Today I’m delighted to welcome Saif Derzi back to the show. He’s been a guest a couple of times now, and since it’s been a while since we released an episode I wanted to start with an update on what’s working for a couple of my favourite investors in the industry.
This week I’m talking to Saif, and next week I’ll be welcoming Jackie Tomes back to the podcast, before hopefully settling into a more traditional routine as we transition back to like in the UK for winter.
Anyway, Saif operates at a volume I don’t see many other people even attempting, with over 140 purchases under his belt since he started investing back in 2017. The numbers don’t even really make sense to me – that’s about 30 per year, and whilst they’ve not all been purchases for himself, it’s a crazy success story.
Today we’re looking at the systems and processes that allow his business to operate at this scale, as well as where his focus is currently in the industry.
Our discussion with Saif Derzi:
- It’s been over 2 years since our last interview with Saif Derzi, right at the start of the first Covid lockdown in 2020
- Since then Saif has focussed on growing his team, as well as the systems and processes within each department to allow them to operate at scale – he’s bought and sold over 140 houses since he started investing in 2017
- A big change in his approach has been to stop focussing on houses that need extensive refurbishments, and instead buying tenanted stock from tired landlords
- These properties come with their own problems, but are typically quicker and cheaper to turn into profitable assets
- We discuss the 3 categories that they use within their business for the tenants the inherit:
- Group A – new tenants that Saif’s company have found from day one
- Group B – inherited tenants from previous landlords who are happy to work with the new owners to resolve any ongoing issues
- Group C – inherited tenants who don’t want to play ball
- Saif’s priority for finance has been to build better relationships with lenders so they can access larger sums of money at short notice, and typically work with investors over a 5 year term rather than the typical 1 year period with private finance. This allows him to act like a cash buyer
- Auctions continue to play an important role for Saif, both for buying and selling property
- Saif discusses the creation of a letting agency in response to needing to manage his own portfolio, and then growing it with his business partner to manage 400 tenancies.
- We discuss the business structure – acquisitions, project management, and lettings – and the model of having a trading business for short term income, alongside the asset building side of the business
- The balance between keeping portfolio building customers happy and building his own portfolio is a fine line to tread. He only proposes deals to his customers that he’d be happy to buy himself (and sometimes he has to, if a buyer pulls out last minute and he wants to retain the relationship with the vendor/agent)
- Sourcing has changed a lot in recent years, with costs per lead for direct to vendor stock increasing rapidly, and relationship with agents and auction companies providing the best opportunity
Saif currently works for around 15-20 clients helping them grow their own portfolios, and is looking to scale this to around 40 before they reach capacity as a business.