Today I’m delighted to be joined by Jerry Alexander, a fellow Scot investing in commercial property but in a much more active way than the usual approach, enabling it to compete with more creative residential strategies from a profitability perspective.
It’s an approach that Jerry has been refining since he bought his first commercial unit in 2004, and he’s now got it down to a pretty fine art. It’s all about adding value to the property by increasing the rental income, as commercial property valuations are typically based on a multiple of the rent. This allows him to release much of his initial investment from each deal, ready to move on to the next.
It’s not dissimilar to the common buy, refurbish, recycles residential model, but the focus on commercial has many advantages. He’s built an enviable portfolio with this strategy, generating over one million pounds per year in rental income. I’m confident you’ll get plenty of inspiration from this episode, and probably a couple of ideas for your own investing too.
Listen to this episode below:
Here’s a sneak peek at what we discussed this time:
04.45 – From sales experience to a roofing company, Jerry talks about life before property.
07.41 – Jerry discusses how these experiences eventually led him to property investing.
“I need to have my own business, that was the objective.”
10.11 – Jerry’s first investment and the hard-learned lessons that went along with it.
13.42 – How Jerry used those lessons to inform his next investments, as he followed a successful local buy, refurbish, rent, refinance strategy until 2004.
14.58 – Jerry’s ambition to swap one at a time deals for a larger scale strategy, which became the beginning of his commercial journey.
“I’m thinking to myself: how do I find a bigger deal?”
15.47 – Jerry’s first commercial investment and the power of talking to people and making connections.
19.32 – How Jerry learned to add value to commercial property, increase its income, and leverage that to fund further investment.
“I can’t say that at the beginning that’s what I knew I was doing… But that’s the way it ended up!”
25.35 – Secondary and tertiary commercial investment sites and their benefits over primary high-street locations.
28.59 – The difference between, and the advantages and disadvantages of, passive and active investment.
31.46 – A spotlight on Jerry’s most recent investment, an old 6-floor flour mill.
36.50 – Jerry’s strategy of holding onto the property as opposed to selling on, and how that encourages creativity and opportunity.
“How do I take this (often) knackered building and make it work the absolute best way for income and longevity?”
41.41 – The importance of goal setting, and how that has led to the development of investment criteria to help Jerry meet his long-term goals.
47.38 – What Jerry’s team looks like, and how he splits his time.
50.19 – Why Jerry’s active, business-led strategy might not be for everyone.
54.35 – Jerry’s own podcast, The Commercial Property Investors Podcast.
56.30 – From skiing to holidays with the kids, Jerry’s plans for the future.
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Links Mentioned
There are lots of ways you can keep up with Jerry on social media: connect with him via his Facebook page or LinkedIn, join his private Facebook group for insider tips and tricks, or visit his website, where you can also listen to his podcast.