How to Be a UK Property Auction Trader

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Hello there, welcome to episode 275 of @XPAT property story. Paul Ribbons is a UK property trading specialist known for turning this stress and on-market deals into profitable auction trades. With decades of experience, he's here today to share his tips and tricks on auction trading at a time when finding ways to expand your war chest or pay down debt has never been more relevant. What do you do if you want to get into trading but you don't have the experience and the knowledge and you're on the other side of the world? Well the first thing I'm going to state here and it's the core of everything I do and that surely comes down to you, you've got to know what the market wants, not what your fancy trade. I get people coming to me and say I've got this bungalow in Hawn Church and they're like and they go yes really really everything needs to do into it, it's ideal for auction but it's less people chasing a bungalow when it comes to selling an auction than it would be a say a terrorist house in Rumpford. So you have to know what your market wants, not what you fancy buying. So first thing I do is I go to an area and then check what the demand is generally. So I go on to right move, tap it a postcode, click what's for sale. I wouldn't put any preferences in, I would literally just put whatever's for sale in that area and I would then unclick the sole subject to contract button to see the difference between the two because that gives you your marketplace and then you can narrow down preferences two and three bedroom houses to see where the market's the strongest because then you know there's a good market for that type of property and then I'd use a website called EI Group which is got every single property that's been sold in the UK since 1997, 1998. At auction only properties that've been sold out auction. Yeah, yeah, for auction properties and then I'll go on there, check the postcode out to see what's been going through the auction and whether it's been selling or not because you know it's it is there is a certain type of property at the moment, there's not good for auction. In fact there's more than one type. So I would then set the criteria based on that information and then I go looking for that type of property. Paul recently wrote a state of the market report which I turned into episode 263 and if you haven't already listened to it then it's definitely worth going back for and one of the findings of his report is that all the fundamentals are in place for the mass return of the first time buyer. So with all the things that you've been saying about how the market is tipping towards first time buyers and perhaps second stepers and away from investors and someone wants to bring you a deal to tap into your experience. I guess your first time buyer and your second stepper they're not going to be buying properties at auction. So they are starting to are they yeah you're starting to see a quite a lot of them. I'd say probably about 20% are going down that route now and you're right and I think this is the interesting thing I look at. You made a really valid point about they won't go to auction to buy that sort of stock. They'll be buying that sort of stock when it's refurbished. But how do you find those properties as a trader? They're about I mean it's digging 85% of my deals come from the open lock-in and what I'm looking for are red flags they're what I call technical indicators. They'll be one or two technical indicators and I'll be pulling on them and then the most important part about all this is the phone call. The phone call to the agent to say explain to me what the situation is and during that conversation I'm looking for certain bits of information and when I send someone off to go and do similar teacher amount to do it they'll come back to me the following week is I can't get anywhere of that agent. Worst agent you've ever come across even you couldn't get a result out of them. So that's like a red rag to a boulder piece and I said okay what's that I maybe they knew. I don't think they did actually because they were a bit embarrassed afterwards and it's not me being beheaded. No it's experienced and knowledge. It's experienced and knowledge and I said look just watch and listen to what I'm doing. There's many many calls like this but one sticks in my mind the guy that was in down in Bath Tim his name was and he said she was so bad so rude so I run this agent up I said I want if you can help me I said the Tim gave me a number and said that he was one of the most professional agents he'd come across. I've laid the foundation straight away everyone likes and compliment. Oh Tim she was trying to work and you know when someone says yes I know you're talking about but you know for where they don't. So yes I know. So we got past that and I said you said you're really busy yes I'm really busy and I just thought how long she'd been in the business up in the business 30 years I'll say I can tell straight away you know you know what you're talking about and that disarmed her right so she said well how can I help you and I said you've got a property of someone's own and so and she's sung like a culinary she gave me everything about I wanted to know every single bit of information that she would normally protect her client from you know from an investor coming in and asking lots of questions and she just gave me everything I needed and Tim said to me afterwards you caught her on a good day and I went really okay but that's the key and I've got a formula where I'm looking for certain information and you've read my stuff you'll know the first thing I'm asking circumstances second is what's the timing where's the leverage and I always ask three questions what have you got what else is coming up and what have you got in your sales cabinet that might fall out of bed then three questions what you got coming up and what's in the I say sales cabinet shows that old I am but what's in the pipeline that might not go through then three questions have got me more deals than anything else. Another recent episode explained the concept of doing deals almost exclusively by email from the comfort of your laptop but Paul prefers the nuances of a conversation. It's on right now if you used to be able to email or an agent you can't do anymore which is a real shame because it was just literally click the button central and you would get I'd get agents to call me because there's a difference dynamics when someone's calling you as opposed to you calling them the biggest issue I find with that is that I don't get the correct information. I'll give you an example of what I mean by that. I'll have a conversation with an agent and there'll be a throw away comment within that conversation which I'll pull on the thread. What do they mean by that? So I won't ask them what they mean by that but I'll just prod a little bit further and the information will come to me and that experience that's listening and the thing with what I do and if you think about the core of everything I teach comes down to one bedrock really which is this is not about property. It's got absolutely subtle to do with property. It's about people. Yeah, about people. So if we understand the psychology of how people react that's the key to what I do. If I had to say to someone focus on one thing that's the core. Get really good at your communication skills because your communication skills will unlock deals. Now the problem with email is you can do a lot of them. It can be very efficient way of spreading the net so to speak but you are machine gun in rather than rifle shooting. I'd rather be the sniper. I hear what you're saying about it being a people business and understanding the nuances and spotting the opportunities by little phrases that people use but you've got to get in front of the right person and that's what I was going to come to right next. Yeah, that's great. Yeah and just before you start on that, you know, I've heard different versions but you know you want to get to the value of but the value is always out. So how do you get to the person and who is the person you need to get to and how do you get to them. There's a few myths or a few things I get told quite regularly about you know you need to be looking for below market value. You need to be looking for motivated sellers. You need to be speaking to the decision maker in the office. You need to be speaking to the vendor or direct and they're all right in their own way. The problem with that is if you focus on just that, how many deals are you going to miss and that's what my system doesn't I don't go straight for source and I give an example of what I mean by that. I was an I stay a manager and seen in negotiate a value right through to Julian and the O shake what I first started. If you was chasing me as the value I wanted me to phone you back you wouldn't get a phone call from me. I wouldn't even want to speak to you because I'm too busy. Right. Unless you're one of my mate or someone I deal with on a regular basis, you're not going to get through to me unless one of my negotiators say oh I've got this guy that is asked about so and so asked the specific questions I don't understand what the question is can you give him a call that's different because it's been introduced by one of my staff does that make any sense. Now you naturally progress to people in within offices if you're dealing with them on an ongoing basis. But I can tell you now, if you focus on say through a four single agents to give you deals, you won't be buying many. You need to have lots of agents in your watch est effectively. So I never go out looking for blow market value, but by definition of what I do, I buy by low market value, but I don't focus on that. I buy from motivated sellers, but I don't look for them in the first place. So they come to be naturally by definition of what I do. And the same with dealing with people in the office. I will naturally gravitate within that office to the right person. So what I would do automatically is I'm looking at properties, not people. So I will be on right move. I'll be looking at everything that's sold subject to contract. I'll be looking at everything that looks a bit shitty. And then I'll be making them calls based on them finding all I'm doing is I'm fishing. That's all I'm doing. I'm fishing. I'm asking questions. And I would easily enter an infiltrate in office by asking a question, especially if something comes up that say, "I've got a problem." And I'm dealing with a junior negotiator. And this is so important. And the reason why it's so important is because I'm looking long term. When I first started, I wasn't looking at this. I'm going to be doing this a couple years, or I'm just going to get my next deal. So I would work with younger agents just as someone did with me when I first got in the business because your junior negotiator day could be a manager in three years time, four years time. And I've got a lot of people I deal with that were junior negotiators 25, 30 years ago. There were senior members now who say, "Yeah, Paul's fine, go, be a self-scientiful." So never dismiss the junior ranks and use the system to get to where you need to go. So ask a junior negotiator saying, "Unstance got a structural problem. It was a crack in the wall. Did you have a conversation with the seller about the crack in the first place?" Well, we don't know. "Who took it on?" I always say, "Could you ask something to give me a call?" So you're asking a question to unlock it. So you're picking someone that is junior and perhaps you have a skill at recognizing the ones that are going to, that are hungry, are going to be staying there for a while and not just there for a couple of months. And then you're deliberately asking a question that you know they don't have the answer to. No, I'm dealing with the person who's on the phone in front of me. So when I make the phone call, it's whoever's in front of me, I just, accordingly. All right, okay, so you're not targeting. Don't target anyone. So you just phone up anyone. Doesn't matter who you're talking to. Doesn't matter. And then you'll just start talking about the property. What'll happen very quickly in your know if that person is the right person to speak to or not or whether they're just taking names or making viewings. Do you want a bit more information? They'll have to pass you on. If you call it, it's the negotiator who took it on, you'll know because they say, "Yeah, I took it on." So I'm dealing with whoever's in front of me. Unless I've got a relationship within that office, and I say, "I want to speak to Tim." Tim's poor ribbons, yeah. How long are you spending on the phone each day then? I guess this is for people who are starting out or maybe they're starting in a new area, a new postcode dealing with a new agent. I had a system when I first started out. So I used to gap in the morning. Originally when I first started out, we didn't have the internet. It was literally go down the agents and where you shoe lever out. But once the internet was established, I'd gap in the morning. I'd probably do a little search to see what's come up. Just so it gives me an opportunity to call someone. That's all. That's all it is. I'm not looking for a deal. I'm looking for an opportunity to have a conversation. It might be something I want to buy, but sometimes I use a property just to have a conversation and it prompts me to ring that agent. And then you can ask your three questions, anything else you got coming up, etc. Exactly. That's where the three questions came from. So I would search them, save them, go and have some breakfast, take the time. Knowing full well, there's no point me ringing an agent before 10 o'clock. Because the agents are going to be probably in a morning meeting and then once they're finished in morning meeting, they're organised themselves. And so they're not going to function until 10 o'clock. You'll get them on the phone, but they want to get you off pretty quickly. So if you want a decent phone conversation, you need to be speaking to someone say between 10 and 12. And I'd use that 10 and 12 period, they're two hour period to make as many calls as I could. So then set up myself after say one o'clock to do some viewing. I'm always looking for ways to do this from 12 hours away on a plane. So you know, I'm not going to be doing viewings and there are people out there who say, you know, you don't need to view properties. You can make your offers and then subject to a viewing. Now I'm going to take you seriously unless you've seen it. If I was into your shoes, I would be filtering down to the ones that you would need. Because I would go and view three or four nine four, well, I probably wasn't going to buy two three of them or offer on two or three of them. And reason to is to build, establish the rapport. Yeah, I do have viewing if I knew I was going to meet the value. You know, just for for a building a relationship, like, but in your case, you would need that because I don't see nothing really very, very, do I see anything today? But I've got boots on the ground. That's the difference. So you can, there's a service called VUBA. So you can place someone to do that. But you need to be very specific about what you're actually viewing. Yeah, because it gets quite expensive. So you want to narrow it down to the ones that you think, right, this is the one I'm going to be buying. But the key to this, the rule key is picking the right stock where you get excited. And it happens regularly with with my delegates, right? So I literally the other day, one of them said to me, I've got a deal come from a deal source. And then I said, what's the circumstances? He said, well, the deal source knows the vendor. Oh, now we're talking. The circumstances have completely changed for me because he's direct to the seller. He's not getting it by someone. He knows them. This is not, I've got the instruction and then I'm offering to say, he not there's a relationship there. That's more powerful than anything else. And I always realize that deal sources are going to stumble across deals that are going to come from nowhere just because they might know someone or know someone who knows someone. And that's the one we focus on. That's one if you couldn't do a view, a view, a view, you do a view, but you need to have someone there within the next couple of hours because that tells me a deal can be done. Are you looking for a hands-free, low-risk way to build a UK property portfolio with someone you can genuinely trust? They look no further than today's sponsor, the Finnegan McNeil Property Group. FMP specialised in simple, straightforward, vitalets under £125,000 operating across the northwest and greater Manchester. FMP have sourced nearly 300 properties for clients, including several listeners of this podcast. Now, I've always declined potential sponsors in the past, but I can wholeheartedly recommend FMP. Founder and ex-guest-darramant-Neil will find, renovate and fully manage your property giving you a completely hands-off investment while you get on with your life. So if you understand the power of property but don't have the time, contact, or local knowledge to do it yourself, FMP can do it all for you, safely and transparently. To learn more, visit www.fmp.group or go back and listen to episode 240 where Darren explains his full hands-free service. Now, back to ex-pant property story. I've heard you say it's important to have multiple deals, but what is the threshold for multiple deals? One a month? We're not like normal traders, right? So I know traders were probably putting 30 or 40 lots into two or three options, right? And they're trading a lot. They're probably losing on seven and gaining on three. So it's a numbers game. Now, I don't mind the numbers. I'd have the numbers game on finding the stock, but I'm very specific about what I buy. So probably 98% of my stock makes a profit. My losses are very, very, very low. They are there. They do happen from, we lost one one in the beginning of last year. We bought it the back end of 24 and we sold it in an auction at a loss, but it was unusual, very unusual. The reason why it was a loss is because I didn't have a lot of stock at the time because as you may know, I've been through a few personal issues and I've been through a few health issues. I took a break for a while. Didn't have much in the pipeline. So instead of sticking to my rules, like don't get emotional about stock, I thought, "You'll have that." It's a risky one, but we'll take it. My gut was telling me, really, don't take it, but I just needed something to put in the pipeline so I can show people what they're doing. And we land up losing 20 grand on it. And it does happen because I wasn't paying attention to what I was doing. But that is rare for us, very rare. So you lost them that, which means you must have put the reserve price lower than what you paid for it. For someone who's starting out, they haven't got a big pot to start with, so they can't really risk the pot because otherwise it's like putting all your money on red or something. So how can someone get started and ensure that they don't lose their pot? I guess you have to put the reserve price above or at the same price that you bought it for, but then you're not really going to stimulate the market to start bidding, what are you? The way to do it, I think, is you set your reserve, your money back after all costs, right? But if you're doing this for the first time, this is my recommendation. You have another exit. In your head is another exit. So if you buy the right, you So you buy a nice 1930s semi with a garage on the side. So you know there's a big demand for it. And you get a bad day at auction, you doesn't meet the reserve. Your exit is, I'm gonna refurbish and sell it and what have you. So you've got that in mind all the time. We do that automatically, i.e. Part of my process, my due diligence is, if we had to, not what we want to, if we had to, what else would we do? Could we refurbish this, could we resell this? And that's always in the back of my mind on usually most things I'm buying. Now we're quite blas, I, because we've been doing it a long time, 20 grand loss doesn't hurt us because it's coming off your profit anyway. You're not getting it off somewhere else. Yeah, you, I remember losing 56 grand years ago on one house, but the next week I've made 90, I think it's so much in me, you ain't 90 grand on a house. So it balances itself out. So you've always got that in the back of your mind if you've got enough stock, so you can absorb that risk, that loss. But if someone's protecting their capital, I'd even go as far as to say, make it your reserve, so you make something, not just get your money back, maybe five or 10 grand, because that way, at least it's working, rather than not working, and you've got that other exit if it doesn't sell. But if you pick the right unit, you should be okay. Let's say, for example, you've bought this 1930s, three-bed semi, garage to the side. You've got it at a very cheap price, it needs refurbishing. So you've got to bake in your profit, you've got to bake in the profit for the developer, and stamp duty and all that kind of stuff. I've heard you say that, you know, to get that kind of property from an estate agent, you run the risk of pissing the estate agent off, right? So can you expand on that? A little video, don't you see it? It was a little video of a property that we come across, and I did a whole video on it, and it had been on the market for a year. It was coming off with one agent. It was on for $3.90, and it was coming to another agent, and the old agent had three buyers on it. They kept failing survey. And the new agent, so I'm gonna say, "You're not gonna get $3.90, "you're probably gonna get $3.25." Now, if you looked at $3.90, where would you expect that to fall? If you looked at it on the open market, you'd think, "Well, you might get it for $3.50, "you've had a result, right?" We bought it for $300. We said to the new agent, "They've had three buyers on it." When I got there, it was bad, right? The floors had all gone. It was down in Wichita Boyn Kent, Wichita Boyn was an area where had a massive flood in 1953, and some of the houses are still suffering from dampness, because they were saturated. They were six foot under water. So dampness is coming back on, they weren't dealt with property for probably many of them years and years ago. A bit like the old war damaged houses in East London, where they were patched up. The ones that needy pull it down were pulled down. Some of them were patched up. Some of them were less just left, whether it weren't too bad. But some of them still got problems years later, right? It's the same with the floods. So we offered $300. He said, "I don't think they're gonna take $300." I've got them down for $3.90 to $3.25 I'm about to pull it on. I was gonna go off as a excess of. But I said, "Look, the reason why we're offering is "because I mean, give a big list of problems." The dampness was the main mic, because this house was probably $80,000 to $90,000 to do up. So this particular house we bought for $300,000 and we threw it in an auction and we got $347. But you would have thought $3.90 to $300 was too much, because that's getting on for $25,000, 23% of its value, and this is the thing. People see the value at $3.90. It was never worth $3.90 in the first place. But they had buyers at $3.90, but investors were trying to get mortgages on a house that wasn't mortgable. Well, that was never gonna happen. The agent was wrong by introducing investors who were getting finance who thought because they were investors and they were putting a big chunk down, they would be fine. Whereas a good agent would have realized that that wasn't mortgageable, that wasn't the right price it needed to be less. So it's looking for them pieces of leverage that enables you to get the price done. And another thing with this particular house, it had stone cladding on it. Now, stone cladding in itself is not a problem, but it is a problem for lenders, they don't like it. It's a virus, don't like it. Because what is there is adding weight to the property? They're big stone slabs stuck on the brickwork. The bricks can't breathe behind it, right? It also gets trapped in grassy, it causes even more dampness problems. So that's quite a big leverage point, right? With the damp inside and the state of the house, there was no structural structural problems with it, like any cracking on it. But we had major leverage on that to say, look, the reason why we're offering 300 is because of this, this, this, and this. And this was key for this house. And this is a key to a lot of the deals that I untied. Unravel, I should say. Is this house because it was pebbledashed? Wasn't worth as much as a house that was brick-fronted in that area, because it was a conservation area. Now, the problem with the conservation area is, if you add to ultra, you're going to be restricted by what they allow you to do. People buying conservation areas, because they like the style of houses that have been unaltered. So you tend to find the better quality buyers by the ones that look original, as an original as possible. And I was thinking to myself, this is where 350, whereas if it was brick-fronted, unmodnized, it would probably be 400. And when it was resale, or it's resale value, would have probably been 475 to 500, whereas agents were saying to me, yes, it's got to be worth 550 in that house. Well, I didn't think why I'd add a front door and a roof, even if it was refurbished, it was going to sell for that amount of money. And this leads into the next story I was going to tell you. I'm about to do an article about that particular house that I sold. I sold that one in 2023, and it's still on the market with the person that bought it. They refurbished it. They got rid of the stone cladding, they rendered it, made it really nice, put sash-type windows in, because the conservation area, they're going to force you to do these, or sash style double glazed windows. And it looked really, really smart. They added it on the market a year ago, after the refurbishment program at 575. Today, it's on for 525, they still haven't sold it. So my idea was right, it was probably worth 475 to 500, had they gone at 500 to start with, they would have probably got it, but they probably overspent on it, because they had stamped it, they had all the other costs, and then top of that, and I reckon they've spent 100 grand on it, at least 100 grand, because 100 grand doesn't go a long way on a house that needs completely gutting back to brickwork. You know, you're taking chimney breasts out, replacing stone cladding with rendering, sorting the garden out. It doesn't go very far, people think 100 grand, a lot of money, but it's not anymore. We actually miss one recently, where it was on the market for 325, and we offered 225. We conditioned the agent and the vendor, and they tied it up for 250 to someone else, right? They went from 375 to 250, because there was a crack in it, there was a problem with it, and most investors would go in and offer, "Oh, they're stuff, I'm willing to, "nilly." There was a reason to offer 225. There was a genuine reason, there was a problem. There's got to be a reason, otherwise you're gonna get a reputation that you don't want. - Is it your experience, or is there a process to how you value properties, work out that GDV? - The first thing I'm doing is, I'm looking for recent under-offer sales, not completions, recent under-offer sales. So the one in which to go straight away, there was three or four that are around, that had gone under-offer in that location, so you could set the price up. One was 550, which was an old brick-fronted, beautiful house. Another one was a bit of an untidy, crappy one, up 475. So you could gauge what it was be setting for to make. - You're looking for the done-up value, and then you're gonna minus everything from there, like the developer's profit, et cetera, et cetera. - That's it, yep. - You said earlier that you are just starting a conversation with an agent, how about you're looking at sold-subject contract? Are you looking at stuff that's come back on the market at least once? - There is a formula. If I look at the majority of deals I've done, I'd suggest that the average was, when I went under-offer three times before we got it. I'd say the majority have been at least twice. Most of them have been three times. - At what stage are you starting to log that? - Straight away. - Or it's even come off once. - This is what happened. The technical indicators I'm looking for, I realized there's a problem with the house. They've got it on for market money, and we're gonna track that. And that's what Martin did with the other house. He tracked it, tracked it, tracked it, and then it was going to another agent, and he was talking to that other agent that said they were getting it. So he tracks things. - Something's come on, it's got a crack in it. I know it's got a crack in it. I know it's gonna be a problem. I'm going to the agent. Have you seen that? Do you know anything about it? And most of them will run a buyer without realizing they've got a problem. So I'll wait for it to go and fall out of bed, but usually we're tracking it to the point before it comes back on. So I would say to some to an agent, "Look, you don't mind if I just keep an eye on that." "Yeah, yeah, give us a call, not a problem." "Then I'm gonna take what you're gonna offer." - Have you told them in that stage that you know about the technical problem? - Yes, yes. And I wouldn't offer it that stage either. I would just say it's not for me at that price, but I'll keep an eye on it if you don't mind. Yeah, of course you can. And the idea is to track it through. on a regular basis because the last thing you want is it going back on the market so everyone else knows. You want to get it just before it comes back on the market. You know, you're ringing up a bad house and they go, "Oh, you know, it's funny of that. That's about to come back on the market. That's the point where you go and have a look at it." Before it gets untixed, we had one in Swindon with one of my delegates. She was looking at something completely different. I was doing some research on the one she was looking at for comparable. I mean, "Oh, look at that one." And she said, "What? It's this sold." I mean, "Yeah, but look at the picture of the kitchen. There's a crack in the wall." She said, "Oh, yeah. You're being sold." I said, "Well, give the agent a call anyway." So she went, "Oh, and really?" She said, "We were actually doing it." And she rang me up 10 minutes and I had all excited. You never guess what? Leave, guess what? Now, the good thing about modern technologies, you can track things so I can see its history. Prop take portals like property engine, give you all the details on when a property has been reduced or sold subject to contract, will be returned to the market. So I just whacked that in. I can see when it came on, if it's been under offer before, it'd been under offer twice beforehand. It was coming back on the market. So I said, "What's the situation?" She said, "The guy's found love on the internet and he's moving in with his new girlfriend. They're going to go round the world. They've already booked their tickets. They need the money from the house to pay for the rest of the ticket." So there's a little bit of leverage there. He moved out quite some time ago. There's an extension on the back. There's a crack in the wall. The extensions put in a way from the main structure of the house. It's failed two surveys because of that. The vendors cheesed off. It's on for 235. They've sold it twice at 235. In fact, the first time round, they got more money than 235. And he just wants rid. I haven't unticked the soul to something contract, but if you want to come down and have a look at it straight away. This was in Swindon. I'm in Kent. So I drove all the way to Swindon there and then because I'm smelling blood here. I'm like a blood out straight down there. She's got me excited. There's a crack and I love cracks. So I'm straight down on the crack. It's walks in, meets the agent as a chat. I've did very little. Just walked around, shook his hand. So this must be a bit of a nightmare for you on this one. I said, didn't say any more. Tell me about it. And you have all the information just comes pouring out. You guys sit here. More. He has more. Yeah. And he said he's tried to claim the insurance. The claim is the insurance is kicked out. Said, no, they're not interested. So he's got this problem. He can't solve the problem. And now we need it sold. And I said to him, I'd love to buy it. Love to buy it. And I just framed it in a way. I don't really want to insult the guy though. He said, where are you then? So I said, my long way from two, three, five. So he's pushing me. All right. So I said, I'm probably it's below two. It's in the ones. He said to me, what? One nine five. So now I'm thinking, I can't assume this. But I'm in my head. I'm thinking, I reckon he's had a conversation with his client and said, you were not going to get two, three, five. You're probably going to have to bring the price down. So the fact he mentioned one nine five tells me that's a probability. It's not a guarantee. It's probability because I can't assume it is. So I said, I'm not going to be there. I'm probably going to be now. I was going to say one eight five. And I just went, I'm probably about 175 ish. Right. It was never going to take that. It's never going to take that. I said, that's a shame because I think it's a nice house. He said the lowest it goes one nine two. Then you know your bottom price. So I now know my one eight five is doable. Right. I said, I might come up a little bit. I might go one eight. Now one eight from two, three, five is a long stretch. Right. But one eight to one nine. He's not. And that's the point you confirmed. He said that conversation with his client. The lowest you've taken is one ninety. I now know that that's been confirmed. Right. So I said to him, I might go to one eight. He said, that firm bid. I don't think you'll take it because that firm bid. I said, yeah, you got authorization to go one eight. Going the car driving the car back home. I got my lawyer to email him telling him we're off for one eight. Confirm position sent bank statements. So he's got it. But time he gets back to his office. He's all in his hand, right? He's got on his screen. He's got the email from the lawyer. He's got a bank statement from me. We can afford it. And he phoned me up. He said, I reckon if you meet him halfway, I'll get him there, which was the price on what you'd apply. So I said to him, you sure he's gone. I'm pretty sure I said go on then go one eight five. And he came back to me and went to your lucky day. You've taken one eight five. And we sold that for £215,000. And we didn't even own it for two weeks. And that was literally having a conversation with a delegate over something else that sparked my interest and thought, oh, there's a crack there. And even though it was sold suddenly contract, that came out. No one else knew that was coming back on the market apart from the agent and us. Now if you've read Paul's excellent book, hustle your way to property success, you'll know that he looks for what he calls technical indicators as leverage to bring the price down off top of your head. Can you give us five technical problems? You said one structural issues. So there's different types of structural issues. There's, you know, subsidence. There's something that's breaking away. So cracking is one of them. And the key is to understand the stock that you're buying. So I tend to target endeteris and semis because endeteris and semis or the weakest point is the outside wall. So I'm looking for the outside wall and leverage point on a structural issue on a semi might be the walls bowed out because it needs to tie an in. Then you've got another one where it's got a structural problem. My it's subsidence and it's causing it might be pulling away from the house because that's got drainage issues or it might have had. So it's a dry summer and it's a place of and then you got the back additions, which is where you got the Victorian houses typically slundered main towns. There's plenty around towns outside London as well where you've got the main structure and you've got a back addition where the kitchen is and usually the third bedroom and a bathroom upstairs. I forgot what they're called now outrigger. So the the back additions are usually shallower foundations than the main structure and can pull away from the back of the house. So it's looking for that for a leverage point Japanese not mean that would be another issue and you can tell that from a photograph if you know what you're looking for. If you're not sure just take the photograph of the garden and stick it into Google and say is this Japanese not really no tell you right so it's I mean we've got plenty of tools today. So it's going to be neighbor issues disputes between neighbors and this is the thing the leverage has got to be solvable. You've got to be out of solve the problem if you can't solve the problem mean you really don't want to buy up on one. It was right on a mind shaft and you couldn't underpin it you couldn't do anything with it you had a problem property that was never going to go away I wouldn't want to buy that. So we can solve that a neighboring disputes can I solve the neighbor is it a defense issue is it about the issue I bought one once where the agent said to me the guys moving because of the neighborhood. The neighbors are really driving in mad and I knew the area and I thought that's not a bad neighborhood. That's that's quite a nice street and as I went down and drove into the street is a banjo type cold sack. And right in the corner there was one house I've got all over it and I got closer to it I had chickens and geese and birds and God knows what else and I thought I think that's what I'm buying and it's not the neighbors that the problem is the problem. So I realized it was that house and you take that house away the neighbors all the guards were macular there was new cars outside there was no problems with the neighbor he was the problem so that's so really easy so you bought the property sorted it out but there's lots of things. Structural usually is the main one I'm looking for something without planning permission to flats without planning permission is a classic example we buy them on a regular basis we bought one recently where there's no planning and no one wants to put their name to it because it's a probate and no one's taking responsibility say yeah now it's been flats for years and usually for funding purposes or for going to the council they want a five year or 10 year unbroken tenancy to prove it. So what's the best way to argue with the council is how long they've been taking council taxes to separate units because you can't if they've been paying the council tax as two separate units that's unbroken right you can't argue with that and this particular house I thought this has been flats for years the great thing about information today when in on to the council's website put the post code in for council tax and it came in unit 93 I on 93 B. And then when I look at it clicked on it it said 1993 was when it was valued as two separate units well that's all I need so I've solved that problem so two flats without planning something like that building regulation no building regulations again as long as it's solvable you know someone's put a lot conversion in with no regs someone's knocked off knocked a through lounge through with no regs taking chimney breads without regs can cause havoc with someone on a mortgage but it's easy solvable it's not a major problem so these little things I'm looking for all the time. If you're familiar with UK property auctions you know that covid changed everything social distancing meant that live in person auctions became a thing of the past they did return in an altered format allowing people to bid in a live setting but online, meaning that they didn't have to attend the auction in person. But a new type of auction also came along. These eBay-type, timed auctions are also common now. So I wanted to know which type Paul prefers as a seller. I don't mind. We started using Savils recently. We used to use Savils years ago, came away from them, used McQs, then come back to Savils. I don't mind either. I don't like the IAMS old modern method. I wouldn't touch that. I might buy one from there, but I certainly wouldn't sell one for them. If you can get the right stock at the right time with IAMS old one, you might get a deal or two. But by selling I would, I don't mind either. I like McQs. I actually like Clive Emerson's auction because Clive Emerson's a three day while it starts on the Monday and finishes on the Wednesday online. So you can see people's behaviour, how many people looking. And it's funny because in the last five years, things have changed dramatically since the pandemic years. There's a tendency to go online. And with online, it's a completely different data set that we look for. So whereas before, if it was a physical auction, you didn't know how many people are registered before the auction because they turn up on the day, register on the morning and then bid during the day. Well, today, because it's online, or even the main auction house is that do that hybrid where they're standing in front of the computer screen, but it's not physical and they've got online bidders as well. They have to register prior to the actual auction itself. So we know how many people have actually registering for our auction not, which gives us confidence if you've got 20 people registered for your one unit. You know, you're going to set it for a reasonable price. You've only got one person, you know, you've got a problem because you're probably going to get your reserve price. Also, you get to see how many watches there are and you see watches jumping when the auction is progressing and it might be someone who's got there on a couple of units and the first or second units get sold and they start watching your one, they jump on your one afterwards. They don't watch your one while they're trying to bid on one prior, but they'll, I've got money burning a hole in my pocket. I didn't get that last one. Let's bid on that one instead. So there's different data points that we look at now with auctions, but I don't mind either of really. What's more important is the auction in itself is how good the auction is, how strong they are, how how do they control it because they're allowed to take bids even on an online auction up to the reserve on your behalf. And they're fake, right? They used to get it bidding off the wall. It's the same process. They can be up to but not beyond the reserve. They cannot go beyond it. The other finding from Paul's report was that flats will also come back into favor, but does this mean that they're worth buying to sell at auction just now? There's caveats. There's definitely caveats. They've got to be the right flats. There's lots of flats being sold off at the moment by housing associations, your own freeholds, and they're sending off flats. This is a lot of stock off, older stock, because they know they've got a problem with EPCs in the future. They're buying a new stock off, developers for affordable housing. So they're getting rid of a lot of their older stock. And what they're doing, and this is a good indication to where the market is going, they are selling with new leases. You're not selling with old crappily short leases, because no one wants to short lease, because it's aggravation to extend. You can make money out of that, by the way. It is a strategy, but you've got to know who your freeholder is and what the animal you're dealing with. If it's a commercially minded freeholder, they're going to pull your pants down and slap your backside, because they know you need to have that extension. You know, if you sit in there, I didn't care, and I'll argue you it, that's a different ballgame, but they know you need them more than they need you. So picking the right freeholder, or the right properties, is important. But again, this all comes down to what the market wants. So in East London, where I used to live, and I know really well, there's a batter flat called Warner Flatts. There's thousands of them, right? They sell really well, but why haven't they got a decent lease? They sell really well. And also, a first floor is really coveted, because go into the loft. You've got the loft spice. It's really trendy today. Someone has spend 50, 60 grand, having an extra bedroom and a bathroom upstairs, because they like the location, but they've got to be the right flats. It sounds like flats in London and the south east mainly then. Mainly yet. Or a good quality flat, you know, very good, say, say for instance, where's that lovely place in Yorkshire? I can't remember. Lovely old. Harrogate. Harrogate. Yeah. So a big old Victorian house converting to flats in the sort of locations, not a city centre in leads, which has been carved into two small units. Affluent areas? Yes. Affluent areas only. Yeah. Big old houses with big size rooms. Eventually, the four dark will catch up. Because when you get to that point, it's people are desperate, because what's going to happen? Flatts will go back up in value in the next 18 months, two years. It could be quicker than that, but they're going to start to jump. Right? And when that happens, the cheaper stuff is going to be dragged up with it. In a break from tradition, I've picked out seven quick fire highlights this week, so here goes. One, start with what the market wants and not what you fancy buying. Work out demand, and then go looking for stock to satisfy that demand. Two, your main edge is not property knowledge, although that obviously helps, but your leverage comes from conversations with agents. And always end those conversations with what else is in the pipeline that might not go through. Three, look for technical problems that other buyers can't solve. Things that stop lending, like Japanese knotweed, planning problems, or pull zone favourite, structural issues. Four, set up good CRM systems to track problem properties through multiple failed sales. Five, protect your downside with clear exits and sensible reserve prices. Six, use data and recent under offer comparables to work out your GDV. Not wishful thinking. You can do this on property engine, and you can get a discount with the code expat via the link in the description. And seven, you don't need to be a 30 lot per auction volume trader. Your numbers could be more in terms of deals you're analysing, tracking, and making offers on. That's it for this week. Links to Paul in the description. And please follow the show wherever you get your pods to never miss an episode. And please do one small favour for me and share the show to spread the word. You've been listening to expat property story. you