What's Henry's opinion on the Property Education Industry?

Unfortunately, as humans we instinctively want to believe the concept, that we can get rich quick. We want to live the dream and hope we can become financially free without much effort.

The sad reality is that only lottery winners can achieve this without any hard graft. With property educators operating in an unregulated property training industry, some are less scrupulous and tend to play to our emotions as humans for our desire to get rich quick - without much effort. This drives some less credible operators to take advantage and 'sell the dream' with overly ambitious and simply unrealistic strategies. These include strategies such as buying property with 'no money down' or 'below market value' or 'buy a property for a £1' with lease option strategies.

While it's always good to be optimistic, many of these ideas are complex and a major challenge for some - even with plenty of experience. It's fair to say that some of these ideas are unrealistic for the vast majority of people, and especially so, for those starting their property journey.

Some of these strategies that involve specialist circumstances, may be possible for highly experienced people who are well known in the industry and with proven track records, who can attract partners, investment and interest. Unfortunately, often promoted as 'easy to the many', on these less credible training courses that contain misleading content, 90% of the people attending will not achieve success with these 'creative' strategies.

Experience is key to success in a specialist and complex property world and when purchasing, the more complex, and higher the risk of the deal, the greater the opportunity for profit. I do not believe in taking risks without clarity of my due diligence position being as clear as possible, by understanding of risks and rewards. However, the key issue is - this due diligence should be completed before exchange of contracts.

When you are told you can get a 20% discount on property, you should ask where the starting point was, how was that price arrived at and why are you getting a discount? The other issue most face is that many simply will not have the ability to accurately value a property. So if you can’t accurately value an asset, how do you know how much it was or wasn’t discounted.

Valuations are tricky, even for property traders and RICS valuers and often a judgement call, and the more experience you have doing this, the better your judgement calls tend to be. Accurate valuations derive from a mix of your ability to interpret the information from your due diligence, your business acumen, the quality of your judgement calls, plus you need lots of deal experience in any given postcode.

Unlike many mentors, Henry isn’t a full-time trainer or mentor. He has been in property through two 'boom and bust' economic cycles. He faced challenges himself being over-geared in 1992, and again in 2006 and learned the hard way, that property is a cyclical capital intensive specialist business. He has since learned from his own mistakes and developed systems, plans and hedging strategies to deal with inevitable downturns and fluctuations of the property market. It is the lessons learned from this experience, that henry wishes to pass on to others through his property education channels.

There are plenty of 'educators' who have only seen the market go in one upward direction only, and who also have limited transactional experience. Henry believes it’s the variety and number transactions which really matter, many have only been in the business for 10 or less years and they are teaching for a short while themselves, but position themselves as ‘experts.' There are also many less credible operations 'selling the dream', suggesting anyone can be a developer, with no money or experience.

He presents no more than one property course per month and he mentors no more than two people at any one time, as he usually has on-going projects to work on. Henry can offer quality time because he limits the numbers he mentors, but also has time to concentrate on his property business.

So given we can’t look into the future – what is Henry’s Investing Ethos?

Property is a game of risk and reward and Henry believes in “Investing cautions” which is a less glamorous term or way of saying “apply reasonable risk aversion” – this will push you to do better due diligence, employ more conservative assumptions, insist on a margin of safety, and invest when the potential return is at least commensurate with the risk, based on trying to understand how a deal will play out over the short, medium or long term depending on the deal strategy target. Worrying about the downside and how a deal will play out before exchange, will focus your priorities and dramatically sharpen your focus and enhance your due diligence skills. Investing proactively, yet cautiously will result in making fewer mistakes, but it does not have to be at the mercy of you being overly pessimistic, and needs to be balanced with an investor taking maximum advantage of a riskier and more complex opportunity. The law of economics suggests that more risk and complexity - increases the profit opportunity.