The Emu Investor that tried to spoil my sunday :)
An Emu is an Australian bird that has a brain the size of a pea, eyes the size of tennis balls and a long neck that is good for one thing: sticking its head in the sand and waiting for someone to walk up and kick it up the arse (sorry about the language)
Now why the emu lecture, because this morning at 8:30am I was annoyed to have a new investor that had never spoken to us call and tell me that a property YPC is marketing is all wrong and full of bad due diligence.
Let me explain:
The property in question is also being advertised by a club that is offering a bigger discount (obviously on an inflated value) with cashback on completion (potential for mortgage fraud), the rent they are offering is higher by £100 per month (clearly not based on a realistic market rent), the interest rate they are working on is lower (fixed rate with lots of tie-ins), the rental demand in the area is so great that you don’t need to worry about void periods (really? no void period?? I would like to see that) and best of all apparently the other club is offering better spec apartments (although he couldn’t tell me what that meant.)
I immediately felt like blowing this guy off as he was actually calling to attack me personally because I was doing such a poor job on the structure and due diligence front (or maybe I was just telling him the real figures, not exaggerated and made-up ones).
I got over the personal attack and begun to explain each point and why I do things a certain way, why we work out everything based on a 2 year cashflow using realistic market rent. Why we must allow 4 weeks void per year, etc, etc.
I spent a good 30 minutes of my Sunday morning explaining my simple principles and strategies but I was getting nowhere.
I realised the stupid emu investor had already paid the non-refundable reservation and was simply justifing his purchase by attacking me. He effectively had stuck his head in the sand when it comes to any due diligence and was simply waiting for the kick up the arse.
<>
It will come when he completes and realises that he needs to find money each month to fund the property. Now he only earns £20k per year. So that stupid, undisciplined and close-minded approach will cost him dearly.
So what’s YOUR lesson. This guy got sold, well and truly sold. In his desperate need to get on the property ladder he jumped out of the plane before he learn’t that you need a parachute.
Your lesson: don’t believe anything a salesperson says. Do your own due diligence, test and question every statement, be harsh, don’t stop until you can be totally comfortable with your purchase.
Just because you want something to be real doesn’t mean it is real.
Anyway thankyou for letting me vent my frustration with not only this guy but so many people that believe everything just because it’s written and has glossy pictures and a guy in a cheap suit says so.
Enjoy your Sunday!
Live with passion,
Brett Wood
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