Smart Strategies for Commercial Property Success w/ Suzi Carter

Transcript

Speaker 1 (00:00.172)
literally have lost count of the number of clients who have come to me with projects they think they have to repurpose into some other different use class, primarily residential. And then when we've looked at the numbers, actually just holding that property as commercial actually yields more money over five years. The number one lesson I think I've learned in 30 years in real estate is if you buy at the right price, you're going to make money.

You're going to have to try hard not to make money if you're buying it at a low price. That's the market we're in now. And I can see this window of opportunity now continuing at least for the first half of 2025, if not longer.

Speaker 3 (00:36.718)
Welcome this week's episode of Wealth Talk. My name is Christian Rodwell, the Memchip Director for Wealth Builders, joined today by our founder, Mr. Kevin Whelan. Hello, Kevin.

Toonah May!

white scarf around your neck I see

Got to be, got to be. Look, most people, you know, they say good things come to those who wait. I've been waiting since 1969, Chris. And finally my team won some silverware. I think they'd lost the key to the cupboard because it was empty. So finally they've got something.

waving the scarf for those of you that aren't watching the video here. And of course we're referring to your beloved Newcastle United, although we wouldn't know that from your accent today, Kevin.

Speaker 2 (01:24.142)
No, well, it's just, you know, a softening of the Geordie voice over years of living in London, moved to London, you know, in the mid 80s and I've been here ever since. joking aside, unless you're a Liverpool fan, and if you are, I do apologize because I do love Liverpool. And my Liverpool friends have said, well, if we're going to lose to anybody, I'm glad it's you guys. You know, I'm thrilled about that and looking forward to.

Another 50 years of nothing, but at least my brother and my sons were there at the game. it was a thrill for them. So I'm delighted. And I think there was a bit of a Geordie Bank holiday going on, but we're back to work now and ready, willing and able to share even more lessons from not just from ourselves, but the wonderful guests we've got. And you've lined up kind of almost like a star repeater, haven't you?

Suzy Carter, one of our good friends and commercial property expert. was thinking there, how am going to bridge this from football across to Suzy? Unless you're thinking of buying Wembley Stadium, then that would be a big commercial project, wouldn't it? But commercial property can be all shapes and sizes, Kevin. And some of our listeners may already be investing in commercial and others who perhaps are residential investors might have an eye now on a different strategy, especially in light of some of the recent changes over the last couple of years within property.

Susie highlights some of those changes, but there's always changes. And there's always changes, not just in property, but changes in every aspect of your finance. And we talked recently about budgets. We've got another budget up and coming. All of these things, you have to be flexible. You have to be aware of what's going on to see how it affects your wealth plan, assuming you've got one. And I call it being financially fleet afoot, meaning

You know, like the goalie, you're able to flex and move when you see something that's either threatening you or is a big opportunity. Suzy refers to it as a yin and a yang in every situation, and there is. But you have to be aware of what's happening and then make a decision either with help. And that's why I love the community we're in, because we're surrounded with like-minded people who are building their wealth. So these things...

Speaker 2 (03:49.122)
they develop a sense of acuity towards them, they become more aware because other people are making them aware. Because in traditional jobs and businesses, you're not really made aware of things that affect your wealth. It tends to be something that's just affecting, you know, average people, not how it affects you specifically for your long-term plan. So Susie does hint at some of those things.

Absolutely. And if you're a new listener to wealth builders, don't understand the concept, then you'll see on the logo of wealth builders, there are seven pillars, and those equal seven different asset classes that you can use to build predictable recurring income. And property, which we're talking about today, is one of those seven, Kevin. And within each pillar, there's many different strategies. again, commercial is simply one of many strategies that can be chosen within the property pillar.

Well, exactly right. And I would say, if people are trying to get who wealth builders are, I suppose we're the only completely independent wealth building organization, meaning, I suppose we're a bit like a financial GP. So we've got good grounded knowledge and information about all aspects of wealth, the IP of the seven pillars of wealth, and there's still only seven and they've been out now since 2004 when I wrote the book around that.

And so nothing's really changed, even though I throw out that challenge, if you can help me with number eight. Still, I've still got that case of champagne on ice, Chris, nobody's claiming it yet. The point is, these are principles and we're the GP who knows the principles and wherever we need to call on a specialist, we're able to do that. And Susie is one of our trusted specialists. So just as a doctor would do that, we refer to Susie, amongst other specialists who do.

commercial properties. is just one of those that we trust among others.

Speaker 3 (05:40.554)
Absolutely. I think that's a good time for us to head on to our conversation today with Suzy Carter.

Suzy, welcome back to Wealth Talk today. How are you? Really, really good. Thank you. You're no stranger to Wealth Talk and wonderful to have you back again. I think one of the last times we were talking about wealth builders for families and you were talking about some of the lessons that you're using with your children. That was fascinating. I'll link to all of those in today's show notes. Of course, we talked about your background many, many years in commercial property, Suzy. Just a very quick recap for listeners who are new to you.

I'm good thanks Chris, how are you?

Speaker 1 (06:15.884)
Yeah, so 30 years, slightly depressingly actually in commercial property. And yeah, I've got a corporate background, worked for lots of big corporates in London. And for about 10 years, I've been investing for myself in my investing company, of residential and commercial. And I run the Commercial Property Academy and I help people do great investments in commercial property.

be talking today about why commercial property is still an exciting asset class, especially in light of the recent UK budget and tax changes. You're going to tell us about what you call the easy money opportunities in commercials. I can't wait hear about that. Should we rewind back to the autumn budget? There were some changes. Can we recap those?

Yeah, sure. So I think kind of what the commercial property market was waiting for from Rachel Reeves before the budget. Obviously, there was a load of money. Do remember how apprehensive we all were before that budget started? And I think what the markets were looking for was two things really, was business confidence and investor confidence. And investor confidence to basically have the confidence to go out and really kind of start investing again.

And business, obviously, businesses are the tenants of commercial real estate. So, you know, if businesses are happy, if businesses are investing, if businesses are confident, then obviously they're happy to pay higher rents, they'll take longer leases, and that's really important for the sector. And unfortunately, I don't think we got either from the budget. Now, obviously, there's a yin to every yang. So, you know, on the downside, the budget changes, obviously, there was a lot of increase in wage costs. So, you know, the minimum wage went up.

the employers national insurance went up. We also saw, well, there was going to be increases anyway in business rates. know, Rachel Reeves was trying to kind of lessen the impact in kind of retail leisure hospitality. But the blatant fact is that business rates in those sectors have doubled in 2025, or are doubling in 2025. And so, you know, cost of business is really, important in commercial because rent is really a residual of all the other fixed costs that a business has.

Speaker 1 (08:28.096)
So if a business has got high energy costs, which they've got at the moment, tick, high wage costs, tick, if the cost of goods has gone up as well, especially if they're trading, they're retailers or trading goods, then what that means is that they have got less to spend on rent, basically, business rates has gone up, et cetera. So they've got less to pay on rent. And so that obviously means that rental growth is reduced, because affordability is just not there.

So that's not great news. And what we're seeing coming out of the budget is that retail, leisure, hospitality, childcare, health care, they're all the sectors that are being affected by these wage increases because they tend to employ people on the minimum wage. That's just the nature of the beast. And I've got clients who are in leisure and hospitality who are actually trying to automate a lot of processes so they don't need to bring people in. saw a...

report from the personnel management. think they did a survey of 2000 firms and there's a real lack of confidence in business at the moment, I think, because they're worried about rising costs and they're worried that the government doesn't have a growth agenda as well. And so, you know, that is definitely affecting business confidence. you know, because, as I said, because businesses aren't confident, that means that potentially certain sectors falter.

And then, know, on the other side, investor confidence, you know, I think just the markets have been speaking for the last couple of months in terms of their reaction to the budget, in terms of the fact that they don't think that Rachel Reeves is on the right path. You know, the UK bond yield reflects that, you know, the cost of borrowing to the government has gone up because people don't feel confident in the government and, you know, sentiment rules markets.

So, you know, if people are feeling jittery, if people don't trust the direction of travel, they're not going to be as confident to invest. whereas I think a lot of the market was being talked up at the back end of last year, I think what we're now starting to see inflation as we're recording this, inflation is now three percent. You know, that that's unexpected. I don't think the markets think that's unexpected at all, by the way. I think they were anticipating that.

Speaker 1 (10:42.828)
that's definitely going to affect the rate of interest rate declines as we go through the year if inflation stays at that kind of level or a bit higher. yeah, a lot of agents have been talking the commercial market up at the back end of last year, kind of saying, you know, the worst is over. We've been really at the bottom of the market, I think, for the last couple of years. And I think everyone felt, you know, that 2025 there was green shoots, you know, there's a bit of investing activity happening at the top of the market.

But what I'm very clear about is that two factors, external factors, know, what's Donald Trump going to do next is kind of the Trump factor. And then also the Reeves factor in terms of, you know, the impacts of the budget. Both of them are affecting both businesses and investor confidence. And so I cannot see that the market is going to have a massive bounce back, certainly in the first half of 2025. Now, obviously that can be seen as a negative, but it also can be seen as a massive opportunity.

Because when prices are lower, when prices are reduced, then obviously that's when you have opportunities. The number one lesson I think I've learned in 30 years in real estate is if you buy at the right price, you're going to make money. You're going to have try hard not to make money if you're buying at a low price or at a reduced price. And that's the market we're in now. And I can see this window of opportunity now continuing at least for the first half of 2025, if not longer.

And it might even tickle down a bit depending on what happens globally. But I definitely see there's this massive opportunity still to buy at really reduced prices and have many more motivated vendors, obviously, which is where the lower prices come from.

Thank you for recapping that for us, Susie. And within commercial, there's offices, retail, industrial, mixed use. Any in particular that are exciting you at the moment.

Speaker 1 (12:32.142)
I mean, obviously every sector is performing differently and it's really dangerous to generalise in commercial because you're quite right, there's so many different types of sectors. But if we kind of follow the money, which I quite like to do, so you what are banks really liking at the moment? know, commercial finance is still a bit tricky in some sectors because they're still a bit jittery because the market's not recovered yet. What banks are loving at the moment is multi-let space. So they like, if you can find something where...

Maybe you buy a single industrial unit or a single office or a single retail unit and you split it up into smaller units or smaller suites, then banks are really liking multi-let space. And the reason for that obviously is because there's quite a few tenants paying their mortgage. So, you know, they're not relying on one tenant if they go under then the bills stop being paid.

it basically de-risked them. And they particularly like multi-let industrials. the strategy I really like at the moment is buying a single-let industrial and splitting it into smaller units. Now, they don't come massively cheaply in the market, so the prices are definitely lower. But quite a few people in the market quite like that as a strategy at the moment. So I wouldn't say you're necessarily going to get it cheap, but there's going to be quite a lot of motivation in the market this year. Quite a lot of five-year debt was taken out in 2019 in the commercial sector.

So that's maturing this year and obviously some rents are lower, capital values are lower, interest rates are higher, loan to values are probably a bit lower than they were five years ago as well. again, there's going to be motivation to buy in certain sectors as well.

mentioned industrial, think of smoke coming out of chimneys or car manufacturing, but industrial comes in many shapes and sizes. What are some examples of recent projects either you or some of your clients might have been involved in, Susie?

Speaker 1 (14:19.458)
Yeah, the beauty of industrial is that you're right, it covers everything from chemical works to, you know, small little, little kind of 500 square foot units, we call those flex space, and myself and some clients that are investing in that space. And the beauty of that is that with the the class E changes that the government put in place, you know, when they after COVID, they basically put this new class E in place, which includes retail offices, health care,

childcare, leisure facilities, but it also includes B1C, the old B1C class, which is industrial. The reason Class E was brought in was that you didn't need to go and change use, get a planning application to change use. You could do it automatically and it was designed for town centres. But the kind of happy accident of what's happened is that some Class E uses are now industrial. The old B1C class, which is industrial use class, is now Class E.

So there's some really nice strategies of maybe bringing slightly more high street uses into industrial estates. And it's got a lot of benefits for it. You can carve it up into quite small units. They have had lower business rates, but I think that those days are going to be over soon. But they're really accessible, lots of parking on site, and you just not got the expense of being in a town center. And they're much more accessible. So that's quite a nice little strategy in terms of,

kind of taking advantage of some of these changes and actually applying them in a different area.

And when you talk about sort of carving it RP, we talking about splitting titles here?

Speaker 1 (15:56.286)
Well, you can do, really more physical. So the beauty of commercial, which I'll talk about in a minute, is that you don't have to necessarily do physical works. But if you put a breeze, two or three breeze block walls, I mean, that's all it is, literally. You put some breeze block walls up. It's not top glamour in the world of industrial, that's for sure. You're probably talking maybe 30,000, 30 to 50,000 to do that, maybe even a bit less than that.

So, but you could just do that physically. And then of course you can split the titles if you want to. I love title splitting as a strategy because obviously you can add huge amounts of value, but you don't necessarily need to do that.

One of the other advantages, of course, commercial property lends itself to the wonderful world of SaaS pensions. We've talked about this in the past as well. Any examples again, Susie, of clients recently or yourself that have been able to leverage money in a pension to purchase more property?

Yeah, sure. I mean, I've done lots of investing by leveraging my SaaS. Anyone listening, I would highly recommend you investigate it because it really is a fantastic way of kind of growing your wealth, both inside and outside your pension, depending on what you're looking for. I do have a lot of SaaS investors that I work with as clients and are buying either outside or inside their SaaS.

I think one of the golden rules at the moment is to add value. So I've got a client at the moment who's buying, you know, but is buying industrial. So carrying on the theme is buying industrial for about 300,000 and splitting it up into smaller units and being able to probably add about 150,000 to the value as a result. And the reason being is that there's more demand for the smaller size units. And then obviously that means that the rents are higher. So

Speaker 1 (17:45.262)
almost doubling the rent based off the smaller units. So yeah, in at 300, revaluation at 450-ish. And obviously then it depends as to whether you can leverage that. 50 % of your SAS pot you can leverage in mortgage. And obviously there is some money left in on that kind of deal, but you're not talking a great deal and you're talking a very quick payback. So, you know, some really nice deals you can do that. And obviously you can get a full repairing, insuring lease on those. So it's nice hands-off income.

which is perfect for an equity pot or a pension pot. That's the beauty of commercialism. You can get these hands-off income where the tenant will go in and have to do all the repairs. You just literally need to pay the rent. Obviously, you need to keep an eye on them and make sure that they're behaving themselves. But other than that, it's a nice kind of way of holding pension.

I think you referred to the FRI list as one of the eight wonders of the world. And if anyone's listening now who's a business owner and maybe they're still paying rent for their premises, their offices, then this is something that, you know, understanding how your SaaS can own that or buy that. And then you end up, you know, paying the rent to yourself. So it's that wonderful circular economy.

This book.

Speaker 1 (18:58.88)
Exactly. Yeah. And you can you can maybe even bring other tenants in. You can subdivide the space, which banks really like. You can bring other tenants in, which might even pay your rent for you. So it's it can work really, really well as a business owner.

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What are some of the other strategies that you would recommend to our listeners, Suzy?

Well, I was going to come on to this, what I call rather tongue in cheek, actually, I have to say, kind of easy money. now, obviously, those of you who've invested and those of you who know about investments will know there is absolutely no such thing as easy money. So it is a bit tongue in cheek because we all know that even if you're doing paper based exercises, tenants can be difficult, it can be awkward.

The beauty of commercial property is that you don't have to do big redevelopments. You don't have to convert to residential. I literally have lost count of the number of clients who have come to me with projects they think where they have to repurpose into some other different use class, primarily residential. And then when we've looked at the numbers, just holding that property as commercial actually yields more money over five years than

Speaker 1 (20:36.474)
than the conversion would because obviously the high build costs, the write-off period, etc. And so these paper-based asset management strategies, it's one of the beauties of holding commercials. So an example is buying a vacant property and getting it let. So when you buy a vacant property, obviously because you're valuing on commercial valuations, which is rent divided by yield, so you're basically applying a multiplier to the rent. So you're not valuing on bricks and mortar value.

A vacant property, therefore, when there's no rent coming in, there's no lease and there's no tenant is worth less than an occupied property because it's more risky. There's no income coming in. So therefore, you've got to build in big void periods or whatever else in your calculation. And if a bank sends a value in, they'll look at it and say, obviously, there's risk associated because it's empty. But if you can niche your strategies and you understand a market and you know that, a property might be vacant,

but there's some kind of knowledge that you've got where you can get that let pretty quickly, then obviously you can add a lot of value pretty quickly. I'll give you an example of that. One of my clients recently bought a property post auction. I think it was on the market. It was in the auction at 750,000. They bought it for 700 post auction. So about 750 all in, including costs and stamp duty, et cetera. So there was three commercial units, one of which had been vacant for about nine months.

And of course the market was quite scared off because that particular unit had been vacant for quite a long time. But what my client found out was actually to be on the market with the wrong agent. He was actually a friend of the vendors, this agent. So they were actually more of a residential agent than a commercial agent and just hadn't had the interest and the knowledge to let it.

So the very first thing that he did was he went in there, he spent 3,000 pounds on white paint, basically giving it a lick of paint. So that's literally all he spent on it, just to tart it up a bit. A nice technical term we like to use in commercial, just a bit of a tart up. And then he put it on with the right agent, who was the main retail agent in that particular area, and he got let within six weeks. He let it within six weeks, and then he also, there was a vacant, it was mixed use, had a couple of flats above.

Speaker 1 (22:50.69)
He also let one of those, we actually doubled the rent within about three months. And now he's looking at basically getting all money out within about six months on that particular deal. So, you know, not a load of money being spent on a refurb or redevelopment, but just purely having some knowledge and kind of being clever with the strategies really. The other thing that you can do is you can extend leases. you know, again, it's all about risks.

If you can mitigate the risk, if you can reduce the risk in a commercial property, you know, so say you buy a property where there's a tenant in place on a one-year lease and you can talk to the tenant and find out they want to stay and maybe extend that to a five-year lease, then, you know, that's going to be seen as less risky by a valuer and again, is going to increase in value. So it's these kind of paper-based things, you know, you don't need to spend a lot of money to repurpose them or redevelopment. Obviously, sometimes that might be the best route, but very often you don't have to do that.

in residential world lease options is a popular strategy. Can the same apply in commercial?

Absolutely. Yeah, absolutely. In fact, when I first learned about all these creative residential strategies, because I've been in the commercial world for years, it wasn't new to me because I've been doing these for years and years and years. So you can absolutely do that. But obviously, exactly the same as with residential, it's all about motivation. So it's finding vendors motivation and finding vendors who maybe don't need the money straight away and who are willing to wait. And you can also do

lease purchase options in commercial as well. So I've got clients, they run a restaurant and what they're doing is they're actually buying an investment. going to buy it in their investment company or their pension. They're going to occupy it as an operational business and they're going to actually rent it before they buy it. So it's basically a lease purchase option. as a business owner, you could definitely look at that as an option. they're also going to

Speaker 1 (24:48.834)
be able to get their rent taken off the final price of the property. So it's a nice little deal that to be able to do. So yeah, nothing's off the table with commercial. You can be as creative as you want to be.

For someone who's listening now, Susie, perhaps the increases in interest rates are making residential a of a tougher gig these days and they're exploring commercial. What's the best way to get started, would you suggest?

Yeah, so I very much believe in starting with the end in mind. So kind of work out what you're looking for to begin with. I think if you are a Rezzi investor, I think the automatic thing to think is, I look at commercial and convert it to Rezzi. It's not necessarily the best route for you. And the way I like to look at it is that, you know, if you're after cash flow, you really shouldn't be doing big developments straight off. Like cash flow, you can get from commercial, you can get income from day one.

You can have multiple exits on a property. you can start, you know, I would highly recommend that you niche your strategies. So obviously you need to know what you're looking for, but find areas and find types of property where there's good tenant demand and you find that out by kind of your knowledge of an area. You find it out by speaking to local commercial agents, by speaking to local tenants. And, you know, I invest in areas where, you know, everyone says that retail's dead.

But I invest in areas where there literally isn't a vacancy on the high street. And if a shop comes up, you can usually get a 10-year lease on it. And that's because it's a nice little niche. So I would strongly recommend that you invest in areas where there's plenty of tenant demand. Because really, that's the main thing that drives commercial values, is that even if property is vacant, if there's plenty of tenant demand, you know you can let it. You know you can get a decent length lease. And you know you can get a decent rent.

Speaker 1 (26:40.44)
Have a look on all the portals like Loopnet, Property Link Estates, because there you can also look at Rightmove and Zoopla Commercial, see what's available in your area. Definitely get in the car or walk around areas. It's amazing how many people do desktop research when really you can only really get under the skin of commercial property when you go and look at it. You get a feel for an area, you get a feel for how busy an area is and how popular it is.

and then just build some great relationships locally and with commercial agents. Because about probably around 70 to 80 % of commercial deals get done off market, especially down south, bit less up north. So building those great relationships and getting those deals sent to you can be a really great strategy.

And we started off by talking about the budget changes and we know that announcements can come and take effect in the same day. So we never really know what's heading down the line. But are there any potential threats that you foresee in the world of commercial?

think there are definite economic threats at the moment. This is now my third cycle that I've experienced in UK commercial real estate. if you compare, we're in a down market now, if you could compare what happened in 2008 to now, obviously we've had nowhere near as much pain as there was in 2008. And I'm not necessarily saying that we're going to have it, but I do think that we just need to be aware.

that with everything that's happening in the world right now, especially if Trump starts bringing in tariffs and if Rachel Reeves determinedly stays on her path and inadvertently stifles growth, then there are potentially economic threats, I think. Now, obviously, as I said, that does affect commercial property first. It definitely trickles down to residential, but I do think that it affects commercial first. But it's nothing to be worried about because A, that's going to

Speaker 1 (28:33.706)
If you're buying the right kind of property where there's good tenant demand, if you're not leveraged up to the eyeballs, I mean, you really can't leverage more than 75 % loan to value on commercial anyway. So you've got some wriggle room in there. But tenant demand is really important. Obviously, when you buy at the right price, which is very, very possible at the moment. And by the way, ignore asking prices at the moment because agents haven't read the memo about the economy at the moment. So they're still talking the market up. And I definitely think that they're barky at the wrong tree at the moment.

So just making sure that you're kind of following the fundamentals and hedging your risk. So I do think there's potential economic threats. It may not materialize and we may kind of rise out of this. I mean, we are due kind of increases in prices. I just think it's delayed. So hopefully that will happen. But in the meantime, you know, now really is the time to get into the market, you know.

I wasn't investing myself in 2008, but I was in the market working for land securities at that time. And I look back now and think, gosh, I wish I'd been investing at that time, because really, it was one of those buying opportunities, not of a decade of 20, 30 years, really. And the beauty of commercial is that very often, when we come out of an economic dip, prices rise again pretty quickly. Obviously, it depends on the sector, it depends on the location, but

Really after 2008, know, prime property by 2010 really was really starting to recover very strongly. So, you know, once commercial comes out of this, comes out relatively.

quickly. Yeah, and you've been passing on your knowledge for many years, Susie. Tell us a bit more about how you work with clients.

Speaker 1 (30:16.098)
Yeah, so I have various programs where you can work with me. I have, you know, from a very low entry price where you can have an online course and then come to six weeks of group calls with me, you know, which are basically deal clinics. You can work with me kind of relatively light touch right through to my board where I work very closely with a small group of investors for six months. We meet up regularly and the board only opens every six months. It's open at the moment.

We are always sell out at that relatively quickly, but there is a wait list that we hold. And on the board, you know, I help people formulate their commercial strategies. I hold their hand through deals and obviously give them all the knowledge they need to be successful investors.

If you pass on a link, we'll definitely add that in the show notes for today for you, Susie. We're recording this at the start of 2025. It's February now. Is it possible that someone who's completely brand new to commercial could have their first deal by the end of this year with the right education and support?

Absolutely. Yeah, absolutely. I obviously, I wouldn't recommend that you invest without some knowledge because like every sector, it's got its own kind of peculiarities. You need to know about commercial leases. You need to know what to invest in. need to know how to do a deal properly. But as long as you've got that kind of knowledge, then absolutely you can. And I think kind of just as a bit of a myth buster, know, commercial property doesn't need to be

Super expensive. think a lot of people think you have have millions to invest in commercial, but really you can buy commercial property for 150,000, 200,000 pounds. Obviously you go up from there, but very similar prices at the lower end to residential, especially at the moment.

Speaker 3 (31:56.11)
Susie, if anyone wants to go and kind of hunt you down online, go and watch some videos here, here's some other things that you're talking about. Where's the best place for them to head?

So if you go to my website, which is www.susiekarter.com, there I've got loads of free resources. You can sign up to my newsletter. You can find out about the training. And I also, a little plug for my podcast, if that's all right, it's called the Commercial Property Podcast, totally free commercial property advice. It's geared to SME businesses, so small investors who might want to be dipping their toe into commercial or who are already investing and just want some.

Good hints and tips on commercial property.

Excellent. All right. Well, once again, I will point people your way, Susie, in today's show notes. And as always, it's been brilliant speaking with you. Thanks so much for sharing with us.

Thanks for having me.

Speaker 3 (32:47.286)
Okay, always wonderful speaking with Susie. And before we dive in some of the points that were brought up there, Kevin, I'd like to actually say a big congratulations and thank you to one of our members. It's Lorna who got in touch with us last week actually. And we always say, Kevin, we know that we have a process that if you follow it step by step, small steps each month.

you will achieve your financial goals and you can achieve financial security within three years. And Lorna is one of those who's followed the process and her email, I'll just pull out a little bit of what she said. She said, over last four years or so, we've had our eyes opened to all sorts of opportunities. We now have four companies, a SaaS, Wills, Lasting Powers of Attorney, two properties. I'm an option seller of three years and most importantly, a great network of like-minded individuals. All our cash is deployed.

and working for us.

Great, isn't it? And if you were to roll the clock back three or four years, 36 or 48 months, they weren't in place. It sounds a lot, but it's not. It's small actions compounding monthly on previous actions. And that's the way to build wealth, slow and steady is the key, by taking small, deliberately intentional actions every single month. And most people don't do that. And I ask the listeners now to reflect, how much time are you spending each week?

or each month in your normal pay cycle dedicated to building your wealth, creating recurring income. And let's make a big difference here, Chris, and point of differentiation. The difference between time for money income and recurring income, always worth repeating. When you've got recurring income, it's permanent income, not temporary income. Yep, that's a big difference, isn't it? So once you do the work once, you get paid forever. The second is predictable.

Speaker 2 (34:40.837)
Once you're building multiple streams of recurring income, you're building predictability, what I call creating certainty in an uncertain world. And the third one is my own language, Chris, so you forgive me. It's not a real word, but I call it pass on a ball. Right. You can pass it on to the next generation. So they're my three P's, predictable, permanent, pass on a ball. How much time are you spending each week or each month dedicated to building that?

as opposed to turning up at work, in a job, in a profession, doing what you're doing, getting paid, and then repeating that cycle a month later. What we're saying is interrupt that cycle, do one thing this month, one thing the next month, one thing the next month, and you build that compounding effect. That's what we teach in the World Builds Academy, Chris, and we always have a webinar to look forward to. Maybe you could showcase that.

give people an option to join in and hear that with a little bit more detail so that they can really get what we do. And hopefully some people will see it's a right fit. And maybe they've been listening for a while, Chris, but haven't really taken the action. A lot of people tell me they listen to the podcast, but do they all take action? Well, when the student is ready, the teacher appears.

Yeah, that's it. And you can always head to wealthbuilders.co.uk and look at the events section to find out when the dates of our next webinars are and our live events of which we have peppered throughout the year as well. In fact, I was speaking this week, Kevin in Bournemouth at a property networking event and someone came up to me and said, Oh, I've heard you so many times on the podcast. It's so nice to meet you. you know, it's really lovely when we connect face to face with people that have been listening for a while.

I was recently in Cardiff and I'm off up to the East Midlands next week and also to Hackfield House. I'm going to be speaking up there as well. So I'd to get out and about, share the WellBuilder messages and distinctions to different groups of people who we serve. Generally it's worth perhaps reminding people who we serve. So we serve the, what we call the ambitious employee.

Speaker 2 (36:59.084)
successful at earning a living, but recognizing trading time for money is not a recipe for wealth. The solo entrepreneurs putting, you your brain, your hands, you know, your intellect to serve people and you're doing it pretty much on your own, maybe with a little bit of support. The successful business owner got a team looking to create wealth independently of their business. And of course, those people who started their property journey, but run out of money before they run out of ambition.

and want to diversify some additional wealth or indeed find an additional source of funding to get their property journey accelerated, which is the SaaS, of course. And Susie mentioned that, so it's worth coming back. Susie's a SaaS owner, I'm a SaaS owner, and many of us are using our pensions to help us build an asset which is a bit more predictable than the stock market asset that most people invest their pensions in.

And she mentioned the FRI lease and you picked it up, Chris, didn't you? And she calls it, I think you said the eighth wonder of the world. Is that what she said? I'm not sure about that one, but I think compound income or recurring income is the eighth wonder of the world. But nonetheless, FRI, full repairing and insuring basically means, you know, normally when people think about a rental, you think about the positives and you think about the negatives. Of course you do. But the negatives of traditional rental, it's Rezzy,

residential is, you know, the landlord's got to pay for bills, the landlord's got to pay for repairs, the landlord's got to pay for insurance, the landlord's got to pay really for everything. But with an FRI lease, a full repairing and insuring lease, it's the tenant that pays everything. So genuinely, you know, your net income comes from that place where if there's a bill that needs to be paid, it's the tenant that pays it if insurance is needed.

is the tenant that pays it. there's a repair that's needed, it's the tenant that pays it. So that's the real value. And if you can go beyond that, as you talked about with multi-let commercial property, you can have multiple tenants with multiple people paying it. And in some cases, you can even occupy the premises yourself as well as with others. And we've got lots of clients who've done that. And then it's the tenants actually paying your rent. So some very clever ways that our wealth builder clients are using.

Speaker 2 (39:27.086)
to bring property and pensions together in a very elegant way.

Absolutely. And many transferable skills from someone who is a residential investor to a commercial investor. We heard some of the same things, doing your research on tenant demand, understanding how the economic cycles can affect things and building local relationships, know, agents. There's obviously a slightly different process, certainly some more education to be done around commercial if you haven't done it before. you know, transferable skills, we've talked about this before, even people moving out of corporate world.

into business themselves. Think of the skills, the years you've already built up and the knowledge you've already got and try and transfer that across.

Absolutely, I mean, we're all standing on a mountain of value, but we don't see it because we're seeing what's new, not what we've done in the past and the experience that we bring to bear. you know, these are valuable things we repeat and repeat, but sometimes you need to hear something two or three times to be really effective and get it and then lock it in and then apply it. So I don't apologize at all for repeating some of these things.

Well, we have a guide on SaaS pensions and properties. So if you'd like to find out more about that, then do click on the link in today's show notes and you can download that absolutely for free. If you enjoyed the episode, then do share it with a friend. We'd love to spread the word of wealth building as far and wide as possible and your help is much appreciated. I guess that wraps things up for today, Kevin. We hope you enjoyed listening and we'll be back same time, same place next week.

Speaker 2 (41:00.13)
I'll still be celebrating Tuna May!

you

Speaker 1 (41:06.734)
We hope you enjoy today's episode. Don't forget that we are constantly updating our resources inside the WealthBuilders membership site to help you create, build and protect your wealth. Head over to wealthbuilders.co.uk slash membership right now for free access. That's wealthbuilders.co.uk slash membership.