In an interview with Development Finance Today, Michael talks about starting a brokerage in his 20s and the biggest opportunities and challenges developers face this year.
What gave you the inspiration to start a brokerage at such a young age?
The inspiration stemmed from seeing that there was a fundamental lack of young brokerages in the market. I could see that developers and investors were starting to move away from the high street banks and the more corporate brokers. More and more clients were becoming frustrated with the outdated systems and the lack of creativity in the market. I remember sitting in front of a developer who has been developing for 30 years and he was just baffled at what lenders outside of the high street could do. Another inspiration was the fact that I had always wanted to start my own business, and with a passion for finance and property, it seemed like the perfect fit.
My biggest inspiration from a personal point of view were my daughters and my wife. My wife was integral in setting up and she was so supportive of it as well. She really gave me the push I needed to get started.
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What experience have you brought to your new role?
I began my career in civil litigation, before becoming a conveyancer, then moving into estate agency, and then finally into commercial finance. I am very lucky, because this gives me a unique perspective when looking at deals for clients. It is also very beneficial when chasing solicitors for updates. Also, with two stints at other brokerages, I have been able to transition the experiences from there in order to help me create a more effective and user-friendly brokerage.
Working in civil litigation was also very helpful, as it has helped me to become a great problem-solver, and I now have a great reputation for sorting cases that other brokers have struggled with.
I am also a very keen public speaker and podcaster, so that experience has been fundamental when growing the new brand and getting the name out there.
What can you offer the development finance industry as a fresh set of eyes?
It is great to come into the industry at such a young age. I see everything in the industry in a totally different way to some of the older brokers that have been in the industry for decades. I don’t want to do things in the same way they have been doing it for 20 years. I want to bring a new spin to it all. I’m always looking to help lenders to improve their processes and bring them into the 21st century.
Also, with the amount of time I now spend on social media, and with the advertising, it is starting to attract some younger blood into the commercial finance space. I think the industry is desperately in need of some younger blood, and I hope I can inspire more brokers to get into the industry at a younger age.
Some of my biggest clients have actually come from Facebook and Instagram, and I hope that this will inspire more lenders and developers to use these platforms to grow their following and, in turn, grow their businesses.
What do you plan on injecting into the industry? Does the Property Finance Guy have a youthful approach?
We run a totally paperless office, and we are all able to work from anywhere in the world. We are always looking for ways to integrate the latest tech into everything we do. We are also actively building followings on Instagram and Facebook, and even now using podcasts to attract new clients into the business. We are using these platforms for advertising as they seem to attract a younger clientele. We tend not to use LinkedIn too much at the moment, as it is still a very hard platform to connect with people on. Some brokers have had great success, but I tend to find the likes of Instagram and Facebook have a friendlier and more direct connection. We are picking up many clients who are just starting out in property, and it is great that we can grow with them.
What’s the biggest opportunity for developers in 2019? Are you seeing any asset classes gaining real traction?
Commercial conversions seem to be one of the biggest opportunities at the moment. Whether that’s an office block converted into flats, or a pub into an HMO, there seems to be more opportunity than ever. With many lenders now preferring this sort of development over a new-build development, it is easier than ever to get these deals funded.
I have also seen a massive uptick in the number of investors and developers moving into serviced accommodation. At the moment, there are not as many lenders lending on this as there could be, but I see more lenders moving into this space during 2019, especially as they become more comfortable with serviced accommodation as a security.
What is the PPN Bank? What can property investors and developers gain from attending?
PPN Bank is an event located right in the heart of the Square Mile in London. Just behind the Bank of England, we will be located in the Brand Exchange, a private members’ club, perfect for property investors and developers to network and meet one another.
The reason I wanted to create this event is because one of the biggest stumbling blocks for investors and developers when they want to get into property is the finance.
Each month, we will have lenders and finance-orientated speakers come in and help to remove that obstacle. They will teach you how to raise finance, what products are available on the market at the moment and how you can structure your deals to ensure that you get the best possible funding.
We will also have some very well-respected professionals from the property circuit available on the night to help you with any other issues that you may have when it comes to investing in property and developing property.
We want to create a community of property investors, developers and finance providers, who can network with one another and grow together. We want everyone who comes to the event to leave knowing they have the tools to succeed in property.
What will be the biggest challenges for the development finance market this year?
This is a difficult question as it is a matter of perception. Unfortunately, none of us have a crystal ball, and we cannot predict what the economy will present us with this year. With Brexit almost forgotten about now, no doubt that will rear its head once again later in the year. I personally don’t see Brexit having a huge impact on the development finance market. It seemed to slow the market back in October/November last year, but with so much time to prepare, I think most lenders will see no effect.
With so many new lenders coming to market, I see the biggest challenge to lenders being the ability to remain competitive. There is plenty of business to go around, but a lot of this is being placed with the most competitive and most reliable lenders. I definitely think we will see a few lenders withdrawing from the market this year as they struggle to keep up. I think the biggest impact will be with the lenders that are funded by some of the more restrictive funding lines.
What is the most interesting case you’ve dealt with?
There have been a number, but I would say one of the most interesting was a case that was completed in February of this year with the Bridging Group. I had a client that had managed to purchase a property at a very significant discount because of a lease from the 1700s which had been lost. Because of this, most bridging lenders were not happy with the deal and could not get comfortable with the title of the property. Bridging Group was great, and its solicitors worked with the vendor’s solicitor to get indemnity policies in place and get themselves comfortable with the title of the property. We managed to complete within two weeks of application. This was especially welcomed as we had spent eight weeks with another lender before they pulled out of the deal.
If you weren’t a broker, what would you be doing?
I would definitely be in marketing. I have a real passion for building brands.