How to Determine Your Personal TKM Triangle

So, you have decided you want to invest in property to retire at 55, buy a yacht and sail around the world. It’s a great idea – but time to tie it back to reality.

Just about all business endeavours and certainly property investment, boils down to a combination of the following:

1. Time
2. Knowledge
3. Money

This article is going to walk you through how to relate each of these items back to you, as an individual. Let’s take each in turn and dive deeper.

Time

You are going to need some of this, at least.

Determine how much time you can devote to property investing. If you are serious, I would suggest finding 5 hours per week. Some of you will be shaking your head, saying that is impossible.

But show me your calendar and I will tell you your priorities.

I am willing to bet there is time in your day. Consider:

• The average person watches around 27 hours of TV per week. That is 10 years over a lifetime! How much of that is essential downtime to unwind and how much of it is mindless junk because you can’t be bothered to do anything else?
• How do you spend your lunch hour? (I used to spend many a lunch hour dealing with property related tasks).
• Can you get up earlier? Just rising an hour early twice per week is 2 hours found, already.
• Weekends. How do you spend yours? Carving out time on a weekend is essential, as this is probably the best time for you to do viewings, assuming you have a day job.

Figure out where you can find 5 hours per week, minimum. Next, block out those time slots in your diary. Importantly, keep to them! If you had a meeting booked, you would attend and keep to the appointment. Treat yourself with the same respect and honour your own time commitments. Make sure you have the buy-in of a significant other or your family if you need to find time on the weekends.

It is possible to leverage someone else’s time, of course. But then we are into the realm of partnerships, which is a whole other ballgame. Whilst I have used partnerships in the past (and continue to do so), if you are just starting out I strongly recommend you do it yourself until you have some experience in the game. Once you have some battle scars, you will be in a much stronger position to partner with others.

This isn’t a website focused on habits, productivity or deep work but I will talk about these subjects occasionally as I struggle with time like everyone else. Even when we have the time, we often procrastinate, me included. We all need to use our time efficiently.

This is why your Why is important. Without that drive, you will be watching reruns of the X-Factor instead.

Knowledge

Knowledge and experience count. Notice they are distinct. Knowledge is what you gain via talking to others, reading books, attending network events, courses and training. Experience is what you get by actually doing property in the real world.

They are not the same thing. Knowledge gives you the theory. Experience gives you the practical application. Stuff happens in the experience stage that knowledge doesn’t necessarily provide.

If you are starting from a position of little knowledge, then ensure your experience is sharpened at the simpler end of property investing. If you were learning to drive, you would start in a small, low-powered car. You wouldn’t get into something as twitchy as a Ferrari and floor it. This analogy applies in property investing too.

Where do you sit on the following scale?

• Beginner. Less than 5 years experience as a landlord. Small portfolio of single lets managed via an agent.
• Intermediate. Have been a landlord for 5+ years. Experience of single lets and beyond (mixed use, HMO’s etc). Uses a letting agent.
• Advanced: Have been a landlord for 10+ years. Experience of single lets and beyond. Experience of buy-to-sell strategies such as buy-refurbish-sell. A mixed portfolio. Strong knowledge of the regulations in this sector. Self-manages or outsources property management.

Clearly this isn’t hard and fast, but I believe different strategies require different levels of knowledge and experience. Crucially, lenders think the same way. For example, the majority of lenders will want some experience as a landlord before they will lend to you for an HMO property. So it is important you accrue the experience before progressing.

I think property investing has three distinct phases:

1. Build: Learning the mechanics of getting started in building your property business. Finding, negotiating and acquiring properties. Learning your responsibilities as a landlord and learning how to manage both tenants and the properties.
2. Systemise: As your property business grows, you will need to consider the key components (people, processes and systems) that enables you to concentrate on the strategic elements and not the day-to-day running of the business. This will lay the groundwork that will allow you to scale.
3. Grow:  By now you should be thinking and acting as a CEO. This is where you take your property business to the next level and consider advanced strategies and larger projects whilst the business runs itself.

If you are starting out, then focus on the Build phase. That’s it. Don’t worry about doing things that won’t scale. At this stage, you should be optimising for learning.

If you are an intermediate, think about systemising what you have so you can work on the business and not in it. Once you have this covered, you are ready to scale and move onto more advanced strategies. Or not. The beauty of property investing is you can stop at the level that works for you and your why.

You might not agree with my definitions above and that’s ok. Remember: You are the CEO of your own business and free to make your own decisions. But like a good CEO, make sure you understand the risks involved, your own limitations and ensure you make good decisions.

If you are a Beginner, then you need to improve your knowledge. Approach it as follows:

1. Read this website. Well, if I don’t blow my own trumpet, who will?
2. Books.
3. Networking and speaking to others who are ahead of you in terms of knowledge and experience.
4. Training. Deepen your knowledge via appropriate training courses.
5. Coaching / Mentoring: For specific feedback, strategy and accountability.

1-3 are free, but take time. Use some of your time highlighted in the Time section above to allocate to this.

4 and 5 cost money, anything from the hundreds to thousands, depending on the training and the provider. There are those that think it is a waste of money and those that think it is essential. That is for you to decide, but choose a course or coaching based on where you are currently at, once you understand where you want to go!

Resist the temptation to become a course junkie and get distracted by the Shiny Penny Syndrome. It is easy to think you are progressing by taking another course, but progression will only happen when you take action on what you are learning. Don’t lose sight of why you are in property in the first place. Don’t use property courses as an excuse for procrastination.

My Complete Guide to Property Investment Strategies describes where each strategy sits in terms of beginner, intermediate or advanced.

Money

Realistically, how much money do you have to start? How quickly you progress will be a function of the money available. You can clearly buy more property with £1 million than £100k.

Remember, for each property, you will generally need:

1. 25% deposit (the total amount required will depend on the rental stress test. In expensive locations, this will mean more deposit is required).
2. Circa £1k for legal fees.
3. Money for Stamp Duty Land Tax (with a 3% surcharge if you already own a property, such as your own home).
4. Money for possible refurbishment costs to get it ready for letting (e.g. £10k).
5. Cash flow to cover the mortgage, buildings insurance and any council tax and utility bills to pay whilst you are awaiting a tenant.

This means that, for a typical property costing £100k needing a light refurbishment, you will need circa £40k to get started. Whilst, by buying well and forcing appreciation through refurbishment, you may be able to recycle some of this money back out through refinancing, you will still need this amount to purchase the property in the first place.

Obviously, the more expensive the property, the more capital you need to get started.

What funds do you have to begin?

But I don’t have any money!

If you don’t have any money, then quite honestly property investing is not for you! This isn’t a popular view, with many (usually those with unrealistic training courses to sell) telling you that you can get started with very little, if any money.

Are they lying?

Technically, no. This is because, in theory, you can go out and find a private investor to bankroll you. Have people done this? Undoubtedly. Can everyone do this? Definitely not.

Would you lend a significant lump sum of cash to someone new to any business, with very little experience and no money of their own to contribute, so that they have no skin in the game? 

If you are sensible, the answer will be no.

Besides which, you shouldn’t be learning using someone else’s money!

If this is you, then you would be better off by:

• Understanding where you stage you are at in Maslow’s Hierarchy of Needs as applied to property investment.
• Starting a business which requires less capital to get going.
• Generating extra money by starting a side hustle.
• Increasing your ability to save by getting a pay rise or moving job.

If you don’t believe me, then that is fine. It’s just my opinion and some of you will prove me wrong, but that doesn’t mean it will work for the majority.

Summary

If you have followed the advice above, you should now have a deeper understanding of:

• What time commitment you can allocate to property investment and the important of diarising your actions and committing to yourself.
• Whether you would define yourself as a beginner, intermediate or advanced property investor.
• Whether you are in the Build, Systemise or Grow phase.
• What starting capital you have to invest. You will need typically £40k+ to get your first buy-to-let.

Armed with this, you can begin to develop your Property Investment Blueprint.