It’s a new dawn, it’s a new day …

By Martin Skinner,

Martin Skinner
Martin Skinner

Well after keeping radio silence for what seems quite a while, I’m proud to introduce a new member of the team to everyone.  Jack Christopher Skinner was born on the 26th March 2010!

Jack Christopher Skinner
Jack Christopher Skinner

Jack has already chosen his football team (Tottenham Hotspur needless to say) and is also starting to show signs of his parents’ impatience.  Like most youngsters these days, he’s also better at the high tech stuff than they are and is fully operational with his own Facebook, Twitter, You Tube and Google Buzz accounts.

Jack Dribbling for Spurs
Jack Dribbling for Spurs

So as you can imagine, life has been even busier than usual in the Skinner household.  In fact, this is the first time I’ve really been able to sit back and reflect on how dramatically things have changed over the last couple of months.

We’ve created a new family, the country has new leaders (hopefully better than the last lot), and Inspired has made its first great property acquisitions with Urban Share. Even the sun has come out!

Bush Road Purchased
The three properties bought so far include this 3-bed house in Bush Road, Surrey Quays, SE16 bought for £228k

Then again, some things haven’t changed and we still love London Residential Property.  Their recently published residential IPD (Investment Property Databank) report fully supports my own and Inspired’s views.

Aside from linking to the report here and the multiple award winning IPD here I thought I’d just share a few of the highlights with you:

“The residential total return index has experienced real [after inflation] growth of 86% [in the 9 years] to December 2009, compared to 33% in all commercial property. This equates to 7.2% per year in residential against 3.21% per year for commercial. The real capital growth in the residential index is the same to the total return in the all commercial property index. The residential income return on top of the capital therefore represents a real out-performance “bonus”.”

“Over fifty years real house prices have risen by 274% compared to a -55% fall in real commercial property value. This represents long run annual residential value increase of inflation plus 3.3% compared to inflation minus 1.2% per year for commercial property.”

“Residential has represented the best real return to a December 2000 investment [against equities, bonds and commercial property] at every stage throughout the previous 9 years.”

“The annualised rental growth over the 9 year period was 2.23% for residential compared to just 0.45% for commercial.”

“Residential market let investment has consistently rewarded investors with greater returns than commercial property and other asset classes since 2000 despite lower income returns.”

residential property vs other asset classes
residential property vs other asset classes

“The long term real performance of residential represents a hedge against inflation and volatility whilst maintaining impressive performance relative to other sectors.”

Property Risk Reward Spectrum
Property Risk Reward Spectrum

“The fall from peak to trough is smaller in the residential market cycles.”
Source IPD Residential Index 13/04/2010, The Strength of Residential as a long term Investment

As you’ll know if you’ve ever met me, I’ve long been an outspoken advocate of UK residential property investment – especially in London.  Discovering this report (as well as Jack’s arrival, of course) has made my 2010 !!

If you’d like to discuss the property opportunities we can offer, would like to raise finance for an amazing site, or you’ve discovered a distressed scheme or portfolio that might interest one of our funds or clients, we’re always keen to hear from you.

I’m also collecting high tech baby accessories and bargains/donations are welcome – particularly if you can offer me a great deal on one of these little beasts !

Awesome High-Chairs
Awesome High-Chairs
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MIPIM and The importance of being Earnest

By Martin

For the last week I’ve been networking like crazy at a big property conference called MIPIM.  The event’s hosted in Cannes in the South of France and a is big, glitzy affair with lots of investors, developers, property fund managers, Mayors and service providers doing their best to attract attention and investment to their new schemes.

MIPIM Sponsors' Marina

Boats hired by the sponsors jam the marina

Finances are very tight these days and I had to do it on a shoe string budget travelling there in cattle class on the train and sleeping on a friends’ sofa (thanks Bradley!) for the duration.  The time commitment alone meant the opportunity cost was also high.

Martin, Sav & Bradley & the Edge Party

Martin, Sav, Bradley

Naturally, with property & finance having been hit so hard there were far fewer people there than when I last went.  Numbers were down from about 30,000 to 18,000 delegates.  It struck me that the people that were there were much more serious than before.  Discussions weren’t about the market as such but more about deals.  Those there were clearly making the most of the current climate and using their time in France effectively to speed network.

Cannes Mosh Pit

Cannes Mosh Pit

Most of the people I met there were top influencers – as an example the chap I happened to sit next to and chat with in a cafe on Saturday is developing a huge scheme in Korea.  I’m pretty sure he casually mentioned it was the largest in the world and that he had hosted 7,000 guests at the MIPIM launch party (and he owned 15% personally).  I didn’t have the money to buy a ticket to go into the main ‘bunker’ (which cost 1,600 Euros) so I missed that bit but I was lucky enough to be invited to quite a few of the lunches, boats and parties where I chatted to numerous UK property legends.

Knowing I had to make the most of my time there I collected plenty of business cards and made sure I sent them all personal emails and Linked In connection requests before I left.  In the months that follow I’ll aim to turn at least a few of those brief business card swaps into coffees events, coffees into mutually beneficial exchanges and as a result some new business all round.

Cannes Flea Market

Cannes Flea Market

Residential – what’s it all about then?

By Martin Skinner

A love affair – my story
I’ve been a passionate advocate of residential property investment particularly in London since I bought my first investment property our in the far reaches of London’s Docklands in 2002.  My love affair with residential began much earlier though…

I spent my formative years from 7-18 growing up in a big house on 3/4 of an acre of land in East Sussex.  My parents had settled there after many years of travelling and teaching in far off places like Uganda & the Solomon Islands, where I was born.  It wasn’t a particularly expensive house or in a particularly expensive area but it had a big garden, big trees, a gravel driveway and a garage big enough to play table-tennis & snooker in.  And I had a bigger bedroom than I remember any of my friends having – so they often came to my place – I loved it !  An Englishman’s home is his castle and I didn’t have to pay any rent…

…  until I moved up to London for university in 1998 and had to pay rent.  From 11 years old onwards I’d always worked to earn extra money to pay for extra toys – first skateboards, then bikes and finally sports cars – and I really didn’t enjoy having to throw a whole £300 a month away on something I’d always enjoyed for free.  Have you any idea how much faster I could make my car go for £3,600 (12 months’ rent)??  My parents didn’t seem to share my pain.  “I could buy a 3-bed ex-council flat, rent out the spare rooms to friends and live rent free if only you’d guarantee the mortgage”  I explained. Mum would have helped but my dad, who was a tough old sod from an army background, threatened to divorce her and move out if she took such a huge risk on me.  And then my car got stolen.

Anyway, as soon as I had the salary to support it without a parental guarantee I bought my first 3-bedroom house.  I paid £220,000 for it in March 2002; quickly knocked the kitchen into the dining room to free up an extra bedroom and let the 3 rooms out.  I received enough rental income to pay the mortgage, all the bills and still left me with £500 a month (and my own bedroom).  I then re-mortgaged it for £70,000 extra just six months later.  It would have taken me at least 10 years to save up that much money from my £34,000 a year job and I was convinced; this was how I would earn my money.

Institutions – still flirting
Meanwhile institutional investors rarely share the passion I have for the sector and consistently struggle to get their products beyond first base.  A number of large UK institutions announced their intentions to invest last year but almost a year on they still haven’t got them off the ground.  The main reasons appear to be:

  • More active management required
  • The recent rebound in market values
  • Lower net yields compared with commercial
  • Short-term tenancies (longer-dated income is preferred)
  • Reluctance from banks to release large volumes of discounted stock

In addition to this many financial advisors struggle to differentiate between an investor (or client)’s home and their investment portfolio and therefore look to diversify into commercial property over residential alternatives.

These are not insurmountable challenges however and some including Invista Real Estate and Inspired Asset Management (who I advise) with their Urban Share Fund are succeeding with their products.

Why not just stick with commercial property?
Assets are generally valued based on multiple of their current and future income (in this case net rental yields).  And rents are still under downward pressure for offices, industrial and in particular retail where sheer weight of money meant more space was developed.  Combined with changing consumer and occupier behaviour (online shopping for example) the recovery in commercial property is likely to be much more muted.

In residential meanwhile there was a housing supply shortage/crisis before the downturn even began.  The demand pressure is building and the supply-side is hamstrung.  National house builders had to shrink their businesses to survive the recession and could take 5 years to get back to where they were in 2007 and smaller developers cannot raise the development finance they need to produce new stock.

Hybrid variants of residential including affordable housing and student accommodation are attracting more attention from investment funds but even they are both still in short supply; particularly in London where according to Savills student numbers are growing at 15 times the rate of new supply.  London is also where waiting lists for council housing have reached such extreme levels that dedicated workforces are being recruited to persuade those on the lists to look to the private sector for help.  Private landlords of course prefer to steer well clear of tenants on housing benefit after suffering huge losses when the government diverted payments from landlords to tenants who then frequently failed to pass them on.

Anecdotal evidence from West London agents suggests rents are increasing again and at quite a pace.  Knight Frank is forecasting house price increases of 34% in London over the next 5 years.  The Centre for Economics and Business Research (CEBR) expects prices in the UK as a whole to rise by 20% over the next 3 years as banks step up lending and interest rates remain low.

Historically residential property has proven to be a relatively safe asset class hence the expression ‘as safe as houses’ and:

  • outperformed other asset classes
  • offered higher income yields than bonds
  • offered an effective hedge against inflation

Whether the powerful few step up their investment programmes in Residential Property or not it’s clear that in the years ahead many students and young graduates are going to have a much harder time finding accommodation they can afford to rent let alone buy.

If you would like to learn more and/or discuss some of the pressing issues faced by our next generation please book your tickets for our University Challenge event.  We will be hosting a discussion involving fund managers, property managers and students at the May Fair Hotel in London from 6.30pm on Thursday the 11th February.  The last few tickets are available now on http://inspired.eventbrite.com.

Can social media save my day?

By Martin Skinner

Putting on events is H.A.R.D.!

Admittedly I’m a newbie at it and I often try to do too much in too short a period of time but seriously I have a new found respect for those that manage to get regular events running – let alone running smoothly.

To give you, the reader, a bit of background on me I’m basically a residential property investor and advisor in London.  On the one hand I specialise in ‘supercharging’ yields for investors and on the other hand I specialise in developing accommodation for student and graduate occupiers.  The aim has always been to profit through raising the bar for:

  • quality
  • flexibility
  • community
Bedroom in a student/graduate houseshare

Bedroom in a student/graduate houseshare

Having been successful at this in the past I’ve been working hard to get back in the saddle after stumbling in 2008/9.

Most people in London can’t afford much more than £500 a month and it has always been clear to me that making life easier for sharers adds significant value to both investors and occupiers.

The government has managed to consistently interfere with misguided policies on Houses in Multiple Occupation and is about to make matters worse (in a populist attempt to combat NIMBY complaints of ‘studentification’) and in doing so will only force more landlords to withdraw from the marketplace.   Many major institutional investors either don’t understand the broader residential market (let alone students/HMO’s/graduate’s) or can’t be bothered with it instead preferring fire and forget commercial property investment.

Anyway, what’s that got to do with events you say?  Well, I see bringing interested parties together for great events, regularly, as key to building momentum behind a movement to solve what I believe to be a very serious problem – housing and enabling the next generation upon whose endeavours our retirement depends.

Getting people to spend some of their hard earned cash is very, very, difficult these days though and getting people to take time out of their busy schedules to attend an event or two is also very, very, difficult.

I’m sold on their value to an individual or a business (here I represent both) once established and I’m committed to both attending and promoting our own Inspired Events and other people’s events.  Because regular face-to-face interaction builds both:

  • breadth – expanding & connecting networks and
  • depth – strengthening relationships within networks

And here are some other reasons for perseverance that I was attracted to online:

  • Entertaining clients
  • Brand differentiation
  • Increasing brand loyalty
  • Highlighting community responsibility, or corporate social responsibility

But and it’s a big but, and contrary to the famous song I don’t like big but’s, I cannot, lie I’m really struggling to get people to book tickets to come along.

Expensive direct marketing (c1,000 personal contacts and c9,000 purchased) has failed to yield meaningful results and despite pumping in expert assistance, promotions, considerable sums of money and an unbelievable amount of time I’m struggling to gain traction.

The best results so far have come from kind friends – in particular Nick Tadd, Vanessa Warwick and Tony Chads – who have endorsed the event and spread the word.

The May Fair Hotel, W1

The venue - The May Fair Hotel, W1

If we don’t get a lot more people along we’ll still have a great event (and a lot more pre-paid drinks per head) but the message from the students and the investors and managers that are getting involved will be muted.

So I’m asking you for your help to get the message out for me.  I am not as smart as all of you and I’m certainly not as effective as all of you (no matter how many hours I put in).

If you are interested in coming along please book online at http://inspired.eventbrite.com by the 7th February and/or if you know any investors, accountants, lawyers, developers or fund managers please encourage them to come along on the 11th February.

This could be you (or me)

This could be you (or me)

Thanks !

🙂 Martin

07968 790 611 or martin@inspiredassets.co.uk

Learning to walk again

My new ‘social’ life: Learning to walk again

By Martin Skinner

In many ways I now see myself as having started my life over again in 2009.  I’ve always been a fortunate soul and believe I’m lucky to have a ‘glass half full’ attitude.  Even so, my last ‘life’ concluded painfully after a glorious period I think I’ll call my roaring 20’s.

Magda & I testing the Gumpert Apollo with Roland Gumpert

Magda, I & Gumpert Apollo

My last life

A Nice Group team meeting

A Nice Group team meeting

With a background in technology, I deserted the world of direct employment in 2003 to embark upon an unforgettable entrepreneurial property adventure.  For seven years I worked hard to build up the ‘Nice’ brand. It began with my own property portfolio followed by a property services group (run together with my partners Paul and Guy) before eventually hitting the heady heights of joint venturing with big City fund managers.  It was a fantastic journey and I met and learned from a great deal of amazingly intelligent people.

Example Nice Room Bedroom

Example Nice Room Bedroom

Lettings cars

Lettings cars

Tenants' welcome pack

Tenants' welcome pack

In Nice Group my partners, friends and I had built up a substantial enterprise with a magical atmosphere. Our staff actually wanted to come to work, bold plans were made for creating a new asset class for affordable young professional accommodation – and there was much, much, more to come… until disaster struck in the form of the credit crunch.  After a gruelling period of redundancies through 2008 we were effectively wiped out in March 2009 when our financing was pulled with just 24 hours notice.  Worse still, we were due to hit profitability again that month so heartbreaking stuff.  The following months were not the happiest of times and I don’t dwell too much on them. These things happen, so learn from them and move on. So without further ado I’ll move on to my new life …


My new ‘social’ life

I never considered looking for a traditional 9-5 job. I’d got a taste for building up a business and I wanted more.  So I threw myself into helping a couple of friends plan a new business.  Pledging to revolutionise the way fund managers treat their partners and their customers, the concept for Inspired Asset Management was born.  Simon Hussey is the financial services expert and Alistair Britton covers the legal, financial & private equity fund raising bases – and they’re both brilliant to work with.  I look after the branding and marketing, with help from a group of exceptionally talented friends and contractors.

Now I’ve always been a pretty hardcore networker. I love meeting new people and connecting them up with people that can help them – and London is a great place for it. But apart from signing up to a few sites and occasionally chatting to people on Facebook,  I hadn’t really followed what was happening in the world of social networking/media.  I was too busy running my businesses.

But now I suddenly had the chance to immerse myself in an online world where you can meet, connect to and build relationships with pretty much anyone and everyone. Soon I began developing a strategy for Inspired to develop, market and support products through social media.  And it led me to one of the first people to come up with the concept of search engine marketing – David White of Weboptimiser.  His webinar about Twitter got me interested in an application that I had previously thought to be purely for pointless ‘celeb’ chat/following.  David has provided superb and effective online marketing advice ever since – although my genius copywriter Mark will never forgive him for his grammar.  I’ll be forever grateful to David for getting me started and keeping me on the right track.

Around the same time, I met a remarkably helpful American gentleman by the name of John Corey, who appeared to spend his whole time helping property investors, including me, to invest better.  For the [second] life of me, I couldn’t figure out why he would be so generous without trying to sell me something, charging any money or even asking for a role with Inspired.  I later discovered he attracted a considerable following both online and offline – and suddenly everything made sense.  John is a true gentleman as I’m sure those who know him fully appreciate.

Burning Man

By this time it was August 2009 and a long-since-booked first pilgrimage to an event called Burning Man beckoned. I say ‘first’ because it was such an astonishing experience I can’t for a moment imagine it’ll be the last. And I say ‘pilgrimage’ because it provides so much meaning for so many of the people who attend.  Burning Man is a collaborative social experiment that’s been running for nearly 25 years, yet is almost impossible to describe because of its sheer magnitude. Instead, I’ll let you try and make sense of a list of random facts, figures and rumours:

  • Started on Baker Beach in San Francisco in 1986.
  • 4th largest city in Nevada for one week then vanishes without a trace
  • “The Man is a wooden monument to nothing specific, in the middle of nowhere” – The Burning Book
  • Highest concentration of billionaires in the world for one week
  • 50,000+ people, survival conditions, middle of the desert
  • Mix of Mad Max, Hunter S Thompson and The Grateful Dead for all ages
  • Astonishing celebration and spectacle of endurance, art, music, comedy, spirituality etc
  • Pure gift economy

In my opinion, Burning Man has a lot in common with social media – particularly with its gift economy. I doubt that it’s a coincidence that Burning Man takes place so close to San Francisco and is frequented by so many movers and shakers from there.  It’s a seriously, fabulously crazy place and an experience that will inevitably affect my future endeavours. If nothing else, it’ll make any events I help to organise a lot more fun.


Back to reality and a ‘bump’

Big Little Baby

Big Little Baby

Wow, the unsung heroine and love of my life, my gorgeous and incredibly supportive fiancé Magdalena is pregnant.  Magda’s indomitable strength and determination have never ceased to amaze me. Combined with my insatiable entrepreneuring, I can’t wait to see what kind of little maniac our offspring turns out to be.  It does up the ante though and will require us to put new foundations down and establish a replacement income pretty quickly.

Both our mums have been superstars.  They’ve helped us financially and emotionally throughout and will be there to help us when the baby arrives.

Adapting fast

I think it’s fairly safe to say that social media is going to accelerate the rate of progress and dramatically change the worlds of education, work and leisure over the next few years.  The way information now flows around the web in real time allows people to learn faster and more collaboratively, so much so that working practices will inevitably have to adapt and evolve.

While investigating opportunities for promoting the first Inspired property fund to financial advisors, I came across Philip Calvert who runs IFALife.com – a very successful social network for financial advisors.  Phil kindly agreed to speak about social media at our launch event in October.  He also recommended Penny Power’s book Know Me Like Me Follow Me.

Penny’s book is a great read and provides a rare heartfelt view into a world of individual capitalists competing on almost equal footing with the big corporates and building their own personal brands.  The stories she tells about learning from her children also give great insights into where the original demand for social networking sites first came from.  After reading the book it only seemed right to join their online social business network Ecademy.com – another superb find that deserves much praise for its innovation and emphasis on sharing knowledge and skills.

Nick Tadd and his wife Vanessa Warwick provide an excellent example of entrepreneurs embracing successful new ways of working in this brave new world.  They’ve founded and encouraged a number of new enterprises and online/offline communities.  They’ve dedicated their property and social media activities to honest sharing and mutual benefit.  In fact, I paid for a days’ coaching with Nick and it was probably been the best investment I’ve ever made.  Even Tim Watts, or the ‘man from the Pru’ as I like to call him because of his natural aversion to technology, was convinced and went away to buy books on blogging.

Tim has joined Inspired after running the largest listed residential property company in the UK and he’s an icon in the industry. It was a real coup to get him onboard, and for me, the first sign that our efforts to brand the business well and create new working practices are starting to pay off.  Coming just at the point where I succumbed to personal bankruptcy, Tim’s arrival couldn’t have been better timed: a vote of confidence that provided me with a much needed dose of fresh inspiration.

The supremely educational meeting with Nick Tadd led to my joining the 4Walls and Property Tribes social networks. I also upgraded my Ecademy membership to Blackstar status and subsequently met some great characters including William Buist, Judith Germain and Clare Gilbanks.  A more supportive group of people would be very hard to find.

Most recently I had the pleasure of joining 10 other social media devotees on a two-day retreat with Thomas Power in Surrey.  Thomas taught us how to clearly express our key personal values and then link them up with our contacts across a variety of different networks.  A rare group of great human beings – I hope to stay in contact with them for a long time.

Learning to walk again

It’s been a remarkable journey so far and I’ve had the pleasure of meeting an incredibly rich and diverse mix of new people, many of whom I haven’t yet mentioned. I’ll make up for this in future blogs.

Yes, I’m still an entrepreneur. Yes, I’m still a residential property investment specialist. But today, sitting here right now, I’m also a social media evangelist.

So how does it all combine? Well, the Inspired Urban Share fund has achieved its first close and can now start buying properties.  We’re working to develop an investment community with financialtribes.com – many thanks to Nick Tadd for the name, and to Jamie Steele who was at the social media retreat and is building the platform for me.  I have some exciting ideas to develop on it including a contribution currency and a decision market.  And our launch event went well with another planned for the 11th February.

In keeping with the gift economy leanings of the social media universe, the Inspired launch event was an educational and entertaining affair.  PowerPoint presentations were banned and we didn’t overtly promote our products.  It went brilliantly and caused a real stir with our audience – and it was great fun too.  Good connections were made all round in the bar and I’m hoping it will be the first in a long line of future events, attracting more and more investors and advisors to our cause.

What I do find slightly bizarre at the moment is finding myself introduced to senior investment and property professionals as a social media expert – a title certainly not yet deserved, but one that demonstrates that opportunity awaits anyone prepared to adapt quickly and incorporate social media into their business and social lives.

So when it comes to reinventing myself I think I can say so far, so good. But I’m not calling it a comeback … not just yet.

Some key messages on social media from my journey so far:

  • “The biggest shift since the industrial revolution” – Erik Qualman
  • “The group gets better together” – Clay Shirky
  • “You should focus on creating a web of findability” – Nick Tadd
  • “Be random, open & supportive” – Penny & Thomas Power
  • “Serendipity occurs more often in a collaborative environment and more frequently the larger the breadth and depth of your social network” – Penny & Thomas Power
  • “Given the right conditions and the right problems, a decision market’s fundamental characteristics – diversity, independence, and decentralisation – are guaranteed to make for good group decisions.  And because such markets represent a relatively simple and quick means of transforming many diverse opinions into a single collective judgement, they have the chance to improve dramatically the way organisations make decisions and think about the future.” James Surowiecki
  • And most importantly “It is not the strongest of the species that survive, nor the most intelligent, but the most responsive to change” – Charles Darwin