Challenging the face of the property industry from the ground up isn’t something that I come across often in other investors, but Alex Hickman has blown me away with his individual, creative, grounded and caring approach to investing. Read this interview to find out more:
Hi Alex,
Thanks for agreeing to do an interview with me for the NC Real Estate blog.
I’m going to be honest and let you know that I have done a lot of googling of you, and as you told me when you agreed to do the interview, you definitely have an ‘out there’ approach to investing which I love. You are making property investing extraordinary.
Thanks, I find most investors sole reason is to create wealth for themselves, whereas I also do my best to provide opportunity to future homeowners who cannot otherwise get onto the housing ladder. I think as entrepreneurs we have a duty to serve as many people as we can.
Why was property the next step after leaving a football career?
To be honest, all I had ever wanted to do growing up is play football. After getting a professional contract I thought that with hard work and a bit of luck I could have made a very good career for myself. Circumstances changed a couple of years after which meant I had to take a different path. A few books come into my life that completely changed the way I saw the world and how I could create a different life for myself while providing as much value as possible for other people. These few books (mainly on wealth creation at this point) all mentioned investing in real estate, which is what edged me towards property.
What was your first property deal and what made you buy it?
It was a straight forward buy to let purchase. I paid £60,000 for it in October 2013. I got a 75% LTV mortgage and put the deposit on a credit card. I also had to use a mortgage host because I couldn’t get finance at this point so It was quite a creative transaction. I bought it because I was in a rush to get going, a complete amateur mistake! It was in poor condition and taught me a load of lessons which I am very grateful for looking back. This was the only deal where I did most of refurbishment work myself.
I had remortgaged the house within 9 months to a value of £80,000 after spending £6,000 on the refurbishment.
Do you still own it?
The property is still in my portfolio and rents out for £575 per month.
What is the best investment you ever brought?
My best investment would be one of my long term delayed completion contracts that I have picked up over the last 3 years. Putting no money down into cash flowing assets using none of your own credit is a superb way of building a portfolio. If I had to pick one it would be a 28 year delayed completion where the cashflow is over £300 per month as a single let.
£1 on exchange of contracts
£229 per month babysitting sellers mortgage
£76,500 purchase price (at time of writing…Whatever the remaining balance of the mortgage is at the time of completion)
Current rent is £550 per month
You invest in the Midlands, what inspired you to invest in this area and to keep investing in this area?
I live here and know my local area like the back of my hand. I have built a good relationship with the estate agents and other investors who often pass deals my way if they are unsure on how to structure them.
What came first the Property Factory or Rent2Own-UK?
I was a sole trader for a couple of years, just building my own portfolio and scraping by off rental income and sourcing fees. I set up Rent2Own-UK first to supply the growing demand for these type of opportunities in my local area. If I put one advert out I was getting 10 parties fully qualified to take it on, leaving quite a few disappointed potential future homeowners.
As I have seen from the Property Factory, you provide property solutions for others who are looking to sell or buy property. What advice would you give to my readers who are stuck trying to find investments?
Create a marketing machine that is pumping out leads on a consistent basis. In todays world you have to be effective with online marketing, keeping one step ahead of the game. Lead flow, follow up and good sales/negotiation skills are the footprint of a solid property business.
Expanding your network is also absolutely vital to finding quality investments. Some of the most profitable transactions I have done have been working with other investors who have bought deals to me. A good relationship with your power team (brokers/solicitors/agents/angel investors/debt consolidation company etc) will provide opportunities you would not have heard about otherwise.
Your Rent 2 Own UK company is such a moral way of investing – it is what is needed to give households a step up onto the property ladder if that’s what they want. Could you provide my readers with an explanation as to how this scheme works?
It works in a very similar way to how a ‘Personal Car Purchase – PCP’ works.
- Buyer and seller agree a price
- Buyer puts down a small up front payment that comes off the purchase price
- Buyer pays monthly market rental figure
- Buyer pays a small monthly payment on top of rental figure that comes off the agreed purchase price.
- At the end of the agreed term (or any time within), usually around 5 years, the buyer has the right but not the obligation to purchase that property at the agreed price minus all the monthly credit that they have paid. This can be done using any normal means ie – mortgage/cash purchase.
They are incredibly flexible arrangements and can be negotiated to suit both parties, providing a true positive outcome for both sides of the agreement.
What was your motivation behind setting this up and do you get much take up from households wanting to enter into this scheme?
Being completely honest my main motivation to begin with was to be a bit different in the marketplace. There are still very few people offering this service, which I find a bit confusing as I think it can produce huge profits and genuinely give a helping hand to first time property buyers.
Now my highest values are growth and contribution. My main motivation is giving people as many opportunities as possible to achieve their dream of home ownership when the banks may feel they are not quite ready yet.
I started out by using properties from my own portfolio for our Rent to Own program so I could take any hits if I made any mistakes. Now it is more finely tuned we market to landlords and homeowners who may be interested in providing this opportunity to eager first time buyers.
What has been the proudest moment of your career to date?
Allowing a young couple from South Africa with a young baby who had only been in the country for 3 years a chance to get their feet onto the housing ladder. They were both nurses living in London at the time paying excessive rent in a shoddy property. I placed them into one of my own properties in the West Midlands on a Rent to Own. They are still in the property now and are in touch with my mortgage broker to complete on the property within the next 12 months. They actually have another 3 years left on the term of the agreement but have decided to exercise their right to own the property early. There is no better feeling than knowing you have helped people improve their lives.
What does your average day as an investor look like?
Haha! I get asked this quite a lot and I go against the grain a little bit. I ‘m not in agreement with the ‘Hustle until you collapse in a heap’ mentality that I see everywhere. I have been through that and wouldn’t recommend it.
I have a strict morning routine where I get up by 6AM and spend the first 4 hours on my inner world. I will meditate, read and then go to the gym 5 out of the 7 days which is my mind, body and spirit done by 10AM every day. Without a doubt this is my most effective time of the day.
After this I do the 3 most important things that need to be done, whether I want to do them or not. These can usually be done within an hour; they are always tasks that get me closer to my vision. – read ‘eat the frog’ and you will get the picture.
The rest of the day is just getting into my flow and is very rarely set in stone. From experience being too rigid is counterproductive and we should surrender to what life throws at us, as these things are usually what makes us grow as people and entrepreneurs. There will usually be meetings, viewings, skype calls with my VA’s etc (VA’s are game changers) during the day. I am also setting up other online businesses, which is taking up some time at the moment too.
Throughout the day il take regular 15 minute intervals to quiet my mind and ground myself, which I find keeps me at my most productive. I think its vital to not clutter the diary, being ‘pretend’ busy to feel like you are doing something productive when in reality you are just creating a false construct in your own mind.
Of the evening I will play sports with friends or read and fill my mind with what best serves me, with where I feel I am in life.
The diary past 12PM changes daily, so I am sorry I couldn’t be more structured for you on that question!
I would definitely call you a very successful entrepreneur. However, there must have been tough times, do you have any tools or techniques that you use to keep going no matter what?
Great question! I think if you master your inner world, then that will reflect in your outer world. The human race, especially the Western world has that the opposite way round – It is like saying ‘give me muscles and then I will lift the weights’.
In my opinion it is absolutely critical to master you mind and realise that the little person in your head is not always best serving you. That doesn’t mean working all God send hours, which usually only ends up in stress and then physical illness.
When you hit a ‘hard time’, which is relative, you can either see that as an opportunity to grow or wilt and die… If you want to be an entrepreneur it is part of the game, you will take financial hits that may put you on the brink or a law suit that will plunge you into an emotional mess. If you can control your mind then all situations can be seen as you want them to be seen – an opportunity for growth or fear to run away from.
I can honestly say that I welcome every rough patch that I go through, I see it as the catapult that will leverage me to a more expanded place than I was before. I would go as far as saying I ask for them.
Continually growth is key for not only business but for your true higher self too.
What are your next steps in the property industry?
I will continue to put energy into the vision and intention I have set out to achieve whilst not forcing life into the way I think it should look. My overriding vision is to revolutionise the way we transact property in the UK, without the integral need for mortgages relying on the already broken banking system.
I often get asked to teach what I do to others and that may be a possibility in the near future. I do some charity work with a family member of mine at the local homeless hub and would put a large percentage of the profits into that.
Thank you so much for taking the time to answer these questions, both I and my readers appreciate it.
Thanks, it been a pleasure.
If you want any more information on Alex and his businesses then check out Alex’s websites here:
And you can get in contact with Alex by emailing alex@theproperty-factory.com.
If this has been super useful for you then don’t forget to share it far and wide and comment with what you took away from this below!
NC
