Doing more with less

By Martin Skinner,

"Martin Skinner"

Following on from my bright side article, I’m pleased to be able to report that the positive mental attitude approach appears to be working out rather well.  Investors (including my own little family office) have bought no less than 13 auction/receivership properties through Inspired Asset Management in the last month alone – with more sure to follow them.  That’s more than we transacted in the whole of the previous 12 months!

Dynamic duo

Dynamic duo | Inspiring interns

To achieve this we’ve been considering and discarding 1,000’s of other opportunities – more than ever before.  As you might imagine, organising, viewing and thoroughly appraising this volume of residential property is very labour intensive.  Like many other post credit-crunch businesses, we have far less resources at our disposal having dramatically reduced overheads and staffing in the wake of the squeeze.  So I would like to say a big thank you to the unsung (and unpaid) heroes of the City and the West End.  We have benefitted hugely from a series of very smart, diligent and hard working interns, most notably Louis, Kunal, Agne and Akvile who will all no doubt go on to achieve great things.  The help they have given us has been priceless.  Thank you!!

Our Joint Venture partners at Urban Share have also attracted a number of new equity investors and are close to securing their senior debt facility, so we’re clearly not the only ones making headway despite the choppy economic conditions.  Rather than blind optimism these developments are undoubtedly the result of the plain hard work and persistence that fuel most growing businesses these days; and a smile always helps.

On the macro-economic front there has been quite a lot of good news recently with employment up by 143,000 during the traditionally difficult Dec-Feb period and unemployment down by 17,000; the trade deficit reduced from £5.7bn in Dec to £2.4bn in Feb; and GDP growth again establishing itself despite the spending cuts. 0.5% growth has been initially reported for the first quarter and this is likely to be revised up, while 1.8% growth has been recorded for 2010/2011 as a whole despite an estimated 1.5% GDP fiscal tightening.

However, real incomes (i.e. after the effects of inflation) are still falling, retail spending is down and growth is likely to remain muted as public spending cuts take effect and the private sector continues to hoard its profits.  In general this should be good news as the government gets out the way and the economy rebalances from debt fuelled consumer spending and imports towards business investment and exports.

I believe this shows we are getting off our backsides and doing more with less.  The next couple of years are likely to remain tough as lower real incomes mean we feel poorer. But with this trend forecast to reverse in 2013/2014 and house prices, at least in London, expected to push beyond their previous peak, we will in due course start to feel wealthier again.

Meanwhile the North/South house price divide is continuing to widen dramatically as I and other Southerners forecast back in late 2009London is clearly driving this local growth on the back of global interest in our relative advantages, not least our discounted exchange rate and stable legal and political systems.  For example Galliard reportedly sold 80% of its new flats in the Strand for between £1,500 – 2,000 psf in just 8 weeks, with 90% going to overseas, typically Asian, investors.  Interestingly, the IPD’s recent annual results also highlighted the fact that Inner London (where we focus our activities) has outperformed all other areas on a total return basis over the last 10 years, including Prime Central London.  This is because Inner London yields are much higher than those in Prime Central London, while capital growth is only marginally lower.  And if you like London you’ll really like Jim O’Neill’s (Chairman of Goldman Sachs Asset Management) recent article entitled Brics herald a golden age for London.

IPD residential regional performance 10 year

IPD residential regional performance 10 year

George Osborne’s decision in the budget to finally link stamp duty land tax (SDLT) on bulk purchases to the average unit price, instead of the total transaction price, could actually make a real difference and eventually lead to a wholesale market developing.  And a barely reported amendment to housing benefits will mean more than 80,000 extra people need to rent rooms just as the unintended consequences of the House in Multiple Occupation (HMO) Licensing regulations start to bite and their supply is cut off.  We already expected rental growth in the young professional market to outstrip the rest of the market and issues like this will simply serve to push rents up further.

In conclusion it is my firm belief that investors should be planning their routes into the London residential property market right now, while the supply and demand imbalance is most acute, before the recovery becomes too established and opportunities for super profits dry up. Institutional investors may also start dipping their toes in the market, but are sure to lag behind the more entrepreneurial and often underestimated buy-to-let and private equity brigades.  So there’s still time for us to thrive.

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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