Case Study Of A Successful Investor: Andy Foote

Creating an investment portfolio can seem overwhelming, which is why it is important to consult as many seasoned investors and professionals as possible to determine whether this is the right avenue for you. 

Our very own Andy Foote is one of these seasoned investors, and it’s safe to say he knows a thing or two about creating successful property portfolios. We sat down with him to discuss everything about property investment – from planning your financial future, to taking the first steps towards creating a portfolio, to mitigating investment obstacles. Join us as we unravel the story behind this savvy property investor’s impressive portfolio and gain a deeper understanding of the strategies that have propelled them to success in the dynamic realm of real estate.

ARE YOU A SAVER OR A SPENDER? 

Am I a saver or a spender? Well actually, I’m both. I’m a firm believer that you have to save for the future, especially in this day and age when pensions are on the decline. I think you’ve got to prepare by having one eye on passive income for the future but also you only live once, all work and no play makes Jack a dull boy so you’ve got to enjoy yourself as you go along. I think having a fine balance between saving and spending is really important. 

WHAT WAS THE CATALYST THAT MADE YOU THINK ABOUT YOUR FINANCIAL FUTURE? 

What made me think about my financial future? Actually, I was about 17 years old and I was in a lecture on a business course, the lecturer came in and said put down your pens and he waved a £10,000 check at us. He said I’ve just come from the bank to pick this up, I’ve been saving for 10 years in what was called a PEP or an ISA account at the time and it’s the most important lesson I can teach you all today. For an hour we spoke about how he’d been saving £25 a month and he’d only put in something like £3,000 into this ten-year investment and he’d picked up a check for £10,000. We’re talking 1984 or something so it was a lot of money and this guy was probably earning about £8,000 a year and so, it gave me the idea of creating wealth by saving. 

WHAT WERE YOUR BIGGEST FINANCIAL INFLUENCES? 

What influences me in investment? The simple one, around the world, not just for me, is property. Everybody understands it, it’s really easy. You buy a property, somebody rents it and you get an income and over a period of time, it goes up in value. Really simple. The stock market is much more complicated. There’s the basic idea of buying a share and it goes up in value but it’s more complex for the general public and it is for me. So, I always preferred property to the stock market although I do have an investment in the stock market. And again, the third thing, investing in people, can be a box of frogs if you like. It can go any which way and it’s not even you controlling it, you’re just advising. Property is really simple and as long as you’re buying carefully, in the right location at the right time, over a period of time it normally works out well.

WHERE ARE YOU ON YOUR INVESTMENT JOURNEY? 

Where am I on the investment journey? Well, I’ve been investing ever since I started earning money as an 18-year-old and I will always invest because I find it very enjoyable. I feel I’ve got a knack, I’m quite confident in what I’m doing, I’ve learnt a lot of mistakes and lessons throughout the years and so, I will always invest. As far as financial security, I’ve been there for quite a while through investment so if we’re talking about an investment journey, I’m enjoying the journey and I don’t see an end to it. 

WHAT DOES A PERFECT INVESTMENT PORTFOLIO LOOK LIKE? 

I always think a perfect investment portfolio should have two or three things in it. One of them is definitely property, all sorts of cash investments like pensions, bonds or stock markets, so you’re playing both markets, the property and the investment market. But there is a third dimension and that’s people, you can invest in people. That’s something that I did 10 years ago and it has been the most wonderful journey, not without its problems, it’s been challenging but now, these people I’ve invested in, these young people who’ve impressed me have built this fantastic business that I’m the Chairman of and it’s been a lucrative investment. 

DO YOU HAVE A GOAL? 

Well, I think it comes with age. When I was in my early twenties, I knew I wanted to start investing and I bought a property. The reason I bought a property was because my friend bought one and we all talked about it and it sounded like a good idea. But the driver was to create wealth. In your 20s you just want to create wealth, you just have ambitions and aspirations of making money and getting up the ladder, to have a nice house and a nice life. So the driver, why did I buy this house, was because I wanted to make money. I didn’t actually know what for at that point but I just wanted to do it and then you learn what’s good.

The first property I bought was a fantastic success and so then, I bought as many as I could. When you then get older and come into your 30s, you then start thinking about getting serious, maybe you’re married or thinking of starting a family so your drivers change of why you want to make money and how you’re going to invest. Then again, when you get older, in your 40s or 50s, you go through a different change. Now you’re thinking about passive income. Before you just wanted to create wealth and have a nice house and provide for your family but later on you’re starting to think, when am I going to finish work? What am I going to do when I retire and what does that look like? How can I get passive income where I don’t have to go to work or rely on a pension but this money is going to come to me every month, sustainably for life? So your thought process changes about how and why you want to invest.

I think the goalposts change for most people as you go along. As I say, when you’re in your 20s you just want to make money, you’ve got dreams, ambitions of making money but you don’t particularly know why. You think you want a posh car or a big house and then when you settle down you want to protect your family and have a good life for your family and then as you get older, you start thinking about retirement. I think everyone is the same, you go through these stages where different priorities come into play. 

WHAT CHALLENGES DID YOU FACE? 

90% of my investments throughout my life have been property investments. Like I say, it’s nice and easy and I understand it. The challenges are twofold. The first one is leveraging, mortgaging, and getting lending. You can invest in so much more property if you can get a credit line or some kind of lending operation. You can build your portfolio so much easier if you have access to lending. For some people, you have to go to the bank or mortgage company for every property you buy, for other people if you have a business or some kind of asset behind you, you can set up a credit line because you have other wealth elsewhere and you can draw down on that and buy properties far easier. That’s a big challenge and it changed for me when I got a relationship with a mortgage lender who knew me and trusted me.

By this point I was older, I was 40 and that opened the door. It allowed me to invest in all the properties I wanted to and ride the waves that came round. The second challenge I call the shark-infested waters. The cornerstone of any property investment is the tenant. So if you buy an office, you need a company to come in and lease it from you. If you buy a shop, you need the retailer to come and lease it from you. And if you buy an apartment or a house, you need the tenant to lease it for you. Without the tenant providing you with income, it doesn’t work.

Now, if you buy in the right locations, there will always be a tenant. The market ebbs and flows but there’ll always be a tenant, there’ll never be voids. These shark infested waters I refer to are voids. The more properties you invest in, which is great, actually become an exposure if they’re all voids. If suddenly all of your tenants have gone and you’ve got 10 apartments and the tenants are paying £1000 a month, that £10,000 income is paying for your mortgage, your ground rent and your service charge and if they go, because you bought in the wrong place or because of an economic downturn, you have to pay all of those mortgages, service charges and even council tax because now there are no tenants in there. You can quickly find yourself underwater. I never fell foul of that because I always invested in the right location. 

WHAT OBSTACLES DID YOU OVERCOME? 

The only tricky times during the investments I’ve made are, when they’re fully-managed and you get on with your life, your job or whatever you’re doing, property investment is a great thing because it’s all being done for you. But then when something happens that needs your attention and you have to get involved, that can be a challenge. For example, if you have a property and the tenant left and you can’t find a new tenant and you’ve got these extra costs, that’s one challenge. If you invest in the stock market and there’s some kind of crash and you need cash but you can’t draw your money back because you’ll crystallise a loss, there’s another challenge. And if you invest in people and they don’t perform, what do you do? Do you walk away from the money you put in or do you invest more? So there are all sorts of challenges with investments, the key is to have them managed and managed well, so it doesn’t take up your time. 

WHAT WAS YOUR BEST INVESTMENT? 

Well, my best investment has to be the house that I live in. I’ve lived there for 15 years, it’s tripled in value since I’ve lived there and again, it’s down to location. It’s in a good location and so it’s very sought-after but it’s more than that. I believe you’re only here once and wherever you choose to live is where you’re going to experience the majority of your life with your family. It’s where you’re going to wake up in the morning, these are going to be the views you have, these are the spaces that you’re living in. So I believe that investing in the right house is one of the most important investments you’ll ever make.

WHERE WOULD YOU LIKE TO BE IN 10 YEARS TIME? 

Where I’d like to be in 10 years is exactly where I am now. What I mean by that is that I don’t think I’ll ever want to stop investing. It can be so enjoyable. When you make any kind of investment, property investment or stock market investment, for example, you’re taking a risk, there’s a certain amount of risk. If you take the right advice and you invest correctly, seeing these investments coming to fruition, seeing the wealth that’s made and most of the time it’s passive, it’s a wonderful feeling in many ways and you can take your wealth as and when you need it. So the idea of saying ‘right, I’ve made enough money now and I’m not investing and I’m just going to sit down and enjoy it’ – for me personally, that’s not as enjoyable as carrying on investing and going on the investment journey, especially when you involve other people as well and share it together. 

WHAT ADVICE WOULD YOU GIVE TO INVESTORS? 

If I could give advice to people setting out, or halfway through their journey, it would be two things. One, would be the old adage location, location, location. If you’re investing in property, you’ve got to look at the location and you’ve got to make sure that there’s going to be sustainable interest in renting that property for the foreseeable future. If you get that bit right, it’ll always be rented and always work, it’ll always go up in value. The second thing is the leveraging. The money lending. If you can get leverage, if you can get access to funds, a credit line or mortgages, it makes it so much easier and for a small amount of money i.e 20/30%, you can leverage up and get four or five times what you could have with your cash and that’s how over a period of 10 or 20 years you can make some real money.

Want to find out more about becoming a successful investor?

After speaking to Andy, it’s clear that property investment is no easy feat but, when executed well, having a property portfolio can be life-changing. However, you don’t need to embark on the journey of property investment alone – Andy and the team at Joseph Mews are here to help you create a portfolio that fits your lifestyle, helps you achieve your goals, and creates the returns you want. 

Our team of seasoned property professionals are on hand to provide you with advice and guidance at every step – from helping you find the perfect investment, to pinpointing upcoming investment hotspots, and providing exceptional aftercare once you’ve exchanged. Our years of experience, paired with our unrivalled knowledge of the UK investment landscape, makes us your perfect partner for curating the ideal portfolio. Who knows, maybe you’ll be our next case study of a successful investor?