. Within days he had landed himself his first rent-to-rent deal.
Nigel, who was still in employment at the time, negotiated an agreement to rent out a three-bedroom house in Smethwick, Birmingham with a view to adding another bedroom.
He would then pay the owner a guaranteed monthly rent and let the rooms at a higher rate to make a profit. As part of the arrangement, he had to pay a deposit up front, covering the rent for the first three months.
“It was open plan downstairs with a separate kitchen, so I thought I’d partition a wall [for the extra bedroom]. But then the landlord said I wasn’t allowed to do that.”
Having also spent money on bringing in furniture and decorating the house, Nigel had just £2,000 of his savings left. By his own admission, it was a bad deal. Fortunately, he was able to extract himself from it, thanks to a six-month break clause.
“I felt terrible about losing so much money, but I knew it wasn’t right to blame Samuel. I was waiting for training, which was coming, and I’d decided I just want to take action now.
“Especially after watching Samuel’s video about his Financial Freedom Challenge, I remember I messaged him on Facebook and said I wanted to quit my job. Samuel said it was probably not the best idea before I actually got money coming in. But in my head, I was so super-crazy because he had opened my eyes to a whole different world of how you can get passive income.”
Undaunted by his experience, Nigel drew on his connections with people he’d met at the crash course who gave him some advice. Then, armed with a whole raft of new information from the Deal Finding Extravaganza, he set out to find different types of rent-to-rent deals.
After a disastrous deal Nigel aims high!
Birmingham’s tallest residential tower block, Brindley House in Newhall Street, provided Nigel with his first triumph in the housing market. The landlord of one of the flats agreed to rent it to him for £800 a month. He then let it out as furnished accommodation for short stay lets.
Within months it was giving him lucrative returns. “It fluctuated, depending on the time of year, but it was grossing £3,500 in August. The average profit in a month was £1,200. It’s not doing so well now because of the Covid-19 pandemic, but I’ve still got it.”
More successes were to follow. His portfolio now includes three rent-to-rent HMOs (house shares). Two are making a profit of £850 per month each. The other one – a three-bed town house converted into an HMO – is generating a monthly profit of £700.
On top of this, the young entrepreneur has also managed to negotiate sought-after lease option agreements on two flats – having been taught the strategy by Samuel. One of the lease options is with a landlord who lives in Canada.
Nigel was looking for a property which he could rent out to visitors when he came across an apartment on the market in Coventry city centre. During the viewing the estate agent mentioned that the owner would be prepared to sell it if Nigel didn’t want to take it on as serviced accommodation.
As a fledgling investor, he couldn’t believe his luck. He realised in a flash it was a massive opportunity but took time to collect his thoughts before he responded.
“I was thinking, what does Samuel normally say in this situation?! I had to gather myself a bit and pretend I was still looking round but I was thinking what to say. Then I said what if I rent it and buy at the same time, but the completion would be in the next five years.
“The agent was open to the idea, but I was worried he wouldn’t pitch it to the landlord as I would. So, I said, talk to him first but is it OK if I also talk to him afterwards. That was OK but when he pitched it to him, the guy called me straight away to ask a couple of questions.”
Nigel explained the principle behind lease option agreements but was careful to follow Samuel’s advice not to answer any legal questions. Instead he told the landlord to consult a solicitor on the ins and outs of the strategy.
As the property was tired and had been on the market for a couple of months, he made an offer of £175,000 – £20,000 below the asking price – with the option to buy it in five years’ time and no deposit to pay. He was delighted when the owner agreed to his terms.
After finding a solicitor through Facebook, Nigel picked up the keys within a month of the viewing in October 2019.
After doing up the flat, it is now generating a profit, despite the coronavirus lockdowns which have hit many investors hard in the pocket.
His margin in November 2020, during the second lockdown, amounted to £250. This was after paying the owner £800, which includes the mortgage, ground rent and service fee.
The apartment is advertised through booking.com and Airbnb. Once the restrictions on travel are lifted and tourism picks up, he expects the monthly yield to rise significantly.
Nigel has also secured a rent-to-rent agreement with the landlord of a four-bedroom house in Birmingham who has applied for a licence to convert it into a six-bed HMO.
His profits from property now add up to around £3,200 a month, the equivalent of a respectable salary. Even with the challenges of Covid, Nigel remains ever hungry to clinch more deals. When the serviced accommodation side of his business slumped following the outbreak, he watched Samuel’s videos again to refresh his knowledge. He also joined Samuel 365, Property Investors’ online training programme, which offers weekly coaching webinars with Samuel, as well as unlimited one-to-one support, access to courses and other benefits.
Nigel says the courses are good value for money when compared to his student loan of nearly £30,000. “It costs £95 a month and you can try it out for seven days for £1 which is crazy.
“I’m gaining as much information as I can from there so that I can increase my cash flow by doing at least another 10 deals in the next 12 months.”
- I negotiated another lease option agreement but gave the keys back because it wasn’t working. As Samuel says, you should get rid of under-performing properties and just concentrate on the ones that are going to over-perform.
- It’s important to pay for training to avoid losing money like I did. I was so motivated after the Property Investors Crash Course to go out and get a deal but it’s best to get a few options in front of you before making a decision.
- Connect with other investors. I have and it’s helped me. I posted messages on Facebook groups to find my solicitor.
- Check the head lease when you’re about to complete a rent-to-rent deal on serviced accommodation to make sure there are no restrictions on sub-letting it.
Samuel Leeds’ verdict
“What I like about Nigel is that he is constantly transitioning. He’s completed different rent-to-rent deals and then moved onto lease option agreements. Now he’s looking at doing buy, refurbish and refinance projects, as well as deal sourcing.
“He’s done amazingly well, and the mad thing is he’s just getting started. Who can say at his age I’ve got lease option agreements, rent-to-rents and I’ve had to hustle from scratch with no prior property experience? Nigel has gone through the training with Samuel 365. One day he’s going to be a mentor and an inspiration to many people. I’m ridiculously proud of him.”
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