Michael, a Chinese native, was the first Masterminder to break an 8-figure annual turnover in his property business. And he didn't start with millions already in the bank, a modest £190,000 was what he started with. This is the definitive case study in rapidly scaling your property business.
Total turnover: £10,088,490
Total net cashflow: £100,016
Total flip profit: £926,325
Total equity: £854,583
Total properties: 84
Number of joint venture partners: 5
Next deal in pipeline: 18 units @ £2,100,000
It is customary that at the final workshop of each Mastermind Programme, some of the departing Masterminders get up on stage and talk about their experiences and results. Here is Michael's contribution...
WATCH MICHAEL'S CASE STUDY
TRANSCRIPT AND SLIDES
I love this guy because I can find a lot of similarities. This is one of my favorite quotes. It doesn't matter where you're from, how you start because it doesn't make who you are. It's the rest of your story, who you choose to be. Who do I want to be? Who do I choose to be? Your Mastermind.
Goals and strategies. Why did I do Mastermind? Although I had some experience before Mastermind I never had a formal training or property education. I was looking for new challenge, new vision and network and self development. I remember the first seminar, the first workshop. I was proper pumped and so excited. I'm thinking, "Michael, you gonna do this? You gonna do this right." Looking at that banner we're gonna add zero at the end. That's my goal. £10 million in property and £500,000 profit. When I calm down a little bit and went home, checked my bank statement luckily I had £190,000 in the bank. Unfortunately, I told everyone I'm gonna make £10 million. With that goal in mind, I can only do big deals. My strategy is what I call wholesale to retail. That involves efficient use of my own money and introduction of joint venture money and a lot of clever structures.
What happened during the Mastermind year? Mastermind is about commitment and hard work, absolutely. A lot of sacrifices as well. I'm the kind of person that I would kill myself just to make things happen. I was trying to do so much. I hit the button again and again, reached the full capacity in terms of finance, time, manpower and emotion power. At the beginning I thought it was easy, just do more deals to reach the target. It's not like that. I think we spent half the time on learning things, on building system, on correcting things, on getting things right before moving on. At the beginning of Mastermind I did pretty well. I was very upbeat. Reaching my target I give to myself at the beginning. Towards the middle the frustration kicks in because I was chasing some big deals. Especially after those big deal fell through. I was start question myself, question why I'm doing this and the goal. If my goal is right. I start losing focus and pick up shiny pennies. I wasn't happy. I was very tired.
Let's have a look at some property case studies. We got this deal from our solicitor. This is typical HMO cash flow deal. The idea is to retire with one property. This is a first of its kind for me as well. We got a really good price. Spent loads of money on this £75,000 to do it up, turn it into a nine bedroom HMO. The commercial value based on the new rent is higher than what we paid for. We got all the money back and a free property and £29,000 cash flow for the year and the rest of life, of course.
Case study two is freehold to leasehold renovation product. We got this from a motivated seller who couldn't finish out the project. We came in, we finish out the work and did the paperwork [inaudible 00:08:10] divide into leasehold properties. I have the all rented unit before the renovation's finished because the work done was quite good. You can see the finished product inside. Figure-wise, we now have this portfolio on the market and offer received for 716,000. That gives us a net profit of 201. This is a joint venture case study so 50/50. The joint venture partner put in some of the cash and then we financed the property. We managed to make him just over 100,00 in about seven month time. He's a very happy guy looking for more deals now.
Why do this type of deal? We like to have some massive income on top of passive income and there are three ways to make money from here. When you purchase, you're avoiding the rat race. You purchase with less competition. You purchase with greater discount. When it come to adding value and shorten the time scale, you can rely on the economy of scale and we can sell it fast at a good price.
Here's some of the results. These are a spreadsheet of cash flow properties that we bought and kept. There are 11 properties, total £1.6 million and we net income of £8,000 per month.
This is flipping. The properties have been sold at £1.4 million. Properties sold, with profit £635,000 before tax. This is the result.
The secret ingredient is nothing. It's just you. If you want something special enough. You got to believe it's special.
What's the future? I just came back from the Far East. I've been to a couple of countries. I been to meetings with some of the major players in the property industry. I can see huge opportunities over there. Huge opportunities. I will become the go-to person between UK and the overseas buyers. We are in the middle of setting up CPIN, which is Chinese Property Investment Network. Maybe because the language barrier or the culture barrier, a lot of the Chinese people are not taking advantage of the knowledge or the strategies that could be available to them. I would like to help more people.
Property investing can be lonely. It can be hard, but it doesn't have to be. With the knowledge we learned this year, with the experience we gained this year, we can do things a little bit differently. Work with more people in a smarter way. Finally, more balance in life. I like to get more sleep.
A NOTE FROM SIMON ZUTSHI
Ready to begin the journey of a lifetime? Become my next success study by joining the Mastermind Programme.