Property Business Lifechoice
Discussion
Hey guys,
A lot of knowledgable people on here so I thought I would pick your brains. I've always been intrested in business since I was a little kid, but for some reason I went into medicine and now am a GP at the grand age of 27. I flirted with the idea of going to somewhere like Harvard/London Business School to do a MBA which would have hopeffully furthered my business career or going to work for a consultancy company in london like McKinsey/BCG (they are actively recruiting doctors.) However after chatting with "business consultants" I don't think I'm made for consulting for other people; I would rather run things myself.
I have been very intrested in property, partly as that is what the "family business" is and have been lucky enough to grow up with it for most of my life. I know a fair bit about the ins and out of property investment and I feel that I have a good knack for it and other things regarding business (particularly with balancing risk/reward which I have to do all day in my "day job".) I'm a firm believer that the real money is to be made in down markets.
There are some incredible property deals out there at the moment and we are buying things as much as our resources allow us to buy. I could go on doing this for the next few years and have quite a sizable portfolio growing at a very good rate whilst also working as a GP; however I feel that even if I do this something may be missing. Growing up reading Fortune/Forbes magazines and other books on "corporate" business; I feel that if I go down the route of being one of the many (hopefully) successfull small to medium property investors - I would feel like I missed out on the "corporate life" where everything is bigger (projects, money etc...) This is one of the reasons why I was thinking about going into formal business through a MBA/consultancy job. It would allow me to build up the contacts and get involved in property/business on a bigger scale.
Can anyone think of any ideas that would allow me to get involved in property on a bigger scale. Ofcourse I know it won't happen overnight. One of the things that I thought of was kind of setting up a "fund." I don't know much about the way funds/REIT's etc.. are structured, but I have been thinking about them and how running one may give me a good mix between investing in property (which I believe I can do really well in) and also allow give more kind of structure to the business than we have now. Do you need formal business qualifications to do these things or is it a case of a good track record etc...
I'm not saying I want a get rich quick scheme and "set up a fund" tommorow, but just trying to figure out what I want to do for the rest of my life and how I may go about doing it.
Thoughts?
Cheers
A lot of knowledgable people on here so I thought I would pick your brains. I've always been intrested in business since I was a little kid, but for some reason I went into medicine and now am a GP at the grand age of 27. I flirted with the idea of going to somewhere like Harvard/London Business School to do a MBA which would have hopeffully furthered my business career or going to work for a consultancy company in london like McKinsey/BCG (they are actively recruiting doctors.) However after chatting with "business consultants" I don't think I'm made for consulting for other people; I would rather run things myself.
I have been very intrested in property, partly as that is what the "family business" is and have been lucky enough to grow up with it for most of my life. I know a fair bit about the ins and out of property investment and I feel that I have a good knack for it and other things regarding business (particularly with balancing risk/reward which I have to do all day in my "day job".) I'm a firm believer that the real money is to be made in down markets.
There are some incredible property deals out there at the moment and we are buying things as much as our resources allow us to buy. I could go on doing this for the next few years and have quite a sizable portfolio growing at a very good rate whilst also working as a GP; however I feel that even if I do this something may be missing. Growing up reading Fortune/Forbes magazines and other books on "corporate" business; I feel that if I go down the route of being one of the many (hopefully) successfull small to medium property investors - I would feel like I missed out on the "corporate life" where everything is bigger (projects, money etc...) This is one of the reasons why I was thinking about going into formal business through a MBA/consultancy job. It would allow me to build up the contacts and get involved in property/business on a bigger scale.
Can anyone think of any ideas that would allow me to get involved in property on a bigger scale. Ofcourse I know it won't happen overnight. One of the things that I thought of was kind of setting up a "fund." I don't know much about the way funds/REIT's etc.. are structured, but I have been thinking about them and how running one may give me a good mix between investing in property (which I believe I can do really well in) and also allow give more kind of structure to the business than we have now. Do you need formal business qualifications to do these things or is it a case of a good track record etc...
I'm not saying I want a get rich quick scheme and "set up a fund" tommorow, but just trying to figure out what I want to do for the rest of my life and how I may go about doing it.
Thoughts?
Cheers
I'm not really sure what you are asking here. Do you want to get people to invest money in your "business" buying property and giving them a return? If so, then you'll be one of many doing the same. I see, but can't recall the name, some company have become the first FSA approved property investment company recently.
I'm in a similar position to you. Grew up in a family that ran a successful business, I went and got a career of my own but always wanted to work for myself. I've a growing property portfolio, own a couple of businesses but still do some odd consultancy here and there. The consultancy allows me to grow the property or other business and pays my living expenses, so means more "for the pot", and a nice car or two
I'm in a similar position to you. Grew up in a family that ran a successful business, I went and got a career of my own but always wanted to work for myself. I've a growing property portfolio, own a couple of businesses but still do some odd consultancy here and there. The consultancy allows me to grow the property or other business and pays my living expenses, so means more "for the pot", and a nice car or two
As others have said, not sure what you want to achieve.
There are many property funds but investors like a good return, small deals tend to be the risky ones and people putting equity in will be looking for 9% plus after costs. VCT is probably a better way to get other people's equity in. Setting up a fund is really hard if you have no track recordas the risks are high and investors know this, a track record shows that you have a grasp of the risks etc. Also if you dont know much about property how can you see where the risks lie and minimise the risks to create an investment grade portfolio? Lawyers and surveyors are not going to cover all that off for you (I have seen many basic errors made by professionals)
REITs didnt take off that well. The best one I know of is a specialist niche sector with Government backed covenants, but even that one isnt growing quickly now.
The safer deals are the big ones, but we are talking £20m plus many funds only condisder safe deals to be £100m plus. I work with funds across the range and we are currenty setting up a £20m fund and a £100m fund.
If you want to go into property investment yourself, then that is different again. Resi investment tends to be high risk as void rates can be high and tenant covenant poor.
Development? - Well if you can find the money
I have acess to £10m development funding at the moment, PM me if interested. Its not one of the funds above, but something that was offerred to me last week
There are many property funds but investors like a good return, small deals tend to be the risky ones and people putting equity in will be looking for 9% plus after costs. VCT is probably a better way to get other people's equity in. Setting up a fund is really hard if you have no track recordas the risks are high and investors know this, a track record shows that you have a grasp of the risks etc. Also if you dont know much about property how can you see where the risks lie and minimise the risks to create an investment grade portfolio? Lawyers and surveyors are not going to cover all that off for you (I have seen many basic errors made by professionals)
REITs didnt take off that well. The best one I know of is a specialist niche sector with Government backed covenants, but even that one isnt growing quickly now.
The safer deals are the big ones, but we are talking £20m plus many funds only condisder safe deals to be £100m plus. I work with funds across the range and we are currenty setting up a £20m fund and a £100m fund.
If you want to go into property investment yourself, then that is different again. Resi investment tends to be high risk as void rates can be high and tenant covenant poor.
Development? - Well if you can find the money
I have acess to £10m development funding at the moment, PM me if interested. Its not one of the funds above, but something that was offerred to me last week
Edited by blueg33 on Sunday 24th June 10:16
Simple answer Zuby
Start to locum GP, 3 sessions a day and gross around £150-£180k.
Go out to dinner with GP friends and discuss how to screw the NHS for more money, maybe start doing Saturdays in the walk in.
Consider trading as a ltd co. and use of an offshore tax deal, to make sure you put as little as possible into the system that educated you and pays you.
Spend earnings on property, particularly advantageous in your situation, high cash flow less means less loans and therefore less interest and less reliance on the bank.
You'll prob need to spend approx 2/3 years working flat out and efficiently to raise enough capital for a decent first project. At that point reassess.
Start to locum GP, 3 sessions a day and gross around £150-£180k.
Go out to dinner with GP friends and discuss how to screw the NHS for more money, maybe start doing Saturdays in the walk in.
Consider trading as a ltd co. and use of an offshore tax deal, to make sure you put as little as possible into the system that educated you and pays you.
Spend earnings on property, particularly advantageous in your situation, high cash flow less means less loans and therefore less interest and less reliance on the bank.
You'll prob need to spend approx 2/3 years working flat out and efficiently to raise enough capital for a decent first project. At that point reassess.
Thanks guys, some useful information in there. Without seeming to run before I can walk; I guess I was just looking for some ideas on what kind of things were available if I did turn out to have the kind of knack that I hope I do for business and investing in property. I'm finding it hard to come across any useful info on the net as there seems to be a lot of rubbish spewed around. Funds sound to be a hard area to get into; so perhaps best would be easier to get investors on board.
The kind of properties I like are relatively low value residential and commercial property (think 30-50k for resi and 100-200k for commercial) kind of things. I think if bought well; you could make a good stable ROI of atleast 13-14% on the resi and a bit less on the commercial side (retail/hot food take aways etc..) I've bought some this year achieving up to 18% ROI and I could continue to go on doing this; but it'll be quite hard to scale purely self funded (up to the scale I want). I think the risk/reward for these are good, but yes they don't have the good quality covenants, but I wonder that if these kind of smaller low value properties with high returns would be "investor friendly"? I mean is a single £400k residential property in London grossing £24k pa less risky than 10 x £40k residential gorssing £40-50k pa up north? I personally don't think so; but then again it's subjective.
In my neck of the woods; it's possible to get 30-40k properties which are renting for £4k to £5k pa. (Got a £22k property last month rented out for £85/week the day after completion!) How would investors approach something like this; would they want a fixed rate or a share of the profits/equity (and if so how much)? I guess I'm trying to figure out if this is a scalable model and how to go about doing it.
Cheers!
Oh an amirzed; I think you'll find if I was working 3 sessions a day; I would barely have time to eat; let alone "Go out to dinner with GP friends and discuss how to screw the NHS for more money."
The kind of properties I like are relatively low value residential and commercial property (think 30-50k for resi and 100-200k for commercial) kind of things. I think if bought well; you could make a good stable ROI of atleast 13-14% on the resi and a bit less on the commercial side (retail/hot food take aways etc..) I've bought some this year achieving up to 18% ROI and I could continue to go on doing this; but it'll be quite hard to scale purely self funded (up to the scale I want). I think the risk/reward for these are good, but yes they don't have the good quality covenants, but I wonder that if these kind of smaller low value properties with high returns would be "investor friendly"? I mean is a single £400k residential property in London grossing £24k pa less risky than 10 x £40k residential gorssing £40-50k pa up north? I personally don't think so; but then again it's subjective.
In my neck of the woods; it's possible to get 30-40k properties which are renting for £4k to £5k pa. (Got a £22k property last month rented out for £85/week the day after completion!) How would investors approach something like this; would they want a fixed rate or a share of the profits/equity (and if so how much)? I guess I'm trying to figure out if this is a scalable model and how to go about doing it.
Cheers!
Oh an amirzed; I think you'll find if I was working 3 sessions a day; I would barely have time to eat; let alone "Go out to dinner with GP friends and discuss how to screw the NHS for more money."
My guess is that if you need to ask on internet forum, you may struggle against the grads who are doing the top class MBAs and consulting for Kinsey, Bain et al.
You're 27, have a wealthy family in the northern low value/high volume property industry, and already have a number of them yourself.
If you aspire to even more than you already have, you are right in thinking that your current approach will 'only' make you a few million in 10-15 years when you choose to sell up.
But, taking 2 years to do a £50k+ MBA and then joining the corp consultancy greasy pole as a PAYE employee of a large consultancy will take you longer imho.
If you know property dev AND NHS medicine, you can probably leverage that skillset to property dev medical centres etc.
Are you in Leeds by any chance?
You're 27, have a wealthy family in the northern low value/high volume property industry, and already have a number of them yourself.
If you aspire to even more than you already have, you are right in thinking that your current approach will 'only' make you a few million in 10-15 years when you choose to sell up.
But, taking 2 years to do a £50k+ MBA and then joining the corp consultancy greasy pole as a PAYE employee of a large consultancy will take you longer imho.
If you know property dev AND NHS medicine, you can probably leverage that skillset to property dev medical centres etc.
Are you in Leeds by any chance?
johnfm said:
My guess is that if you need to ask on internet forum, you may struggle against the grads who are doing the top class MBAs and consulting for Kinsey, Bain et al.
You're 27, have a wealthy family in the northern low value/high volume property industry, and already have a number of them yourself.
If you aspire to even more than you already have, you are right in thinking that your current approach will 'only' make you a few million in 10-15 years when you choose to sell up.
But, taking 2 years to do a £50k+ MBA and then joining the corp consultancy greasy pole as a PAYE employee of a large consultancy will take you longer imho.
If you know property dev AND NHS medicine, you can probably leverage that skillset to property dev medical centres etc.
Are you in Leeds by any chance?
As a developer of NHS properties, I can state the GP's know very little about health planning and health building design. All they care about is what it is going to cost them and how can they wangle a way to get more in their pockets.You're 27, have a wealthy family in the northern low value/high volume property industry, and already have a number of them yourself.
If you aspire to even more than you already have, you are right in thinking that your current approach will 'only' make you a few million in 10-15 years when you choose to sell up.
But, taking 2 years to do a £50k+ MBA and then joining the corp consultancy greasy pole as a PAYE employee of a large consultancy will take you longer imho.
If you know property dev AND NHS medicine, you can probably leverage that skillset to property dev medical centres etc.
Are you in Leeds by any chance?
Sorry Op, but thats my experience and we own over 200 GP surgeries and 80 large health centres and a further NHS portfolio of £1bn
zuby84 said:
Oh an amirzed; I think you'll find if I was working 3 sessions a day; I would barely have time to eat; let alone "Go out to dinner with GP friends and discuss how to screw the NHS for more money."
really? 2 of my friends manage it just fine, think the early mornings are a killer - though one of them reckons its less work than his previous partnership. I know I sound sarky but thats what I would so if I was you - seriously!Possibly the best RoI you will see is the continuing GP income on the cost of your medical qualifications.
The obvious suggestion if you want to build a property portfolio is to develop a GP centre (or a series of them if funds permit), remaining in post as a doctor until rental income from other doctors occupying the space in the GP centre meets your requirements.
Then go and buy a bar in Spain or something!
The obvious suggestion if you want to build a property portfolio is to develop a GP centre (or a series of them if funds permit), remaining in post as a doctor until rental income from other doctors occupying the space in the GP centre meets your requirements.
Then go and buy a bar in Spain or something!
johnfm said:
But, taking 2 years to do a £50k+ MBA and then joining the corp consultancy greasy pole as a PAYE employee of a large consultancy will take you longer imho.
I don’t know much about medicine or property but I would definitely advise you NOT to do an MBA and join a large consultancy (any consultancy), for context I work for one of the ‘big 4’. The ‘lifestyle’ might seem attractive but the reality is very different and your ROI on the MBA will take many years to realise. MBAs are not a fast track to the better jobs anymore and haven’t been for 10 years plus. Becoming partner in a top firm is where the real returns are, but that will take 15 years plus these days and the chances of making it are ever decreasing. If you really want to try this start with an accountancy qualification (ACA) not MBA. Most top people are accountancy background and very financially literate. Gassing Station | Finance | Top of Page | What's New | My Stuff