Looking to have a crack at the property development game, but don’t know where to start? Lloyd Girardi & Andi Cooke from leading property development educator, White Box Property Solutions, share their advice on the skills and experience you need, the secrets to their own successful business model, and why you shouldn’t let fear hold you back from starting a lucrative new career..
Full transcript of episode here
Ian: Hi all and welcome to Brick by Brick the podcast of the property development industry. My name is Ian Humphreys and I am a co-founder of Brickflow and one of your hosts. Each week we will be speaking to experts and stakeholders from across the property development sector. We will share ideas and advice on how to get ahead of the game as a developer. As well as trends and insights from across the sector. The series is designed for all experience levels, whether you’re just starting out on your property development journey or you are an industry veteran. We will handpick topics with universal appeal so that we can all continue to learn. We would also love you to share the podcast with your development industry network. Our mission through Brickflow and the podcast is to make development finance better. Every year somewhere between a third and a half of all SME property developers sight the lack of finance as the main reason they don’t build more. Its only through raising awareness of the problems that developers face that we will improve. The more people that hear this, the more the industry will pay attention and the better it will become for all of us. So please share as far and wide as you can. We also really want you to join the conversation if you have any suggestions for future topics or guests or thoughts on any of the podcasts, we would love to hear from you. Get in touch through LinkedIn or Facebook or email us at email@example.com. I hope you enjoy the show.
1:33 Ian: So, this week I am delighted to welcome Lloyd Girardi and Andi Cook from Whitebox Property Solutions. For those that don’t know, the way I think of Whitebox is a company that teaches other people how to do their business the way they do it. They provide master classes both online and through conferences to aspiring property developers. The idea of sharing your intellectual property with others is not something most businesses look to do. But it’s something that has become more popular as a business idea, in the recent past. With everyone having so much access to information online, it seems there are no longer any secrets. So why not share all that, you know? So the main reason I wanted to get Lloyd and Andi on the show is for them to talk about their business model, but also to talk about a phenomenal success they’ve had and what the future holds for them. So welcome, Lloyd and Andi.
2:23 Lloyd: Thankyou Ian, thanks for having us.
2:25 Andi: Thanks a lot. Cheers Ian.
2:28 Ian: Okay, guys. So, we like to start off with just understanding the journey that you’ve been on and as individuals, how you’ve come to where you are today. So if you start a bit about your background, your career todate, what attracted you to property and why you love what you do?
2:45 Lloyd: Yeah, absolutely. So for me to start with, I’ve always wanted to go back to my childhood. I’ve always wanted my own business. All throughout school, I just wanted to do something for myself, I never really knew what I wanted to do. And I kind of got trapped in the job cycle as well, by leaving school because I didn’t know what to do. I just went along with kind of what my mom was saying and telling me to go and get job and get security. All my friends went off to university still didn’t know what I wanted to do. So I just said, well, I want to go travelling instead of going to Uni as well. So I went travelling, again, just went to New Zealand, Australia, and had a really good time, to be honest. But the whole time I was thinking, right, what business I’m going to start to get back and wrote a load of ideas down, came back to the UK with the whole intention of starting the business. And then I think fear of starting a business got in the way and I didn’t know how to start business. So the easiest thing to do at that point was to not start a business. So I got a job. I went back to the restaurant I worked at before I left. And then my mom got me a job at Taylor Wimpey. So it was George Wimpey at the time when I was with them and, I was in a sales show home selling houses. And that was my first kind of proper job, if you want to sort of call it that. And I quite enjoyed it actually because I was in the show home on my own. So in a way I felt like I was kind of doing what like my own, it wasn’t my own business, obviously, but I had to look after myself. I had to decide what I’m doing on day. And I wasn’t really told what to do from someone there every day. So I quite enjoyed that. And after that, that was sort of 2006. 2007 I joined a mortgage broker who were working alongside Taylor Wimpey. And I kind of enjoyed that part but it was in an office. Towards 2007 till mid 2007. I got made redundant and went to sell LED lights for a living. So I did that for quite a while and but it was eight years worth of working for someone else. And the whole dream of starting a business just faded. But it was until it was November 2013 that the whole dream of starting a business came back. And the only reason it came back is on the 4th of November, I actually lost my dad from a brain tumour. And then 56 days later not my granddad died from dementia. So kind of two blows in the family really thought it put a perspective on my life. So I know Andy from my wife’s cousin, so we met at family parties and I knew he had a business. And I thought well, the best way to start businesses is by finding out how you start a business I started talking to Andy about how to start a business I was selling lights. So the business I wanted to start with an LED lighting company or lighting design company, because that’s what I knew and it just kind of stemmed from their really. And he was looking into property investing at the time. So I was talking to about starting a lighting business, he was looking at property investing. And he’s kind of just gauging what I was doing, I think at that time, and then about a couple of months, maybe a month later. Andi approach me and said, I’ve been looking into property investing, I know you want to start business, why don’t we start to look at investing in property together. And that’s kind of where it started. It went on a three day property seminar, learn a hell of a lot in that session. And those three days, even though I had to buy to let property myself before, I didn’t know that you had to, you could borrow other people’s money and do property and it was just an absolutely eye opening experience. And that’s kind of where it started. And that was 2014. And everything we’ve done to date, has started from those three days. And it’s just been an amazing past six years.
6:51 Ian: Are you still in touch with the people who ran that course?
6:56 Lloyd: Yeah, we still get mentored by them. Not as a major thing, but as a minor sort of side mentorship, we still keep in touch, absolutely.
7:06 Ian: Cool. Andi what about yourself?
7:08 Andi: Yeah, so I suppose I’m a little bit younger than Lloyd, as you perhaps notice. That shouldn’t be so funny Ian, you shouldn’t laugh so much. Yeah, Lloyd is 10 years younger than me. So I had a bit of a head start on him. But, in a way, a similar sort of background. I’m not necessarily formally educated myself. I left school and I did go to college for a couple of years but never really ended up finishing the course I was doing sort of technology, manufacturing, engineering, or more practical side stuff. And like to say never really finished it. Then I decided an influence in my life at a time I’ve done a couple of ski seasons he was a few years older than me. So I really like the idea of that. So similar to Lloyd I am, I did a few ski seasons around Europe, I went over and just rocked up at one, one day almost and just sort of got a job there. But low end you know, dishwashing, all that kind of stuff. And that culminated into me doing a few of those I used to come back for a couple of months and a bit of money go back and do another one, summers winters I was in so Marbaiya as well as the ski seasons. I was in Italy and France did that for about five years in the end, but actually formed a really good work ethic doing that, and because I didn’t go with loads of money, I had to earn what I needed to earn when I was there. So I was up. I was the one up at seven o’clock in the morning with a shovel at the early seasons, clear in the drives every time it snowed to the businesses and all that kind of stuff, but like I say it gave me a really good work ethic. When I came back from there, I decided to, I stayed here for a year met my now wife and then we decided after a year to go on a world trip. So we went to all sorts of countries and had a combi van in Australia, all that kind of stuff. And like Lloyd said, really a bit like him when I was away, I had this little burning ambition to use that work ethic and to start my own business, but I had no idea it very similar story, but completely different 10 years apart, but we’re actually very similar. And when I came back, I literally just went into doing warehouse work on the agency in my early 20s. And, because of my work ethic, got spotted quite quickly within the company, they employed me and then promoted me to going out and fitting. I was always quite good with carpentry side of things, but never again formally trained. So I got working for a library fitting company, and then they put me out on the road running my own team in my early 20s fitting counters and all that sort of things in libraries. And I was even in those early days I started running teams, I have a couple of people with me. And then I work for an audio visual company, again, set building. So again, it was carpentry based, but it wasn’t sort of house building carpentry based. And you know, all of the big conferences, where you get the sets at the back of them. I simplified their processes they did they outsource a lot of the work they did, and I built a workshop. And, I just, I like problem solving. And, I saved a lot of money, bringing those processes in house, did that for a few years ago, got bored of that, again, working for somebody else. And it was in 2007, I just had a bit of a, I had a bit of a running with a boss to be honest. And an overnight I basically just said, I’m not going to do this anymore. And I left and I just had my second child at the time, my wife was on maternity leave, and I kind of had to have that walk in, you know, we just lived a very normal life, we lived in a Barrett house, and I had to do the walk in and sort of tell her, I haven’t really got a job anymore, and I was 30 at the time and I just said, well, I’ve always wanted to start a business and that for me was the emphasis I needed and I just started really low level I just got myself. I started with a car I think and then got van a bit later on and just did kitchens bathrooms wherever, I was a bit of a yes, man, anything that came up. Have you done that before? Yeah, I’ve done it and then I’d work out how to do it. That’s it, but my, my ethic and my work ethic and my head, I was never going to leave that job not being perfect. So if it wasn’t perfect the first time I’d do it again, at my own cost, you know, and I’d be there until 11 o’clock at night if I had to be, and that actually gave me a really good reputation really quickly, because, I found out since that not a lot of people have got that kind of work ethic.
11:13 Ian: Yeah, absolutely.
11:15 Andi: So um, so you know, that I’ve got some really quite decent sort of well paid jobs with people who wanted that kind of quality of work if you like. And I was learning all the time, because the best way to learn as you’ll know is that you know, throw yourself into something you can’t actually do and work out how to do it, and hit with problems along the way. And that’s the quickest way to learn to do something. So 2007 set up the building company 2009 was our first extension. So, it was all just me basically before then do my own control of everything I did. That was a big deal for me because it was more like a project management role then I was getting bricklayers and electricians, carpenters, and it wasn’t just me doing what I could control anymore. So that was learning curve in itself, and then in 2012, I built my first house, which was the one I’m sitting in now, actually, because it’s my house I live, in it was a self build. And, that wasn’t actually that long ago and on the build part of this this combination. And, then in 2014 is when Lloyd said that we he actually helped me as he said we were sort of talking at family parties and I knew he did LED lighting and he offered to help me put some of the, I was doing quite fancy lighting in myself build, you want to make it look impressive. So he helped me with some of the design on that. And, he helped me even with some of the installation. And although if you ever met Lloyd, he’s only About three foot so I had to get some extra tall ladders.
And I think that quite impressed me to be honest, I saw that he was willing to sort of put himself out to help me and all that kind of stuff and, as he said, I watched him for a couple of months watched how he reacted, around the self build and things like that and then you know, once all that died down, I went back to an extension for a while and then when the opportunity came up, maybe probably getting on for a year later. I said, is it basically I thought that lighting design company that it was going to do was a really crap idea. He was gonna call it, what was you gonna call it?
13: 06 Lloyd: Quintessential lighting and design.
13:08 Andi: Quintessential lighting and design. So yeah, I told him that that was never gonna fly. So we want to do something proper. The rest is kind of history. We set up doing a couple of HMOs and whatever and were six years later, we are where we are.
13:24 Ian: Well, when you started what was the original pitch, what was the idea? Was it just, you know, let’s do some property investments, see where it goes? Or was it? You know, when did it become? Okay, we’ve done a few let’s sort of teach other people?
13: 38 Lloyd: When we sort of attended that three day property seminars, kind of understanding how to do property. They didn’t teach the development side. They didn’t teach how to do a new build. But that’s kind of where we looked at our skills. I work for Taylor Wimpey, which is a new build developer and Andi just done his house, which is a new build. So we kind of for like two weeks after that seminars pretty much around Andy’s house the whole night, every evening, just working out what to do. And we said, well, why can’t we build our own portfolio, everyone’s going out and trying to find these below market value properties and argue with each other about the viewings and all sorts. So, we kind of just said, let’s just build our own portfolio and why can’t we? And we question that pretty much for two, three weeks. Andi had found a plot of land in Northampton, where we’re based. And, and we just sort of looked at it and said, well pretty much every question is, well, why can’t we do that? Why can’t we do this? And the only way to find out is, is by doing it. And we even said that there’s, initially there’s about £270,000 profit in this deal from what we think because we didn’t again, we didn’t even know how to do the analysis properly. But from what we thought about £280,000 profit in the deal. We did say to each other, if it comes to it, and we only make 50 grand, are we still prepared to do it. And well of course we are. And then we said even if we make nothing, are we still prepared to do it? And we both agreed that yeah it is the kind of experience we’ve got to do something. And that was the key to everything. And looking back all the deals we’ve done so far, that will always be the best deal we’ve ever done because it started everything. We did do it slightly different to a lot of people because no one was teaching how to do development, we had to find out a lot of stuff ourselves. And one of the ways we did it was we borrowed all the money from private investors to buy the land, which isn’t uncommon. A lot of people do that anyway. But what was different at the time is we borrowed all the money from development finance on peer to peer crowdfunding. And it was it was Funding Circle at the time. They were just doing development finance. So we were one of the first to try it. And that kind of got the attention of a lot of people around us in the communities we’re in. And that’s kind of where the training started because people wanted to know how we did a new build development as our first ever deal. And it was for eight houses. So it wasn’t like a small 1 2 house development. It was eight houses. We borrowed about £750,000 in total, and owed about £810,000, which, when I first started, I was earning 15 grand selling lights, I still had no money to my name and Andi didn’t really have anything. So we had to borrow everything. But that’s where it started. And we started teaching people how we did that one deal. Yeah. And then every sort of six weeks, sorry six months, it kind of progressed more as we learn more on the sites we were doing. We just added more into the training we were giving and we never set out to become this sort of big training company teaching people development, we just wanted to give back to people that didn’t know how we did the deal in the first place.
17:03 Ian: It is kind of like a perfect storm of opportunity because Funding Circle, obviously don’t fund development anymore, but at the time, they’ll probably come into the market and as you say most lenders probably wouldn’t have backed you but the fact is they needed deals and you needed lending and you kind of found each other at the right time, I guess.
17:24 Lloyd: Yeah, absolutely. There’s never going to be a perfect time to get into developments. But there’s always a solution to do it once you’re in it. If anyone’s listening to this, and they’re thinking about it. A lot of people say I’ll do it next year. Why? Why are you waiting next year? You’re wasting a year?
17:42 Ian: I think it’s something you touched on at the start. But do you think that a lot of what you’re doing with other people, half of it is almost getting them over the fear of starting a business? Is that a big part of the battle?
17:58 Andi: Yeah, massive.
17:59 Lloyd: Yeah, massive. One of the things that we concentrate on as well, not just the teaching of the developments is we’re very much mindset kind of orientated. We’ve changed as people over the last six years as well, in terms of mindset, and we’ve now got the business mentality, that challenges we’ve been through has made us stronger. But we now pass that on to people starting to get into it. So we’re very honest and open about the realities of developments. We tell people what can go wrong, just as much as we tell people what the rewards can be.
18:32 Ian: So what do you think is when you speak to people, what’s the thing that people hear that kind of resonates most, makes them want to become a developer. How many people? Let’s say 100 people that you speak to? How many of those people will just never get it done and how many people actually go, do you know what these guys are speaking the truth? Let’s, move forward with this.
18:58 Andi: I think from my point of view that you know, if people come on the course and as Lloyd says, we’ve evolved when it first started, it was literally just because I was spending all my time doing one to one tours around our deals because people are interested in what we’re doing and it was Lloyd who said, well Let’s formalise this, put it in the hotel and whatever else it was just about that deal, then you go through the phase of, you’ve got other deals that come into it. And, a lot of other trainers will teach you the sort of rose tinted side of things. And as Lloyd was saying, there, you know, what we’ve definitely evolved into now, as we know that a lot of power is actually showing you what’s going to go wrong and all that. The problems is you’re going to hit, just like I did when I first started out with Redbox and all those kind of things. And from our point of view, if somebody comes who’s, perhaps doing single buy-to-lets and HMOs or whatever else, you know, they go on a training course quite often they’ll get shown the pretty side of it over a couple of days and, sold on to another level or wherever else and then they realise that they can’t do it, that they haven’t got the time to do it, or they didn’t realise it was gonna be that much hard work, and what, I’d prefer to do and, we want to give them the positivity, we want to show them that it can be done. We want to show them case studies, we want to show people that have done it, but we also want to be really real with them. And, show them that it’s going to take some time, some effort, it is going to be harder than they thought. But if they come on the course, and they see all that, and they realise it, and they get all the positivity from the weekend, whatever, but then they’ve realised that, developments perhaps isn’t for them, and maybe they should stick with commercial conversions, or they should stick with HMOs, whatever. Actually, that’s been a real win for us. And it’s a real win for the client as well, the person who’s come on the course, because it may have cost them, they may have spent £1500 pound to 2 grand, whatever the cost is to come and have that experience, but they’ll have got a lot even going back to HMOs and single but-to-lets, a lot that’s transferable, there’ll be better property investors because of it. And, more importantly than all that they’re not going to get themselves into a deal that’s going to trip them up and cost them 10s of thousands of pounds, when they’re not really committed to it, and so if they go through the training and don’t go into development for the right reasons, because they’re educated enough to realise maybe it wasn’t for them, then that is a real value for education that is as well as the ones who go on and absolutely smash it and go and do development for the rest of their lives, you know?
21:15 Ian: Yeah, no doubt downsides in property development is huge. Right? So, you need to go into it with your eyes wide open. Okay, cool. So in terms of, how the business works, obviously you to the main guys, how does it break down between you who’s like, who’s the strategy, the big picture thinker? I think I know the answer to who does the graph but how does it break? How does it break down between these two guys like what who’s responsible for what?
21:48 Lloyd: Yeah, I certainly do the graphs. The bigger picture thinking side is probably more come up with about 1000 ideas and about 2 of them stick, as Andi likes to say. So I’m constantly thinking of different things to do. Sometimes, I think, too many ideas before concentrating on one, but that’s just, that’s just who I am. So one of the things we mentioned is obviously, over the last six years, we have sort of found out kind of who we are as people as well. And I don’t wanna say it’s not a cliche kind of thing, but it has evolved and we’ve developed as people, but we did the wealth dynamics. We heard about that. And I did that. And I found out that I was a creator, which looking back and then sort of seeing how I, was since I was a kid, I’ve always had that creative side where I’m trying to think of something different or find something that works and I think well, how can I make that better? And that’s kind of how we work together really well as well. We’ll come up with the ideas, we’ll talk about the ideas together. Andi great at seeing things through as well. So we’ve now learned over probably four years that I have these ideas and then I need someone to help pull it through and then we’ve got a team around us as well that kind of fill in all the gaps. So it’s really been an amazing journey so far and obviously we’re just in the beginning of where we want to go as well. So we do work well together.
23:19 Andi: So my take on that now he’s done all of his bit. I like to call him Lord Llewellyn Bowen because he’s like the cushion fluffer of the tourists you know, I do all the hard work, build all the houses do all that side of it. And then he goes and glorifies it with a couple of throws over here and there and whatever else and then he takes all the credit, you know, so dives in at the last sort of last 10% of the work to get 100% of the credit sort of thing. You know, he’s one of them.
23:45 Lloyd: Cushions are the most important thing in a development. That’s one of the sessions we teach.
23:52 Ian: Lloyd’s the window dresser. So how big is the operation at the moment?
24:00 Lloyd: So from the development side, we’ve completed about £20 million worth of deals. From a standing start, it’s about 166 units. Which, again, we don’t just teach people how to do it we do we physically do ourselves.
24:17 Ian: That’s what’s interesting, day to day how involved are you in it the nitty gritty.
24:24 Lloyd: Me, about 4%. So I don’t get too involved. But that’s where I focus on the training side, and the social media side. So a lot of people see me on Facebook and social media. Andi looks after the developments that we’ve currently got going on. And I’ll see you there for the training as well. So we’ve got that good balance going on. But we’ve also got a project manager in place who we’ve brought in with expertise. So he worked for Taylor Wimpey for 12 years as a site manager. At the moment got five sites on the go with 86 properties being built. And he looks after all five of those sites. So we’ve got it kind of systemized now. And that’s taken time we’ve had to learn the process as well.
25:08 Andi: We definitely leverage the team, the way we do it, is that we leverage the team a lot more. And I look after the team, and then the team looks after the development. So even I don’t get into the nitty gritty as much now. But yeah, Lloyd’s definitely removed from that. And he’s looking at the, the stuff in the future. And he’s looking at that, like he says, the training side of it more. We actually run with SPV. So special purpose vehicles. We’ve actually got 18 different businesses now. So some of those are just developments. So business for development, but some of them are things like we’ve got a sourcing company purple box, we’ve got the build company, red box. We’ve got the training company, white box. We’ve got an another development company with a site for yellow box, we’ve got green boxes and lettings agency. So the ones we keep they look after that. So each one of them’s got their own team and staff members, and I basically, sort of oversee all of those and make sure everyone’s happy and all of that. Then at the other end, we’ve got like, really high level FDS and accountants and people who are much cleverer than either of us too. And, you know, so I’m the sort of middleman or will be dealing with them at one minute and then relaying that down to the team. So yeah, but I try and protect Lloyd from that because, it gives him the freedom then to be thinking of some of the stuff we’ll be doing in the future. Whilst I’m sweeping up the mess in the past, you know?
26:30 Lloyd: I’m the fluffer. He’s the sweeper.
26:33 Andi: We’ll have to get T-shirts made.
26:38 Ian: In terms of the training now, how bigs that, so you’ve got an idea on the development side, how many courses you run in? Obviously, with lock down, have you switched online a bit more, how’s it working?
26:53 Lloyd: Yeah, so we probably teach about 500 to 600 people a year. There’s an online as well that’s something that’s new for 2020. So we have been thinking about it for about two years to go online. But because we like the face to face, social side of meeting people and talking to them. Like say face to face. We never did it, but locked down kind of forced us to create something online. So it was quite easy to do because we’ve kind of been thinking about it for a while. And my expertise on what I look at is the land sourcing side so I know how to find deals. So straightaway, created the land sourcing academy, which is a nine week academy, it takes you from how to find a site where to look, how to analyse a deal, and how to offer on the deal, how to secure it. And the planning aspects all the way through to actually having that site as under your possession or selling on as a source deal. I wanted to do it as a step by step nine week programme because I knew lockdown was going to be intense and knew people were going to be in their house and needing to do something online. So I created it purposely that people could take nine weeks to do it. So it was very step by step and that went down really, really well. And then probably five weeks six weeks into that we created the project management masterclass which Andi and our site manager or project manager, Nick run, and that’s a series of 50 videos, all kind of as a resource to go back to and check about what’s happened on site or how you control a site all the aspects of construction methods, everything you need in terms of funding draw downs. From managing the site, it’s the project side that a lot of people sometimes don’t have, and they outsource that. But one thing we thought that would be good for is you can either use it to project manager for yourself, or you understand what your project manager is doing. It’s your sight the end of the day. So you’ve got to make sure you’re aware of what’s happening. Those are the educational courses we do, we mentor people, so we probably went to about 60 to 80 people a year, on a regular monthly basis. And then we go to places like this. This behind me is Croatia, so the villa in Croatia, we go to Croatia and Barley once a year and take 20 businesses out to each one to work on their businesses, as well as not just property related, but just business in general because that’s what we both love as well. It’s grown since the first course and teaching people how to build the eight houses.
29:33 Ian: Yeah, absolutely. I must say when, it comes up, the online courses, everyone’s like very complimentary of you guys, the conversation normally goes something along the lines of, I’ve done a couple of courses I’ve done, this one, I’ve done that one, and I’ve done Whitebox you’ll name always comes up and everyone will say that yours is the best. And I’m not just saying that because we’re talking now but people generally do seem to love what you do. So is like a really interesting model. And other than obviously you’re, charging people for the courses, but I mean they’re there. What, other bits of business you do together? Do you JV together or is it really just that kind of arm’s length, here’s how you do it, and off you go. And I’ll help you along the way, or do you actually try and work together as well on deals?
30:28 Andi: So with the delegates you mean, so? We do do that we don’t do that with everyone, obviously, because a joint venture and what we teach people is that that’s, it’s like a relationship at the end of the day isn’t that you shouldn’t just jump in and joint venture with anybody. And I think that gets talked a lot about in property, you find someone with a plot of land, oh just joint venture with them, or you find a builder, just joint venture with them. And, what we teach people is that you have to have the same sort of vision like me and Lloyd are obviously very aligned with our vision. You know, we will work together forever and we found a working relationship and friendship and brotherhood, we’ll call it. That will go on forever, and we will do everything. We do everything opportunity comes in, we make sure we do it together. So we’re aligned on that. But not everyone’s going to find that we’re just someone they walk by on the street. What we do get though is that on our flagship course you like the three day property developer secrets, we’ve had people who meet in that room and go off, and they didn’t know each other before that, and then they form business partnerships and go and do sites together, and they have a same version of what we’ve got. And we will consider working with the people who come through that. And we probably wouldn’t do that, unless they’re on the mastermind, that would be a, prerequisite for us, because then we know, we’ve got so regular contact with them, and we can help guide them more and, you know, make sure everything’s on track. And that’s the monthly sort of check in one. And, even then it just, depends on the deal. It depends on the people, it depends on where we’re at, at the time, you know, what’s needed in the deal, what the, you know, whether it’s going to be worthwhile to everyone. And that’s not just us, we wouldn’t want to come in and take a proportion of the profit, if we’ve made it not worth it to them because obviously, then, it wouldn’t be worth them doing it. So, everything’s got to align if you’ve got that, but it’s certainly something that we do. We’re on one actually 24 flats in Wellingborough. It’s an yeah an old conversion building an old shoe factory. And that was a couple of our delegates who came through the training who did that both full time professionals one is a dentist, one is an IT consultant. They came out to barley last year, they had this deal, they were talking about it. And they asked us if we’d consider doing it with them. In fact, that’s it behind Lloyd there. Big old building and yeah, we decided we would, we’re using my building company to build it as well. And it all just worked, it slide together. And it gives them the comfort that they know that they can go and do their full time jobs and know that it’s going to happen. It gives them the experience going through it with us if you like and we can control it and make sure that it’s going to, be in profit at the end of it and things like that. So, yeah, there’s a good example of where it has worked.
33:02 Ian: Is that ground up or PD?
33:05 Lloyd: No conversion. So and we purchased it with 24, apartments approved with planning. We actually amended the planning as well, it’s still 24 units, but it wasn’t the best of design. So we’ve gone in and changed a little bit and put like dormer extensions on the back. But yes, this pretty much full conversion.
33:23 Ian: Just on that point, when you do new deals, do you find you’re mainly going into planning approved deals or do you work planning as well.
33:34 Lloyd: We haven’t got a preference we don’t look at online stuff. And then we’re just gonna find a deal without planning so we can get the planning gain. We tend to buy sites by mitigating risk as much as possible. And that’s how we teach people as well. So if it hasn’t got planning will offer subject to planning, unless it’s permitted development, and we know we can get it. If its got planning, obviously, we’ll pay for it what it’s worth. We generally just pay for the site what it is worth with planning, because if we buying it subject to then we bind it with planning permission, and we’re not taking the risks that it’s not going to get planning. We don’t tend to have a preference of what we look for and specifics, but we go into every site with our eyes open and think, well, what’s the best way of doing this? Shall we do it? And one thing we’ve learned over the last few years is, if it doesn’t make our boat go faster, we’re not going to do it. So it’s very much a case of assessing the deal. Really?
34:20 Ian: Yeah, needs to have value. One of the things that we’re seeing a lot at the moment, I’d be interested in your thoughts on this, but on the platform when people search for loans, what seems to be happening at the moment is people are putting in post COVID build costs and post COVID GDV’s. So you know, maybe they’re trimming the GDV 5-10 percent. Now their build costs up 5-10 percent, perhaps there’s a bit of a longer build term as well. And deals are skewed because of that because the land cost is still pre COVID land cost, so there is this, mismatch in the market of where you’ve got sellers still looking to achieve what they would have achieved, pre COVID whereas perhaps savvy developers been a bit more realistic, and understanding that actually it’s going to cost them more to build, they might not get what they thought at the end. And therefore, the deal is not working because of that. And my view is that, towards the end of this year, beginning of next year, you’ll start to see that drip down into the market of where sellers will start getting that message and perhaps align their thinking. How do you, how would you deal with that kind of situation, how would you advise your, delegates, about around that point.
35:47 Lloyd: This is something we’ve been teaching since the beginning of lockdown when I first heard about lockdown. I could sense what was going to happen in the market. And it’s not, I predicted it. But I could sense that valuations probably would come down a little bit, that’d be a bit of caution there. Build costs, whether they stay the same or go up a little bit. But what we’re saying to people is the opportunities are going to come out of this and a huge, so you’ve got to start your pipeline now. So if you’re not making offers that are low, you’re not going to have that in six months time to go back to so what we tell telling people is yes, underestimate the GDV and we’ve always said that anyway. So the end value don’t expect to premium don’t expect it to be this value as it is now. So maybe take 5-10 percent off and the build costs, again, factor that in, it might be cheaper, might be the same. It might be more expensive, but the best thing to do on build costs is maybe overestimate it slightly and then your offer is just putting the offer in based on what you can pay, not what they’re asking for, even if it’s 50% lower than what they’re asking for, it’s not going to sell anyway. And so, in six month’s time when they’ve realised that those prices, maybe a bit inflated, then you’ve got that kind of, well, I kind of put the offer in six months ago, is more realistic. So we’re always on about pipeline, you’ve got to build that pipeline now. And if you don’t, if you don’t do it today, then you you’re basically kicking the can down the road each time and not having a decent pipeline to go back to and chase deals up really.
37:30 Ian: Yeah. What are your views on things like overages and deferred land payments, things like that, where, perhaps if he if you do achieve a higher pound per square foot on the exit, you know the residual land, low land price over the change, so, do you think that’s a good thing that people should be considering.
37:53 Lloyd: Yeah, one of the videos I did on our YouTube channel was about offering a 75% overage. So pretty much I say is 1 million pounds. Now, if it does sell for 1.4 million, then I’ll give you 300,000 pounds. So I’ll give you the difference of what I say and what it is at the end. And everyone wins and the landowner gets 75% of the difference. So the majority of the difference and we take 25% so it’s in our interest and their interest for us to get maximum value at the end. So we’re not trying to get rid of the site and buy cheap and negotiate that way. We’re happy to share the winnings equal, proportion to them more than us. So were happy with overages will kind of teach that as well. That is a good strategy to put in place.
38:47 Ian: Okay, it will be nice time to ask this actually. But from both of you, what is the thing that you look forward to teaching most? Or what is the biggest value add? Do you think when you’re in front of people, and you think this is something that’s really going to, like, get their attention? What is that in your courses? Do you think that people really enjoy it?
39:11 Andi: I think by far, I would first start just but to answer that as well. And people say to us, the age old thing, well, why are you teaching? You know, like, if you’re developers, you should be making your money in developments. Why would you give all your secrets away? And why would you be teaching it and whatever? I think by far we would both say that actually the bit we get out the most value out of personally and our mindset kind of way and our fulfilment kind of way is the teacher side of it. You know, that is where we get to see people face to face watch them and their journeys, that, change their families, their kids lives and all that kind of stuff, by us in part and a bit of knowledge from what we had, and they pay us for it, we’re not that Samaritan based, it is an extra income for us. But, I can work on sites all day, I can be helping our teams all day. And sometimes that can be, really stressful and whatever else is, we all know, then to go away, and do even a weekend course where, we go up and have a bit of fun with people. And that’s one of the reasons why people really enjoy the training because we don’t just sit there and deliver information, force it down people’s throats, we have a bit of fun with it, because that’s the best way for people to intake it and to actually be able to action it. So we really enjoy the style of the way we do it and how we’ve come about that. And it’s, it’s changed. As Lloyd said it’s changed me as a person. I used to be the kind of guy at the back of the room in 2014, we started doing our property stuff, I wouldn’t even I wouldn’t even put my hand up to ask a question because I was really self conscious, and all that kind of stuff. And now, you know, we stand in front of hundreds of people and be really outgoing and whatever. So it’s really changed me that public speaking elements been a gift that I have forever now and I can teach my kids and in fact one of my son’s he was really shy and he became a head boy at the school he goes to, and because of I believe some of that is because he saw how his dad had changed in, as he was growing up and all that kind of stuff. So I really believe in all that. But I think as well, over the three day property developer secrets, which me and Lloyd both personally deliver as it stands at the moment or part of all three days. And the Sunday morning, we do a mindset piece, which we sit there basically, there’s no script to it or anything like that. They all know us really well, by then they’ve spent we’ve spent a couple of days in front of them. And we as you start on a Sunday morning earlier than we normally would do on a normal day, which is again, counterproductive to, you think you get laying not on our course. And, we have like a couple of hours, whatever, it takes three hours, whatever. And we literally just sit on stalls at the front. And they can ask us anything, how we work together, what you know, pisses us off about each other. You know, what the most valuable lessons we’ve learned, and that’s always such a massive, we’re open and honest and whatever is asked will answer it, we won’t try and, like guide it or anything like that we’re just clear and transparent. And you know, the way that always goes and we get a lot of people come up to us after that session and say, I’ve never seen anything like that, never certainly in a training environment. No, I’ve never seen anyone be as open and honest about the things that have gone wrong before. And you know, the challenges you had and that’s what we love about it, that we’re not there to mislead people or guide people we’re just there to try and give them the best information we can give them to make sure that they get the best results and quite often that’s by our mistakes.
42:31 Ian: Yeah, they can make informed decisions. What about you Lloyd?
42:35 Lloyd: Yeah, I was gonna say exactly the same thing. The mindset session we do so we teach developments but the biggest thing to help people is actually change their mind first because if they haven’t changed their mind about developments, then they just won’t do it or they’ll get stuck. It’s they’re good timing actually, ill hide the name, just so I’ve got, in fact you can’t see on there at all. No, not working. I’ll read it out. And it says from today. Hi, Lloyd. My offer has been accepted. So get to planning amendments. That’s why we, teach it as an offer that’s been accepted from someone we’ve taught. And they’re just doing the same thing and they’ve actually put after that we have a saying that goes round which quite technical thing but it’s called an OSM. An OSM is a Oh shit moment. So she’s, just got the offer exempted with the planning amendments. Oh, shit. What do I do now? And that’s kind of, that’s what I love. I love helping people through that next step, because six years ago, me and Andi had to do it ourselves. And we had to fight every challenge ourselves where now I know that we’re helping people that kind of a feeling how we felt, but they’ve got the support. So that’s why we train that’s one of the big benefits as well. And I was gonna mention earlier but the, our business model is we want people to make a lot more money than they ever pay us. You go to a cash point you put a tenner in, you get 100 pound back house, that’s the best business you’ll ever have.
43:57 Ian: Yeah, absolutely. I think to be fair, that’s why, when I hear about you guys, and speaking to you more, and understanding your model and how you work, that kind of draws me to you as well, because it’s very similar to our, way of thinking in our business is, we want to pass on the knowledge, every conversation we have, there’s some very common problems that come up with funding and, you can just speak to people, they all have the same problems, but they think developments quite a lonely game, isn’t it? It’s, a lot of developers are, on their own, and, perhaps got a lot of data in front of them. They’re, searching through listings. And they’re trying to reach out to people, perhaps they don’t know. And like you say, in areas, perhaps they’re not experts in and I think he can be quite lonely, and so, to have, what you guys offer and, you’ll know when we speak to people as well to sort of have that, that expertise of somebody that has either been through it, obviously, I’ve been through as a developer, but also, to know that they’re speaking to other people that are having those problems day in day out, it is hugely valuable. And, yeah, I think it’s, I think it’s an amazing thing that you guys do. Okay, so moving on, in terms of the industry, for us. Now, a lot of what we’re trying to do is bring technology into the industry and improve it. And, obviously, you’re looking at online now, which is technology, of course, but you know, where do you think the industry there is quick wins for the industry? Where do you think the industry is gonna go in the next 5 to 10 years? And I know as well that you have a business that you have involvement in as well, which is very much on the prop tech side. So tell us about that as well.
45:56 Lloyd: Yeah. So the future I think, for property in general is online, obviously, not physically building and you could never do that. So you’re always gonna have that. But I think estate agents, I can’t see them lasting more than two, three years on the high street. I just don’t think there’s a need for a high street estate agent because you can search online for the property, COVID now has made people do online viewings. So that’s going to happen, so I just don’t see the point of having a physical agency there. So that that’s going to change in the property world I see. But, in terms of what we’re doing, to sort of see the future as well as we’ve got and we’ve joint ventured and partnered with someone we actually taught two or three years ago who went out to go and try and do the development herself. She realised that she’s creating spreadsheet after spreadsheet analysing the deal and putting a spreadsheet together based on what she thinks is right. And, it was just creating a headache for and she was analysing 200, 300 deals over a month. So it’s a lot of deals to analyse. But what she realised was her actual background is creating software for companies, multi million pound companies, to save the multi, multi millions of pounds as well. So what she was doing as a day job, she realised that she could implement in the development world so she went off on our own. We didn’t know anything about this until so she spoke to us later on and she created my property developers. So my PDA which is my property developers assistant, and that is basically a tool online to analyse deals. And it tells you what you need to search for, it tells you what to think about. So you haven’t got spreadsheet after spreadsheet anymore. It’s all online. It’s all cloud based on your app on your phone, on your desktop, anywhere you want. And it also integrates with things like zoopler to find deals as well. So it’s all kind of in one place. So in terms of the searching for sites and the analysis, it’s all in one places, you can’t really go wrong when you’ve been prompted what to ask and to fill in. And that’s where when we had a demo with yourself and Brickflow, I just saw the kind of similarities there and kind of using my PDA and Brickflow together because we don’t teach people how to get the loans once they found the deal. We teach them the initial part, right. This is a deal. This is how much you should be paying for it. And your Brickflow basically adds the next element, which is okay, this is how you’re gonna pay for it. It worked really well. And I think online, and apps like that will just help the industry simplify things and speed things up, which is, again, the government want houses being built, and they want to be built quicker. So if we can help the initial part of finding the deals and speeding that up, you’ll be on site quicker, which means the houses should be get should get built quicker. The only other thing we need to change is the planning side. So that needs to be a bit more data orientated in a tick box exercise to get planning through very quickly.
48:46 Ian: Yeah, I agree. I think the planning side and there is actually some interesting planning, tech businesses that I’m hearing about. And there’s actually one of the guys who is involved in Brickflow that are involved in a planning app as well, which, looks really interesting. I mean, it’s very early stages, but I think you’re right. What I think’s interesting for me is, is that, it’s a quite a long chain, property development, there’s so many different specialist parts, I think to have one that can do all of it, is quite unrealistic. But if you have quite seamless interaction between multiple platforms, you can kind of get from A to B much quicker than what you can at the moment. And I think that is definitely the future. So, yeah, I think we should, definitely explore that further to try and put the two together. But, I think as well the Conservative government, we’ve got another four and a half years of this parliament, and I mean, they’re hugely supportive of the construction industry. And I think just the mess that we’re in economicall, there’s Covid and there’s Brexit, construction is the perfect way for us to, come out the other side and build our way out of it and build, build, build, as Boris says, I really do think the next four and a half years is certainly at least the next one, is going to be really good for the industry and for everyone involved. And so yeah, I think it’s exciting time. So 10 years from know, will it be fully automated, will we be living in printed houses? Where do we go?
50:15 Lloyd: This is gonna be crazy, crazy times in 10 years time. We tend to think five years in front. We kind of think, where would we want to be in five years and then we’ll keep adding to that five year every year? Yeah, I don’t know where it’s gonna go in 10 years. Time is it Interesting to kind of think about it really?
50:27 Ian: How do you think COVID or the impact of COVID, might work with the industry? In the next months and years? Do you think people are going to be searching for more space like people are going to be, outside space is going to be, much more in demand and working from home, how’s that gonna change the way that you look for sites and build.
50:33 Lloyd: Now, there definitely is opportunities that have come out of the whole COVID situation. Obviously, people work from home for three, four months, which has forced people not to have an office, not forced, but they’ve made the decision that they don’t need an office really. And so it’s made that decision for them which in turn will allow officers to be vacant which will then allow for property to be created. So, vacant office is certainly under permitted development at the moment is something you can do to convert straight away. I also think that the whole Boris announcement, not once did they really closed down the whole construction industry. And obviously it was frowned upon to be on the site during the lockdown but as far as I’m aware there was never anything in concrete decided upon to say that, you can’t be on site you can’t construct you can’t build. So he is and the government are pushing for houses to be built as well.
51:47 Ian: Cool. Okay, guys. Well, listen, I think that’s us coming to the end for today. So thank you both very much, to Lloyd and to Andy for joining us, really good to learn about your business. I think what you’re doing is very unique, well not unique. But you know, I think the way you do it is unique. And the way that people talk about, is very complimentary. And I think you just got to keep doing what you’re doing because the SMEs, and the SME property development spaces is really where we need to attack the housing shortage that we have in the UK. So yeah, thanks again, guys. And yeah, catch up soon.
52:16 Lloyd: And thank you, its been a pleasure.
52:18 Andi: Yeah, cheers. Thank you very much.
Ian: Thank you so much for listening to this episode of Brick by Brick, the podcast for the property development industry. I think the biggest takeaway for me from Lloyd and Andi today was not to let fear get in the way of what you want to do. And both of the guys talked about how they always wanted to set a business up, but it was fear that stopped them for a number of years. Andi also talked about fear of public speaking and how, by just doing it and confronting it, he’s now happy speaking in front of hundreds of people. And I think that’s the great thing about property, in a lot of industries you have to have specialist knowledge and experience before you can set up a business that has a chance of succeeding. But with property that isn’t the case. You can fit property investment, property development around the full time job. In evenings or weekends, you can get friends and family’s help. There are very low barriers to entry and your risk is also very low. If you can’t sell the properties, then you can always rent them. And unless you bought very badly or manage the project horrendously, you should come out at least flat and then earn some money back through rental. So the question is, what is stopping you? Anyway, we’ll be back again soon with another episode alongside other industry insiders, sharing their own property journeys, as well as their tips and tricks to help you get ahead in the property development industry. If you’ve enjoyed this show, we’d really appreciate it if you could leave us a review and share the podcast with your property industry peers. And remember to get in touch about this topic or any future topic by emailing us at firstname.lastname@example.org. Until next time, take care.