We spoke to Lukas Sheen, a young, successful entrepreneurial property investor who has just set up www.vamoove.com, a brand new concept in property investing. Lukas and his father run a construction company and have been investing in property for the past 15 years. Their main focus is on Grade 2 listed developments, manor house conversions, pub redevelopments and blocks of flats, mostly in London and the home counties.
They have invested in an interesting range of properties over the years, including a manor house in Essex and a high end property in West London, which they bought sight unseen. Last year they bought and a derelict pub in East London and have restored it to its former glory much to the delight of the local community.
“People always ask me about what is the best way to start investing in property. I tell them that before they buy anything they must do their due diligence. This does not change as you become more experienced, because every purchase is different but especially at the beginning when you are on a big learning curve.
“A property can turn into a money pit if you buy it without doing a survey, checking all the legal aspects, getting accurate building estimates. Make sure you find out what the average square foot price is for the area, what the yield will be if you are developing something to sell or rent. If you’re borrowing money to invest, work out how the loan will affect your bottom line, especially if you are redeveloping a building. If costs are high your yields will fall”, says Lukas.
“When you first start you don’t know what you don’t know, so my advice is talk to people who have done what you want to do and get as much advice as possible. Of course as you get more experienced you start to know whether to hold on to a property or whether to sell it, whether something is a good buy or not and when to take calculated risks”, says Lukas.
Exit strategies are not just for entrepreneurs they are for any type of investor, and are especially important in property investment. Any successful investor will advise you to decide how you are going to get out before you even buy your first property.
A well thought out investment strategy can provide wealth and income; it is a question of timing, planning and understanding the market. If you stay focussed on your end game and your means of getting there, you will achieve your goals, as long as you know what your goals are.
The first thing you need to consider is how do you want your portfolio to perform? Are you investing for the short, medium or long term? Are you looking for long-term wealth building, high monthly income or a combination of both?
Lukas explains how they decide whether to keep a property in his portfolio or whether to sell.
“It all depends what the yield is, if you get a good yield and it pays you to hold on to it, then hold on if not sell and move on. For example, we’ve just finished developing a property in West London. The yield isn’t particularly high but the property is worth a lot of money so it makes sense for us to sell it. On the other hand, we have a block of flats which we have just developed from a converted factory in East London on Crossrail and we are getting a great net yield on the rents. So we know that not only are getting good capital growth we are also getting a good income from the rent. This is one to hold on to”.
As with any investment there are always pitfalls and of course people make mistakes. One of the biggest problems is when deals fall through at the last minute because of lack of funds. This happens time and time again and something that will definitely resonate with seasoned investors.
Lukas though has turned this, one of the most common, irksome and time consuming pitfalls of property investment into a brand new business, an exciting and truly unique way of buying and selling property online.
“I came up with the idea of www.vamoove.com because I was fed up with being messed around by buyers who said they wanted to buy and then didn’t come up with the funds, or pulled out at the last minute for financial reasons. It can be so frustrating when you think you’ve got a deal about to go through and it falls apart at the last minute. Like practically all property investors I found I was wasting time on deals that didn’t happen when I could have been selling to other potential buyers”.
“The concept behind the new website is fairly simple, but no one has ever thought of it before. On Vamoove buyers have to pre-qualify by giving proof of funds available before they can join the site and have access to properties for sale. This gives sellers proof that they are serious buyers and it also gives buyers the reassurance that the sellers are serious sellers.
“The other main problem is finding the properties, we have been very lucky because we have only ever bought off-market and by word of mouth. Most property investors don’t have access to these deals and often end up paying a premium for properties they buy through agents or at auction. Agent fees eat into the bottom line and auction prices have gone through the roof recently and it is hard to get the types of returns that you used to on properties bought this way”.
“This is another problem that Vamoove addresses. Our Platinum members will have access to off-market, pre-auction, distressed, quick sale and below market value properties. The holy grail of property investing and there is definitely no other site that can offer this”.