Over the past few years I have been in the (questionably) fortunate position of having lots of potential deals put in front of me, and have spoken to lots of people who are either already making it in property, would like to make it in property, or have got into financial trouble through investing in property.
Combining this with the journey that I have personally been on to build a portfolio now approaching 200 units, and by also throwing into the mix what I have seen and heard from landlords looking to sell/exit (particularly portfolio landlords) gave me a lot of information, and also a lot of “noise” - there are so many ways out there that people are using property to make money. I had moved from what was a profitable side-line business in property some years ago, to turning all of my focus to it, and found myself wanting to chase shiny pennies as many do.
Once I started being open and honest about this with people in my network, I found that I was by no means alone. As I have progressed, I now do some occasional consultancy work for investors, traders and developers, and I have seen my perception of this problem absolutely mushroom. It is commonplace for an investor to sit in front of me, having paid a really significant sum to educate themselves, and be totally confused as to what the way forwards is, and also to have lost sight of the basics or fundamentals that are of absolute strategic necessity in ANY business, or when executing any investment strategy.
This led to me feeling there was a significant need to formalise what I saw as the blueprint for success in property. This was the birth of my “Four pillars of Property Investment” strategic framework. Like all good frameworks that readers will be familiar with, for example the SWOT analysis, it is certainly not rocket science, although it contains detail at the granular level that people find useful for providing actionable content.
I was influenced in two directions - firstly I remember a book I first read around 15 years ago that is about wealth management/personal investment, called “The Four Pillars of Investment” by William Bernstein (highly recommended, although I warn any prospective readers - it is heavy on the technical side!). I also have a business partner who has acted as a mentor to me (unofficially) - and he maintains that in property, you only need two things - access to deals and access to money.
I reflected on this for a long time, and it felt like something was missing. I think that encapsulates at a simple level the “front end” of property, but there is more to it than that. I was (and still am) seeing lots of portfolios that have been reasonably funded and have chosen (arguably) the right sort of stock - but they are still in trouble…I was asking myself why?