£10,000 passive monthly income in under 12 months

CASE STUDY #5 - DAN HILL

  • £2.1million property bought
  • 17 properties
  • 70 rooms
  • ​£167,000 income
  • ​£268,000 rent roll
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 Dan's contribution...

WATCH DAN'S CASE STUDY

CUSTOM JAVASCRIPT / HTML

TRANSCRIPT AND SLIDES

Wow, this is very daunting being up here, genuinely amazing 12 months. I'm not a professional speaker, those of you who heard me speak will be aware of that, so apologies I'll probably speak fast, I might mumble and jumble. You'll see through that, hopefully, you can get a better content from that. My name's Daniel Hill and I'm a Mastermind 11.
My background, so I started my first business when I was 15, Pulse Discos, then I went on to buildings for four years and I shoveled sand for a living. I, then, went on to Nottingham University, I started an events company while I was there, then a clothing company, then another clothing company, that took me up to about 2012. This time last year, I was the Director of Pulse Student Network and the events and clothing company.
Why? Why did I decide that Mastermind was for me? Well, I was looking for a new industry. I've done clothing. I'm a creative profile, for those of you who understand wealth dynamics. It means that we're on to the next thing before we finish the last one. We're always looking for something new, looking to reinvent things, create things. That's my flow, it's really what I enjoy. I was looking for ... I'm speaking very fast, I'm aware of that. Sorry. I knew that this is where we were going next. The company was trading well, it was profitable. It was starting to bring in its own management, great little company. Looking for a new industry to entertain. Tracked it for about two years, didn't have any experience. The property market was depressed, as it still is in a lot of the UK. It's depressed, it's ripe, it's fertile with opportunity, but that's not what you read in the papers, but that certainly is the case. I lived in a rented flat, so I thought it would be a nice opportunity to get my own house, start getting on the property level, and ready for a new challenge. That's my creative profile.

I started Masterminds and I thought it was incredible. I did the one day course, did the accelerator, it blew me away, absolutely blew me away. Great, on to the next thing, did the first workshop, yeah this is great, did a deal. Come to the second workshop, I was really hyped up. I stood up on the mic and said, "Right guys, I'm committed. I mean, that is the target. That's what I'm going to do."
So, I said, "I'm going to sell my business." My company, I've traded for three years, I said that's it, "We'll sell it, we're going to get the money out, we're going to do more deals, we're going to make a bigger business." I thought, "Well, I'm going to get a round of applause, everyone's going to go mad."

Simon turned around to me and said, he said, "Is that really a smart move?" He says, "Is that the best thing to do in this situation?" He says, "People have done this with full time jobs. People have done it with other commitments, they've done it with families. Is there a better way to approach it?" It turned out there was a better way to approach it. I ended up being a management file on license, company still traded, did incredibly well. Does better than it did when I was working in it, because I was managing it and that was really, really not my strength. Going from strength to strength, still traded, and I stepped down as Director the first of August.

This put me in a position where I had to replace my income. I went from being a Director, on a salary, had to replace my income very, very quickly. First rule was I going to step down, done the deal, now I had to get cashflow. That's the fire under your feet, that's why you have to do it, and that's why I had to do it, I had to replace my income.
HMOs was the one for me, this is the first one that we did. This is a good testament to Simon's courses, actually, the one day course I did. I took away from it, follow up, follow up, follow up, follow up, so every day, didn't really know what I was looking for, that came on the market. Well, that is at least £10,000 under-priced, but it had sold. So, I thought follow up, follow up, follow up, follow up, no it's sold, no it's sold, no it's sold. The vendor has moved to America, this deal has fallen through this morning, do you want to buy it? That stacks up all day long at £90,000. We said, "Right, we'll buy it but we want it for £80,000." The vendor said, "Right, we'll release at £82,000 and we'll give you a £5,000 vin to give to deposit."

Bought that, [BMV 04:18] deal, fantastic, let's move into there. We got all our mates in there and went on the Accelerator course, understand HMOs, rent the rooms out, let's do this a bit more legitimately, turned it into an HMO, 20 grand refurb, rents out for £1,700 a month. This has been fully rented from the day we bought it, never had a void. £1,700 gross, that's the mortgage bills, £1,000 a month, profit. You'll notice that was in Nottingham, and those of you who know me, know I don't invest in Nottingham anymore. I invest in the other side of the Midlands.

We've since sold this one, it's worth £173,000, we sold it for £167,000 after being on the market for two weeks. That sale [inaudible 00:04:56] strategy is very, very complicated. You really need to understand what you're getting into. After 8 months, on the day of the exchange, the buyer couldn't raise the funds, the mortgage expired, and it fell through. We put ourselves in a very naïve position where we needed the cash. We've since accepted two offers at £160,000, that's going through at the moment, assuming that goes through, we'll accept that. That's a great sell for us, releases our cash, great buy for an investor.
HMOs, we thought, we need to start picking this up. This one was mid-refurb, builder was doing a refurb, on the market £120,000, would have got it all day long, sold, follow up, follow up, follow up. The sale at £120,000 has fallen through, so we went in, said, "Stop the refurb, we'll give you 100 grand for it next week." Completed in six weeks, four week refurb, builders finished on Monday, tenants moved in on the Tuesday. £100,000 purchased, £30,000, you can see the figures there, profit £1,600 a month, that's £20,000 a year, fully tenanted. Everything I'm showing you deals with fully tenanted, up and running.

We've got two or three HMOs by now, we're really thinking, "This is good. This is income replacing cash flow, but we can't do it quick enough. I need to replace my salary, we're supporting other people. We need some big money." We looked to the rent to rent strategy.
That is a residential house, it was on the market, ex-student let, marketed like that. We took the keys for that on the Friday at £550 a month, we furnished it on the Friday, the viewings on the Friday afternoon, and filled it within four weeks. That generates four grand a month. We're thinking, "HMOs work. They work. Buying them is fantastic. They're very capital intensive. They're very time consuming. There's only so quick you can buy a house. However, they turn out fantastic cash flow, £1,000 - £1,500 a month." When you need speed, or you got lower resources, lower capital, you want to be looking at models like this, the rent to rent model. We've got £1500 in there, fully half of that is deposit, return on investment 100%+. Some of these rent to rents, 500% ROI.
Being from a business background, not having any experience in property, found these two pastry cutters, buying and rent to renting, started cutting them out, and then we just rolled that strategy out. Take this from caveat, every deal that's on there, these are hard. Each one of these is one we've actually done, for each of these that we've done, there's going to be two or three that fallen over, haven't stacked up, and you've really struggled with. I don't know how clear that is for you guys on the screen, but that's the first one I showed you. It's worth £160,000 all day long, makes £1,000 pound a month, 5 room profit. I bought myself a house, [BMV 07:24], £150,000 got repossessed. You guy have been [pull 07:26] sales, they're £150,000 repossessed, be bought it £100,000, brand new, three bed, detached, en suite, very, very nice.

Then we started leasing them. Bear in mind, this is starting the beginning of last year, when we started this course. We leased one, makes £350, purchased another one, leased another one. We really, really figured out this is cash flow guys, this is easy. You build your systems, you just cut it out, you cut it out. Again, these are properties we've done. These are keys that are in our pockets, these are tenants that are in these rooms. These are earning money. These aren't what we thought about doing. These aren't what we want to do. This is what we've done. Look at the profit, this is HMOs. You don't make this on a single latch. You've got £400, £400, £800, £500, £1,600, £500, £500, and I mean, you see where this is going guys.

Thank you. That is HMOs, and that is what you get taught. You get taught how to do it, you get how taught to systemize it, and you get taught to roll out. That's what we've done over the last 12 ... There's no review that. There's £2 million worth of property, £22,000 gross income a month, just under £13,000 costs, leaves you over 10 grand of profit a month, that's 70 rooms. That's the portfolio.
Then, we started figuring, there's other people that want to do this, but just need a little helping hand. So, we started a joint venture, we launched the Relocation Agency. How am I doing for time? Excellent. We launched the Relocation Agency, joint venture with people who do rent to rent. We've got contracts with all the big letting agents, we've got access to all the stock. We now deal with [inaudible 00:09:08] Liverpool, Bedford, Darby, Barnsley, Lincoln, Newark, Nottingham, we do them everywhere. We've got access to stock and we help all the people with that. Of course, we charge fees. That's the money we generate in fees.
So, how? This is the more important bit. This is really what I wanted to get across and share with you guys today, is how you can do it and how I can do it. Joint ventures is the way I chose to do it. I started from scratch, I was very, very good at it ... I've got a background, I wasn't very good at it, I've got a background in business, needed to get the knowledge, package deals, work with other people. Pay people for their knowledge. One of the first deals I did was with Dean and Mandy, the Sheffield [pin-hosts 09:47], they're package deal. I've never bought a house before, don't know about mortgages, don't know about brokers, these guys do. They're going to sell me a deal, I'll pay them three grand. In four weeks, I knew how to buy a house, I knew how to broker a house, I knew how to be an investor, I knew how to talk like an investor. They gave me everything I need.

Don't be afraid to pay people. Pay for the courses, pay for joint ventures. Don't be afraid to pay people for their ... Don't be afraid to charge people. When you've got that knowledge, don't be afraid to charge people for what you know, because if you don't charge them this time, they won't come to you next time, because you'll think they want it for free. Don't be afraid to charge people, don't be afraid to pay people.

Reason why, this is a huge, huge, huge one, why do you want to do this? Why do you want to it? What's your target? I bought into Mastermind for the target. Anyone who can achieve half of that is doing incredibly well. Mastermind is phenomenal, that is an incredible target. Anyone who can get anywhere near that is amazing. That inspires people. A year and half ago, I was sitting at a meal and sitting next to a guy, who I now know to be Gavin Barry, sitting next to him, having a few beers. We done [quaffing 10:47] and having a bit of a drink. Simon's up on stage, at this meal, and says, "The new record holder is £4 million profit in 90 pound ..." And this guy gets up, and goes and collects the thing. I thought, "This is a normal guy I've been sitting here chatting to. And he's done these results." I thought, "You, my friend, are incredible. That is the most amazing thing I've seen someone done. I'm up for that. I'm really, really up for some of that." I thought, "I can do that. If I educate myself, if I work hard, I'll get there"

Aspire to those people. It's so easy to stand there and look at them and say, they were given this. They were given this, they've got this, they've got that. I've not told you this, £500 of my own money in that [inaudible 00:11:25]. I lived in a rented flat before I started. Look at these people, that is good, that is where you want to be. Think, I'm going to aim for that. That is what I'm going for. Don't excuse why you're not doing that, look at what they've done, and say, these are normal people that are going to stand on there today. These are abnormal results.

Hard work and commitment. That's, hard work and commitment is it, guys. It's late nights, early mornings, missing birthdays, missing events, not seeing the people you want to see, that's the commitment you've got to put in. Take this for a caveat, that portfolio I've just shown you, that's not what normal people do. That's commitment, that is everything. I threw everything into this. Because I'm going for it. I'm have some of that going. I'd like some of that. I said, that is what I'm going for. I committed everything, late nights, early mornings, work, work, work. That's it. If you want to get half of this, or all of this, or a bit of that, take that as a precaution to what I'm going to show you now, because this is how you build it.
From the Mastermind model, you get surrounded by these people, who are incredible people. They inspire you and they drive you. The Wealth Dynamics model that we got taught in Mastermind was the most incredible thing I ever learned about building a business. I've had businesses in the past, and everyone's chipped in, everyone's married in, everyone's doing a bit of this, everyone's doing a bit of this. I did Wealth Dynamics, and I thought, "Oh my goodness, I spent the last 10 years building businesses that are a mess. Let's restructure it," so we flushed it around. Creative, that's me, I talk fast, I'm enthusiastic, I'm passionate, I can really, really, really get things going. But, I can't finish things, my time-keeping's bad, I can't look at the books, I understand the numbers but I can't put them together. You surround yourself with these people, you will build the most incredible business, I can assure you.

I took that away, and over the last 12 months we've built the team. These are people that are in this room. These are people that are sitting on these tables. These are people you are going to meet and know. If you understand who they are, you'll have a winning formula. I'm privileged to be the creator of that group. On my own, we wouldn't have done what we did on two of those properties and they probably wouldn't cash flow. As a team, you've got machines, and these guys, people in here, they know these people, they've worked with them, they've helped them out. These people know what they're doing, dedicated, committed, hard people.

Hannah was up at ... I got up this morning, getting ready, Hannah's setting production up at 6 o'clock. Chris can turn furniture around in 24 hours. Ollie, he'll be sending you guys tenant requests at 12 o'clock. It's mad. These guys are dedicated, they're committed. They know what they do. They've all got their own jobs, and they all do it better than everyone else. On my own, everything's a mess. With these guys, it's a machine. Trevor, my business partner, absolute fantastic financial director. He makes those numbers stack up, I don't. These guys put the profits together. The last three, Martin, our lettings manager, has sourced, packaged up, got live, I didn't even see him. Again, this is a business perspective, not a [inaudible 00:14:22]. It's incredible guys, it really is.
To summarize, £2 million property, £268,000 is the gross rent roll, you've got £167,000 income which includes fees and the flip. That's gross profit, you've got voids on top of that, and depreciation, but that'll be wiped out by capital growth and application fees. 70 rooms, 17 properties for ourselves, 17 joint ventures. We joint venture with anyone who is committed and dedicated, who approaches us and says I'm up for doing this I just need some help, we help those guys. Two awards I didn't say, the company that Simon stopped me from selling, went on to be Intuit 100 awarded, which is the top 100 high potential companies in the UK, and we were awarded Young Entrepreneur of the Year at the Hilton, at the Midland Business Awards in February this year. That's it guys.
So get yourself a team. A team of people who seriously want you to be successful. They're in this room, they're in those chairs, in the folders, on this stage, they're on this cork. If you can surround yourself with people who believe in you, they'll be successful because you'll be successful. They'll want that, they want that more than anything else. If you can get that guys, that's Mastermind, that's not 12 [mums 15:39].

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