7 minute read
OUT OF AFRICA
From Rands to ROI – meet the investor who leveraged his own experience to show others you can have a healthy long-distance relationship with property
Motivations for investing in property come in all shapes and sizes, from the desire to ditch the day job, secure a second pension or even just a love of all things bricks and mortar. For Sean Thomson, the founder of WealthTrek and a seasoned investor with almost two decades’ experience in the UK market, the desire to lock in income in a strong currency was first and foremost. Thomson’s epiphany moment will be very familiar to a lot of readers. “So, at the end of 2003 I picked up a book called ‘Rich Dad, Poor Dad’,” he recalls. “I was here in South Africa.” Not long after that Thomson emigrated to the UK and found
Advertisement
himself in a ‘dead-end job’ working in the accounts department for the Daily Mail Group. “That led me to a seminar in June of 2004, where I met a guy who has pretty much become my ‘Rich Dad’,” says Thomson, who now lives back in South Africa and runs WealthTrek which specialises in helping South Africans invest in the UK market. “The pound versus the South African Rand are two very different beasts at the moment and have always been - so the ability to obviously leverage the pound and use it as a springboard to travel was the initial idea.” But with his Rich Dad’s influence, he started looking at property as a way to be more deliberate about his future.
EMBRACING THE HUSTLE
With very little cash to his name though in his early days in the UK, Thomson had to hustle to get his first deal across the line – opting for lowcost housing in Burnley and working with a joint venture partner.
“The first property we bought for £26,000. We spent five grand on the refurb and fees and it revalued at £42,000. We used some creative finance techniques including angel investment, friends and family, credit cards, all that type of thing to just get started in property.”
Thomson also faced a challenge then that many are wrestling with today, where he was living and working in London and investing up North.
“I think leaning on and leveraging a good project manager was crucial for us in the early days and building a strong team,” he says.
“The hustle was real,” he laughs. “Two young guys living in London, we didn’t shy away from wanting to go out and chase girls at the weekends but we had to give a lot of that up to focus on property… There were Saturday mornings when our alarm clock went at 4am after a long week of work at the Daily Mail, Matt [JV partner] would pick me up and we’d have to drive five hours and spend the whole day in Burnley and then drive all the way back down again.”
He laughs that back in those days he was buying properties all cash as he was advised it was easier to remortgage a property you already owned, so in his own words, his RIO game needed a bit of polishing. Well, 17 years later he seems to have it down pat, having expanded to look at other areas including Liverpool, option deals in London and high-yielding properties in South Wales with strategies including social housing, flipping, commercial conversions and land development deals.
SEAN THOMSON
On the WealthTrek website, the following Chinese proverb is displayed prominently: “Those who say it can’t be done should not be interrupted by those who are actually doing it.” It’s a mindset Thomson lives by and lead to him setting up WealthTrek, a business he founded which helps everyday South Africans look to UK shores and get started in investing here. Thomson now splits his time between the UK and his homeland.
“It’s quite interesting because some people will find a way and other people will find an excuse. It’s generally down to mindset,” he says.
“Over the pandemic [we have helped in the purchase of] £7 million worth of property bought virtually, which I think is quite incredible because during the pandemic people in the UK were struggling to buy, let alone the thought of someone starting a UK portfolio from abroad, setting companies up, bank accounts, doing all of that and virtually getting your professional team
FIRED UP
There is an ironic truism among those pursuing financial freedom. In achieving financial independence they gain the space to discover what they are truly passionate about and find themselves generating even more value. For Thomson that was helping his fellow South Africans build a better future for themselves.
“The thing is, with people who end up going into property or starting businesses, they are entrepreneurial.” At the time that Thomson set up WealthTrek, he says the model that has now been popularised as ‘BRR’, or buy, refurbish, refinance was not really the done thing. “They [were] sold on new build property, which I’m sure you’ll agree with me, is not a way I’ve ever been taught to make money in property,” he explains. “So that was where the idea of WealthTrek came along, was to sort of getting people focused on the adding-value model, educating them on how to invest their money with that model in mind, and then introduce them to thirdparty service providers in the UK.” WealthTrek specialises in education and introductions starting with a series of ‘UK Discovery’ seminars online. Putting his decade and a half’s experience in investing in the UK market to great use, Thomson will cover everything from how UK property works and obtaining mortgages as a non-domicile to various strategies, company set up and renovations. He may have a tried and tested system but even so, since the pandemic lockdown eased, Thomson and WealthTrek’s clients have been facing the same challenge all property investors have – deal flow. “When the market was a bit less buoyant, larger sourcing agent outfits would find four to five property deals a month.
UK property can offer those from countries with weaker currencies a safe haven
Now it’s one or two property deals a month… In terms of your money left in [the deal], your return on investment and your cash flows, that potentially has got to be a bit more conservative.” “The bottom line though is property is a long-term game.” Still, you have to be proactive. Following the teachings of revered productivity guru Brian Tracy, Thomson gets granular when it comes to his goal-setting and reviewing. This perseverance has also seen him climb the property deal value chain in recent years.
“We’ve got two major projects on the go at the moment. One is a hotel purchase in Mumbles, South Wales, which works out as £1.1 million, spending just over £600,000 on the refurb, and that’ll be worth about £2.4 - £2.5 million, possibly more on the gross development value,” he says. “And the other is a land development deal where we took three years to get planning on an absolutely incredible site, knocking down the existing home, then building 12 luxury flats. So that’s going to keep me busy for certainly the next 12 to 18 months. ”Not bad for someone who arrived in the UK with no job and not much cash in his pocket.
DEAL FOCUS
One deal that Sean is currently working on is a hotel conversion in Mumbles in South Wales.
THE NUMBERS:
Purchase price: £1,100,000
Development Cost and fees: £603,000
GDV: Conservative estimate £2,350,000 (Agent estimate £2.8m)
Gross Profit: £647,000
FIND OUT MORE
Sean Thomson has written a book that shares the knowledge he has gained in helping other South Africans invest in the UK. It can be downloaded from his website wealthtrek.co.za where you can also see other deal examples. Sean can also be found as @sksthomsonproperty on Instagram.
