Welcome to the Slow Money Club Podcast. The show giving you realistic ways of attaining financial freedom. We share Get Rich Slow strategies to help you go from employee to entrepreneur and turn your dreams into income streams.
In this episode, we have a chat with Kevin Wright, an expert in Bridging Finance and developer of the Recycle Your Cash and Ninja Investor Programmes.
How can you use Bridging Finance to fill the gap in Property Investment?
You have your plan set, your dreams on the run and your goal upfront—it is your life ambition. Now you want to invest in a property but there is a financial gap! What to do? Worry no more, this is for you! We recently sat down with Kevin Wright, one of the foremost people when it comes to bridging financing and a developer of the Recycle Your Cash and Ninja Investor Programmes. He is not just here to share to you his knowledge and experiences on finance; Kevin is going to inspire you with his own story and give the advice to help you accelerate your journey from employee to an entrepreneur that may help you turn your dreams into income streams.
Like many people, Kevin did not have a clear career path to the property sector. He has been into a handful of jobs like clerical before he became a successful designer and seller of kitchens. It went quite well in the first phase until a point of recession happened, people were not buying any more— his times were very hard. That is when he moved into financial services and has been a financial adviser since 1992— wherein he found himself addicted to interacting with people.
His current brokerage focuses purely on bridging and development finance, wherein the where they have brokered hundreds of hundreds of bridging and development deals and has taught over 1,000 people about the details of bridging finance and how it can be used with intelligence to produce a successful result.
Kevin learned about the property first was by observing his first landlord making money from property—this happened to be an HMO before they were popular. He then received a book called “Property Renovation Profit” as a birthday present from his mother. The rest, as they say, is history.
This episode is an in a depth discussion where we tackled different strategies that are available to so you can better understand bridging finance and drives away some myths and fears.
Kevin Wright | Key Discussion Points
[6:43] Kevin explains why he choose to leave his on salaried plus commissioned job to go for one based on fully commissioned; because he felt comfortable on it—a quite interesting mindset that is different from most of the people’s.
“I was a single guy at that time although I have a mortgage I don’t have a family to support. I guess that guy has a lot more flexibility but certainly now, I’ve got bills to pay and mortgages to pay and incidentally a trade running through the at most of that period.” “I’ve never been full-time in property—I never want to be full-time in property, actually. Otherwise for the last 25 years of being involved in financial services… in recent years, in bridging— I like it because of tremendous fulfillment I’m doing there.”
[8:05] Kevin explains the reason he decided to invest in property back in 1983 even though it wasn’t necessarily as popular as it is today.
“Well, there’s no training courses or resources where you could learn from other people. Two things triggered that actually…”
[13:00] Kevin talked about how he managed to juggle a full-time job and property investing.
“I think it is about, good time management and then a lot of people effectively burn the candle at both ends— if they want to become fulltime in the property. It was my ambition, it is not anyone’s ambition but it is little people’s ambition, I think— if it tends to be the goal and the objective. If to have a less fulfilling day job doesn’t captivate their imagination, then they would like to gravitate a little bit into something fulfilling and maybe give them a better work-life balance.” “It’s about burning the candle at both ends for a limited period. For myself, I would have several weeks of intense action. And then chill out and take a back step, typically while the property was being sold.” He added.
[15:47] Kevin shares how different the market was especially in finance, back in the 80’ and what he learned on the financial side during that period.
“There was no system to work at, lenders could not access if you already had a mortgage. It was much more of innocent times. In addition, the advent of AST’s was a dramatic shift on the landscape, prior to that you had regulated tenancies and they were geared heavily inside of the tenant AST’s dramatically shifted that balance.” He stated. “Mortgages have gone full circle from being ridiculously hard to get, very restricted like 30 years ago that would have been unthinkable…”
[20:46] Kevin talked about how the landscape is different for newbies and how should they be approaching it differently.
“Certainly what worked pre-credit crunch doesn’t work post credit crunch. It depends on what entry-level point someone comes into the property sector and that entry point does largely get around two factors; their available cash and provable learnings.”
[21:55] Kevin talks through a scenario of what will be the best approach if a person has an in existing residential property with equity and wants to purchase an investment property</p.
“If you have equity your property, you will be limited in terms of how much you can borrow against it because of changes in affordability calculation. However, in a bridging perspective, there are other ways around it, because they do not look for the affordability.”
“Well, clearly it’s more difficult to remortgage a mine residence and take out equity than it was in early years that it started progressively since the credit crunch… Underwriting main residence mortgage has changed for the good, it’s certainly got the basis of logic around it now, in the early years after the credit crunch; you could take someone with a 30,000 salary. They would lend multiple of their salary; their present circumstances would play the very little part in the mathematics. It may four times 30,000 or five times 30,000…”
[33:40] Kevin gives his viewpoint on how somebody can get a property below market value and what sort of things could lead to that transaction.
” At any one time on Rightmove, there are upwards a million properties for sale. And everyone o those owners want to sell the property. Now, if you drill down another level, every one of those sells wants to sell their property, but there is a small proportion, probably less than 10% that needs to sell the property. And it is a crucial difference. The vast majority are prepared to hold out for their desired asking price. There are a small minority of people who can’t afford to wait for however long it takes to find a buyer.”
This is what you call a motivated seller. He pointed out that if someone wants to sell his property faster, one that can motivate buyers to buy quicker is the price reduction. You can negotiate a price point that is good for them and provides enough of a good discount, that you can reduce the deposit that you put down by executing a purchase against the true value as supposed the agreed price.
[41:53] Kevin discusses if there is any way that bridging can be used so that it does not involve finding new money.
“Some Bridgers will be preferred to be put a charge over their current property and it can have the effect that you can do, a no hard cash down deal. You borrow 100% of the purchase price by taking a 1stcharge over the property you are buying, and a second charge over the property you already own.”
[49:13] He added that if you haven’t got the cash for the deposit and if you haven’t got the equity in any property that you own, then you’ve got to go to a private sector and look for a private money, because there will be people that they’ve got the cash to put the deposit for you. Wherein you can bring the private money and use that to bridge the gap.</>
“A Bridger will always fund any project, no matter what your project is. Not every Bridger will fund every project.” He stated.
[54:05] His insight on what was the biggest barrier people face when it comes to taking action to on the knowledge that they get from training courses, given that he has taught thousands of people in the past.
“Fear and Procrastination. It is very easy to let enthusiasm dissipate as real life kicks in. The longer the gap between the learning and trying to take action there’s knowledge fade” “If you risk nothing, you risk everything. If you never take any action, what you risk is your hopes, dreams, and aspirations.” Indeed, opportunity cost a lot.
[56:36] Kevin’s advice on what should you look on a good training course.
“The material that supplied should be some form of a written version that they can take away with them. If your only way of recording the information is to write it down freehand than you are at a disadvantage. You’ve got to listen, understand, analysis and write down everything that is being verbalized…and understand when you pick it up at a future point. Most speakers speak at a speed that is too fast to fulfill all those functions in any meaningful way. You need some form of written material that has the very basics of the course.” He said.
Now that you have heard it all, it is all up to you now. Procrastinating is a poison that can kill one’s ambition. You’ve got your dreams; the options are yours to choose. All you have to do is to take action because that’s the cost of ambition.
Interview with Kevin Wright | Bridging the Finance gap – Download Now!