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September 23, 2008

Property Investing is dead... Long live property Investing

Dear Fellow Property Enthusiasts,

With the collapse of four major financial institutions last week, we are entering unchartered waters. It would be easy to get quite worn down by all this doom and gloom. Every day we're receive calls and emails from people who are feeling very down-hearted about property investing. It's interesting to take a different and more lateral view.

For our part, we would like to recommend a book called "The Dip" by Seth Godin. It is totally inspirational and explains how these challenging times can actually be an amazing period of growth and success, if you can push through "the dip" to the other side.

The Dip creates scarcity, the scarcity creates value.

The dip is where success happens.

Please click here to watch a video with a HIGH DEF option of Nick talking about "the dip" at one of our recent networking events. (Quicktime needed)



A good example of this is the price wars currently being fought by the major supermarket chains. They are cutting their prices just to get customers through the door. This creates value for the consumer. Some supermarket chains will fail, then there will be scarcity - but the ones that survive will go on to be even more successful as there is less competition. Hope that makes sense?

In other words, this whole industry, actually the entire world, is going through a massive filtering system where the weak and uncommitted give up or get filtered out. It is the end of an era of "instant gratification", "get rich quick", "taking short cuts", wanting "something for nothing", and success without putting any real effort in. It is an unprecedented time of survival of the fittest. We are in now for a bit of a slog.

Those that keep pushing through "the dip" will reap the rewards. Right now, in property, the dip is creating value for tenants as there is so much stock on the market. But the pendulum will swing the other way at some point, and then rents will start to rise. That is where the success happens for us.

I read a report today that the U.K. is now officially the most densely populated major country in Europe, and yet no new housing is being built! The supply and demand pendulum will shift at some point.

On a lighter note, when Sainsbury's reduce the price of strawberries, we don't all run around shouting "OH MY GOD, THERE'S BEEN A STRAWBERRY PRICE CRASH !! WE MUST STOP BUYING". Oh no! We go out and buy as many strawberries as we can! Every negative has a positive side if you care to look for it.

From my point of view property prices have been irrelevant, whether they be going up, down, left, right or sideway. I'm a Landlord, therefore, I wish to get paid every month.

Property prices only effect those that rely on them.

We have based our property portfolio on cash-flow (not capital growth/equity release), so in reality, house prices have very little effect on my property business because I am receiving an income month on month from the rent. It is the lack of good mortgage products that is currently the biggest problem for us, as we see bargains every day that we would love to snap up.

If people cannot buy anything, then they will be forced to rent, meaning rents will start to go up. It's a fact that every single person in this country needs a roof over their head - that will never change.

We've been asked on other forums why we "waste our time" writing these kinds of posts. I don't regard it as wasting my time. If this has made someone feel a little bit better or more confident about property, then I feel that I have contributed something to the community.

We are all entering a new and hugely exciting era in business and a big part of that will be reciprocity and trust in on-line communities. We're starting now.

For an alternative view of the "credit crunch" have a look at:

Credit Crunch view 1.

Credit crunch view 2.

and this one from Donald Trump: Click here

So our advice is to keep the faith. Get yourself along to some networking events and surround yourself with supportive and like-minded people who can help you through.

Vanessa and Nick at 4 Walls and Michelle at Property Jedi would also like to take this opportunity to thank everyone who attended our property networking event on Sunday in Milton Keynes.

It was great to catch up with old friends and meet so many new property enthusiasts! We would like to acknowledge all attendees for giving up what was probably the nicest day of the year, along with the Ryder Cup golf, to sit in a conference room and advance your property knowledge. We salute you and your commitment to your property business!

Here are some testimonials from the event:


"Re: your presentation on Web 2.0: I feel as if I have had my head buried in the sand - withdrawn it fnding someone shining a 2000 volt torch in my eyes".
Nina Griffiths

"As always, a most empowering and englightening event which helps me focus on moving forwards. New faces and ideas. Vanessa, Nick, and Michelle are unique in their ethical approach to the property business. Integrity in this environment is rarer than you think. Thank you all for keeping me motivated!". Clara Von Horn

"A very interesting and different day.  Also surprisingly refreshing".  John McKay

"Thank you for another excellent meeting where we learned some things

we didn't know before!  You had some very nice people there and we did some very worthwhile

networking.".
  Dennis and Hazel, Hampshire Property Meet

"Great networking and a productive use of my Sunday with like-minded people". Bobby Gill

"As ever, this event provides practical advice through the harnessing of knowledge, experienced property professionals, in one easily digestible session". Richard Francis

Thank you to Adam Powell of Csense Lettings for an inspiring presentation on how to permanently avoid a void! Adam wowed the audience with his in-depth knowledge of the lettings market and gave us all some new ideas and strategies to keep our properties rented throughout the challenging market conditions.

Our next networking event will be in October in Guildford. Date TBC. You can pre-register at registration@4wallsandaceiling.com

Remember - you can never learn less!

To your success!

Kind regards,

Nick

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