Caroline Tolman: Can You Invest in Property With No Money?

This transcript is auto-generated and lightly edited for readability, it may contain errors.

[0:00] Sammie Ellard-King: My name is Sammie Ellard-King, and welcome to the Money Gains Podcast. We’re a show all about making, saving, and investing your money, interviewing the top minds in the industry to unpack their tips and tricks to success. This week I am delighted to welcome Caroline Tolman, who is a property investor, and we’re going to talk all about how you can actually invest into property. She started with nothing, barely any money to put in, and she’s grown her portfolio to be in the multi-millions in just a few short years. You’re going to absolutely love this one. Caroline explains it all brilliantly. And honestly, you’re going to walk away with tons of new stuff, new knowledge that you can put into action right away. But for now, let’s get started on the Money Gains Podcast. So Caroline, welcome to the Money Gains Podcast, man. How are you doing? You okay?

[1:08] Caroline Tolman: I am brilliant, yeah. Thank you for having me on, Sammie. I’m really excited. I know we’ve had multiple technical difficulties over the last few weeks. All of mine, I think. All of my issues, though. I’m sorry. And me as well. Yeah, no, I I did mess up on the first one. So, you know, we’ve we’ve we’ve kind of been playing a bit of tennis, but we’re here. We’re here. We are here. Third time’s a charm, as they say. So yeah, we’ve made it. 100%, 100%. I have been really enjoying watching like your rise on social media recently, the content you put out, it’s like super cool and valuable. And um it’s another side of investing as such. That you know, we obviously we’re a money gains podcast. We want to talk about all of the sides and different options that people have. And I just loved your love your take on property investing. And I thought it’d be a really cool chat today. But I’d love if you could bring us up to speed.

[2:02] Caroline Tolman: Oh my goodness. So I love talking about property investing. So thank you so much for asking me to come on and talk about this. It’s my favourite subject ever. Which bizarrely, like seven years ago, I did not, it was not on my radar at all. Um, and it was something that myself and my husband, we had two young kids at the time, they were three and one. I was working part-time, he was full-time, and he basically said, like, we need a plan, we need something for the future. Like, we’re on this treadmill of life. What, you know, what’s going to change for us, or at least have a retirement plan for when we’re older. And um I was kind of like, Yeah, yeah, sounds like a good idea. Thank God he like had the foresight to kind of think about it. So our plan at the time was we’re gonna buy a house in London, probably with friends, because we don’t have enough money, so just buy something that we can hold for 25 years and then sell it. And that was gonna be our grand plan. That was gonna be the nest egg, the pension pot. That was the idea. And then we ended up, it was one of those weird things where your phone is like listening to you, and Instagram like pings up adverts all the time, like, oh, you want to learn about property investing? And he is a massive Liverpool fan as well. So it was, yeah, it was learn property, learn how to invest in property with Robbie Fowler. So he was just sold. Yeah, he was like, Oh my god, Robbie Fowler’s gonna be there. I am going to this, I’m going. So he said, Do you want to come with me? I was like, Yeah, like, yeah, I’ll come. Um, went along for two hours, and that was the first kind of little window into property investing that I’ve ever had. And those two hours just blew my mind in terms of what is actually possible. Like, like I said, we thought, buy something, 25% deposit, hold it, sell it. That was the plan. This just blew that out of the water, and it really opened our eyes to what was possible. And kind of from there, we did more training and then we just dived in really and got started.

[4:05] Sammie Ellard-King: So, what did life look like before that for you? So, before I was working part-time, so I did go back to work as a full-time sales brand. I was traveling the country. So, after our first baby, Harry, um, when he was one, I went back to work and I was I was like national account manager for a tennis brand. Tennis is like my my background. So a tennis brand, traveling up and down the country, which before I had kids was awesome. After kids, you have this, oh, I want to be, I want to be at home. So the plan was have another baby. So that fortunately worked out. Had another baby, and then the idea was to go back three days. So I was back at work three days a week. He was working full-time, but quite locally, about 10-15 minutes away from home. But kind of every night he was he was doing his stuff after work, like sports, um, and then I was sorting the kids. They were in nursery Monday through Wednesday, and then they were with me Thursday, Friday. So I had a nice balance, but I just did not want to be travelling Monday through Wednesday, kind of for the for the foreseeable. Um we had a decent like living, we had some good income, we were saving a little bit, but not probably enough at the time. Um, and obviously the difference from before we had kids to post-kids was that disposable income. You go, hmm, where’s all that gone?

[5:37] Sammie Ellard-King: Yeah, right. So that was a change. So we kind of knew that yeah, something was gonna have to change if we wanted to maintain, maintain our lifestyle, but have a plan for the future as well. Um, and also our son was three at the time then, and he was starting school the following September. So, again, like how do you how do you navigate school, drop off at nine, pick up at three if you’ve got a full-time job and you’re a couple? How do you do that? So that was also kind of a bit of an alarm bell. I wanted to be able to be there for drop-off and pick up. I didn’t want them having to go into after-school club. So that was a big motivating factor for something changing for us as well. That’s really interesting. Because, like, obviously, childcare as well, if you do do that, like your costs go through the roof. And then basically, you as a mother are working just for the sake of paying for your kids basically to stay in school. And it’s like a like a round robin over, like, hang on a second, why am I actually even doing this? If I just stay at home, yes, we might yes, we’ve got less disposable income as a family, but I’m at home and the kids get picked up, right? And then, but then the pressure all goes on the husband, and it’s like you know, and it can cause so many issues. And so it’s really interesting. Do you feel like then the kids were a massive catalyst in this kind of like we need to do something also for them, but equally for like our life as a family?

[7:01] Caroline Tolman: Yeah, I think it kind of like turned into that, um, and we realised that they were the driver. So initially it was we need a plan for retirement, then we went on the two-hour course and we realised that we could do it now and it could change our life now. And I remember um, so we went on a two-hour course and then we signed up for further training, which was a three-day weekend. Me and my husband have never spoken so much over those three days. Like every night we’d go out for tea and we’d just like just couldn’t stop. Um, and one of the actions that we had to do when we were there was we both had to write down separately, everyone in the room, about 100 people in the room, write down your why as to why you have to make this happen. So we did it separately, and what we wrote was pretty much the same thing. It’s for our family, for the kids, for our security, for the future, but for now as well. Um, so yes, that was bizarre that we’d both kind of said the same thing. And for a lot of people, your kids are kind of your biggest driver as well, aren’t they?

[8:06] Sammie Ellard-King: Oh, 100%, 100%. I I we don’t have kids, but it like getting your why right in any form of life for me is like massively important. So like it just gives you that foundation of to build for absolutely anything. It doesn’t have to be a property business, it can be anything, right? And yeah, what you what are you doing it for? So interesting. Okay, so you’re then sitting in this room with Robbie, good old Robbie, yeah. Bang in Striker. He was not there. Oh, he was not there, right? Yeah, his teamwork. Yeah, he wasn’t there, but he was just safe. Yeah, okay, fine. Best celebration of all time, I will say that. But um, if you’ve if you’ve seen it, you’ll know exactly what I’m talking about. If not, Google it, it’s hilarious. Um so you’re sitting there and you’re wondering, right, cool. Because a lot of people will look at that and think, well, yeah, you know, property, I need a lot of money. And that’s that’s that’s where it ends for them, right? And then then they just go, Oh, you know, it’s for rich people. And like, let’s be honest, you know, me, you, we’re not cut from like enormously silver spoon cloth, like what’s what’s the like how can we go and do this as an everyday person?

[10:01] Caroline Tolman: So that kind of broke it down for me on those three days because I thought exactly the same. I remember speaking to someone um who was crewing at the event, so they were there to like answer any questions when the presenter was having a break or whatever. Firstly, everyone that I looked at, I was thinking, all of these people that were actual investors who were working there for the weekend, I was going, if you’re investing, why are you not like dripping in diamonds and Gucci and all of these brands and all of that? Fast forward seven years, I totally now understand that because when you’re investing, you are all in, everything is in whilst we’re in growth, growth phase. So that was number one. And then number two, it just I remember speaking to someone who had three properties at the time, and I was like, wow, you have three houses that is so unattainable. That was I think that was maybe one of the first conversations that I had. And then as the weekend went on and I learned the processes and the mechanisms and the different strategies for how you can make money in property without any money, um, depending on the strategy I will say that you are doing. Obviously, to buy a house, you need money. Um, but there are different strategies within property that can help you get started and grow your capital pot. So that was kind of the eye-opener for me, where I was going, oh my god, I just it’s that saying you don’t know what you don’t know. That’s the thing, isn’t it? So from the outside, yes, people think you need loads of money, you’ve got to have connections, or yeah, one of those two basically. How can the normal person do it? One of my first mentors that I worked with, he worked on a market, he was a market trader, and I think at the age of 40, late 40s, he decided I need to do something else, and he’d gone through a similar training to me. Um, and the other thing is time. People say they haven’t got enough time to do something. Everyone’s got time. So he was getting up at four in the morning to go to a market, getting in at 10 pm, and then he would spend an hour on his property training, whether it was looking at properties, listening to a podcast, reading a book, something every day to get him close to his goals. And he’s done it, he’s left the market, and he’s now a landlord. So it’s about learning the ways to get in and also dedicate some time every day to it. So when I started, I was writing down, I think I read the book, and I don’t read a load of books when people go like, Oh, I’ve read this, this, this, mad. Like, oh, audiobooks are number one for me. But I did read two books when I started. Yeah, so Rich Dad Poor Dad was the one that kind of went, and everyone mentions that, that was like the light bulb moment in terms of get your assets, yeah, liabilities. Exactly. It’s like, Mom, you pretty much don’t need to read the rest of it. Once you’ve got the gist, you go, fine.

[13:01] Sammie Ellard-King: And then the other one was literally just ChatGPT, just say what happens in this book, tell me, and like as a five-year-old, and honestly, just do that because otherwise you spend three hours, free, you know, more than three hours reading it, and that’s it. It’s just like, I just need to know that one thing. Yeah, okay, I’ve got it now. Yeah. 100%, 100%. That is the key. And once you understand that, and then the other one was the slight edge. I can’t remember who wrote it, but the slight edge, gist of that synopsis, every day you’re either moving closer to your goals or you’re getting further away from them. So every day I would write down, like, what have I done today? Actually, have I viewed a property, have I spoken to an agent, have I grown my network? And over time, if you can do something every day for like a month, two months, three months, your knowledge just increases massively. So, for anyone looking to get started initially, and wants that basic understanding, there’s so many free resources out there to actually kind of give you that baseline level of knowledge. But then we can by all means talk about how people can then get started. Because I think it the beginning comes from knowledge. You can’t do anything without that initially.

[14:12] Sammie Ellard-King: Okay, cool. So let’s say, you know, I’m listening like Caroline. Oh, cool, that sounds like really good fun. Treat me like this beginner. If you would like to turn around to me and go, like, like, let’s say we’re meeting up for a coffee, and I want to know in like the next sort of 15 minutes, like, is it for me? You know, how do how do I go about it then from this sort of point on? I’m just working in my nine to five, I’ve got a few grand saved, but I don’t have much, so like, but I wouldn’t do this. Yeah, okay. So the knowledge and the information, anyone can do property, but it’s not easy. That’s the thing. It’s hard to work, it is hard work. So let me just tell you that. Obviously, when when you see things on Instagram and all of that, it looks like shiny, squeaky clean. It’s not easy to do it, but you can do it. So whether you’ve got savings or you haven’t got savings, the first thing that we need to do is understand what is it that you’re actually wanting to achieve. Is it cash flow or is it capital? What’s that first goal? Um people will be different. Depending on your capital pot to get you started, you do need money to buy a house. I think an actual realistic amount would be 30k. Your cash flow strategy is when you have a capital pot that you can invest and buy a property, um, and then that property is going to give you that passive income. So your capital strategies could be something like flipping, um, sourcing deals for other investors, rent-to-rent, where you don’t need the chunks of capital to get you going. And so all of those three things will grow your capital pot. Cash flowing strategies create that passive income, and you you buy those cash-flowing assets using the capital that you’ve either created or you’ve got. So that is your starting point. What is it that you actually want? Um, and then from there, so we’re looking at the strategies within that. So, like I mentioned with your capital strategies, you have rent-to-rent, sourcing, flipping, um, and then for cash flowing strategies, you’re looking more towards buy-to-lets, HMOs, um, which again, HMOs like where you’re housing multiple people in the one house, single lets, or you’re buy-to-lets, and service accommodation, social housing. There’s loads of different strategies with which are all cash flowing strategies. So, which strategy do we want within there? Then we’re going to find our area that we’re wanting to invest in, and that can be broken down by actually right move is a really good tool for finding areas where properties are cheap, demand is high, there’s a lot of properties available to rent. But when we look at let agreed, there are a lot of properties that are let. So we can test demand, speaking to agents, and then it’s going out and finding the properties. So it really is, it’s the strategy area property. That’s the model that we follow once we know if we’re doing cash flow or capital. Um, but yeah, from a starting point to understand which strategy is right for you, then I would be doing some sort of training or education just to actually get that basic level of knowledge to understand how we can use our money um and kind of recycle our pot. Once we’ve got that capital pot, recycle that pot as as many times as possible as well.

[17:30] Sammie Ellard-King: Okay, interesting, really cool. I mean, I’ve learned pretty much everything there is to know about this now, uh, to the point where to the point that I can get started from YouTube, like literally for free. Yeah. Which is nuts. And because people just put out fantastic free resources. There was like an 11-hour course, I think it’s like is it Ahmed Khan, the guy? Um it’s quite a one, he’s quite quite big in the property game. But he has like an 11-hour property course on YouTube for free. So it’s and it’s talking about all of these strategies, so it’s crazy. Yeah. You can get started with no money, but it just differs in what you can and can’t do. And exactly, exactly. When people say, Oh, no one, no money down, you can buy a house, realistically, no, that’s not gonna happen. But it can be someone else’s money.

[18:16] Caroline Tolman: Could be somebody else’s money, um, a hundred percent. But from my point of view, we need to kind of have your own capital pot just to cover you from a risk element. I mean, the properties that I’ve invested in, so I can give you a couple of examples. I bought one, um, so we bought one, the first house that we bought, little buy-to-let, two bed in Doncaster, bought it for 50k. We spent like 50k. Oh my god. This was five years ago. Spent 10k on it, renovated it. So let’s say for ease of numbers, we were all in for 60. This property refinanced at 75,000 pounds. Oh, you paid cash for the whole thing. Yeah. So at 75% loan to value, we um we got back £56k. So in effect, we left in left in £4,000. We’d spent £60, we got £56 back. So that £4,000, that’s fine when you use somebody else’s money, but you need to have the £4,000 that you can suck up yourself. Does that make sense?

[19:18] Caroline Tolman: Yeah, yeah. So that’s um another deal that we did, which was one done. Yeah, that property’s paying us. Yeah. Yeah. Yeah. So we are cash flowing from that. Yeah. So you look at the cost of leaving that £4,000 in the deal. We were cash flowing, I think, around £250 a month from that property. So you become kind of eight months. Yeah, well, under a year. Yeah. Yeah. So it’s a little bit longer, actually. No. Yeah, I suppose with the price of the five years. £16, sorry. Yeah, £160,000. So around that. So you look at it and you go, um, does that work for me numbers-wise, yes or no? And that’s everyone’s got different criteria as well for what they need to achieve. Another deal that we did, and these are the deals that you hear more often, we bought a house for $110, spent $40 on it, so we’re all in for $150.

[20:11] Sammie Ellard-King: So when you say all in, sorry, is that deposit, stamp duty, everything. So surveys, all of it. Yeah. All of it, refurb, cost of, yeah. Yeah, you’re simplifying. Yeah. Um, but yeah, so we bought the house was $110. So let’s say that includes um stamp duty, all buy-in costs, solicitors’ fees, searches, everything around there. And then the refurb was $40. So then all into the deal, we were all in for $150k. Does that make sense? Yeah, yeah. Yeah. Refurb plus purchase. We refinanced that property at $215,000 was the new value. So we got back, I think it was £165,000, something like that. So we were actually paid, in effect, £15,000 to buy the house. Does that make sense?

[21:03] Caroline Tolman: Yeah. So I’ve I’m all in for £150 and I’ve got back £165,000. There’s a £15k difference that is surplus. So that was an additional profit. You’ve got more money out, right, though, than in a way. Because you’re actually less. Well, yeah, you’ve got the equity as well. Yeah, yeah. And all of that. And you’ve got capital appreciation in two years’ time, you’re capital appreciation. I’ve got a cash flowing asset. Um, yeah. So it’s not all deals are like that. Some are like that. It’s about looking at the average across. So when people do their first deal, it’s about knowing what your parameters are and what your criteria is in terms of what kind of cash flow do I want from a deal? How hard do I want my money to work for me? And then also, um, how much money can I leave in a deal as well? So for us, it was like, right, £5,000, that’s our money that we have saved. That’s what we can leave in. So that was the figure that that worked for us. So I think that’s a good starting point for people.

[22:05] Sammie Ellard-King: Really interesting. So we’re looking at one at the moment, and I wanted to ask you about it live on air if that’s all right. See what we can do. Go on. Okay. Cool. So like it’s a it’s a BRR. Um and it’s basically a portion of our own money in to get off the ground, but then also utilising an investor and their money when you then pay them a percentage out, which allows us to buy a bigger property. It’s a it’s a it’s a seven bed HMO uh right opposite the university. So it’s a it’s a it’s a big jump for the first one, but it’s such a good opportunity because it’s uh literally uh like the unigates are there, the house is there. It’s like it couldn’t be anymore. It’s always going to be full of students, and the union is buzzing and growing, and it’s you know it’s going one way. So it’s a it’s a really great opportunity. But uh it’s quite scary because obviously then you’ve got to go and find money. So I wanted to like see what your thoughts were on that and uh whether or not we’re we’re we’re not.

[23:05] Caroline Tolman: No, absolutely not. So is the HMO ready made or does it need to be refurbed? It’s not a refurb, but the tenants are coming out, so we’re gonna do a 50k refurb on it. Um it needs it needs a brand new kitchen, brand new bathrooms. Like it’s it’s it’s not in it’s not in a good way, but the um because it’s just been studented, right, for like probably about six, seven years, no one’s touched it. Um but then we reckon on the remortgage on that it’s about 65, 70 to pull out. So yeah, it’s pretty crazy. Okay, so when you remortgage, you’ll be able to pay your investor back as well. Exactly. Yeah, so exactly. Okay, yeah. Amazing. So using investors, this is the way that we have scaled our business using other people’s money. And again, I remember hearing this and going, oh my god, who’s gonna lend us any money at all? So that was the first buy to let that we did was actually we had our savings, we knew we had the 5k that we could leave in a deal. So we yeah, with that, we thought we needed to test the system, have our own skin in the game, test the system, and just understand BRR. So buy, refurb, refinance rent, which for a lot of people I remember hearing that, and it was that light bulb moment of, oh my god, that’s how people actually scale. So buying a property, yeah, below market value, refurbing it, refinance it, refinancing it, renting it out. So, yeah, once I knew that that system worked and we actually got the money back in the bank, that 56k, I went, oh my god, yeah, right, okay, I buy into it now. I trust that this is gonna happen. So then we went on the hunt to find investors. Um, and again, you think who’s gonna invest in us? Um, but actually, when you have conversations, and this was why I started my social media kind of five, six years ago, was an just a window into my knowledge, really, so for any potential investor could look at what I’ve done, what I’m viewing, what like my back catalogue is, that I’m active in property. So I think you need to be able to show your experience if you’re looking for an investor, or at least some baseline level of knowledge. So I’d put together an investor proposal document and I would direct them towards. So it was basically talking through this is the deal, this is the money that we’re looking for, and this is what we’ve done, this is the buy-to-let that we’ve done, this is the training that I’ve done, the knowledge and I’ve invested in myself, in my education, so you can trust that I know what I’m doing. And I think all of that leads to the know, like, and trust thing. So we’ve always only borrowed money from investors that we know, which again, when we started, they weren’t on our radar that they were going to invest with us. Like it was a you you go out, and a bit of advice that I was given was to put together a proposal document, like I’ve just said, and hand it out to 10 friends and family, and just say, Can you just have a read through this for me? Just see if it makes sense. Like, is there anything that needs changing or whatever? And um, I remember my mum bless her, gave it to my mum, and she gave it back to me and she was like, This doesn’t make sense, you’ve missed a bit here, like red lines all over it. I’m like, it’s mum.

[26:30] Caroline Tolman: That’s not what you needed, was it? It’s like slapped to the confidence of mum. Yeah, 100%. Yeah, and then got it back from another um person that had handed it out to, and they were like, Oh, well, I’d be interested in this. Shall we have an actual conversation? Can we have a sit-down? And you go, that was what it was there for to spark the interest and the conversation. So from there, we now work with seven or eight investors. Um we’ve borrowed over a million pounds today to actually grow our portfolio. And this is something that I’ve spoken a lot about is like good debt and bad debt, and actually the mindset around leverage. If you’d have told me seven years ago we were going to be leverage to this level, I would have gone, oh, because it goes against everything that we were kind of ever told by our parents. But to grow a property portfolio, you have to be comfortable with leverage and an element of risk. Um, but we’re not over-leveraging ourselves, we’re not taking on bad debt, everything’s kind of calculated.

[28:43] Caroline Tolman: Yeah. Um so yeah. So yeah, it’s doable. You can find investors, is what I would say. Yeah, they they say that like raising money is the easy bit, is finding the deals that are the hard part. Do you agree with that? I heard yeah, well, but then the other side of it is I remember some advice that I was given was find the deal and the money will come. If the deal’s good enough, someone will come. Um that’s kind of the reverse to it. It’s is legit like a no-brainer. We’ve done all the numbers and it’s like above the gross yield, the the yield that essentially that we would like want. It’s like two percent above that, and we’re like, well, okay, so we’ve got like we’ve got room for it to mess up and still be pretty good, right? Yeah, yeah. I think that’s the that’s the key to being confident with using other people’s money. You know the deal, you’ve done all of your due diligence, um, because that can be a real thing to kind of stop you. I would there’s no way I’d be using someone else’s money if I, and I know some people ethically would potentially just take it. There’s no way I’m taking anyone’s money if I don’t know that I can pay it back to them a hundred percent. And that’s the thing. I won’t take any money from anyone that I don’t know as well, because I don’t know where that’s come from. So I think that’s kind of a key thing, you know, that all the AML checks, all of that, that comes back on you. So I want to work with people that I know, I trust them, they trust me. And I think that’s really an important part of the investor relationship.

[30:14] Sammie Ellard-King: I want to talk a little bit about like the refurb and maintenance side of this because it uh can be quite nuts, right? So, like we all hear build is from hell, there’s literally a show about it, like you know, that’s where a lot of this can go wrong, um, and quite quickly, especially if you know you get done over in these ways, and that you know, if you don’t know what you’re doing. So, how how do you how do you get like good at spotting this and uh finding a decent builder? So we were very lucky. Everyone, everyone knows a builder, everybody does does know a builder, whether it’s good or bad. So, our builder, we were very lucky, who’s a family friend, and he was one of the reasons why we actually chose the area that we chose to work in. So he was from Barnsley, um, I knew again for my area I was prepared to travel a one-hour radius um from my home in Huddersfield to make sure I could get back for the kids when they’d started school, etc. So we ended up looking and Doncaster came up as our first area of investment. He was prepared to travel there. So I actually had our first property was a single let he did the renovation for on a shoestring, and the second 10k, I’m like, I would love a 10k refurb now, so they just don’t happen. Um, our second property was a HMO. He’d never done a HMO. So this was a case of right, I’m gonna get three quotes. So where did I find the other two builders from? One came from Facebook referrals. So that is a really good place actually to try and find a builder. People love giving referrals. So if you’re looking to invest in an area, can anyone recommend a builder in Leeds, in London, in whatever? I was inundated with about 30 people going, oh, this guy, this guy, this guy, this guy. One guy’s name came up about five times, I think. So I thought, right, I’ll pick him. Had my guy, and then I had um a guy that came through a letting agent. So again, speak to your local lettings agents, estate agents, lettings agents, especially, because they have all the maintenance of all of the properties. So who does all your maintenance? Are there any you know, specialist HMO um builders or whatever that you can recommend? So they put forward another builder. So I got three quotes. My guy came in, this was five years ago, so it was he was a bit cheaper when materials were cheaper than anyway. But for a five-bed, all ensuite HMO renovation, he was 65k. The HMO specialist was 57 and a half. Yeah, so he was through the letting agents, and then the other guy who came through Facebook was 40k. Now the 40k for me, I was like, that doesn’t sound right from my own knowledge. I thought that just sounds too cheap. Like you can have you can’t have quality and cheap and time. That’s like you can’t have all of those. So that was a bit of a red flag for me. I was like, nah. So then it was a decision of do I go with my guy that I know and trust, or do I go with the HMO specialist who was cheaper? Um, I decided to go with my builder that I knew who was more expensive, but I couldn’t put a price on the fact that I had already had that relationship with him, and I could trust him to get the job done and leave him to it. And he kind of I knew that he was gonna have to learn as he went. So, like all the regulations, room sizes, all of that. So he took longer, but it meant that I didn’t have to be there every single week checking in. We would have conversations, he’d send me pictures on WhatsApp, and then actually, fortunately, I did go for him because the HMO specialist ended up going bum like about six months later. So, so yeah, so sometimes don’t always go for the cheaper option, and trust is key. Yeah.

[34:12] Sammie Ellard-King: Okay. Charles Yeah, you can’t put a price on that, can you? Mm-mm. Yeah, I’ve had some. I personally haven’t had any shocking building experiences, but I’ve heard I’ve heard of them. And it’s usually when people rush into relationships. So again, like with letting agents and builders, it’s it’s the same kind of scenario. So you hire slow and fire fast. So take your time, do your research, get referrals, speak to agents, speak to other investors. There are so many networking events everywhere. The hard bit is, is when you’ve got a good builder, you don’t really want to share them because you’re like if you’re keeping them busy, you’re like, Oh, I’m gonna need you. Um, but then I did Facebook, we found because we had too many projects on, and my builder is lovely. And he would say, Yes, I can do it, I can do that, I can do that. But it got to the point where we were like hemorrhaging projects and knew I had to find another builder. And um, Facebook again was where this other guy came from. I went three guys, they all went to a bite of it for me, asked them to do a schedule of works. So when you’re working with a new builder, you outline how you want to work. So I need a full schedule broken down, itemized, what is the cost of this so I can kind of compare it with other prices of refurbs that I’ve done. One guy didn’t show up, one guy went to the property and couldn’t be bothered to do a schedule. The third guy did the best broken down schedule of works I’ve ever seen to changing like the pendant, light fitting 30 quid. Like, great. So we gave him a chance, and again, he was brilliant. So without taking the time, yeah, 100%.

[35:50] Sammie Ellard-King: You know, you can a lot of times, you know, unless they’re an absolute charmer, but even the charmers, they you you get a little sense, and you’re like, Yeah, you’re a charmer, you’re talker, but show me the quote. Show me the quote and show me some work that you’ve done. Yeah, put me in touch with another um one of your clients or two of your clients. Yeah, I want a reference, I want to come around and see what you’ve done for somebody else, especially if it’s vital letters are a bit different because you just your level of risk in terms of the refurb spend can’t really go too far out from what you’ve budgeted. So if you’re really looking for a two-bed buy-to-let, I’d be as an average, without seeing anything, I’d just be like 25k. I’d just be thinking 20 to 25k for a two-bed, three-bed, 25 to 30, as a rough, really rough, obviously depends what needs to be done, but as ballpark figures, so then it may come in at like 26, 27, or it may come in a little bit lower, but you shouldn’t have a bite of that that goes from 25k to 50k. That just doesn’t happen. Your risk is in HMOs and your bigger conversions where there’s just more elements. Yeah. So that’s exactly right.

[37:04] Sammie Ellard-King: Like we we’ve we’ve we’ve very sensibly put 20% contingency in place and everything, like so it’s all factored in, and there’s like a worst case scenario in there and everything, and it’s still come out like um, yeah, do it. Like, so we’re just like, right, right, whatever, let’s go for it and you know, we’ll learn a ton and uh be ready and hopefully go again in a few months’ time. Yeah, that is the other thing, is a lot of people as I say, do the training, get your education, your knowledge first, but then you can’t just be like a classroom geek studying. You have to go and put that into action. No deal, your first deal won’t be your best deal because you’re learning and it’s there will be things, there’s always curveballs, property is property. When you’re looking at, you know, my GDV is gonna be this, my rent’s gonna be this, I’m not gonna have any voids, my maintenance is gonna be like fine. There are curveballs in property, it’s not linear, it’s yeah, up and down, and as long as you can understand that and then actually take the plunge to buy something. I remember someone saying to me, the worst thing you’re gonna do is buy a box. I just think of it as that. You’re buying a box, that’s it. Everyone wants to live in a box, you can sell the box. That’s the other scenario, I guess, is about having another exit strategy. So, especially when you’re starting off, what is your second exit with a property? So, if we’re gonna keep it and it’s gonna be a buy-to-let, if your numbers don’t quite, you know, hit what you’re expecting when you come to refinance, can we flip it? Is that an option as well? How do those numbers look? So that’s always I think when I started, I was quite blinkered into and looking for a buy-to-let, and this will be a buy-to-let. Whereas now I know that there’s so many different options. Yeah, so many options, yeah.

[38:49] Sammie Ellard-King: Yeah, I think like we’ve been um I’m really lucky that my partner in this is owns his own building and plumbing firm, and so we’re gonna be putting a lot of stuff through as costs, so our costs come down. Trust with guys that he’s known for years. So we’re like, we’re we’re we’re lucky in that regard, and obviously with me, I can help raise finance because of what I do and you know my profile and what I and that’s really helped, and so it’s interesting. And uh, I’m definitely excited because it is like the next phase because it’s like you know, I’ve got the I’ve got the stocks and the investments going and that’s working, and it’s like, okay, well, I’ve left alone real estate and 82% of millionaire’s own property, and I’ve always had that in my head that like that’s always what I wanted to do. My other half literally just loves like old cool properties that she can go in and put her own spin on, and like this is what this is what she wants to do, and I want to give her that opportunity, so um I can so yeah, it’s exciting for sure.

[39:48] Caroline Tolman: I think with property for me, I didn’t really love property in terms of oh my god, like gorgeous house. I do appreciate an old building now when I’m in a city centre or whatever. But what I love about property is what it’s enabled us to do in terms of actually giving us that freedom. Um can I talk about what the profile size for you is? Like, what’s life look like now from where it was? Like, what’s where is it at from versus where it’s so for us now? So my husband um just left his job, which he was basically supporting our lifestyle. Um he just decided, I think his company was taking over. There are a few different things in there, decided to leave because he had the option to leave. So now we just could live off the cash flow from our property business. Um, so that is really nice to be able to kind of think, you know, if this was five or six years ago, he if he wouldn’t have had the option to leave his job.

[40:49] Sammie Ellard-King: So you’ve got to that point in five years, basically. Yeah. Yeah, nice. Yeah, so he it’s not been easy by any stretch, but it was looking back now, it is so worth it. I’m so glad that we did it because the stress that we would be feeling, and this is the thing with jobs, people think, oh secure, it’s that like false security, isn’t it? I’m secure, I’ve got my job. Well, how many months could you survive? Yeah, yeah. How many months could you survive if you lose your job tomorrow? And that was really like that, oh my god, we won’t be surviving very long, or our lifestyle would have to change considerably. Um, whereas now we’ve gone, okay, he can actually choose to not go to work and do this, and actually he’s just annoying me at home every day.

[41:39] Sammie Ellard-King: Oh, you sound like my available. Yeah, yeah, yeah, yeah, yeah. She’s what she’s like. I go downstairs, I’m like, Molly. She’s like, oh my god, well, you go away, you’re so annoying. I’m like, what have I done? It’s just my present. I mean, that’s the thing. I’m like, that is the dream. And then now with that, I’m like, what? But no. Do you like build a garden office somewhere? Just like just take yourself away. Yeah, I get it. He um, if he listens to this, I mean, I love you really, Mikey. But he um he loves doing the school run now, which he’s not been able to do for like however many years, and it’s got to the stage where I’m like, um, can can I take the kids to school? Like, I’ve done it. I enjoy catching up with the moments.

[42:26] Caroline Tolman: Exactly. What was the gospel at school today? He’s like, I don’t know, I wouldn’t speak to anyone. I’m like, oh my god, I need to go in. So yeah, so it is just that side of it, and and I think we’re in this stage now where we kind of think, right, what do we want to do? Because we could quite happily do this and just live off where we’re up to now, and that would be a very nice life, and we can do that. Or do we push on and go and keep going? And it’s funny, I spoke to another investor yesterday, and he was very philosophical, and he was telling me all these things that he’d read, and he said, you know, you can have three, you can out the three things in life health, income, and lifestyle, you can only have two. So he said, if you want more income, which one are you gonna drop out of health and lifestyle? As in if you go after income, you know. If I went right, I’m gonna hammer.

[43:22] Sammie Ellard-King: All right. Do you know? Yeah, but then I I agree and I don’t agree. Yeah, yeah, yeah. I think there’s a an element of okay, that’s a bit much. But I think for people who really go. If you really go really push yourself, yeah, your lifestyle. Something’s gonna fall off. Lifestyle. Lifestyle, really, right? But then uh you can also go, okay, that was a fun five years. I’m done now. Yeah, yeah, yeah, yeah. Exactly. Let’s let’s vote. I’ve got all three going for me now. So like there’s a there’s a there’s a give and take there, and that’s how I feel. I agree. Pure like blingers on let’s go mode with both the business for me, and then I’m obviously now like want to do the property thing as well. And I’m like, cool, three to four years from here from now, and we are good, like the work I want to put in. And but I know I’m not turning up to the pub on the Tuesday night, right? Like, I’m not going to be lovely to see you, but I’m busy right now.

[44:19] Caroline Tolman: And your focus is, yeah. Yeah, and it’s not like yeah, I’ve just made those choices. I’m just select more way more selective about how I spend my time because I know what I want in the future. Yeah, 100%. And if you can be focused like that, then I think that’s the way to do it. If you know that there’s a time scale that you’re wanting to achieve. So that’s the other thing in property, is like you need to have goals for what it is that you’re actually wanting. So one thing that we did initially was like write down our dream life scenario, which was a fun exercise. Me and my husband, right, how much is our monthly cost if we could do whatever we wanted? So, where does that get us to? Um, I was more expensive than my husband, obviously. And then, okay, so that’s like we’re talking like five, six, seven years down the line. So, what are the stepping stones to actually getting there and how do we break that down? So, if year one, our goal was to cover my income when I was working part-time, three days a week, £2,000 was my income, which I’m like, wow. Um, but that’s what I was earning, that’s what we needed to replace. Um, so with that, if you work on the basis that roughly a buy-to-let will generate you £250 a month, and a HMO will generate roughly £1,000 a month. Obviously, your larger ones are a bit more. So seven beds. Yeah, seven beds. Yeah, yeah, yeah, yeah. So these are rough papers, but let’s say, yeah, maybe different. What are you thinking of cash flowing on yours? Just out of interest.

[45:50] Sammie Ellard-King: Uh one eight. Okay, okay. So yeah, a little bit more. But that’s a seven bed as well. So these were five beds we were looking at. Yeah. Yeah. So we were around five bed £1,000 a month marker. So anything over six, seven is is profit. Um so that was the case of right, we can do two HMOs. That that that hits our target of the $2k a month, eight buy-to-lets, four buy-to-lets an HMO, like, and then it’s about working out okay, how much money have we got? How much do we need to borrow from investors or bridging loans or whatever? And how do we actually, you know, how many properties do I need to view? How many offers do I need to put in? So it’s about putting in actual goals, stepping stones along the way to help you reach those targets. So, what is it like for you then?

[46:37] Caroline Tolman: In terms of per month. Well, because you’ve got to this point now. Yeah, you guys technically you guys are good, right? Yeah, yeah, yeah. Appreciation’s happening in the background, like you’re you’re exactly good. But the thing is, Alex Hormozi says it, uh, and I, you know, I like him and I don’t like him for other things. And um, but what he did say was really interesting is you get to the goal and then you go, oh right, well, that was fun. And now what? Well, yeah, like yeah, and then you kind of get you go, well, are we do we want the next goal? Are we ready to go for five years more years? Do we want that? Yeah, and you have to ask yourself that. And if the answer is yes, then you go again, and then when you get to that point, then you go, actually, our goals have now shifted. This is what we would like to do, or we want to buy a business, or we want to do a we want to open a shop and just have a bit of fun. Like, do you know what I mean? Because this is what we always wanted to do, really. And then it’s like, okay, cool, but then like that’s changed and it’s allowed you to have that choice and that opportunity. So I’m interested to know like what that looks like for you now.

[47:42] Caroline Tolman: So for us, our portfolio is around the six million marker, so that’s where we’re up to, and we cash flow about 10k a month from that. Um, so net cash flow. Um, we are at this stage, as I just said, in terms of what do we want to do? Do we want to double the cash flow or do we just sit back and have a year, two years where we kind of go, my husband loves playing sport. Does he want to do that? Do we want to just spend more time with the kids? Go on more holidays. I mean, we go on holiday quite a lot anyway. Um, so that’s we’re in this transition, I guess, at the minute of what we do. I’ve started, well, it was actually COVID, I started mentoring um people who have done some education. So I mentor people who have the knowledge but actually then need to put that knowledge into action. And then at the back end of last year, I put I set up my own um become a property investor course as well. So I actually love that side of things. I love the social media side, I love all of that content and actually creating and teaching people, kind of hoping to like give them that light bulb moment that I had. So I love doing that. So that’s kind of been a bit of a focus for me over the start of this year. Um, and then we’re, I mean, we’re literally away all of summer. We’re not in the country really, or not at home, I should say. Um, and then it’s really September’s probably the the time where I go, right, what are we doing? Are we going and buying more? We are actually, I say we’ll buy more. We’ve got three that are on the go at the minute, and one HMO that’s going to go through planning for an eight-bed if I can fit eight into it. So that’s in lead. So it’s not like we’re not doing anything. But compared to like the second and third year, I think the first year we bought four, second year we bought eight, third year was eleven, and then we dropped back off again, and then the last year was like three.

[49:41] Sammie Ellard-King: So it’s kind of all so you’re already tailed off anyway. Yeah, yeah. Yeah. Now you’ve been way more selective about the opportunities, I’d imagine. Yeah, exactly. And the area that we were buying in, and this was something that um I’ve learned and other people had said to me, so when we started, we were buying in higher yielding areas, cheaper property values, yeah, yeah, um, easier to get into the market. But then now we’ve moved to really anything now. I’m like Leeds. I just want to buy Leeds for me because I get the capital appreciation, and that is the winner. Yeah, and uh it’s such a great city, like in terms of the investment, um Leeds is I should say there’s no deals there, so don’t come to Leeds.

[50:27] Sammie Ellard-King: Don’t give away your sneakers, guys. You know what all these people listening. I’ve heard Liverpool’s great as well from Rochester. Yeah, pissed off over the border, yeah. If you’re starting, you’re not buying Leeds because it’s terrible. Interestingly, Liverpool, you was the one a few years ago, wasn’t it? And then Tyo was telling me it was like, mate, you can’t you can’t yeah, you can’t do it there anymore. It’s but it’s like it’s wild now. Like, oh you people want the sky in the rooms and all of that, and it’s just gone through the roof. And so it’s interesting, it’s like it happened to like different cities that they become on the up or like a train line goes in to connect it to London or whatever, and it’s like suddenly it’s like a massive opportunity. Like for me, there’s really massive opportunity in Kent and the south east because they’re putting all the high speed rails in, and all of these towns are just suddenly were absolute shitholes, and now massive capital investment going into them because like people don’t want to be in London, but they want to be in London in 40 minutes. So, oh cool, like can I buy Ashford and all these places, like and uh if they’re opening uni’s there because you can like and so campuses or whatever, and it’s like okay, interesting. So it’s like it’s prick pricked my ears up. And look, and I I think to round this off, like it just goes to show like it’s totally possible, you put your mind to it. So, like what I would say is that like if you’re running a split strategy and you’re you know you’ve got your stocks and shares ISA open at the moment, you’re putting a bit of cash into it. You can automate that and then learn this on the side. So then you’ve got another strategy which we’re then bringing into play, and then what is that doing? It’s diversifying your income, and you’re then you literally just tuck the words out of my mouth.

[52:16] Caroline Tolman: Yeah, diversification. No, diversification is key, and diversification within property, but diversification within investment strategies as well. Like we have other investments, it’s not all just in property. Um, but then yeah, when when you’re within property, diversifying your area, diversifying strategy type, property type, it’s all about reducing your risk. But my reasons why I love property out of all of the other opportunities that are available is that you’ve got a tangible asset. Yeah, and your rent kind of tracks along with inflation. The value of your property, your capital appreciation tracks along with inflation as well. And then as a result of that, your debt is just naturally eroded without you even having to do anything. So all the houses that we bought kind of four or five years ago that are coming up for their first refinance now, we refinance those onto 75% loan-to-value mortgages. They’re kind of coming down to like 70, 65 just because of how they’ve increased in value. And I haven’t had to do anything. So my I just think that that is like absolute no-brainer, no-brainer.

[53:24] Sammie Ellard-King: Someone else is making new money. Uh unbelievable, really, isn’t it? Yeah. And the rental market is going nowhere, is going one way. Yeah, we’ve got, I mean, uh, unless Labour build their 1.5 million homes in five years, which I think they might struggle with. Yeah, let’s be honest. I think what they’ve managed to 190 something thousand last year, and they were like really trying. So, like, oh man. Uh in Ireland, we have a shortage of how of homes, unfortunately. And on space, not everyone wants to own their own home, though, as well. Like, renting gives a really good option for people. Um, so that market will always be there. It’s not going anywhere. 100%. So are you worried about your question, actually, are you worried about Labour at all in this regard? Because they were quite tricky last time they came into power with property.

[54:18] Caroline Tolman: What yeah, I mean, it is interesting because obviously I’ve not had any other government since we’ve started doing property, it’s only ever been the Conservatives. I mean, it’s really easy to bash landlords and it’s a bit of a vote winner to bash landlords as well because we’re the horrible people. The issue is is housing and shortage of properties. Um I’m not yeah, I’m not too concerned because they need the supply already because of the changes that the Conservatives made, a load of um a load of landlords have left the market already, which in turn has has resulted in rents going up. There’s a shortage of rental properties. So I think they’d be very foolish to do anything too drastic. I think they’ve probably said, you know, what they’re gonna do um to try and win votes. Um and now that they’re in, I think they may U-turn on on some of the stuff because ultimately landlords are needed in the in the property sector.

[55:17] Sammie Ellard-King: Yeah, agreed, agreed. Okay, wicked. Well, I’ve loved this. So you mentioned your property course, that’s cool. Can someone do that now? Or is that yeah, yeah, yeah. So that’s available. Um, it’s basically you can see it on my website, or you can DM me on Insta. Um you can do it in your own time. So it’s not like a six-week thing or anything like that. It’s seven modules broken down step by step, how we get started, what are the strategies, how we raise money, how we find your area, how you run your business, all of these elements. You click through, it’s Google Drive, and you can do it as many times as you want. It’s yours to keep once you’ve signed up. So yeah. Oh, wicked. Well, send us a link for that and we’ll drop it in the description below, and hopefully, um anyone listening to that can uh can get themselves started because yeah, that’d be awesome. But is there is there anywhere else where you you want to send people?

[56:09] Caroline Tolman: Um you can just check out my Instagram, I guess, and my website. So I’ll I’ll send you my website link. It’s your name, isn’t it? Yeah, yeah, yeah. Yeah, just carolinetolman.co.uk so you can find out some info on that. Yeah, I think for the listen for the northern accident, and you’re in the right place, yeah. Honestly, it’s been a real pleasure. I’ve really enjoyed this, and yeah, I think there’s so much value in people just seeing that it’s possible for the everyday individual, and that’s all about what we we’re about here and just giving people opportunity. It may not may or may or not be right for you, but you’ve probably learnt a lot today, and that’s something you can take away, and perhaps in the future you you put into action when the time is right. So yeah, I’ve loved this. Thank you very much, Caroline. It’s been a real pleasure. No, thank you so much for having me, Sammie. And yeah, for anyone who does really want to do it, like just don’t sit on the sidelines and wait because property is only going in one direction. And as long as you’re in it for the long term, you’re going to win. So, yeah, get involved and drop me a message if you’ve got any questions as well.

[57:08] Sammie Ellard-King: Awesome. Thanks so much. Thanks, Sammie. The Money Gains Podcast, the financial guide. Let’s make it twenty four.