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Embrace problems – a normal days work for us

I think that if anybody wants to be really successful in business they have to be thinking all the time of how to solve problems. Start with the ones you have got and expand from there. When you are in business you don’t have to look for problems they will come looking for you, thick and fast.  All you have to do is figure it out.  An example of this was back in the late 80’s.

One Friday night I got a call from a Commercial Estate Agent saying he had a client who wanted a Property that we owned and would we be able to do a deal with him.  The client wanted to turn the said property into a tearoom/cafe and he wanted to live above it with his family.  I said ‘great but I didn’t think his client would be able to make a living from it, but would be nice if he could’, so I told the Agent to draw up the paperwork.

The Agent replied, ‘it’s a bit more complicated than that, my client needs to sell his house before he can move’.  I said, ‘let me know the address of the property’. We knew the area well so we agreed to buy it.

The Agent said, ‘there’s a slight problem my client is in arrears with his mortgage and he will be repossessed the following week if he doesn’t pay £3,000 by the following Monday so could we give him the £3,000 and take it off the price of the house when we buy it?’  I said, ‘of course’.

The Agent then responded, ‘that’s great but there’s another problem my client cannot legally sell his house for 3 months.  He bought his house cheap as a sitting tenant and if he sells before June he has to pay back the discount he got’.  I said, ‘that’s fine, we’ll organise the paperwork and then complete in the June’.  The Agent said, ‘that’s not legal so you would have to take it on trust’.  I said, ‘ok’.

The Agent then said, ‘and there’s a further problem he’s getting married in a week’s time.  He needs £1,500 to pay the caterers or they won’t do the catering’.  I said, ‘I would take the £1,500 to him’.  Would there be anything else that he has a problem with? Ha! Ha!

The Agent replied, ‘actually there is another thing, before he gets married he needs to get divorced but his wife will not sign the paperwork unless she has £3,750’.  I said, ‘ok, so as I see it I am going to buy a house in three months time, I am going to give your client £3,000 for his arrears, £1,500 for his wedding catering and £3,750 for his ex-wife?’  The Agent said, ‘yes, that’s it’.

I said, that’s fine on one condition.  ‘I will also give him a year’s lease valued at £11,000 for the commercial property that your client wants and take it off what your client thinks his house is worth’.

The client wanted £39,000 to get himself out of trouble but I had to value the house first and it would have to be a win-win situation for both of us.

The following day we agreed £34,250 made up of £16,000 for the house (which was what he paid for it), £11,000 for the year’s rent, £3,750 for his wife’s part, £3,000 for his arrears and £1,500 for the caterers.  The client moved into our property and we bought his house in the June.  I then renovated his house for £5,000 and sold it for £47,000.

When the tenants came to our office to sign the paperwork they found out that we owned a nursery business, and unbeknown to us at the time they had decided to open a baby shop instead of the cafe.  Within 8 weeks the owner came to see us to say that he wanted to leave and would we give him £600 for two month’s rent on a house he had found?  We did.

He left that day, knowing full well that he could have stayed for another 10 months without paying anymore rent but he didn’t want to.  A win-win for us again due to them taking a year’s lease.

We made £17,000 on the deal for an outlay of £30,000 over 6 months – that’s equivalent to 57% profit.

We’re still not sure why he moved on so quickly though…….

Embrace problems – a normal days work for us