Paul & Linda Cronin
After many years spent building an impressive corporate career in the IT world, Paul Cronin felt the urge to get out of the rat race and run his own business. Paul and his wife, Linda, now own a Platinum Property Partners franchise, through which they are building a highly cash-positive property portfolio in Berkshire & Surrey.
Paul is an IT professional with an impressive career in sales and marketing, primarily in the high tech telecommunications solutions sector. His 30-year career culminated in him holding the position of Vice President of Sales for a Telecommunications software company, but after he had reached this position, he began to reassess his options. With their three children now young adults, Paul and Linda decided they wanted a business they could run together and, having already bought, developed and sold investment properties during the boom years, property was certainly an attractive option.
They looked at a number of white-collar franchises and shortlisted six. In carrying out due diligence, it became apparent to Paul that in virtually every case, the success and value in the kind of businesses they were looking at came down to goodwill. They all seemed to require Paul and Linda’s continual daily involvement and, if they wanted to sell, it was only the goodwill and client base that had any real value. Platinum Property Partners (PPP) stood apart, as it was the only business that was based around the accumulation of tangible assets and,
importantly, was the only one that offered very real possibility of achieving significant passive income.
Steve Bolton, one of the Founding Partners of PPP, gave Paul copies of Robert Kiyosaki’s books, ‘Rich Dad, Poor Dad’ and ‘Cashflow Quadrant’ at their first meeting, and it was the financial concepts in these books
that brought home to him the sense in investing in this kind of business proposition. He realised he and Linda could own a property investment system – specifically PPP’s buy to let HMO model – that would allow them to employ people and eventually have their money and assets working for them, without needing to be involved directly in the running of the business.
Says Paul, “When we first ventured into the world of property investment, a few years ago, we were buying and selling and the benefits were fairly intangible. It was an awful lot of effort for not as great a return as we might have hoped. I was doing a lot of the building work myself and, although it was a very educational experience, I soon realised that the reward versus effort was not good enough. Before setting out on our own again, Linda and I recognised that we needed a better return on investment in respect of both our time and money. The PPP franchise business, and other Platinum investment options on offer, give us not only excellent financial returns – the kind we’ve not seen offered by any other property company – but also the kind of lifestyle we’re looking for.”
Paul and Linda joined the PPP franchise in April 2010 and underwent two days of intensive mentoring in May, focusing on the investment locations of Bracknell, Camberley & Frimley. As at December 2010, they have 3 HMOs up and running and a fourth in the pipeline. The third acquisition, which has 6 double bedrooms with 4 en-suites, is cash flowing just under £1,700 gross profit a month. That’s after the mortgage, utility bills, broadband, maintenance & cleaning costs and PPP’s management service fees have been deducted, and an allowance has been made for voids.
That property generates just over £20,000 a year gross profit, giving a return on invested capital of around 18% per annum. The couple’s first 3 HMOs are generating a combined monthly gross profit of around £4,200, for a total capital investment of £264,000. That gives Paul and Linda an overall return of 19%. In time, as they are able to refinance, although the cash flow will reduce slightly, the return on investment will rise, and they will be able to reinvest that money in more of these highly profitable properties.
The couple also get great satisfaction from providing really good quality accommodation for the ever- growing number of people that want to live in shared houses. With their youngest son currently at university, they are all too aware of the amount of sub-standard – and sometimes illegal – properties that are housing young adults. Linda, in particular, is always very keen to ensure that all the properties in their portfolio should be set up and maintained at the kind of standard they’d want their own children to enjoy.
“A large part of our decision to join PPP was down to the integrity of the Founders and quality of the network – both professional advisors and the other franchise partners”, says Paul. “We are now working with some truly great people who approach life with a very giving attitude and a philosophy of sharing their time and skills freely. The focus is on achieving financial freedom and thus being able to choose how and with whom we spend our time, and being part of such a community has already had an incredibly positive impact on our lives. Linda and I are enjoying more time together while giving something back; we’ve found a way to address the balance between input and return and are enjoying all the personal and financial rewards of running our own business”.
Paul views the franchise fee as a kind of insurance payment. “There are so many things that can go wrong in property investment and mistakes can be incredibly expensive, not only in terms of pure financial loss, but also lost time and effort when things go wrong. The PPP system supports and protects us against the risk of making those kinds of expensive mistakes.”
The income from four HMOs will cover Paul and Linda’s living expenses and give them that first level of financial independence. They aim to have 10 HMOs by the end of 2011, by which time they will have employed a property manager and bookkeeper and handed over the day to day running of the business. That will them leave them free to spend more time together and travel the world, with the peace of mind of knowing that they are leaving a working legacy for their children.
