324: Danny Farrow and Hein Lingenfelder prove that teamwork really does make the dream work, with their multimillion-pound property portfolio

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Today I’m delighted to welcome Danny Farrow and Hein Lingenfelder, friends for almost a decade, who brought together their varied corporate backgrounds and limited property experience three years ago to create The Momentum Investment Group, and go on to achieve far more together than they would have done apart.

To give you an example of how this played out, before they started working together Danny’s route to financial freedom through property was saving up deposits to buy a portfolio of single lets at a rate of one per year. That sounds familiar to me, a lot of people are struggling trying to do the same thing, and he estimated it would take him another 15 years in order to step away from the day job.

But, since they’ve started working together, they’ve created a pipeline of around 50 build to let units across five sites in only three years, with a minimum return on GDV of 25%, but getting far in excess of that with their current light industrial to residential conversions.

They really show that you don’t need decades of experience before stepping into larger projects and during the interview we discuss a lot of detail around the type of projects they focus on, exactly how they create value in each of their projects and the numbers behind several of their deals as well.

It was an absolute pleasure talking to both of them and I know you’ll enjoy it!

 

Listen to this episode below:

 

Here’s a sneak peek at what we discussed this time:

3.35 – Danny and Hein’s friendship, and why it makes them such good partners in business.

“It’s a tough journey and you need to have a solid base of trust.”

6.32 – Hein’s background, from building houses in South Africa to working for Transport for London.

8.58 – Danny’s background, from a career in finance to a passion for property.

12.25 – How, and why, Danny and Hein made the decision to work together.

“You only get one life; you have to go after stuff you really want.”

17.40 – Why Danny and Hein quickly moved away from a buy to let strategy and how a visit to Dane Sampson, as well as implementing a minimum return criterion, helped them to find the right strategy for them.

23.44 – Why Danny and Hein focus on achieving a high return on GDV rather than return on cost.

25.31 – The benefits of property retention.

27.15 – After analysing well over a hundred potential deals, how Danny and Hein found their perfect first property in Manchester.

31.13 – Why Danny and Hein prefer to create single lets.

“We won’t create a property that we don’t want to live in ourselves, and the proof is in the pudding: the rent we achieve is 33% higher than the surrounding areas.”

32.45 – The challenges of the sourcing industry, and the importance of having conviction in your own research.

34.01 – The challenges involved in their first deal, the lessons they learned along the way and why Danny and Hein make a point of taking charge of their deals.

“There’s no such thing as a perfect deal.”

36.31 – Why Danny and Hein chose to focus on Croydon as a hub for their investments.

38.45 – How Danny and Hein use planning and creative thinking to create good deals and identify opportunities that others have missed.

43.03 – How you can de-risk through understanding planning.

“By understanding planning, and by having a good strategy, you can actually take out a lot of the risk, and you can get all of the returns.”

45.40 – Some key project figures.

48.49 – Danny and Hein’s new light industrial conversion.

50.26 – The appeal of light industrial sites and lowering risk through investing in sites with prior approval rights.

54.27 – The future for Danny and Hein.

56.29 – The benefits of owning blocks of build to rent.

58.41 – Why working together has been Danny and Hein’s key to success.

1.03.33 – From its potential to its projected returns, why Danny and Hein are so excited about their latest deal.

 

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Links mentioned

Find out more about what Danny and Hein are up to on their Facebook page.

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