Lessons Learnt from Two Decades in Property: Finding Direct-to-Vendor Deals and Working With Your Sibling
As siblings, we spent most of our childhood together, and now since we’re in business together, we can't get rid of one another!
Our parents owned a building company when we were growing up, so a lot of our childhood revolved around building sites and renovation projects. As kids, being with contractors and watching houses being built was just part of the daily routine.
In 2003, we took the plunge and started investing in property. At the time, our pensions were decreasing in value, and after paying a wealth manager to essentially watch our money disappear, we decided to take control ourselves.
Over the past 20 years in property, we've made our fair share of mistakes and have tried nearly every property strategy out there. But along the way, we have had a lot of fun, and each mistake taught us something valuable. So, here’s what we have learned after two decades in the property industry, what we wish we had known sooner, and the strategy that helped us amplify our portfolio in a relatively short space of time.
Luck or Judgement?
Back in 2003, we had no clear strategy or training. We didn’t understand the benefits of buying below market value, adding value to a property, or refinancing to recover our investment.
To our credit, we did make one smart decision—we chose the right area. Relying on our local knowledge, we bought in the same area as our motor trade business. After speaking with a local letting agent, we knew there would be strong demand for our modern two-bed end terrace, which was one of the first investment properties we purchased.
22 years later, we still have this property in our portfolio. Other than when we’ve refurbished it, we have never had a void period, and the value of the house has risen nicely.
In 2017, we got serious. For the first time, we invested in formal education; an expensive but valuable step. With our newfound knowledge, we hit the ground running, and our portfolio began to grow. Looking back, we realised we had moved slowly over the 14 years between our first purchase and when we started training.
Since then, we’ve built a diverse portfolio, considering any opportunity that crossed our desk. This includes buy-to-lets (BTLs), houses in multiple occupation (HMOs), mixed-use buildings, commercial property, lease options, planning gain, flips, listed buildings, blocks of flats, and land.
Lessons That Allowed Us to Grow Faster
The main thing holding us back from growing quicker was a lack of time. Our motor trade business, which we have had since the early 1990s, took up most of our time. We knew we needed to change our day-to-day operations to be able to spend more time on property. Whether you're in a full-time job or running a business, the biggest obstacle to growing your portfolio is a lack of time.
We knew we needed the right people to replace ourselves in the busy day-to-day running of our motor trade business. We naively thought this would take a couple of months, but in reality, it took almost two years.
Our advice is to free up time where you can or replace your income as quickly as possible so you can focus on what you want to pursue, which in our case was property.
We also realised the importance of understanding multiple different investment strategies (we had only done BTLs at this point). Our training showed us how to be more creative, for example, doing a lease option agreement instead of an outright purchase, refinancing a property to pull money out, and adding value through planning gain.
Buy Refurbish Refinance: Our 'Aha' Moment
Buy Refurbish Refinance (BRR) was a real lightbulb moment for us. We realised that by using this strategy, we wouldn’t have to leave all our capital tied up in a property after refinancing.
Just in case you are new to the terminology, BRR means buying a property, adding value to it, and then refinancing it at its new, higher value to pull some of your capital out.
Some of our deals have been money in, money out (MIMO), where we managed to get back all the capital we spent on the project.
Finding Deals
Our MIMO deals have all come from negotiating directly with the vendor. There hasn’t been one golden nugget to going direct to vendor (DTV), just a combination of doing simple things with consistency. These include:
Facebook posts/Ads
Leaflets
Social media groups
Guerrilla marketing boards, car stickers
Tell EVERYONE what you do.
TOP TIP: It’s All About Persistence
With the tactics mentioned above, the key is persistence. You can’t expect to do one Facebook post and have people running to sell you their house. Likewise, you can’t do one leaflet drop and expect your phone to be ringing off the hook.
You have to stay persistent. Do multiple leaflet drops, one every six weeks. Post to social media regularly for months on end.
Sometimes you think, “Well, I'm not getting anything.” But, you have to wait. Then, all of a sudden, it'll snowball, and then you'll probably get two potential deals at the same time.
Which Tactic Has Been the Most Effective?
Out of everything, social media and word of mouth have been the most powerful. Many of our deals have come from referrals from our builders, friends of friends, and strong relationships with local estate agents. Everyone who knows us is aware that we are in the market to buy property, and this is key.
We have also had success with DTV deals through Facebook. We post in local buying and selling groups, letting people know that we are looking to buy properties in the area. You get some abuse (but we don’t care about that), but you also get genuine leads, so it is well worth it.
What Would We Do Differently If We Started Again?
It’s all about having the right team around you. This isn’t always easy, and finding the right people takes time. In property, we all rely on professional advice, whether from accountants, solicitors, architects, or even our build team. A strong team is critical.
We also believe in keeping things simple. In the early days, there were times when we would overcomplicate a refurbishment, adding too many extras that weren’t really needed, particularly when converting properties into HMOs.
The thing is, when it comes to selling a property, it’s often easier to sell a residential property on the open market to any buyer, compared to selling an HMO, which would likely only appeal to investors. Looking back, we would have kept some of our early refurbishments simpler, making it easier to switch them back to a residential house.
For the past six years, we’ve also invested in social housing. It’s generally more hands-off from a management perspective, so it’s become our preferred strategy. There’s a huge demand for social housing in the UK, and as investors, we’re here to help meet that demand.
So, a takeaway: Keep it simple and attract the right people to work with.
Continuing as a Dynamic Duo
People often ask, "What is it like investing as brothers and sisters?" The truth is, we wind each other up for fun on a daily basis (It’s what siblings do), but we would never change it.
Because we are family, we know we can trust each other, and we are fortunate as we have very different skill sets that complement one another. There are times when Richard will buy a property for us, and the first time I see it is when we pick up the keys. Once, he bought a new property in Lichfield, Staffordshire, to add to our portfolio and forgot to tell me for a week!
We enjoy passing on our lessons learned in property and business in the form of mentoring. There is no greater pleasure than watching others succeed and prosper both financially and personally.
Our dynamic is unique, but I hope our story and the lessons we’ve learned from over 20 years of investing in property help you on your own journey.
If you have any questions, or if we can help in any way, please contact us using the details below.
Website: LinkedIn: Instagram: starpropertygroupFacebook: Richard & Tina – Star Property
