From scrambling to pull together the deposit for the first £130k investment property in 2014, Jackie has since done over £14M of property deals, raising over £4.2M from investors and grown Tomes Homes to a team of 16. And she’s continuing to grow the business as she travels the world and supports other investors to do the same.
Jackie and her business partner (and husband!) Dave, have achieved what many of us in business strive to do. Jackie has freed herself from her 9-5 corporate job and now operates a growing property business with comparatively little of her own time. She has just returned from a long spell travelling and skiing through the European alps and is already planning for an extended trip, having recently purchased a large motorhome for exploring Europe. I love outdoor spaces, particularly mountains so Jackie’s story really touched me on a deeper personal level. It was a pleasure to be a part of writing this article. Her property journey has not been easy, Jackie will be the first to admit that, but the rewards at the end are well worth the effort. I’ve learnt so much from Jackie through the process of pulling this piece together and I’m so pleased to be sharing these great nuggets of advice from Jackie. It just goes to show, you never stop learning.
Jackie began her property journey modestly with a one-bedroomed leasehold flat on the outskirts of a Southeast London suburb.
“A place called Erith near Abbey Wood. I’d only read books by that point. I hadn’t done any property courses. It was for me finding that balance between, an area that had good potential for capital appreciation, but that was low enough in value that meant it would yield from a rental perspective, whilst buying it with a small discount to market value and adding value through refurbishment.”
For this deal and others to follow, Jackie wasn’t sourcing at 30% below market value (BMV). She was aiming to add value through simple refurbishments and then refinancing in time when the property had gone up in value. This is a fine strategy in a rising market. Much like the one we are in today. For her first property, it meant a full cosmetic refurbishment – new kitchen, bathroom and redecoration – which at the time Jackie described this first project as ‘intimidating’. I don’t blame her.
Your first project is always daunting but don’t be afraid to take the plunge. There’s plenty of support out there. Jackie refinanced her flat after six months. It was a huge amount of work and Jackie was hoping to reap and instant reward for her efforts but unfortunately, she was to be disappointed. Her project was down valued from £130,000 to £125,000 which was hard to take.
“Looking back now it seems ridiculous, but I was absolutely devastated – I felt like I’d failed! But then you come to realise that’s just the property industry – you can’t control what a valuer will do on a given day, so you can’t let it get to you. You just adjust, make it work, and carry on!”
But Jackie wasn’t deterred. She had learnt so much from the process, and in spite of her down valuation she knew that the property was still a good investment in the long term and as she was renting it out to a good tenant, she was making some hassle free cashflow on a monthly basis. Between £200-300/month was a good start. All she needed to free herself from the day job was ten more of those. So that’s just what she went and did! She forged ahead and 12 months later she’d done ten more deals! Astonishing.
“They were all in a very similar area and it was such a good little business model. Buy tired flats at a good price, add value through refurbishment in strong areas for capital appreciation. Then refinance 6-24 months later and do it all over again.”
It sounds like a great model to me and if something isn’t broken then why try and fix it but Jackie by now was networking among many property groups by this point, telling her story and listening to others. Now she would fall victim to a virus in the property world. One which like covid, has spread through the property. If you’ve been around long enough, you’ll know someone who has been infected with it. Shiny penny syndrome.
“We’re all looking at everyone else thinking that every other strategy is better than the one we’ve chosen. The general perceived wisdom in property is that you need to diversify across a number of strategies in order to get the results (freedom, money and time), so it breeds distraction.” The problem is age old. The grass is always greener. There are so many strategies out there and so many people doing each one with success, that it can be easy to lose focus and start spinning multiple plates, leading to overwhelm and being spread too thin.
“I’m making a few hundred pounds a month cash flow from each deal and meeting people who are making half a million pounds from a commercial conversion. And you start to question, what am I doing here with this little thing?”
The problem was that as Jackie had started to meet potential investors at networking events, and the criteria these potential investors was at best very hard to achieve, and at worst very unclear (so impossible to deliver on). So rather than thinking she just hadn’t found the right partners yet and rather than saying “no” to these potential investors – she went back to the model and decided that the buy-refurbish-refinance model on buy-to-lets just wasn’t ‘good enough’.”
“This just led us off on a whole wild goose chase of looking at other property strategies – with the great post-rationalisation of ‘it’s a good idea to diversify’. But the end result? Progress just slowed right down AND we were working all hours under the sun, getting up at stupid o’clock, eating badly and feeling guilty for taking even a few hours off at the weekend”
“When we started looking at loads of other strategies, you don’t have the same level of knowledge and experience. So you have to ask a lot more questions to get the confidence and understanding to be able to offer quickly (before you lose the deal to someone else). For example, you want to start doing developments – you’re having to talk to planning consultants and the planning department and party wall surveyors… And there’s just so much you don’t know. The speed of progress just slows right down, which is the opposite of what you need if you want to start to do enough deals to create the cash to be able to have the freedom, and also to not be working on it 24/7.”
After a lot of soul searching, Jackie figured out how to strip back the noise, stop trying to do everything and get the laser focus back – and start saying no! Returning to what she was originally doing so well which was buying and refurbishing flats. There are so many advantages to sticking in the area you know. Yet she still wanted to scale her business and grow quickly. The solution she came to was buying blocks of flats rather than individual units. Part of this also meant a move from South East London to Thanet by the coast in Kent. This allowed her to scale her business much quicker.
Jackie ended up returning to an evolved version of the original model and reverse engineering to find investors who wanted to get involved in these kind of deals (not the other way around). In most cases Jackie chooses to joint venture (JV) with her investor partners and is happy to split the profits and the equity growth with them.
Typically the deals will refinance 65-80% of the initial investment on refinance (between 6-15 months depending on the deal), the return on investment on funds left in the deal gets to the 15-20% ROI sweet spot. The refinanced funds are then moved over to the next deal to repeat the process.
Jackie discovered that there was less competition in this space – particularly in the £1m-£2m price bracket. There were more learnings of course. There’s always more to discover as your business evolves. One great advantage to buying blocks of flats is the capability to add value to the building which allows greater returns based on extracting funds at the end of the process. Targeting ‘tired’ buildings often from retiring portfolio landlords is one big tip. These can often be refurbished and modernised to add significant value.
One other great benefit to doing a JV like this on blocks of flats is it does give multiple exits. Jackie has now systemised and delegated much of the workload in her business so she can live the life she dreamed of when she started investing in property. True life by design. But it wasn’t always like that. Starting a property business is HARD WORK. Perhaps you’ve just started and are feeling overwhelmed. Are you juggling two jobs while setting up a business?
Trying to manage childcare and property perhaps? It can be really hard to start out. I’ve been there and so has Jackie. It can become exhausting, you feel like a busy idiot, feeling spread too thin and in the darkest moments feeling like you want to quit.
“We start in property because we want to create the financial resources that will enable us to have the freedom and time to enjoy our lives.
But along the way we get addicted to doing stuff in the business because you’ve had to work hard to get it off the ground. But then it’s almost like we get addicted to working hard and we don’t know how not to work hard anymore. We feel guilty not working evenings and weekends!… but that was the whole plan in the first place. So it’s definitely a real journey of how you move your mindset through at those different phases to make it all happen. It’s not easy, but it’s worth fighting for.”
To start with you have to do a lot of the work yourself. There isn’t a choice for most of us when you’re starting out but then you absolutely must learn to delegate as much of the process as possible. That’s the real secret. Building a team and a system to run the business for you otherwise you become a busy fool. Work smart not hard where possible. I must admit I’m still working on this myself, but Jackie has nailed it. It can seem daunting to begin with but bit by bit you can get the help you need and start to free some time for yourself. Part of Jackie’s success in this is using the same model and the same strategy time and again. It makes the process replicable and makes it easier to let go of parts of the process to other people, and makes training the team much easier.
If you’re worried about the cost of staff, you needn’t be. An increasing number of investors are reaching out to the Philippines for their staff.
I’ve done this myself and I can’t sing the praises of the people out there highly enough. They are an incredibly costs effective way of getting started and have proven invaluable to myself and Jackie.
The other part of her success is having a really clear focus. Because she is looking for the same thing time and again, her team already know what to look out for.
“We have half of the team is in the UK and half of the team is in the Philippines” Building her team has allowed Jackie to really live the life she wants whilst continuing to grow her business. Jackie has spent a large part of the winter travelling and skiing through the alps and has also spent a lot of time in South Africa.
“We were skiing in France for three weeks before Christmas, came back and did Christmas in the UK… Then we spent 8 weeks doing the Garden Route in South Africa, before heading back out to France for the end of the ski season.”
This feeds back to the agents she works with as well. Because she has specific criteria of what she is looking for they know exactly what she will and won’t be interested in. Jackie has sourced lots of deals through the agent relationships she’s built up over time. Once a property is found, it’s over to her UK based team to arrange and view the property. Having been through the process many times, there is a very clear checklist of what to look out for and what pictures and videos to take. Then, armed with all the information they need the property can any fully analysed.
“When it comes to analysis, you’ve got the same template analyser every single time. So, someone else can do the first phase of all that analysis and the comparables analysis, because it’s the same process every single time.”
Well, thankfully I’ve dedicated my entire adult like to business, entrepreneurship and economics (bit sad I know!) and have read pretty much every data report page by page, highlighted it, annotated it, analysed and scrutinized it and come up with the five highest value actions that you can take to capitalize in an uncertain market.
The contents of this report are based on the information available and current market conditions in June 2022.
Jackie is well on the way to outsourcing the entire process from start to finish meaning theoretically her team will supply her with fully stacked property deals, in her target area and using her target strategy.
Then it’s just a case of signing off each one and handing those over to her investors to approve. The work that Jackie & her business partner (and husband!) Dave do driving the business forward can be done from anywhere – which means the world is their oyster. It has also given them the time to build a business mentorship programme for other experienced property investors – helping them to do more deals with less of their time, which they love doing.
Jackie has had highs and lows in her property journey but is now reaping the rewards of all her hard work. Ultimately, it’s been achieved by building an incredible values-driven team around her and delegating almost everything to that team. It’s not something that happens over night but in time any of us could do the same thing in our own businesses. I for one will focus on delegating more to my own teams in the following weeks. Jackie has inspired me to reach further and value my own personal time just a little more. What’s next for her? Well, she just bought her first motorhome and plans to spend next winter touring the alps. For now, you’re likely to find her in somewhere in Europe on the golf course. Her business of course, will be growing all the time.