Investor interview - Cameron Scott

Sticking to a clear strategy and having the confidence to maintain focus when others are losing their heads can pay dividends. It certainly has for 20-something investor Cameron

OTH: You were relatively young when you started off in the property investing world. What were the driving forces for you wanting to start investing in property?

I was 26 when I first got into the property game. I’ve always been interested in investing, ever since a kid I liked the idea of leaving a pound somewhere and watching it grow to two pounds over time. When I started generating solid levels of income through my business, I got super interested in the idea of property and began to consume as much knowledge as possible about the subject. Books like ‘Rich Dad Poor Dad’ and ‘The Intelligent Investor’ really helped to shape my philosophy around investing in general.

One of my favourite quotes from Warren Buffett is “Be fearful when others are greedy, and be greedy when others are fearful.” When Covid 19 hit, for better or worse

Warren Buffett

I noticed a brief window where there was a lot of panic and negative sentiment in the property market and remembering the wise words of Warren, managed to find a landlord that decided they wanted to get out of the game. I put in some cheeky offers on a few properties and to my surprise they were accepted without any negotiation.

Tenants were already in situ, and I got the properties well under market value. Today, similar properties on the same streets are being sold for around 30% more than my purchase price and were secured on mortgages at rock-bottom interest rates, so the timing was great, but it did take some balls to go for it because, at the time, people were quite concerned about what the market was going to do. Luckily, I had Warren on my shoulder whispering his timetested advice in my ear.

OTH: What’s your investment strategy and how did you go about choosing to go down that route?

My investment strategy is relatively straightforward, purchase family homes at a good price and get solid, reliable tenants in place. That way I benefit from healthy cashflow and also the potential for capital growth, as the areas I invest in around Cheshire have seen good gains over the last few years and there is a lot of investment going into these areas too.

I decided to invest in the North West of England due to prices being much lower than where I’m based down south. I particularly like the North West because of the local proximity to major cities like Manchester and Liverpool, so there are a lot of people who live in neighbouring towns and cities who commute for work. It’s North, but not so North that it’s impractical to visit when I need to. I can be at my properties in around 2.5 hours, that being said I’ve hired an agent to manage the day-to-day.

OTH: Where do you see your portfolio going? Do you plan to diversify or rinse and repeat? Will you be making any big changes due to market changes, regulations, etc.

My strategy took a slight change early this year, as I had an offer accepted on a 4-unit commercial/residential property that I’m currently working through as a cash purchase. Again, due to various circumstances, the sellers want a quick and efficient sale and the yield is almost double what I receive on some of my current properties. I was an attractive buyer for them as I could move forward with a cash purchase to speed up the process. I saw this as an opportunity to completely diversify my portfolio with some business tenants in addition to having a more working professional style tenant in the flats above the shops. From here, I will likely go back to my strategy of purchasing family buy-to-lets.

OTH: What are your big learnings so far? What would you do differently if you started again

Keep a contingency fund. I’ve had boilers go, unexpected damp, windows leak, etc. I purposely kept a contingency in place for issues like this and that was key to being able to get the issues fixed as quickly as possible and tenants satisfied. In all honesty, while these issues are now fixed and the properties are up to a good standard, I would probably get more in-depth surveys done in the future for older properties. I’m also much more inclined to go for newer build properties at this point in my journey where I can be more confident that unexpected issues will not arise.

OTH: What systems and processes do you put in place that mean that you can balance your property company alongside a busy work schedule?

The key is to find a great agent. I’ve built a brilliant partnership with my current agent based on trust. I completely trust him to manage tenant relationships and keep me informed of any issues.

As I’m by no means a handyman, having access to a good network of tradespeople that I can rely on to maintain and repair any issues has also been key, and my agent has done a great job in building that network. So, perhaps the best system has been to outsource to an agent who already has those systems and networks in place.

MINI CASE-STUDY - 3 BED SEMI, LEIGHTON

This property was interesting to me as Leighton is known as one of the best areas in Cheshire East to live due to proximity to the countryside and a major employer, Leighton Hospital. It’s also easily accessible to Manchester, Liverpool, Chester and Crewe. In this case, the buyer was looking for a very quick and efficient sale, originally listing the property for £180k. After some back and forth, we negotiated a cash purchase of £151.5k providing I could get the deal done as quickly as possible.

As there was no mortgage needed, we were able to get the deal done and tenants were in place just a couple of weeks after completing on the property at £950 per month, a very attractive yield. The property was spacious, in great condition and a brilliant location, I’m very confident it will see nice capital growth in the coming years.

I recently took out a mortgage on the property to release funds for additional purchases. The monthly gross profit on the property currently sits at £454 per month after paying mortgage and management fees.

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