The 3+1 Plan. Brett Alegre-Wood

PROPERLY AND IT WILL RUN ITSELF

      My Set and Forget Philosophy is the over-riding philosophy that will help you achieve The 3+1 Plan. For me, the reasons that I work with property are clear: it gives me a fantastic lifestyle and allows me to help others achieve the same.

      Pinning down the over-riding philosophy on which I built my portfolio - a philosophy that pervades everything I do - was a ten-year quest, until I realised that the answer was right in front of me. It can be summarised in three simple words.

       SET AND FORGET

      Set and Forget is more than just a strategy for your portfolio or a way you set up each of your properties. Set and Forget is the philosophy. It is present in every transaction, in every strategy. In fact, it is perhaps the most important thing I do for those who want to follow The 3+1 Plan.

      Set and Forget is about creating efficiency in your portfolio.

       I first met Murray Gray in 1994 when we worked together on a software package that allowed sales teams to become highly efficient. Murray was the systems expert and he was able to make my ideas become a workable system for many of Australia’s top companies. We have worked together building portfolio-building software, systems and websites for over fifteen years now. Without his input and systemisation, as well as his ability to allow me to communicate to the masses through the web, it would have been difficult to get the portfolio-building strategies to the ‘efficient’ stage they are now.

      Once you achieve this efficiency you will have time to do more of the things that you want to do, while the portfolio works itself. This is why I am so focused and passionate about Set and Forget.

      Set and Forget, put simply, is:

       Every little thing I do that has anything to do with property is set up so that I can forget it on a day-to-day basis for two years at a time; then I simply set it up again, so that I can forget it on a day-to-day basis for another two years.

      So that raises three questions:

      1.What do I mean by ‘Set’?

      2.What do I mean by ‘Forget’?

      3.Why do I say two years?

      I will deal with each in turn, but first let me give you a practical example, in the way that I run my main current account.

      •All rent is paid into my account between the 1^st and 9^th of the month.

      •All mortgages are direct-debited out between the 1^st and the of the month.

      •All other direct debits come out between the 1^st and the 10^th of the month (personal loans, TV licence, Council Tax, credit cards etc).

      As you can see, between the 1^st and the 10^th of each month there’s a lot happening in my bank account. During this period my cash flow gets Set and from the 10^th onwards, I can Forget it because very little happens on my account. Each property becomes nothing more than a number and numbers are easy to forget. This means that I can forget the numbers and focus on living.

       Simon Shankland, my business partner and director of portfolios, is a massive support in this respect. Simon worked at applying the principles in his own portfolio, as well as with our clients. His feedback and relationship are invaluable. I first met Simon when we were drinking in an Aussie bar (The Redback Tavern) in Acton. Simon was interested in property, having grown up with his mother as an estate agent, and as he already had some property of his own in New Zealand (he’s a Kiwi). That was 2004 and, in the last five years, he has built a substantial portfolio in the UK and Spain using the Set and Forget principles.

      You will find my full Set and Forget Checklist at the end of the book in Chapter 10. You can go through and see which ones you are already doing and which ones you perhaps need to put some thoughts into. As with anything, it’s not a one-size-fits-all. The checklist works well for me; many of my clients do 80% of the checklist, are perfectly happy and better yet, they still make money.

       1. WHAT DO I MEAN BY ‘SET’?

      Setting is all about doing the little things that will save you time later and allow someone else to take responsibility for the task. I find that when most people start to build a portfolio, they uncover a massive control issue. This is something that you will have to overcome if you want to build a portfolio. In my experience, the biggest issue you will face in your portfolio is letting go of control.

      My early years as a self-employed businessman are a classic case of not wanting to let go of control. I kept finding that I would get to a dozen staff or so and then the business would stagnate. I could never work out why and over time it became a little frustrating.

      I guess I was about 29 when I realised that the problem was with me. I needed to let go of control, which began when I moved over to the UK and had to let go of everything into the hands of other people.

      These are my portfolio managers, my mortgage brokers, my solicitors, various letting agents and a number of managing agents. I am confident that they will do their jobs and this frees up my time to do mine. It makes things so much easier when you let go of control and stop getting involved in everything.

       John and Beth signed up to my newsletter. They were successful landlords with 25 properties, and Beth worked full-time in the business. They were extremely interested in my Set and Forget philosophy, because they had noticed that as they built their portfolio and bought each additional property, they would spend more and more time managing it. You see, they had 25 properties, 25 tenants to manage, 25 rents to collect, 25 mortgages to pay, 25 sets of maintenance and 25 separate properties to be a full-time landlord for. They didn’t know the first thing about investing, but they were awesome landlords.

       We sat down, and I very quickly identified that they needed to take back their life. They were both spending so much time on the properties dealing with issues that they didn’t have a life.