BUSINESS TIP: INVESTING VS SPECULATING
Why I Don’t Gamble on News: A Lesson from a Stoke-on-Trent’s Car Park
FIRST PUBLISHED: 08 AUGUST 2019
Content: I am recording this from a car park in stoke-on-trent after a massive week. I’ve been presenting to hungry investors and held consultations with nine different clients today alone. We’ve been walking the streets of Crewe and Stoke, looking at the “land of the free,” as I call it.
The one question that kept coming up: Is the HS2 happening of not? With the news that the project was being pulled back for review, everyone wanted to know if the “gold rush” was over. My answer is simple: if your profit depends on a government decision, you aren’t an investor; you’re a speculator.
THE DIFFERENCE BETWEEN A GAMBLE AND A CALCULATED RISK
A speculator buys a house for £100,000 and “hopes” it will go up 20% because of a new train line. That is not the cleverest way to work. As an investor, you take a calculated risk. This means that even if Plan A (the big news) fails, you still have Plan B and Plan C to ensure you don’t lose money.
This is the core of our property sourcing strategy. We don’t rely on the “luck” of the market; we rely on the numbers we find on the ground.
HOW WE MANUFACTURE EQUITY (PLAN B & C)
I started investing in Crewe long before HS2 was even a headline. We have successfully completed HMO and flat conversions because we focus on the physical value we can add, not just the speculation of capital growth.
When we manage a refurbishment project, we follow a proven process:
Purchase Rundown Property: Buy at a discount due to condition.
Refurbish: Do the heavy lifting to increase the actual value.
Refinance or Resale: Pull the equity back out.
By doing this, I already have my equity locked in before the government even makes a decision on HS2. Whether the news is good or bad, my profit is protected.
YOU MAKE YOUR PROFIT WHEN YOU BUY
The bottom line is this: You do not make your profit when you sell; you make your profit when you buy. If you are waiting for a train line to save your investment, you’ve already lost control.
If you want to stop speculating and start building a portfolio based on real-world results, you need to see how we operate. I invite you to join us for a Property Discovery Day where we show you exactly how we find and fix these opportunities.
Alternatively, you can read more of our property investment blogs to see the consistency of our behaviour across different market cycles.
Rico Pieroni
Founder, Treasure Tower | Sourcing Agent | Property Investor
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BEFORE YOU GO
If you have questions or want to discuss how this applies to your own situation, you can contact us via email or the contact form.
Treasure Tower is an established UK property sourcing company operating for over 10 years. We also provide full Project Management for your refurbishments. We also offer a complimentary 20-minute introductory call.
If you have questions or want to discuss how this applies to your own portfolio, don’t rely on guesswork. Let’s discuss your strategy directly.
Important Information: Treasure Tower is a registered business with The Property Ombudsman, HMRC AML and ICO.
While trying to keep clients updated and provide valuable content, it is important however that you seek independent advise about everything you do. Treasure Tower Ltd and Rico Pieroni do not offer investment advice on the merits or sustainability of products and no information contained within this website or presentations should be construed as such. Examples are for information purposes only and must not be treated as advice or recommendation. Should you wish to seek advice, please contact an Independent Financial Adviser.
