Short Leases, Auctions & Hidden Property Opportunities:How to Turn Overlooked Properties Into Profit

Cleaned YouTube Transcript — Jason Patterson, The Short Lease King

0:00 — Deji: Hi Jason. Good morning. Thanks for the invite.

0:04 — Jason: Good morning.

0:06 — Deji: It's lovely to see you here. I'm looking forward to this episode. It's definitely something that would be useful to everyone else.

0:13 — Deji: As an introduction, we'll be bringing in experts who are actually doing what they are preaching. I've watched you over time and I know you're very popular in the community. You've done quite a lot of things yourself.

More importantly, I love your journey, how you started and where you are currently. That's what we'll be diving into in this episode with Jason Patterson.

You have a nickname, so I'll allow you to introduce yourself and maybe tell us a bit about your nickname as well. Why has that been sticking with you for some time? Welcome, Jason.

0:45 — Jason: Thank you. My name is Jason Patterson, AKA the Short Lease King, mainly because I like to buy flats with short leases.

In relation to short leases, in England you have freehold property and leasehold property. If you buy a leasehold property, you're given a flat of some kind and it has a lease on it.

That flat may initially have a long lease of maybe 99 years or 125 years. Every year, that lease gets lower and lower. When it gets to 80 years, that's what they call the marriage value, and anything that falls below 80 years is classed as a short lease.

The lower the lease, the more it's going to cost to extend, but the more money you can make once you extend it because you're adding value.

Think of it as a paper version of the BRR. If you buy a flat that has, for example, 68 years left on the lease, you can get a mortgage on it, bridging finance, buy it with cash or crowdfunding.

Once you extend the lease back above 80 years, you're adding value to the flat. You can either flip it and sell it on, or take out the equity and buy more property with that or do what you choose with the money.

Basically, you buy a short lease, extend the lease, create value, and then you can either flip it or reuse that value to buy more property. That's basically what I do.

2:05 — Jason: I started in 2001 when I bought my first ever flat in Enfield, North London, for £70,000.

The first ever lease extension I did was a voluntary lease extension in 2002.

With lease extensions, you can either do it the formal way or the informal way. The formal way is when you serve a Section 42 notice, and you can extend your lease by 90 years with a peppercorn ground rent.

A peppercorn means zero rent, and the freeholder has to allow you to extend your lease. They cannot refuse you the right to extend your lease.

Alternatively, you can go the voluntary route, which is the informal route. You can extend your lease to 99 years, 125 years, 990 years or 999 years. The government can vary the rules as well.

So there are two routes: the Section 42 formal route and the informal voluntary route.

You can choose either one to extend your lease and then add value. You can rent out the property afterwards or flip it and sell it. The choice is yours.

3:06 — Deji: Thank you for that. You've dropped a lot of information. We're going to deep dive into some of those things so that a lot of people will get a much better basic understanding.

Before we go into that, I know you've mentioned buying your first flat for £70,000 in 2001. What I think is interesting, and something we might miss, is that sometimes there's the idea that you need a lot of money to start or that you need to have a lot of experience.

I want you to cast back to 2001 when you started. Tell us what you were doing then, where you were working and, if you don't mind, the kind of salary you were earning and how you were able to actually purchase a property.

I know it wasn't just one property you bought while you were working in a regular, possibly blue-collar job. Share that experience to give us some depth into where the journey really started.

3:56 — Jason: I was in Sainsbury's. I was there for 11 years in total. I was on the bread aisle, just stacking bread — Kingsmill, Mr Kipling pies.

I was in the same position for 11 years. I started on £3.28 an hour and, after a few years, I said, "I can't do this anymore. It's too much."

There had to be another way of making money, whether it was buying property, starting a business, or investing in stocks and shares, because crypto wasn't around then.

I tried to think of a business idea, but it wasn't working, and I wasn't too good with stocks and shares. So I thought, "I'm going to try and get into property," which was a lower barrier to entry.

I did a lot of overtime — Sunday pull-outs, which were 10 a.m. until 10 p.m. I did Sunday shifts in addition to my normal shift. I did trolley work on checkout because I wasn't till-trained. I also did night shifts, which were from 10 p.m. until 7 a.m.

I was doing 60- to 70-hour weeks just trying to get the money together. Eventually, I managed to get enough cash to buy my first flat. That was in 2001.

I still have that same flat to this day. I bought it for £70,000 and it had a lease of about 82 or 83 years. The following year, I increased the lease by contacting the freeholder.

Initially, I worked hard, saved, took a while and then got the deposit together to buy my first ever flat.

If I stayed in the same position, even if I became a manager, the pay wasn't that great. I like nice things, so I said there had to be another way of making money without doing anything illegal.

I decided property was a way forward and moved forward from there.

I managed to buy five flats while I was at Sainsbury's over that 11-year period. After that, I refinanced the flats, took my money out, combined the rental income with my business income and overtime income, and managed to scale the portfolio from there, bit by bit.

That's how it started initially.

5:46 — Deji: Thank you for that. 2001 was completely different from what we have now. That's 25 years of experience.

Casting back then, were you buying as a buy-to-let? Were you buying residential? How much deposit did you need to put down?

Were there creative things you were doing then, or were you just using a standard approach that allowed you to scale up?

Most people probably would not have bought a property — a flat — with 83 years left on the lease. Were you concerned at any point? Did anybody tell you never to do this? Did you worry that you might be unable to renew?

What did you know then that gave you the confidence to actually go for things like that?

6:23 — Jason: I wanted to get into property, but buying houses was too expensive for me and way out of my league.

If I had started with houses, which are freehold properties, I probably never would have started. I thought, "It's a lower barrier to entry. I'm going to start with flats."

At the time, for buy-to-lets, it was a minimum of 15% deposit initially.

Some people also used to buy a flat with a lower deposit — 5% or 10% — live in it for a little while, and then move on to a bigger flat afterwards and rent out the old flat. You could put down a smaller deposit that way.

But if you were doing buy-to-let back then, it was 15% deposit for a standard buy-to-let.

I didn't know anything about BRR, short leases, reconfiguring or refurbishing. I didn't know anything about that.

I just bought it, rented it out and then moved on to the next one.

It was only after maybe seven or eight years that I started using a short-lease strategy. Before that, it was just vanilla buy-to-let: buy it, rent it out and then move on.

I met a guy called AJ when I bought my first one. On my second one, I went to a different mortgage broker and said to him, "Look, I want to buy three properties."

He looked at my spreadsheet, I did the maths correctly, and I managed to buy three flats in one go. That was in 2003.

He gave me an idea about BRR, where you buy the flat and add value by refurbishing it and adding another bedroom.

Outside his estate agency, he had a nice black Mercedes. I asked, "How did you get this Mercedes?"

He said, "Jason, you know what I did? I bought this one-bedroom flat in Edmonton. I turned it into a two-bedroom flat. I did a refurb on it and pulled the money out. I used that money to buy my Mercedes."

Before then, I didn't know. I thought you just bought the flat and rented it out.

What he had done was add value by refurbishing it and adding another bedroom through reconfiguration.

From then on, the next few flats I bought were ones where I could add another bedroom and refurbish them.

As time progressed, I started buying flats with short leases.

I was doing what I call the "triple threat": I buy the flat with a short lease, refurbish it and reconfigure it by adding another bedroom.

That's three ways of adding value.

I started with buy-to-let, then moved into refurbishments, then reconfigurations, and now I do a lot of short leases, freeholds and block management.

It's been a logical progression in relation to leasehold properties.

The market was a lot different back then. There was less regulation, no Renters' Rights Act, no EPC requirements, and you could claim the interest payments on your mortgage if it was under your personal name.

Many different factors were conducive to making money back then. Now, with more policies and restrictions, you have to be much smarter and wiser about making money moving forward.

9:16 — Deji: Thank you for that. There's a very important strategy you mentioned there that I wanted you to expand on.

Let's take someone who is a novice and doesn't know anything about property. They've heard, "Jason is the Short Lease King," and you want to help them understand how to use this triple solution.

Could you expand on that? Give us a real-life example of what you needed to do, what the cost of getting the reconfiguration might be, and put it into a step-by-step format that people can easily understand.

Let's lay it out for a first-time person looking to take on this strategy. What would that look like step by step?

9:57 — Jason: In a nutshell, there's a lot to it, but you have to find a flat where there is enough space.

Most lenders will only lend on certain minimum sizes. There are a few that will lend below this, but the minimum flat size is generally 30 square metres.

If, for example, you find a bigger flat — say 50, 49 or 56 square metres — and it's a one-bedroom flat, some ex-local-authority flats are quite big and have large front rooms.

What you can do is move the kitchen into the front room and turn the old kitchen into a bedroom.

The minimum size of a bedroom has to be 6.51 square metres. That's one option: turn the kitchen into a bedroom and convert the property from one bedroom to two bedrooms.

Another option is if you have a large council or ex-local-authority property and the front room is massive. You can put up a stud partition wall in that room and create a separate bedroom.

You would then have a reception room and another bedroom, turning it from a one-bedroom to a two-bedroom property.

Look for space where the minimum bedroom size can be achieved in order to reconfigure the property and, obviously, refurbish it as well.

For flats, the sweet spot for me is between 50 years and about 75 years on the lease.

If you find a flat with a short lease between 50 and 75 years, that's where I like to find or make the most money.

You can buy flats where the lease is below that, but it's going to cost you a lot more to extend the lease.

If you can find a flat where you can extend the lease, reconfigure it and do a refurb, those are three ways of adding value to the flat.

You can either keep it or sell it afterwards.

If you're going to reconfigure a flat, you must ask the freeholder for consent to alter. You can't just buy the flat and reconfigure it. You need to ask permission.

Some freeholders charge for this and some do not.

A common question is, "What if the freeholder says no?"

When you're reconfiguring the kitchen or the flat itself, make sure it doesn't affect the rest of the building or the fabric of the building.

No load-bearing walls should be removed, and the waste pipes and soil pipes should hopefully not be affected for the other flats.

If you can keep everything within your flat and separated so it doesn't affect the other flats, the freeholder should normally say yes.

But if you're going to interfere with a soil pipe serving flats downstairs or upstairs, or remove a load-bearing wall, the freeholder will probably say no because you're affecting the rest of the building.

With a kitchen, there is no minimum size, but a lot of modern flats now have open-plan kitchen-diners.

If there's gas in the old kitchen, make sure you cap it off with a Gas Safe engineer.

You can then plaster it over and use the space as a bedroom, subject to the applicable requirements.

If you're going to rent out the flat afterwards through Airbnb or Booking.com, you need to get permission from the freeholder.

Sometimes the deed of covenant may need to be amended, provided the freeholder agrees.

There should be no short-term lets unless the freeholder allows it. Check the terms of your lease to be safe.

That's the strategy in a nutshell.

13:16 — Deji: That's very detailed, so don't expect somebody to just jump at this and take it on.

You mentioned professionals and all of that. How much do you get professionals involved from the early stages?

Imagine someone is starting out. It might be easier for you to see the floor plan and understand what you're doing, but for someone starting out, what would you recommend?

What professionals would they need to speak to in order to understand that they're talking to the right people?

You've talked about the covenant. That's an important document they may want to see and review.

What professionals have you put in place in your team, and what would anybody looking at this strategy need to start with?

14:04 — Jason: You need a lease extension surveyor, which is separate from a normal valuer.

They'll either do a desktop valuation or a physical valuation for you in relation to the lease extension.

Whatever the freeholder comes back to you with as the lease extension figure, get it verified by a lease extension surveyor.

Sometimes a freeholder tries to inflate the price of the lease extension, so you need to get it verified to be safe.

You also need a lease extension solicitor. They will handle all the paperwork for you.

You've got deed variations, the lease extension documents and other legal documents that they can deal with for you.

If there are any issues between yourself and the freeholder, the solicitor can sort that out for you, including any disputes relating to serving a Section 42 notice to the freeholder to extend your lease.

If you're going to buy the freehold, which I've done before, they can also look after that for you.

So those two professionals are important.

You also need an EPC professional.

Sometimes you might buy a flat that has an EPC rating below the required level. During the refurbishment, that can be a good time to improve the energy efficiency and bring it up to the required standard in time for the regulations.

Your mortgage broker is also very important because they can find out what bridging finance or mortgage products are available for these types of flats.

They can look at what lenders are available.

You also need a conveyancing solicitor. The conveyancer is the person who will go through the purchase for you.

If you're buying from auction, you might have 28 days to complete. That person is important because you may have to put down your 10% deposit at auction, plus fees and everything else, and then complete within that 28-day period. Otherwise, you can get into trouble.

Once you purchase it, you need your build team.

Once you contact the freeholder, a floor plan needs to be done. That's straightforward. Get it sent over to the freeholder.

The freeholder can review it. Once they're happy with all the works and comments you've mentioned in the email, hopefully they'll come back with a yes.

Then your build team can come in and reconfigure the flat and carry out the refurbishment work.

That's part of the power team you really need initially.

16:30 — Deji: We're going to talk about how, for someone starting out, you can leverage other people's skills, networks and teams.

You mentioned auctions. We're going to go into auctions because that's something we're passionate about and something we help a lot of people with.

But before we go there, short leases are a fantastic strategy. What's the one mistake that you can't forget in your journey?

16:53 — Jason: Initially, I used to take the freeholder's quote as what it should be.

But once I started speaking to a lease extension surveyor, they came back and said, "No, it's inflated. They've added 5% or 10% to what it should be because they want to make more money."

Before, I used to negotiate the price down, but whatever the freeholder comes back with, you can negotiate the price down.

That was a mistake I made in the beginning. I just accepted the figure and moved forward.

What else? Sometimes your freeholder or conveyancer will also double-check the service charges.

Sometimes in the description, it might say £2,000 a year or £1,800 a year for the service charge, and there are no major works mentioned.

But when your surveyor or solicitor gets involved, they might say, "They're expecting some major works to happen. It's going to cost £7,000 or £8,000, and each leaseholder has to pay their share."

So double-check those kinds of things.

Check the service charge amounts with your legal team.

You can also negotiate the lease extension price down. Your surveyor can do that on your behalf and get the price down for you.

Those are the main areas that need to be improved over time.

18:16 — Deji: Have you ever been in a situation where you had to go into a battle for a freeholder to agree with you?

Maybe you thought it was going to be easy, but it turned into disputes. Have there been any issues like that in your journey?

18:27 — Jason: Yes. The longest one took about nine months.

The freeholder gave me a quote. It was quite high, so I verified it with my surveyor. He said the risk was high.

He had to go around and do a physical valuation, prepare the surveyor's report and send it back to the freeholder.

They weren't budging on the price and insisted that it was what it should be.

So, over a nine-month period, my surveyor and the freeholder were battling it out.

This was through the voluntary route, by the way.

Eventually, they managed to agree on a figure closer to what it should be.

That took a while.

Another situation is if you serve a Section 42 notice and the freeholder does not agree with your figure. You have six months to agree a premium.

If you can't agree a premium within those six months, the case can go to the tribunal, and the tribunal will decide what you pay for the lease extension based on the surveyors' reports.

So there are two different routes.

The one I had was the informal route. It took about nine months for the price to come down and for us to agree the lease extension premium.

If you're on a bridge or mortgage, it's not so bad. If you're on a bridge or have investors helping you, you have to make them aware of this because it may delay the completion or the release of funds.

19:45 — Deji: Thank you. You mentioned a good point. Let's get into bridging.

In your experience, have you used bridging finance for short-term projects? Have people in your network used bridging finance?

What's the most concerning thing that people don't understand about bridging finance, especially for short-term projects?

How have you been able to overcome that? I know you talked about private investors as well, so we'll talk about that later.

Just specifically on bridging, how has that journey been for you and how have you been leveraging it?

20:16 — Jason: If you're going to use bridging to purchase a short-lease flat, you might buy at auction.

For example, you might see a flat in Auction House London with 53 years left on the lease. It can't get a mortgage, and it's dilapidated and uninhabitable.

You can go to your broker, and your broker can give you a list of products or lenders available to lend on that particular flat.

Let's go through different types of bridging.

Bridge number one: the lender may say, "We'll lend you the money, but you need to have completed the lease extension before the end of the bridge."

Route number two is where the lender says, "We'll give you a bridge, but you have to serve a Section 42 notice between exchange and completion."

Another type of bridge is what I call a hybrid product.

The lender will lend based on the end value of the flat.

For example, say it's worth £400,000 in good condition with a good lease, but you're buying it for £250,000 or £280,000.

The lender will lend based on the end value of £400,000. That can cover the flat purchase, lease extension and a light refurbishment.

You may only have to pay the solicitor's fees, surveyor's fees, stamp duty and other smaller fees.

As a whole, you could put in little or no money yourself.

The rates on those products are a bit higher than other rates.

With that, I would try to go for a 12-month bridge just to be safe.

If there are any issues, a lease extension can take up to nine months or so.

If things run smoothly and the freeholder doesn't try to inflate the price, you should be fine.

Once you're happy with the figure, it takes about six to eight weeks for the paperwork to go through to extend the lease and then for the Land Registry registration.

If things run smoothly, within three months you can get your refurb done and extend the lease.

You may need to expedite the Land Registry registration if you're going to come off the bridge and move to a normal buy-to-let mortgage or flip the property.

There can be delays at the Land Registry, so make sure you complete everything — the refurbishment, reconfiguration and lease extension — within the 12-month period if you can.

If you go over the 12 months, there may be financial penalties.

However, if you speak to the lender and keep them informed about what you're doing — for example, if the freeholder is taking longer than normal — sometimes they will allow you to stay on the same rate for another month or two.

If you don't keep them informed about delays, they may apply a financial penalty.

So make sure you stay within that period and communicate with your lender.

That's for auction properties.

Sometimes I also buy post-auction.

Post-auction is when you look at the lots that didn't sell.

Generally, there's 28 days to complete, but I try to ask for 56 days to complete because there's more time.

If the property is habitable, I can get a mortgage on it within about four to six weeks.

Then I can extend the lease and refurbish it.

After six months, I can refinance with the same lender through a product transfer or equity release and get the funds back into my pocket, then go again.

It all depends.

I always look at post-auction properties because a lot of people leave the short-lease properties alone. They say, "I don't want to get involved with this."

But those are the ones that can bring the most money.

23:30 — Deji: Thank you for sharing that.

In terms of bridging and finance, one of the things I always tell clients is that you need to be very careful because when these things go wrong, it can be so bad.

Your experience also matters in terms of how a lender will treat you. What you're getting will be very different from what a new person will get.

There are creative ways to structure things, but at the same time, people need to understand that different lenders apply things differently.

There are lenders, as you mentioned, that will do bridging finance for below-market value.

A lot of them would expect you to put in perhaps 10% of the purchase price, meaning that you still need to put in a 10% deposit. Some may offer 95%, so it varies for different reasons and different circumstances.

People need to be careful because, from my experience, I see a lot of people out there pushing different courses that aren't always ethical. People get involved and then get stuck.

From your network, tell us a bit about how you help other people to perhaps copy what you do, do it better or use you as a guide.

Tell us about your network and one case you've experienced, either directly or through someone else, where things went completely wrong and what they could have done differently.

Maybe you visited a property and thought, "How could somebody have taken out a structure from a flat without realising they shouldn't have?"

Tell us a bit about that and how you support investors within the short-lease strategy.

25:10 — Jason: With my services, I offer three main services.

The first one is a one-hour paid Zoom consultation.

If you're refurbishing a house or flat, doing a BRR, assisted sales, a lease option or a short lease, I can help with that.

A one-hour Zoom session can be enough to go through the deal analysis, check all the figures and metrics, make sure the deal stacks, and look at the equity release.

We make sure you have enough equity release in relation to your stress test and rental cover calculation.

Some people do the work with a refurb and expect, "I'm going to take out 75% of the money straight away."

But if it doesn't pass the rent-cover calculation or stress test, they can't do that. They may only be able to take out 65% or 60% of the money.

We go through all of that in a one-hour Zoom session.

I also offer a short-lease course over five sessions.

They go through everything relating to short leases, government policies, leasehold and commonhold, the finance elements using mortgages, crowdfunding and bridging, reconfiguration, more detailed information, all the fees involved, how to extend your lease, what's in the lease extension formula, how to finance it, where to find deals and how to source them.

That's the five-session part of the course.

The third option is mentorship.

If you have cash ready to go and you want to increase or build your portfolio, depending on how much you have, you might be able to buy two or three properties over a whole year.

I hold your hand throughout that process.

You can use my solicitors, lease solicitors, surveyors, EPC professional and the rest of my team to build your portfolio.

That's available for anyone who needs assistance.

26:48 — Jason: Now, the horror stories.

Some individuals have seen my videos online and become confident and think, "I don't need any training."

They ask me for the surveyor's number, solicitor's number or broker's number.

I might give them the contact details.

One person bought a flat at auction.

She said, "Jason, thank you for inspiring me through your videos. I bought a flat at auction."

I congratulated her, but she hadn't read the legal pack properly. She read it herself.

She saw 59 years in the document. That was the start of the original lease.

When she bought the flat, I think there were only about 13 years left on the lease.

Once we double-checked the small print, we found there were 13 years left.

It was going to cost her £110,000 to extend the lease.

The lender she chose didn't have the hybrid option available, so she couldn't extend the lease on that flat. She didn't have the money.

She refinanced her house as well and got into trouble with her husband. I don't know what happened afterwards.

She had put down a 10% deposit and tried to withdraw from the auction because you're tied into the contract once you put down the deposit and win.

She tried to get out of it and lost her deposit.

I think she lost about £50,000 as a deposit plus fees because she didn't read the legal pack properly or get assistance.

Always get a legal professional to look at the legal pack for you.

If you're more experienced and you've done four, five, six, seven, eight, nine or ten deals and you're experienced in looking at legal packs, that's fine.

But if you're a newbie, get a professional to look at the legal pack and summarise it so you're aware of all the risks involved.

Look at things like deed variations, covenants, fees and other legal matters before you move forward.

That's number one.

Number two, another case involved someone who contacted me and said, "I bought this flat. I reconfigured it from one bedroom to two bedrooms and did all the refurbishment work."

It wasn't a short lease. It was just a refurb and flip project.

He said, "I've done all the work. Now I want to sell it."

He didn't know that he needed permission to reconfigure it.

I said, "You should have known or contacted the freeholder at least."

He said, "No, no, no. I contacted them now."

He contacted them and showed them the plans. They said, "Sorry, we're not accepting this. You have six weeks to put it back to its original state, otherwise we're going to take legal action against you."

He was shocked.

Luckily, he got a building surveyor involved and building control and litigation professionals involved.

He was able to obtain retrospective consent to alter. He paid a fee and, because everything was acceptable, the freeholder dropped the case.

He managed to flip the property afterwards.

Always make sure you get consent to alter first before you reconfigure a flat from one bedroom to two bedrooms or three bedrooms.

Sometimes, if it happens, you might have to go to court. If you lose the case and have to put it back to its original state, you've lost a lot of money.

29:58 — Deji: Definitely.

As you highlighted, there are a lot of pitfalls to any strategy. It's not about taking the headline and running with it.

Especially with specialist property, you need to understand what's actually happening under the hood.

Don't assume that what Jason does in his strategy will work for every property or every situation.

I know you've covered this in your course.

Give us a number. Maybe £100,000, £50,000, whatever that is. It doesn't necessarily need to be in London.

For people who want to start this journey, what would they need?

They can go to a location, find a property or a leasehold flat for a certain amount, and then do all the required work.

Factor in the costs at a high level so that it gives someone a framework.

If they have this amount, they can start outside London. If they have more, they can consider London.

31:07 — Jason: Let's say you see a flat for £100,000 in the Midlands or Doncaster, for example.

It has a short lease and is in bad condition, but the end value would be about £180,000 in good condition.

You need to think about the deposit to buy it.

If you're buying with, say, a 25% deposit, that's £25,000.

You've got stamp duty involved as well, which might be another 5% or more, depending on the circumstances.

Then you have the conveyancing solicitor and surveyor.

You might get a free service deal or not.

There's also the broker fee.

You might need about £30,000 to £32,000 to purchase it.

Then you're going to need perhaps another £10,000 to £15,000 for the lease extension.

You've got to pay the freeholder's legal fees, your own legal fees and the lease extension surveyor.

So you've got the premium, legal fees and surveyor's fees.

Just say it came in at £20,000 to be safe.

So that's £20,000 for the lease extension process and about £30,000 for the first part.

That's £50,000 altogether.

Then you might want to pay for a light refurb, which might be £10,000.

That's about £60,000 in total.

The end value might be £180,000, £190,000 or £200,000, although that's not the best example because you need more of a margin.

But it gives you an idea:

• About £30,000 to purchase it.
• About £20,000 for the lease extension and associated costs.
• About £10,000 for a light refurb.

That's around £60,000 in total.

If you want to buy a flat that's a bit cheaper, look at places such as Liverpool, Manchester outskirts and similar areas. You might find something for £80,000 and apply the same principle with lower amounts.

32:53 — Deji: Thank you. At least that helps someone picture how this could work in their own scenario.

That's the whole idea of this. We want to give people insight so they know that a property journey can be started by anyone.

You started in 2001, and now it's a completely different ball game.

You've consulted, had a lot of meetings and done training.

What's one thing, or a few things, that you wish people would ask you about, or that you wish people knew about this journey but tend to shy away from?

What are the things you want to highlight?

33:21 — Jason: Number one, you can still make money out of leasehold properties.

When I was younger, a lot of people were saying, "Don't buy leasehold. Never buy leasehold. Always buy freehold."

But in terms of finances, not everyone can afford to buy a freehold.

You can still make money out of leasehold.

If you want to hold and retain the unit, that's fine. You can add value and then flip it.

That way, it's not part of your portfolio anymore, and you can use that money to buy more freehold properties if you want to going forward.

You can also use it to go into new deals, residential-to-commercial conversions or commercial property.

You can use it as a launchpad.

I've done it all my life.

I've still managed to make a good life out of it, still buy a decent residential house, still buy my dream car, still have four holidays a year and not have to work.

You can retire early.

So you can still make money out of leasehold, as I've done.

Also, be patient.

If you're first starting out, be patient.

Initially, you might buy your first one and then think, "I want to get another one quickly."

Depending on what lender you go with, not all lenders, but a majority of lenders may require you to wait six months before you can buy or refinance another property.

Not all lenders apply that principle. Sometimes you can do it before six months.

If you're buying cash, you can do it within three or four months, then go into a buy-to-let mortgage, refinance, take the money out and go again.

Sometimes you can do three in a year.

So be patient when you're first starting out.

I know initially you want to get more money faster. That's the snowball effect.

You get one or two in the first year, and then they might increase in value if it's a good market.

Add the rental income and the value you've created. Refinance that, plus your employment income if you're working, and combine it all.

In the following year, you might be able to get two or three.

Then the following year, those two might have increased in value. Take out some equity, add the rental income and you might get three or four.

All of a sudden, there's a snowball effect and you acquire more and more at a faster rate.

Nowadays, if you're scaling, it's probably best to buy in a limited company rather than under your personal name.

You may initially pay 19% corporation tax, which can rise to 25%, and you can scale faster in that sense.

Back then, and even now, I don't use investor funds to buy my properties.

But if you're starting out and have little or no money, you can use investor funds.

Get investors involved, give them a return on their money — perhaps 8%, 10% or 12%, depending on what you're doing — add value, refinance, give them their money back and then use your own funds for the next one.

Or flip it, give them their money back and keep the rest.

That's another way of doing it.

You can also do rent-to-rent to start with, get a property on a bridge, or do a joint venture with someone.

There are many ways to start your property journey with little or no money.

36:02 — Deji: I think the first one you mentioned is important because a lot of people feel that leasehold is a no-go.

One thing I tell people, even if it's not creative, is that for first-time buyers, start from where you are.

That's the main thing.

You want to buy a house but you can't afford a house. You might wait two, three, four or five years, but what you could afford three years ago will still be more expensive a few years down the line.

So start from where you are.

A lot of properties in the UK are leasehold. It can't all be that bad.

There are places where you need to be careful about service charges, ground rent and all those things, but again, start from where you are.

You've established yourself in this area, and some people listening might feel, "I don't want to get too involved in this."

You said you don't use investors. What could someone bring to you today and say, "We found this. We don't want to do any of this. Is this something that fits your profile?"

Could they pay a referral fee or something?

For people who feel, "I want to learn this process, but I don't want to start myself. I want to find someone experienced and let them use me to find the deals," how would that work?

Is that something you currently do?

37:12 — Jason: I call it a "learn to earn" kind of strategy.

No, I don't do earn-and-learn.

I know some people who do it, perhaps for commercial-to-residential conversions or refurbishments, but I don't really do earn-and-learn.

I do the one-hour Zoom, for example. If you were to buy something, I can coach you through it.

Or through the mentorship, I can coach you through it.

But earn-and-learn isn't something I currently do.

I also do some talks around the country, so people can come to one of them and learn more.

Some students also come to the projects and have a look at what's actually happening.

Flats can be quite quick to refurbish.

The last one my team worked on was completed in about four days.

It had a new kitchen, new shower, bath panel, new flooring and decorating.

That didn't take too long.

Earn-and-learn would be better for bigger projects rather than smaller ones because you can see the progress over two, three or four months.

That's why we don't really do earn-and-learn.

38:34 — Deji: Let's try to round this off. It's been a wonderful time.

Before I let you go, what would you say to your younger 25-year-old self in property?

I know a lot of what you've said has focused on property, but you don't get to this level of property without the right mindset.

In life, you have failures and wins and you grow from them.

If you knew what you know now, how would you speak to your 25-year-old self — or someone with 25 years less experience?

How would you speak to them, not just on the property side but also from the mindset perspective?

You've built something significant from starting at Sainsbury's, doing basic work and earning a basic income.

How would you speak to a 25-year-old or someone with less experience?

39:34 — Jason: I would say you definitely need patience.

A lot of young people now want the money and the nice things immediately.

You need to have delayed gratification.

It takes a process and it takes a while to get there.

Try not to be too greedy, and sometimes when something looks too good to be true, it generally is.

Take your time, be patient and move forward from there.

Lots of little amounts make a lot.

You might think, "£500 here on the rent, £600 there, £500 there, £600 there."

It all mounts up.

Before long, you've got £2,000, £2,500, £3,000, £3,500 and so on.

Before long, £5,000 a month, £10,000 a month, £15,000 a month.

Take your time and make sure the foundations are strong.

Go to networking events if it's property-related. Meet a lot of people. Understand what they're doing.

Then choose a strategy that suits you and your lifestyle.

Also, have some form of goal in your life, whether it's to work part-time in the future, retire, have four holidays a year or buy that dream car.

Have some form of plan.

Write it down and every year work towards it bit by bit.

These things take time because Rome wasn't built in a day.

40:50 — Deji: Thank you very much for this.

Lastly, where can people connect with you?

We're going to take all of that and put it in the show notes. We'll have this on YouTube, Spotify and all the podcast platforms.

If people want to connect with you and your business, because I see you're doing fantastic things, how and where should they connect?

41:15 — Jason: We've got a website: JasonPatterson.co.uk.

There's a lot of information on there, including podcasts, training and events.

Instagram is Jason Patterson 365.

TikTok is Jason Patterson 365.

LinkedIn is Jason Patterson.

Facebook is also Jason Patterson.

It's all there.

41:35 — Deji: If you've been inspired by this, please show Jason a lot of love.

He's doing quite a lot of stuff. Encourage him as well.

Find him at networking events, talks and other events.

If you're just starting out, that will be a good place for you to learn.

You'll get a lot of professionals in the room that you can learn from, as well as people who are actually doing the day-to-day work.

Please remember that all of this is for educational purposes.

Jason is experienced in this area, but there are pitfalls in any property journey you choose.

Be careful.

Don't get overexcited, lose patience and think you can win the world in a day or two.

It takes time, but you can do it.

You can do it with structure and with someone holding your hand.

If you're looking at flats, short leases or other strategies, Jason has spoken about a lot of things that we didn't have time to cover, including assisted sales.

There are many things you may not have heard about before.

That's your advantage.

Find him, ask questions and make this journey worthwhile for yourself.

We're glad we were able to have you on Auction360.

Our purpose is to talk about the nitty-gritty things that people are not always aware of — the financing aspect, the solicitor's aspect and the things that can go wrong.

I've seen a lot of things go wrong, which is why we want people to be very careful.

Property can be a wonderful journey, but there are a lot of people who don't speak about the things that have gone wrong.

You've heard some real experiences today.

You might get lucky, but some situations can cost you more than you could ever imagine.

Please learn and make sure you find the right people to help you do the right thing.

Please connect with Jason. He's a wonderful guy.

He's not called the Short Lease King for fun. He's earned the right to work in this area.

Thank you very much to everyone listening.

Please make sure you subscribe, like our channel and watch out for more.

Thank you, Jason. It's been really good to have you on. I hope we see more of you again. Maybe another day we'll talk about something specific.

43:30 — Jason: Thank you for having me.

43:32 — Deji: Thanks for the invite.

43:34 — Jason: It's been fun.

43:35 — Deji: Thank you. Thank you.