Archive for December 14th, 2011

After over 30 years down the Yorkshire coalmines, Arthur Oldham’s pension was nothing like it was projected to be; still a familiar refrain today as the pensions crisis tightens its death grip. But for Arthur’s stepson Nick Carlile, founding partner of Platinum Portfolio Builder, it was a story that shaped his professional life.

Carlile is a highly successful property investor, who has built a business creating property wealth for himself and his clients, with a proven investment strategy, backed by a talented team, keeping ahead in a property game that can change quickly and dramatically.

“I realised that if my dad had managed to buy one other property when he originally bought the family house, his pension provision would have been a lot different,” said Carlile.

His own investment journey started aged 19, with his first house costing £27,500.

Carlile was on the road, but not without a few bumps along the way. Barnsley in South Yorkshire is his home turf and the strategy of his youth was to buy run-down houses; refurbish while living in them, then selling on and trading up to bigger properties. Eventually he bought some land and built his own house, gathering up all his equity in it.

The rest is property investment history with Platinum Portfolio Builder purchasing buy-to-let properties significantly below market value. The business grew off the back of Platinum Property Partners, one of the fastest-growing franchises in UK history.

Carlile co-authored a book with business partner Steve Bolton called ‘The Seven Biggest Mistakes Made by Property Investors and How to Avoid them.’ Carlile admits there are a lot more than just the seven, for the property investment world, despite delivering riches to many, is littered with casualties, brought down by greed and ignorance.

Investors forget to protect the downside and ensure more than one exit strategy. They buy with a view to sell, but what if they cannot? Is there a rental option? Carlile says an effective strategy starts with your reasons for doing it. Some sense an opportunity and quit their job, forgetting at that stage they need cashflow, not just the hope of capital growth.

The mistakes made are obvious. The biggest ones often are. Not buying at the right price is one, even if some get lucky.

“We buy between 10 and 20 properties a month, all at around 25 percent below true market value,” said Carlile. Platinum Portfolio Builder bought around £10.3 million of property in the last 14 months for just under £7.6 million, and is expanding further during these excellent buying times.

Carlile is critical of the media’s appetite for sensationalist headlines, with constant references to ‘the property market’ misleading. “There are thousands of property markets in the UK. Generalisations can be useful and convenient, but can also be way off track.”

Companies touting their property wares, promising instant riches, have sullied the investment landscape over the years and the old adage that ‘if it’s too good to be true, then it probably is’ still holds firm.

“Unfortunately there are a few rogues in our business, giving the industry a bad name. There is plenty of room to make good profits in property, operating, as we do, with absolute honesty, transparency and integrity.”

Whilst property investment is not a get rich quick business, it can be a ‘get very rich steadily’ business, says Carlile, providing it is a medium to long-term play, while buying at big discounts locks in equity gain instantly.

A common mistake is not maximising the leverage potential of property. The maths is simple. Buy £100,000 of property with £100,000 of cash and five per cent growth a year is £5,000.

Use that £100,000 to borrow at 75 percent loan to value and buy £400,000 of properties and you get, if done correctly, a greater diversification of portfolio, more rental income and, at five percent growth, £20,000 a year.

“Property is the best place to utilise leverage. I cannot think of another business where the banks will lend you 70 to 85 percent of the capital cost.”

Carlile may have built up an enviable personal portfolio as well as a great business using his knowledge and expertise to help others make money and secure a pension, but he has made his share of mistakes.

“Some people see successful people and assume they just woke up one day successful. It doesn’t happen. I’ve made a lot of sacrifices and sometimes lost that important balance in life. My biggest mistake until recently was trying to focus on too many things. I now have a single-minded focus on PPB,” said Carlile.

“We continue to learn and invest in personal professional development. The market changes so quickly and what worked yesterday does not necessarily work today.”

Just as there are investors who jump in blind, there are wary investors paralysed by analysis, waiting for ‘the perfect time to invest.’

“It doesn’t exist. The only bad time to invest is ‘later.’ Providing you have the right investment strategy, I believe now is a great time to buy. Prices will not fall much further, with the lack of mortgage finance holding back any significant rises for the next two to three years.”

PPB gives clients a guarantee on the level of equity within their portfolio, rather than, as many do, just committing to a certain number of properties, without giving comfort of performance.

The company has a wealth of skill sets across sourcing properties, negotiating discounts, refurbishing, maintaining, letting and managing, making it an entirely passive investment opportunity.

“Property is the best pension vehicle ever. Introduce some leverage, smart tax planning and nothing comes close to property, especially with a housing shortage that is getting worse. Investment needs to be medium to long-term to iron out inevitable peaks and troughs.”

Carlile, with many UK and overseas investors having not yet capitalised on the UK residential market, is looking for new clients and is keen to work with introducers and IFAs, offering them good commissions.

While many remain obsessed with London, Carlile ploughs a profitable South Yorkshire furrow, where he has been investing since 1993, mining property gold into platinum and ensuring copper-bottomed pensions for his investment clients.

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