Investing in Aberdeen with 100+ Units: Trap or Opportunity? | PCN Podcast #39

Investing in Aberdeen with over 100 units in the city: trap or opportunity? Sam Dyer of Apex Property Group on Aberdeen buy to let, where 12% yields are real, and why the £40k flat market is a trap.

Episode 39 of the PCN Property Podcast with David Smart.

Aberdeen ran the opposite course to the rest of the UK. In 2008 the UK crashed and Aberdeen grew. In 2015 the UK grew and Aberdeen fell, and ten years on it still hasn't bounced. Sam's case is that it isn't broken, it's adjusting to an economy that no longer runs on oil, and the gap between flat sale prices and rising rents is where the yield comes from.

He's also honest about the cost of building a portfolio on investor money at over 100 percent leverage: it doesn't pay him an income yet, everything goes into clearing debt, and the true value of a property is what you can sell it for tomorrow, not what a surveyor writes down.

EPISODE HIGHLIGHTS - Around 40,000 to 45,000 people left Aberdeen after the 2015 oil crash, from a city of about 228,000 - Rents bottomed in 2019 to 2020 and have climbed since while sales prices flatlined - Why £40k flats are worth £40k and not the £55k to £60k investors hope for - City centre two bed at £70k to £80k renting for £750, West End two bed a few streets away valued at £200k renting for £950 - Why a scruffy communal area can knock around £10k off a valuation - The £1m buyer who only wants a 12 percent yield and doesn't care about discount - Where Sam would put £100k today: Rosemount, Old Aberdeen, city centre, and why he'd avoid Torry - Peterhead and Fraserburgh flats yielding 29 percent and the exit problem nobody talks about - 100+ units, over 100 percent leverage, and why there's no income from the portfolio yet - Lettings run in house with no outside clients, and the 50 unit portfolio he's hunting now - Aberdeen red flags: ex local authority stigma, factors, and a city short of roofers - Why sourcers are estate agents, and why sourcing works best as a bolt on

CHAPTERS 0:00 Intro 0:53 Why Aberdeen crashed while the rest of the UK grew 3:41 What replaces oil: GB Energy, renewables and reading the periphery 9:23 Peterhead and Fraserburgh: 29% yields and the exit problem 12:22 Bought too early in 2019: quality stock, low yield 15:36 £100k in Aberdeen: Rosemount, Old Aberdeen, not Torry 17:25 Refinance problems and the £10k communal area rule 20:20 The £40k flat trap 21:47 Stanley Street: £80k two bed vs £200k two bed 23:35 Cheapest city in Scotland: value play or value trap 24:37 How Apex went from co-sourcing to off market 26:04 The £1m buyer who only cares about 12% yield 29:01 Seasonal rents, a transient city and SA on Union Street 33:07 100+ units in Aberdeen: how healthy is it 35:40 None of your own money: the truth, and what a property is really worth 38:25 In-house lettings, the next 50 units, and why units are vanity 41:14 Mistakes: trusting someone else's refurb price and the £200k West End flat 47:15 Sourcing is glamorised: sourcers are estate agents 54:47 What makes a good Aberdeen deal, and the red flags 57:33 Members question: what's the end goal 59:51 Starting again, and the hardest thing in sourcing now 1:03:27 Goals: Apex, a 50 unit portfolio and staying bullish 1:05:08 Where to find Sam

CONNECT WITH SAM Website: https://samdyerinvestment.co.uk Instagram, Facebook and LinkedIn: Sam Dyer Investment Apex Property Group: sourcing across Aberdeen and the North East Sam is actively looking to buy a 50 plus unit portfolio in Aberdeen. If you have one, get in touch.

PROPERTY COACHING NETWORK Join: https://propertycoachingnetwork.com Property Coaching Intensive: https://propertycoaching.com/ Business: [email protected]

David Smart Instagram: https://www.instagram.com/david_smart_property/ TikTok: https://tiktok.com/@davidsmartproperty LinkedIn: https://uk.linkedin.com/in/david-smart- Facebook: https://www.facebook.com/david.smart.7393/

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