Make Money From Property

Andy Shaw's Success Story

"Money For Nothing And Your Property for Free"

This is the title of a new book on property investing by Andy Shaw. Mr Shaw is an entrepreneur who has acquired over twelve million pounds worth of property within 12 months, all with "other people's money".

This was several years ago and he now owns hundreds of buy-to-let flats and houses, all being purchased for him with the rent paid by his tenants. The book is good value for money at £20 and at 507 pages long, is an easy and entertaining read. The print is quite large and very clear and is not at all strenuous on those of us whose eyes are not quite as good as they were.

All 507 pages are not strictly about the property business, as he drifts off into sections on his friends, his family and some of his history before he got into property, in the early nineties. At this time, when he realised the enormous potential and quick returns in his method of property investing, he discontinued his former business activities, which were in manufacturing.

"How to Create Money From Property Investing
Whether You Want To Become Good At It Or Not!"

That's the Headline and whilst the approach is somewhat unconventional it is backed up by some impressive statistics and good old common sense .... Plus lots of hard-won experience! 

That is an excellent combination; Painstaking Research, plus Practical Application, plus Detailed Monitoring of Results. That is experience worth listening to. For instance, much of the philosophy behind this whole thing is based on the certainty (he says) that property values have historically risen year on year and will continue to do so indefinitely.

Andy quotes from the website of the Office of the Deputy Prime Minister, which states that the housing market has gone up by 11.74% per year, in the last 35 years. Some more of that impeccable research!

If you think back, it's quite easy to understand. Just remember what your own house was worth way back in 1970. The house we lived in 1970 was worth about £7,000 and now it's worth well over £200,000.

If you've moved house in the last 10 years, what did you pay for it then, compared to its current value? We bought our present house nine years ago and it is now worth almost two and a half times what we paid for it.

I've done a bit of research myself. Back in March 2007, the Daily Telegraph reported that the average house price was predicted to reach £200,000. If you apply that average yearly increase of 11% then in 10 years the average will have reached £567,000 and will exceed one million pounds in just under 16 years!

All the current "experts" seem to agree that this rate of house price inflation is not sustainable and a crash is inevitable. But how long have we been hearing that? But there are strong arguments against that.

Isn't it all about supply and demand? When something is scarce the price goes up, whether it's potatoes or property. Housing is a Basic Need, like food and air. It's not just something that would be "nice to have"  like a new luxury car, or designer clothes, or exotic holidays. So, people have to pay the going price if they want a house to live in,  even if they have to sacrifice other things. Hasn't it always been that way?

I'm getting into this discussion myself, which is not what I intended. Let's get back to what Mr Shaw says, after all, he is the expert.

In essence, his system is quite simple and easy to understand. He identifies properties (primarily one and two bedroom flats) which are undervalued and which can be further increased in value by some relatively minor refurbishment. He has developed a system which can identify such properties with what he claims is almost 100% accuracy.

He has also developed the contacts and expertise to get the purchase, the refurbishment and the tenants in place in the shortest possible time. By securing a mortgage of 75% to 85% on the property, he has a relatively small amount of his own capital tied up for a period of just a few months.

Once the project has reached that stage, the property is then revalued, at a more "realistic" value and is then remortgaged at the higher price. The way that Andy's team does this gives him back the original deposit plus some cash in hand. This releases the original capital to go and repeat the exercise with the next acquisition.

When you see detailed examples of the maths involved in this strategy, it's an eye-opener. You can see where he gets " Money for Nothing and Property for Free".

He runs a scheme called "Passive Investment", which offers to provide the same service to his members (for a fee, of course). It appears to be quite popular. More on that later.

• He now owns a property with 15% to 25% equity, which has none of his money tied up in it.
• So, how do you think most people make money out of property investing?
• Buy at a low price?
• Let the tenants pay the mortgage?
• Wait for the value to rise?
• Sell and take the profit?
• Use the money to start investing in the next property?

Not so! Says Andy. He says Never Sell.  In fact, he says "Never, Never, Ever Sell!"

The reason?  He says, "Why, when you have a tree that is bearing fruit, would you want to cut it down and plant another?"

His answer is to remortgage at the new higher value, take out the excess cash and use that, or a portion of it to buy another property, so you then have both with the potential to increase in value. Then repeat the process! This is presumably why he now owns hundreds of properties and is a multi-millionaire.

He runs a members-only website with advice on all these strategies and a forum where questions and advice can be exchanged, often by people who are succeeding in this very operation.

The chapters that deal with the specifics, I found fascinating. What to buy, Where to buy, When to buy. What NOT to buy, Where NOT to buy. SMALL IS BEST!

He says it all the time: one and two bedroom flats.

He takes you through the entire process in just a couple of pages and makes it so simple. As he says "I am first making sure you are going to go and find the right thing". In fact, he makes it sound so simple, that the major problem for many people will be just believing it.  For instance , how do you know that you're not paying too much? Andy gives you the answer in 39 words!

That's why, if you're at all serious about this, you may consider it a good idea to subscribe to his membership website, so you can converse with people who do believe it and are doing it.

Have I used the word 'simple' in the last few paragraphs? I thought maybe I had. For such a large and complex subject, Chapter 20 is a delight. (It's simple, right?) It tells you exactly how to find the right properties, in the right place, at the right price. As he says on Page 308, "This is the treasure map, people. X marks the spot. Dig Here!"

The section on negotiating with agents and vendors is very illuminating and it's Fun. You will never feel intimidated by an estate agent ever again. There are numerous little ploys and manoeuvres that can influence the outcome of a deal and Andy covers a lot of them in detail.  Doing this properly can save five to ten thousand on the purchase price.

Refurbishment:  Probably most people have seen the "House Doctor" on TV. She goes along and tells the owners what to do with their unattractive property, that's been on the market for six months, so that someone will come and buy it ... or at least make an offer.

Much  of what she says is obvious and common sense. "You may love your lounge with its purple walls and black ceiling but it is not what your prospective buyers want". If the house is untidy, dirty and smelly, people can't get out of the door quickly enough.

Much the same applies to rental properties. Don't impose your design ideas on other people and don't don't spend any money on refurbishment that doesn't add value. (The  double don't is not a mistake, it's intentional).

The property must have "curb appeal". If, when they pull up outside, their first thought is "What a dump", then you're dead. The place may be a palace inside but the negative thoughts have already been sown.

"Should I do the refurb work myself and save money"  Andy says NO and gives good reasons for it. Get a builder. Afraid of dealing with bolshie builders?  Andy tells you how. Don't ask "how much will this cost?"   Say "I want it done for £X" You can always go up a bit, if necessary (after you've got a second quote).

I've read this book through twice  -  yes, all 507 pages. And it wasn't hard work, I enjoyed it. There is so much good sense in it and here is a man who has done it! If you are really interested in this type of investment, then I think his private membership website and forum would be well worth the money. You can stop the monthly subscription at any time. And you can read the First Five Chapters for FREE. Just by registering your e-mail address.

Go There Now!
www.AndyShaw.com