From No Previous Experience To Commercial Property Millionaire In 12 Months
Greg McKenzie had no background in property investing, apart from buying several houses to live in over the years.
He always liked the idea of making money in property. In particular, the business model that appealed to him was commercial property and the magic of the Full Repairing and Insuring (FRI) lease.
To be a successful investor, Greg understood the need for property education. This is when he discovered Paul Smith and Touchstone Education. Now he has completed three major projects in nine months and earns significant wealth through property.
We spoke to Greg to find out more…
Project One: An industrial unit for my three existing companies
“In April 2022 I set up my property company, Myreton Property Investments Ltd and bought this 6,500 square foot industrial unit via an auction and rented it to three of my existing companies.
“It is the best bit of business I’ve ever done.
“It has two offices downstairs and offices upstairs along with ample storage and warehousing space on the ground floor.
“It is a very nice mix between warehouse storage space and offices.
“By separating the building and renting it to three companies, all three companies qualified for 100% rates relief.
“It surveyed up as a vacant commercial property at £330,000 and fully tenanted at £400,000 and I managed to purchase it for £300,000. The biggest challenge was the timescale to complete was only four weeks, so I had to use bridging finance which was quite expensive.
“In total I receive £42,000 per annum for this building!”
Project One: Breakdown
- Valued at £400,000
- Purchased at £300,000
- £100,000 equity plus £42,000 per year in rent or £3,500 per month
Project Two: Commercial property for 12 tenants
Greg continued, “Around the same time (April-June 2022) I bought this 26,321 square foot established industrial estate with 12 tenanted units for sale.
“It was a retirement sale. It surveyed up at £850,000 and I purchased that for £800,000.
“It had a rent roll of £83,000 per annum, which I have managed to increase to £102,000 per annum.”
Project Two: Breakdown
- Valued at £850,000
- Purchased at £800,000
- £50,000 equity plus £102,000 per year in rent or £8,500 per month
Project Three: Small shops and industrial units
Greg concluded, “My final property project of 2022 was when I purchased a mixed bag of small shops and small industrial units.
“This project consisted of two shops and four industrial storage units. These came fully tenanted from the same two gentlemen that I had bought the industrial estate from.
“This mixed bag surveyed up at £225,000 and because the two gentlemen were looking to retire I made them a cheeky offer of £175,000 and they accepted.
“The rent roll on this site is £23,000 per year. I will be looking to increase that to around £30,000 per year as the tenants’ leases come up for renewal.
“In addition to this I’m in the process of setting up our SSAS and transferring my wife and I’s personal pensions to it to buy more commercial property with.”
Project Three: Breakdown
- Valued at £225,000
- Purchased at £175,000
- £50,000 equity plus £23,000 per year in rent or £1,916 per month
A Millionaire Through Commercial Property
Greg has transformed his life through his commercial property investments and these existing income streams will bring him £1 million in income over the next six years.
Greg said, “The three sites are valued at £1,475,000 and I purchased them for £1,275,000 meaning £200,000 equity on the way in.
“The three sites combined rents are £167,000 per year or £13,917 per month.
“I refinanced the three projects to get off bridging finance and have a loan for £813,000, so the loan to value is around 55%. I know I could have refinanced the sites to around 70% Loan-To-Value (LTV), but I was offered a good deal interest only for the first year, making the loan payments only £5,247.75 per month. Then they resort to capital and interest after this.
“Even if the repayments go to £6,000 per month (£72,000 per year), after the first year I reckon that I will make at least £95.000 per year or nearly £8,000 per month.
“In summary I have spent the last ten months building my power team (finance broker, commercial surveyor, property lawyer etc).
“My advice to anyone considering taking any course with Touchstone Education would be DO IT! We only regret the things we DON’T do in life!”
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