What is your Risk Assessment Strategy?

How are you weighing up risk vs. reward on potential projects? What is your Risk Assessment Strategy?

I think we could all do with a good discussion around this in the property industry. There are a lot of potential risks and I wish it was spoken about more openly – but in a balanced, and productive way…

So let’s go.

This might sound strange to hear, doing what we do… but we at Tomes Homes actually have a very LOW risk profile… and yet we have still managed to do a lot of projects and move things forwards very quickly…

But how?

I had a question from a client this week on this very topic, and it forced me to get into more DETAIL about our decision making process when it comes to weighing up risk vs. reward. So I wanted to share this as I hope it can help you too.

Overall, the question is…

What kind of returns do you need to see to feel COMFORTABLE with the RISKS you are taking on?

And the sub questions are…

1- What is your risk assessment model for this?

2- How are you deciding the level at which a projects risk outweighs its potential reward?

3- Which factors weigh most strongly for / against a project?

Some of the areas we would consider as part of this overall assessment are…

  • Are you on high interest finance? How confident are you on your timelines? Is there any chance (no matter how small) of timeframes extending beyond the end of your finance terms?
  • How confident are you on the viability of your refinance and expected interest rates? Do you have a tried and tested Lender lined up?
  • Deal structure: are you fully financing the project with debt, or are you sharing the reward / risk with equity partners?
  • Level of refurb / conversion / scope of the project – how many unknowns are there?
  • What planning / building control / utility / warranty or similar other factors are there that may be outside your control – how many parties are you reliant on to create a successful project and ‘get out’?
  • Current market conditions, is there a chance these could get worse before the end of the project? If so, what is the impact?
  • Viability of exit strategies: thinking about how well does it cashflow and how easy would they be to sell if necessary?
  • What experience do you have to date of doing this specific type of project (and so therefore what awareness do you have of the potential pitfalls)?
  • What team do you have around you to support you, and are you totally confident on their ability to deliver for YOU?

We would  be assessing each of these on a ‘reasonable worst case scenario’ basis, to consider just how much impact they could have on the project if things didn’t go our way, and what ideas/plans we can think of to be able to mitigate or deal with these risks where possible.

Our assessment of the factors above have lead to real refinement of our business model: the area, the purchase prices, the deal structure, the finance type, the level of works we would consider and this is all then translated into a level of profit that we would require to be happy moving ahead on each and every project. For us the assessment figure we usually use is % uplift on cost based on the End Value, which gives us the profit margin available for every project. The concept is simple, the higher the risk (as assessed using the areas above), then the higher this % profit margin needs to be.

There are no ‘right’ or ‘wrong’ answers to any of the above – it will be very personal to you and your attitude to risk. But you should know answers to questions like this, and to be able to have a rational discussion around them when deciding whether a deal is right for you or not. Once you’ve decided what you are comfortable with in terms of risk vs. reward then you can make an unemotional business decision as to whether a project fits your personal risk assessment model or not.

You will probably need to reflect on your decision as you go through the purchase process on a project. Every time information of significant importance comes to light in regards to a project, we would always try and review the deal again from a completely fresh perspective, just to ensure it still makes sense for our business to move ahead with it (as if we were being offered that deal afresh at that moment). This is a positive thing to be doing – even though it may feel you are going around in circles sometimes.

When having these ‘Risk Reviews’ on a project when something changes, there are a couple of things that I would say that you should NOT let influence your decision to proceed with a project…

1 – Time you have put in to date

2 – Money invested to date

3 – Letting down stakeholders

These can all influence your EMOTIONS. And when it comes to making a decision to proceed with a project it needs to be based on cold, hard, LOGIC. It’s a business decision.

As a quick estimate, we’ve lost between £15k-£20k (and hundreds of hours of our time) walking away from situations where we have made the decision that a project no longer fits our risk criteria meaning that we are no longer comfortable to move ahead. And with the benefit of hindsight, those have been some of the BEST DECISIONS we have made. I would definitely choose to lose that money again to NOT do those projects.

Don’t just take action and buy something because you want to ‘do something’ – make sure you are weighing up the risk and reward in a balanced way or you could get seriously burned.

There’s no point (in my opinion) just going BIG, building up something massive, that has a high % chance of just falling apart when a few factors don’t go the right way.

DON’T just take MASSIVE ACTION just for the sake of it, because I promise you… there will always be another deal!

Questions, comments, thoughts and builds on the above would all be very much welcome so we can all help each other to do better deals that help us to grow sustainably.


How a decision about what sort of property YOU live in, can improve your month-to-month cashflow 

When we relocated our investment area from the outskirts of SE London to Margate, in the interests of time we decided to rent out our home in London, and to rent a place in Margate instead. In the interests of moving quickly it made the most sense, and we kind of figured that in time we’d sell our London place and buy somewhere down here to live.

Then we started to interrogate the detail.

We wanted to live in a good size 2 bedroom flat in a good location.

In order to buy somewhere we’d be happy to live in meeting those criteria, we would need to tie up around £150k of cash.

To rent something comparable would cost between £800-£1000 PCM. So let’s call it £900 PCM (£10,800 PA)

So we did the maths.

If we INVESTED the £150k, and rented for a cost of £10,800 PA then as long as we were getting greater than a 7.2% return on the £150k (which equates to £10,800PA)… we were essentially living in the flat for free!

If we had instead bought somewhere to live in with the £150k, we would then also have had to take on a mortgage that would incur a monthly payment which would be coming out of our own pocket each month! So this would be negatively affecting our monthly cashflow, which would mean that in terms of cashflow, purchasing our own home would become a LIABILITY, not an ASSET.

We were concerned that the buy-to-let lenders would not be happy with this set-up, as it was the case a few years ago that if you weren’t an owner-occupier it would cut out a lot of the potential lenders… this hasn’t caused us any issues as it seems lenders are not so concerned about this anymore.

So for us the choice was clear – rent our own home for the long term!

I would caveat this to say that if we didn’t own any other property, we would most likely choose to own our own home, as we would want to have a foot on the property ladder in order to benefit from the long term capital appreciation. But since we are heavily invested in property elsewhere, we really don’t NEED to own our own home – and in fact it would be more of a liability that an asset for us at this time.

So there we go, we own over 40 homes… but we can’t live in any of them!

Oh and there is something glorious about being able to pick up the phone to our landlord when the washing machine breaks down 😉

The Power of Consistent Focus

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If you’ve been in the property business for a while, you’ve probably invested heavily in what you are doing. You can probably see great potential future growth from all the work that you’ve put in so far but may have not yet fully realised or monetised it.

The exponential curve graph illustrates this point well.

When you set up in property (or indeed any business) you have to put in the work first of all, virtually for free or for very little money, before you start to get paid back. You have to have a degree of faith that those results will come. But inevitably if you are focusing on the right tasks and you have got good people around you, the results will come…
But it won’t happen overnight.

If you keep focused on what you are doing (and don’t change every time there’s a challenge or a new exciting sounding opportunity) that will make it so much easier for you to systemise what you are doing.

Systemisation will enable you to scale.

And scale is what will lead to compounding. That beautiful part of the curve that we all want to be in where the results of all your previous time, focus and systemisation start to pay you back well in excess of the time that you are putting in at that point.

The power of consistent focus. Not sexy, but absolutely GLORIOUS in my opinion.

4-Key Tools that are essential for the Holiday Every 6-Weeks Lifestyle (whilst running a property investment business)

How do you run a property business whilst you are travelling around the world every 6-weeks for weeks or months at a time?!

portable printerHere’s my top 4 Tools, that sit as part of a wider framework of systems & processes for making this happen. It’s all about ensuring property transactions and business can still continue in your absence.

1 – Sign Now
This is a fantastic app that you can use to be able to electronically sign documents – so you can do this wherever you are in the world!

2 – A Portable Printer & Tiny Scanner
Now as brilliant as electronic signing is… and as much sense as it makes to us… most of the financial and legal world do not yet agree!! And banks and solicitors LOVE a GOOD WET SIGNATURE. So for these instances you’ll need a portable printer (check this out in action in the photo). You can fit this in your suitcase and take it wherever you go!

For those instances you have to send the original, then you’ll have to find a good old fashioned Post Office wherever you are! Always an adventure.

For those instances where they are not happy with an e-signature, but are happy with a scan (makes so little sense to me!) then a great app to use alongside your printer is Tiny Scanner. You can use your phone camera to create PDF scans which you can then email. Brilliant.

3 – Virtual Office
Being able to receive mail wherever you are in the world is key to this life! If you don’t have a physical office yourself with a receptionist that can send you mail, then this is a great (and much more cost effective!) alternative.

With a Virtual Office, you get your mail sent directly to a specific office address where there is a receptionist who receives your post daily. You can then add on the service of them opening, scanning in and emailing your post to you! We have a specific post email account that it all gets sent to, and then there is a process for post getting distributed to the right person in the team and electronically saved on the online filing system. This is great because it means you still get your post in ‘real time’ so you can still have things being processed whilst you are away (using the a combination of Sign Now, your Portable Printer and Tiny Scanner).

4 – Online Filing Cabinet
Getting no 3 in place is the first step to making this happen – having all your documents electronically saved and available. Then no matter what random question may come up while you are away, you know you’ll be able to get your hands on the paperwork that can answer it! We use One Drive, and have a very clear process for where everything gets saved so you can actually find things 

This is just a snippet of one of the areas that you need the right tools, systems and processes in place in order for your business to be scalable and able to work around your life!

Want to know more about the other areas? That’s exactly why we’ve created the Property Strategy Systems Masterclass so we can help with EVERY AREA. It’s a 12-week online course that we have recently launched. We’ve got a fantastic launch offer that expires this week – want to know more? Just comment below or send me a message.

Here’s to the non-sexy systems that provide you with the ability to live the #HolidayEvery6Weeks lifestyle! Yeaaaaahhhh!!

Messing things up!

dd5adecf-869d-4410-9ca1-8774d38ced47.jpgI was the nerd at school that got the straight A’s, and I got a bit of reputation for being ‘perfect’. This perfectionist label stayed with me and became something I felt was SO IMPORTANT to who I was.

Being Perfect was something I actually thought was a good thing to be aspiring to. However, the pressure that I would put on myself to consistently ‘perform’ to was actually stopping me from being both the best and happiest version of me. I would beat myself up over every single thing that went wrong; or even my impression of what I THOUGHT was going to go wrong in THE FUTURE if I didn’t behave a certain way right now.

It would really hit me when trying to create presentations. They would never be good enough. I would stare at the screen for hours on end obsessing about every little powerpoint detail, and then have a melt-down when I realised I was out of time and would have to use the presentation AS IT WAS!!

I remember the first ever property down-val I ever got and I gave myself SUCH a hard time over it – why didn’t I do this / why didn’t I say that… blah blah blah! Think it must have taken days or even weeks of my headspace stressing over it. Down Vals happen sometimes in property, and I’m proud that over the last few years I’ve learnt not to take it personally, and just crack on and do what you can to sort it out.

Oh and turns out imperfect presentations work brilliantly too – audiences seem to love it when something doesn’t work out perfectly (as long as you have a sense of humour!)

If you can relate to the feeling of berating yourself for every little thing that doesn’t go perfectly – I hope this post helps you realise you are not alone!

Here’s some of my biggest learnings over the last few years which have really helped to feel comfortable being just ‘perfectly imperfect’…

  1. Stop comparing yourself to everyone else. Get clear on what YOU want for your life (your vision) and choose a strategy that will get you there to commit to. Shut out what everyone else is doing because IT IS NOT relevant to you. If you try to keep up, you’ll always be left behind – which is a delusion! – you are not being left behind if you are taking action that moves you towards where you want to go.
  2. Target yourself on the challenges not on the successes. Funny thing is when you get through challenges, success is usually on the other side. So rather than see challenges as a problem, see them as something to be solved (and even… enjoyed!) on the journey to success. When things go wrong it doesn’t mean that YOU have done anything wrong or that you could have done anything different. Solve the problem in hand and move on.
  3. There is no such thing as perfect. Perfection is in the eye of the beholder! Even if you think you have achieved perfection… there will still ALWAYS be someone that disagrees with you because THEIR idea of perfect is something different to yours.
  4. You can’t be brilliant at everything. Find what you love to do and just get brilliant at doing that and surround yourself with other people who are brilliant at the stuff you don’t love. Free yourself to NOT be good at things, and you’ll actually get better at what you love to do… and THAT will truly make you a master.
  5. If you think you can please everyone, you’ll please no-one. You can actually end up losing a lot of your natural brilliance if you think you try to please everyone. So please yourself! Get ok with some people NOT being ok with you and what you stand for. This will give you permission to embrace your uniqueness… and THAT is what will enable you to truly stand out from the crowd.

Embracing these 5 learnings above has made me the happiest and most relaxed version of myself I have ever been (although I do admit I’ve still got work to do!) – I hope they go some way to helping you too.

Oh and I thought a sweaty no-make-up gym selfie would go some way to showing how far I’ve come not trying to be an image of perfection all the time 🤣

Jackie Tomes, The Property Strategist & Recovering Perfectionist


Listen Now: Systemisation for Success in Property

Here I discuss with Catherine Turner on the Leveraged Lifstyle Podcast what systems we’ve put in place which has enabled us to build and streamline our property business.

We talk about vision, strategy, systems and leverage as well as how our multi-million-pound business allows us to have the lifestyle we want and go on holiday every six weeks.


And head to Episode 14!

Listen Now: The Power of JV Finance

In this episode with Christian Rodwell on Escape the Rat Race podcast, I discuss:

  • How the power of joint venture finance can help accelerate your property success
  • What can be achieved in as little as 12 months if you become unbelievably focused on one thing
  • How I built a property portfolio in one year that I anticipated taking ten years
  • The opportunities that can open up for you through public speaking
  • Success doesn’t happen by accident. You have to put in the hard work first, in order for it to pay you back in the future
  • The importance of having a mentor that understands the level you’re currently at


Listen Now: Creating a Lifestyle Property Business

With Mike Stenhouse on Inside Property Investing Dave & I discuss how we’ve created a business that allows us to go on holiday every 6 weeks and what success means to us.


And if you would like a blast from the past while you are checking out Inside Property Investing Podcast… why no check out my first EVER podcast interview!



Listen Now: Creating a Property Investment Business with Family Values

On Your Property Podcast I share the 6 step system to success that has helped me and my husband & business partner build our business with family values and the core.

Strategy has been the key for us to create a successful, scalable & sustainable business and I am now on a mission to bring proper strategy to the property world so that anyone can build a great property business giving them the lifestyle that they truly want!


And it’s Episode 63 🙂