Most people out there today aspire to having passive income, the dream is often sold by Instagram influencers and the like
There are endless options online to sign up to a “no money down, no work required, be a squillionaire in 2 weeks and earn £10k a month for the rest of your life” course. Nowhere is this more prevalent than with some of the snake oil salesmen who sell online property courses (indeed I know that I am in this industry, my hatred for the majority of it, is what inspires me to really make a difference)
I got drawn into the concept of passive income way back in 2007. I signed up to something and was then sucked in before rapidly retreating, when I realised it was a scam
In 2010, I had realised that I wanted to have a future in property. Primarily because I was passionate about it, I love period property, the history, the architecture, the stories those walls would tell if they could talk. I would like to state now that I didn’t get into property development purely for earning money and the potential of passive income. I believe money should always be a by-product rather than the main focus (it actually flows a lot better this way)
In 2011, I started a company called www.blackdownshepherdhuts.co.uk as a 50/50 partnership with my cousin William. We worked extremely hard, reinvested profits and had a lot of success. Whilst growing this business I managed to purchase my first property and started my journey (the best move I have EVER made). By 2015 I had sold my first property for a nice £60k profit (about 2 years wages at the time), fully renovated a second property. The shepherd hut company had gone from a start up in Will’s garage, funded with £2,000 each, to turning over £1,000,000 a year
This all sounds very impressive, I had gone from literally having nothing to my name in 2010 to being worth multiple 6 figures. However, to achieve this I had absolutely hammered myself physically, mentally and emotionally. I was 33 years old and I felt that I was broken from extreme burnout. I decided that there must be a smarter, easier, more sustainable and enjoyable way to living life rather than just working 24/7
I decided to sell my 50% share of the shepherd hut company (big move as this provided a very nice salary and lots of perks), sell my house, liquidate everything I had to go and live on a far away tropical island somewhere. I had managed to save up £350,000 – not bad for 5 years when starting at zero
I figured I could have a bit of a jolly, go travel, jump out of aeroplanes, surf in beautiful locations and figure it all out. You see I was now ridiculously rich compared to where I had come from. I “knew” I could do what all the gurus preach and start working smart not hard. I could put my hard-earned cash to good use and start to live the passive income dream that we hear about
It took a couple months, but reality soon came crashing in. Having a decent stack of cash in the bank is great, definitely takes the pressure off. The thing is though, when it’s only going out and nothing is coming in, it doesn’t take long for things to become a bit worrying. I soon realised that I could not easily retire, as I had initially thought
It was not for the lack of trying, everywhere I went I searched for opportunities, America, South Africa, Thailand, Indonesia, at the same time as evaluating opportunities in the UK. That’s not to say that there were not opportunities I could have taken. I worked bloody hard for that money, investing in some countries presented too much risk, it took a while but I eventually realised that the smart long-term strategy would be to keep money in the UK (currency is relatively stable there compared to some countries)
By earning money in a reasonably strong and stable currency, I could then spend it in countries where its warmer (I don’t much like the cold) and the cost of living is cheaper. So, there’s a plan, simple right?
As stated earlier, my passion was in property, therefore that’s the smart place to operate. Investing in a sector that I had zero knowledge and experience in, would not have been the smartest move (obviously I did explore many along the way). I went through every possible option, buy to let bigger houses, multiples of small flats/houses, commercial buildings etc etc. At the time, I struggled to find anything that could deliver a return that was enough for me to sustain a decent lifestyle with – I was gutted, my retirement dream was shattered (who am I kidding, I would drive myself mental if I had nothing to do)
No doubt some people reading this will disagree with what I am saying. They will say that’s rubbish, you could have put a 25% deposit down on multiple small properties up north where it’s really cheap, take a buy to let mortgages, do some work to them, refinance them, rent them out and earn an income
This is the dream that a lot of online property course providers sell. Don’t get me wrong for some it has worked extremely well. On the face of it that seems really smart. My issue came from my earlier acknowledgement of working from a place of passion. By buying really cheap property in really run-down areas, then doing work to them to make them “habitable”, would mean I would be doing really low-cost work. My main focus has always been doing high end work, my passion comes from creating high end luxury property with real wow factor – somehow, I don’t think a 2 bed terrace in moss side is going to deliver this
The other downside to this strategy is it’s a numbers game, for each property you will earn a relatively small amount of money, therefore you need lots of them, say 10-20. That means 10-20 tenants to manage – NO THANKS!
Having accepted the passive income and retirement dream bubble was burst. I went back to where I should have started from, what I’m passionate about. I managed to purchase a run-down period property in a stunning location. It had the potential to create real wow factor. The potential incentivised me to create something amazing that would give the 200-year-old property another 200 years of life
From 2017 to 2020 life was far from easy, in fact it was an ongoing battle. I had underestimated the amount of time, work and money involved in renovating a project of this size
In 2019, I had managed to get the annex finished, to be able to live somewhere with heating and hot running water is an absolute luxury when u have spent 2 years freezing cold in mouldy a house or a 25yr old caravan, that has hardly any insulation
Whilst going through yet another financial meltdown (there was a fair few) my long standing coach and mentor Emma, suggested that I could rent out the annex at weekends to bring in some much needed cash (The Old Chicken House)
Once the main house was complete, I realised that instead of selling it and taking a one-time profit, I could instead utilise it as a stunning holiday let (Otterhead House). It was at this stage I realised I had inadvertently realised my original goal, of creating sustainable, passive income
I am writing this whilst in Turkey, I’m taking a bit of time out here to work on my course which helps others who are looking to follow a similar journey in property development
After my little work retreat, I will be headed to Thailand and Bali to escape the winter (there from December to March). My cost of living is cheaper there and its warm. I could have started the post with this last bit, to sell you the dream. Instead, I believe it’s important to let people know about the reality of what it can take to get there
Yes, reasonably passive income is possible, generally there’s always an element of work to keep it running though – most won’t tell you this. In my experience, the more hard work and sacrifice you put in at the start, the more potential upside it can have. There is an exception to this, that’s if you are starting out with a huge sum of money
If you are interested in all things property development, then I have launched a FREE (yes you heard correct) mini course.
By the end of the course, you will be able to;
- Understand how to minimise risk with your first property investment
- Point out what REALLY adds value to any property renovation
- Maximise the end sale price of your first investment property so you don’t leave any money on the table
- Get yourself in the perfect position to invest in your first property.
>>> Click here to sign up and get started on the journey <<<
If I knew then what I know now I could have got a lot further, a lot faster, this is what I now share with others
Until next week
Cheers George B