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Fergus Wilson's Words Of Wisdom

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I dug this out of the loooooong Wilsons' thread - listened and transcribed it below.

Programme: Stephen Nolan

Date: 18/09/09

Start Point: 02:38:10

http://www.bbc.co.uk/iplayer/episode/b00mq...lan_18_09_2009/

Transcription

Stephen Nolan, 18/09/09 - Interview with Fergus Wilson

SN: Fergus and Judith Wilson have been dubbed the King and Queen of Buy to Let. They started off 20 years ago buying a neighbour's house and now the two maths teachers, they are not maths teachers any more, they own hundreds of homes and they are worth a fortune - and they've decided to sell the lot. We thought that during this whole property cycle where property prices have been falling and then going up ever so slightly, that it would be really, really interesting to find out how someone has built up a property portfolio and now they're getting out. I asked Fergus how it all started

FW: Well it really started when we wanted to move house and we couldn't find a buyer for the first house so we decided to rent it out. It happened to coincide in the mid 80s with interest rates dropping and suddenly we found that the rental income for a 3-bedroom semi was paying the mortgage for a 5-bedroom detached so I thought this sounded pretty good business, so I thought I'd better repeat it.

SN: How come you couldn't find a buyer? Was this during the bad times then?

FW: No, no, I think I was just a bit too greedy. I thought it was worth more than other people did, however, over a period of time, obviously prices caught up to where I thought it should be and I forgot that particular point

SN: So you Kept the original house, bought a new house, getting good rental income and you thought 'Oh, let's do it again'?

FW: It snowballed from there, it really started out like a hobby, it just got out of hand

SN: You were working at the time weren't you?

FW: I was working as a teacher up until about 1988 and really then the prices started dropping but I thought it was a really good time to start purchasing properties

SN: And that's where it takes guts, and either stupidity or bravery, prices dropping, everyone else was trying to get out of the market, similar to now actually and you were jumping in and buying

FW: I thought prices had dropped to their lowest point and there was only one way they could go, was upwards. I was quite confident of that and over a period of years they did go up to the mid 90s and I saw some figures at a Paragon Dinner I went to about two years ago, showing that the average house price between 1995 and 2005 had gone up 368%.

SN: Hell of a return isn't it?

FW: One awful return wasn't it

SN: How many houses do you buy now, on average every month, do you do it in steps?

FW: I can tell you the Maximum, one year we purchased one a day, we averaged one a day, that was 350 a year which was near enough one a day. But basically one a week at its maximum. I haven't purchased one now since May 2008.

SN: Why not, because prices are plummetting so is it not time to back again?

FW: Prices are high, but prices are no longer plummeting in small houses, not in Kent, where I live

SN: Have plummetted?

FW: No no no, They've not moved very much at all, I t hink they may have gone down by �10k and according to the local paper they have recovered by �12k and I think that's about right, they are slightly more, about �1k more, than exactly the same house than they were in July 2008, so the houses have recovered.

SN: I'm still interested how you rolled out this portfolio, Were you using the equity in your previous purchase and just taking that out as your next deposit?

FW: Exactly, eEssentially yes. Basically the way we were buying them that did start to be the situation, but what then happened was that we were buying houses what they call "off plan" from developers, but only houses not flats I stress - and What would happen you would turn up and buy a house which at that point was just a piece of flat land, not even a brick laid, and you would put down your �250 holding deposit - and I pretty soon realised, the way things were going that I was going to get an 85% mortgage but the prices were going up something like 20-25% per year, now by the time the houses were built, which was often 9 months although they tell you 3 months you can multiply it by 3 whatever they say, what was happening then was that the mortgage offers had passed the 6 month point, which meant they had to be revalued, when they went to revalue them, they found that the market had risen such that the house price had gone up to a new high, in other words it increased by 20% so that meant we were effectively getting 100% mortgage because when we put down the �250 nine months before, we fixed the price at what it was nine months before, if you follow.

SN: Yeah, I do.

FW: So basically we didn't have to put any equity in for very, very many of the houses.

SN: And obviously that's fantastic in a market that's booming and I am aware of High Court writs being issued back where I live for half the week in Northern Ireland because in a bust situation Fegus, when people put down deposits and developers currently are forcing purchasers to buy houses that they put a deposit on and they are in negative equity. And that's where it can go wrong.

FW: Well, I understand that Northern Ireland isn't South East England and it does appear to be a different ball game here and what hasn't recovered in South East England, like the rest of the country is the flats. We have got two nations: those that live in flats and those that live in houses. Those that live in flats tend to be less affluent, poorer people, I don't think there are any rich people around after the last year, there have been no winners in the last year, it's just a question of how much you've lost by.

SN: "Did you not see it coming?"

FW: To a certain extent I did, I saw something coming about May time, 2008, which is why I stopped buying

SN: But by then it was too late and during the collapse it was reported in the paper that your portfolio lost nearly �180million of its estimated value

FW: Well, it may be reported, but you can't believe everything that you read in the newspapers because it's news to me.

SN: Is it not true?

FW: Totally untrue. We lost about �5million maybe �10million at the most and that has since recovered. You have to understand, they were doing their calculations on flats. Some flats have lost 70%, but we don't have flats, we have houses. Houses were dropping 5-6% in our area. We tend to have small 2-bedroom mid-terraced houses, that is the basic building block and they are the ones that are always the last to go and the first to recover.

SN: So you and your wife were two teachers, you Started off in the late 1980s, what value of a portfolio did you build up Fergus?

FW: Well again, it depends what you want to believe in the papers, but I would say about �180million at maximumum; sometimes the papers get to �210, some of them get to �240, but really, at the end of the day, you will appreciate you can't be precise, how much anybody, with that many houses, how much anybody is worth on any particular day

SN: So you're worth �180million?

FW: Well, I'm not, my wife is. I am not worth anything. I'm worthless in fact.

SN: What is it like to have that amount of money, I've often thought that, I've often wondered that once you get past the first couple of million does the rest of it actually matter? Does it become a game? A numbers game?

FW: Firstly, it doesn't make any difference to me. I'm sure a lot of people tell you that, it honestly makes no difference to my wife and myself.

SN: With respect and let's not fall out, it sometimes winds me up when people who are really rich who continue to try to get even richer say "money doesn't matter", of course it matters, that's why you keep on going surely?

FW: I'm afraid it's a bit like a drug it gets out of hand, you get the old adrenaline going and I would turn up to buy, put a deposit down to buy - and when I say deposit I mean �250 booking fee I mean by that and maybe I'd go there and instead of buying 1-2 I'd sometimes buy 20, 40 on some occasions. If they seem at the right price, the business people would buy a bulk lot. Do you follow? The building companies, the developers, were quite happy to deal with us because they knew we always completed, we never let them down. Your word is your bond and you say you're going to buy a property, that's what you've got to do. I'm sorry for the people in Northern Ireland and elsewhere where they put something up and they dropped in value, but I wonder how many of those are flats. Small houses, the smaller the house, the less the drop. You must understand that if you have a �900k house, it drops �150k to �750k. You aren't going to get a �150k drop on a �165k house, but you don't even get the same percentage, you get a far smaller percentage nearer to zero. So the houses which have been hit and are still to recover are the quite expensive houses. but the small houses, and 61% of the population of Britain live in 2-bed mid-terraced houses, they are the houses which have been hit least, so therefore they have got the least to recover; houses are recovering, I'm afraid it's very very bad news for flats, flats are basically occupied by tenants, houses are basically occupied by owner occupiers.

SN: Do you think Fergus that the housing market will come back to its 2007 peak soon?

FW: I think that the housing market for smaller houses will be certainly back by February 2010, I do not think flats will ever recover.

SN: Do you have to spot some of your friends who are trying to use you and get money out of you?

FW: Well, it's interesting really, nobody seems to take a blind bit of notice, no-one every mentions it and they occasionally say I saw you on the telly or I saw you in the paper, but basically over the last two weeks since the story hit the media, we've had contact from Saudi Arabia, Japan, China, Argentina, all round the world really, we've had emails, people running the story all round the world, which has surprised me, but I think at the end of the day you've got to use your money wisely, I will obviously be making provision for family members, when pass on, hopefully in many many years' time, I plan to live forever, but I may have to compromise on that Stephen, but the thing is that you have got to be responsible and it hasn't made any difference to my attitude towards my friends and, to be honest, none of them ever seem to ever mention it to me. Whenever I go to parties, or anything, no-one ever mentions it.

SN: Tell me this, final question Fergus, What's your lesson then to people then about money what would you say to people what they should learn in life about money

FW: You should learn this lesson: Money is but the tool of the trade for a person such as myself. It is just the same as a hammer and nail for a carpenter. It isn't a god, you shouldn't worship it.

Edited by ScaredEitherWay

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saw it coming may 2008!

and as for....

SN: So you're worth �180million?

FW: Well, I'm not, my wife is. I am not worth anything. I'm worthless in fact.

...so he's got the lot in the wife's name. that old trick!

oh and he seems to think a 10% drop on cheaper houses is somehow less; not when you have 900 of them mate!

Edited by MSWHPC

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He thinks he talks a good one about small houses and smaller percentages, but it doesn't disguise the fact he was still buying houses when he should have been selling houses.

How come he didn't explain how he'll offload these properties? It was, after all, the opening topic of the interview.

I guess that question was off-limits... :rolleyes:

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He thinks he talks a good one about small houses and smaller percentages, but it doesn't disguise the fact he was still buying houses when he should have been selling houses.

How come he didn't explain how he'll offload these properties? It was, after all, the opening topic of the interview.

I guess that question was off-limits... :rolleyes:

It's a case of "Watch this Space"..... Time will tell. And he's sh1t scared, without doubt.

Because, he knows, things ain't good at all out there.... :rolleyes:

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It's a case of "Watch this Space"..... Time will tell. And he's sh1t scared, without doubt.

Absolutely. That'll be the "old adrenaline" working again. :lol:

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The Wilson's are worthless because they don't understand property cycles.

Fergus is as thick as shit and seems incapable of acknowledging that wealth actually equals 'equity minus debt'. He shares this distinction along with thousands of other BTL oafs who laughably claim to be multi-millionaires yet are actually hopelessly under water.

Why is it that these BTL people are always fat yobs or unintelligent and inconsequential upstarts?

Edited by Red Baron

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An interesting read. There's two things which stand out for me in this interview.

One is Fergus' continuous emphasis on the difference between flats and houses. He seems to think that flats are terrible and houses great. Now he may have a point based on the last year or so, but I think he has brainwashed himself into thinking that houses can't fall in price. I suspect he could get a surprise over the next few months.

Mind you, much of it is probably his efforts to stay positive so he can dump his investments on some other poor sucker.

Secondly is this little quote:

SN: "Did you not see it coming?"

FW: To a certain extent I did, I saw something coming about May time, 2008, which is why I stopped buying

Seems to me that given he stopped buying in May 2008, that he really didn't see it coming until about a year after it had started.

They did the right things at the right time but the timing at least I suspect was rather more luck than genius (interest rates going down etc).

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the really bizarre thing is that they started off thinking about in such sensible terms:

...in the mid 80s... the rental income for a 3-bedroom semi was paying the mortgage for a 5-bedroom detached so I thought this sounded pretty good business, so I thought I'd better repeat it

but within less than a decade had replaced this kind of sound reasoning with a mindless pyramid scheme mentality, you know, "house prices double every seven years" and ""To anyone dithering about buying a second property to rent, my advice is this: 'Don't mess around [no mention of rental yield or any other fundamentals] Get stuck in and buy it!'"... i guess it must be addictive or something, all that house buying...

Edited by the flying pig

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The Wilson's are worthless because they don't understand property cycles.

Fergus is as thick as shit and seems incapable of acknowledging that wealth actually equals 'equity minus debt'. He shares this distinction along with thousands of other BTL oafs who laughably claim to be multi-millionaires yet are actually hopelessly under water.

Why is it that these BTL people are always fat yobs or unintelligent and inconsequential upstarts?

I wonder who has the more comfortable life, you or "thick as shit Fergus"?

Very easy to denigrate, what have you achieved in your life?

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I wonder who has the more comfortable life, you or "thick as shit Fergus"?

Very easy to denigrate, what have you achieved in your life?

i'd be prepared to be that very few people who have 'achieved anything' have led a comfortable life.

parasites like this probably have though.

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i'd be prepared to be that very few people who have 'achieved anything' have led a comfortable life.

parasites like this probably have though.

He started in the mid '80's providing houses for people to rent from him. I doubt if he was a "Rachman" type landlord. He provided a service that people wanted. Because like it or not some people prefer to rent than to buy. Why does that make him a parasite?

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i'd be prepared to be that very few people who have 'achieved anything' have led a comfortable life.

parasites like this probably have though.

Because of course getting into highly leveraged debt and pricing out the population of an entire town and looking like Les Dawson without the piano playing ability are such a great achievement.... ;)

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He started in the mid '80's providing houses for people to rent from him. I doubt if he was a "Rachman" type landlord. He provided a service that people wanted. Because like it or not some people prefer to rent than to buy. Why does that make him a parasite?

The Wilson's are no saints. Remember these two scumlords tried to sue one of their tenants for 3 grand over a chipped toilet seat. http://www.forlandlords.co.uk/news/no-joy-...d-141931c5.html

There have been numerous other postings about their reprehensible behaviour as landlords. I would rather be sleeping under a bridge than renting one of their properties.

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Because of course getting into highly leveraged debt and pricing out the population of an entire town and looking like Les Dawson without the piano playing ability are such a great achievement.... ;)

:D:D Excellent.

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I thought he came across as a fairly reasonable bloke in the interview , spoke a lot of common sense and in no way would I consider him a parasite ...

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The Wilson's are no saints. Remember these two scumlords tried to sue one of their tenants for 3 grand over a chipped toilet seat. http://www.forlandlords.co.uk/news/no-joy-...d-141931c5.html

There have been numerous other postings about their reprehensible behaviour as landlords. I would rather be sleeping under a bridge than renting one of their properties.

Maybe he is unreasonable, but it's hardly in the Rachman category or Van Hoogstraten for that matter.

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I thought he came across as a fairly reasonable bloke in the interview , spoke a lot of common sense and in no way would I consider him a parasite ...

Therir business model has relied on taking a market monopoly position and the tax subsidy on borrowings.

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It is apparent that the Wilsons started riding the boom from the mid 90s when ever rising prices allowed them to buy houses on the back of appreciating assets without having to raise any of their own equity. Before this they must have had to raise cash and i expect their operation was considerably smaller then.

But they are not very clever and did not understand the fundanmentals that drove the business model they fortuitously stumbled upon. They were not the only ones doing this, it is just they started a lot earlier and thus was able to ride the credit wave for longer and gained a massive portfolio as a result. They were rather a symptom of the boom rather than a cause, if it were not the Wilsons featured on this thread today it would have been someone elses property empire.

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More HPC jealousy and vitriol. It is impossible for anyone to consistently predict the market peaks and troughs. How could they have done well in your eyes? By making even more money?

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How come he didn't explain how he'll offload these properties? It was, after all, the opening topic of the interview.

I guess that question was off-limits... :rolleyes:

Probably find some 'whizz-kid' 21 year old pension fund manager to buy the lot and shove it in some trusting and hard working sods retirement fund unfortunately.

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by doing something more useful to their community than pricing local families out of home ownership.

Could be doing them a favour by making them rent before the pending 50% drop in prices widely forecast.

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