Join me on this episode of The Deal Maker Podcast as we delve into the world of commercial conversions with my guest, Mark Stokes. Mark, a seasoned expert in commercial property conversions, shares his journey from corporate management to mastering property development, yielding profits of up to £475,000 per deal. He breaks down his seven-step blueprint that guides novices from no experience to successful commercial property ownership. You’ll gain insights on the importance of building a professional team, tax efficiency essentials, and strategic relationships’ power. We also discuss Mark’s latest book, “Game Changing Commercial Conversions,” which features 19 case studies and a collective profit of £9 million.
KEY TAKEAWAYS
- Discover Mark’s path from a high-flying corporate career to becoming a property development expert.
- Learn the seven critical steps to achieving success in commercial property conversions.
- Understand the importance of assembling a top-tier professional team for executing property projects.
- Explore strategies for optimizing tax efficiency and maximizing investment returns.
- Get exclusive insights from “Game Changing Commercial Conversions,” detailing multi-million-pound successes.
FULL TRANSCRIPT
In today’s podcast, I have a very special guest, one of my great business partners, Mr. Mark Stokes. He is a commercial conversion specialist, and we are going to do a deep dive into how you could secure your first or next commercial conversion within the next 90 days, and be generating at least 250,000
pounds in profit. Now, if you are brand new to this podcast, please make sure, after you listen to this that you go back to the beginning, literally consume as much of the episodes as possible, because I love to share my wealth and stories with you to help you go and get incredible results. So Mr. Mark Stokes, we’ve been waiting for this day for a long time. Well, welcome into the studio. It’s been an incredible 10 years.
Look where did this all start for you?
What were you doing before getting into the world of commercial conversions? Yeah, thanks, Liam. And great to be on this podcast. What a fantastic podcast, by the way. So yeah, my background, I did my degree in construction management, so property has always been part of what I’ve always wanted to do for the first 25 years, though I was a loyal corporate servant, I was spending the best years of my life making millions of pounds for other people, and I was running by time we got to 2014 I was running seven different companies for my employers. I had four children. I knew there weren’t going to be any more children, but I knew there was going to be an eighth and a ninth company, and at some stage, enough had to be enough, and that was quite a courageous decision for me, after 2425 years to say, No, I’m not going to do that anymore. What impact at that time? Because there’s a lot of people that will tune into this that can really identify they’re working a lot of hours. They’re working either for themselves, but they’re working in the business, or they’re working for someone else, exchanging time for money, maybe low paid, or maybe they’re a high income earner. What? What impact was this having on your relationship with your wife and your You’re incredible for for children?
It was stressing us all out, to be honest. You know, I would be that person who’s up at five in the morning out the door, never seen the kids for breakfast in the morning, never seen that routine of getting them off to school, and I’d be looking if I got back for a bedtime story at night, relationship get fractured. I wasn’t present in the moment. Friday night was all about relaxing, which probably would be having a glass of red wine, which led to a bottle of red wine feeling rough on a Saturday morning and not being present in the moment on a Sunday, because I’ll be thinking about the management beam meetings for a Monday morning. So all in all, it was pretty toxic, to be honest. And I sat down with Sharon, and sometimes it’s the ones that are closest to you that actually hold you to account. And Sharon said, like this, this isn’t working. You know, you’re not happy. What can we do about it? And, yeah, she’s my worst critic, but sort of my biggest supporter as well. What a breath of fresh air, you know, to have that coming from
your wife, yeah, like, what can we do about it? Though, those few words are very powerful, because you don’t have to stay in the position that you’ve always been in. There is always a solution. But people don’t see that, do they? And they stay stuck with you for 25 years. People stay stuck for years and years and years and years. I love that. What can we do about it? So you sat down, you had the chat. What did you do about it?
Yeah, so, and this was the start of the route to freedom for me. We sat down and we said, right, I’m going to leave the company. And I was a senior exec at the time in a PLC. Three and but at that point, the company was funding my exit strategy. That was the mindset shift here. It took me three months to get a meeting with my chief exec, who I reported to, to sit down and say, Look, my life’s going this way. I think your life’s going that way. And the business strategy, and she asked me to stay for another year. We’d been through quite an intensive mergers and acquisitions, so I stayed to do what’s a pretty unpleasant job of making people redundant, that merger, the strategy, the culture. I did that on my own terms and left, but that it was the start of something new. But then my mindset was, now I am planning my new life, you know, and I probably could have been a little bit more prepared, you know, I did jump out the corporate airplane and build my parachute on the way down there, if I’m totally honest. But how refreshing just to know that I’m on that trajectory. And I think, as you say, most people, they live their lives day to day, hoping for something better, but that’s all it ever aspires to hope. In fact, I went out with some friends. I’ve been out of the corporate life for 10 years now. Went out with some friends the other day, and they’re all bitching and griping about really crap the job is. And so they’ve stayed in the corporate life. And you can just see another 10 years has passed, and it’s got worse. It hasn’t got better. And I think that’s a huge realization for 10s of millions of people up and down the UK right now, that, you know, the way we were, what we’ve been told to go and do and get a good job. And the 40, 4040, plan, you know, work for 40 years, 40 hours a week for 40 years in retirement, 40% of your pension is just not really happening for people. And people are working into their 70s and 80s, you know, just to pay the electric bill. So you did the change you came out? Did you know at that point that you were going to be getting involved with commercial conversions? How did that come about? Yeah, so I’d already got around about three and a half million square feet of commercial property under my belt, through power stations and data centers. Think we’d agree, quite an industrial scale. That’s what I’d been doing across 30 odd countries. I wasn’t crystal clear on day one, when I left the company, I’ve got to be honest, but it’s pretty compelling when you walk out after 25 years in corporate life. So I got busy. I got busy trying things. I’m not a procrastinator. Sometimes you just got to get stuck in and do the right thing, and life then gets its clarity. You know, the world unfurls ahead of you, but I knew it would be property backed there is nothing safer and secure than property. And with commercial conversions, I felt that, you know, it gives you the ideal opportunity to add so much value right at the front end that, you know, even if I do make a few mistakes along the way, then I’ve got a great insurance policy there, and it was, to be honest, one of the best decisions I’ve ever made.
Well, that’s where I met you, because we were both invested into some property training and mentoring and business mentoring with the same training provider. And you as a VIP client, I was a VIP client. Always want to go for the best top package. You know, invested a considerable sum of money into our education. That’s where I first met you. So you’re obviously trying to figure this out, what journey to go down. I’m doing the same thing. I just my company had just hit the wall back bankruptcy, went into liquidation, minus 392,000 pounds, I’m at some form of a crossroads. Knew I wanted to get back into property, didn’t quite know how to do it. And then we meet, and you know, pretty much 10 years ago now, we start building this relationship. So you then decided to go and do commercial conversions. And with your experience and what you’ve done over the last 10 years, you have created a system, haven’t you, for anyone wanting to get into commercial conversions to be able to do this? Am I right in saying, even if they’re brand new, even if they’ve never done a deal, even if they haven’t got access to a lot of money? Is that? Is that correct?
Yeah, absolutely. And look the best processes and systems are the simple ones, the ones that you can just recite. And the reason why they’re simple is because it’s my life works, to be honest, 30 years, every little tweak, every little twist and turn, every little mistake, every little opportunity that I’ve created, I’ve put into a system, and it’s highly systemized. It’s future proof, and it’s always evolving as what I just love about this, there’s nothing that we do that hasn’t been done before. Great. So it can accommodate any twist and turn along the line. And that’s that’s why I believe commercial. Your property and having those systems and the leverage that comes with it, well, that’s great. Let’s talk about the system then. So
it’s a seven step process that you’ve created your entire life’s work. You call it the commercial conversion blueprint, and this is a step by step process that will take anyone from having never done a commercial deal ever to doing a commercial conversion, owning commercial property, being tax efficient, where they could be making at least a quarter of a million pound on just one deal. And that’s underplaying it, isn’t it? That’s underplaying it. So can you just tell us the steps in the system, and then we’ll do a deep dive, and we’ll, I’ll pick your brains on a few of these, and we’ll give some really good value out to the to the audience. Yeah.
So the seven steps are, number one, finding the deal. Number two, analyzing the deal. Number three, putting the offer in and negotiating. Number four is the planning. Number five is, how do we create the funding? That’s bank funding and also other people’s money, private investors. Number six is the conversion process, and number seven is the all important exit strategy at the end. So seven simple steps that capture an amazing wealth of opportunity and experience fantastic, and it definitely caught my eye 10 years ago. And I met you, and then you were going down the commercial space. I initially did with Jay, one of my other business partners. We did three high cash flowing properties in 90 days, and I always knew I wanted to get into developments. Then we did priory Street, where we built seven flats and two houses, and then, and then we actually joint venture together, didn’t we? Which was, how did that come about? Mark, because it’s quite an interesting story, and it’s all about proximity, is power and everything is to do with your environment. So do you want to just talk us through how our joint venture and business partnership started? You know, pretty much almost 10 years ago now? Yeah, well, as you say, we both. We’re no strangers to committing to our futures. We’d gone top package or in one of the most elite masterminds in the country, if not in Europe, at the time, and I had a situation where I’d found a great property, fantastic property prime for converting to residential, but one of my friends was going to be the investor, and right at the last minute, his wife phoned me to say she’d got cancer just out the blue and he was absolutely devastated. And look, it was the right thing to do. Look, you go and look after your wife, but I’d got a property, and now I hadn’t got an investor, and I remember we had was having a coffee at the mastermind, and you said, Well, look, I’ve I’ve got an investor, but I’ve just lost the property. So I mean, what a great opportunity it was to do a joint venture. We’re both no strangers with joint ventures, but if I’d not been in that community, that environment, and attuned to doing creating shared value between people, that deal may well never it was quite, quite ironic. Because we were looking at that deal, we lost the deal. I believe, I believe Jay had looked at it, or he walked past it, or something had happened with that deal, and we wanted that deal, and we didn’t get it. But when you put it out there into the universe, things come back to you. So that was great, wasn’t it? So we so we bring it, we brought in the investors. So just so everyone is clear, we had a couple of investors, and they lent the SPV, which is a special purpose vehicle, they lent the money. We then paid them a fixed rate return. I believe one investor got 10% the other investor got 12% we then did the work collectively, and then at the end of the scheme, we paid back the loan notes, and then obviously we had some form of share of profit between us and yourselves. So following the process the blueprint that you’ve created over many, many years, let’s have a look at some elements of that in relation to this particular deal. Because this was called Oak house. It was an office that was converted into 16 one bedroom flats, one and two bedrooms.
Yeah, what we had was we’d found this, this vendor, and the vendor had got permitted development rights. So, you know, great example of how what those mark so permitted development rights is an instrument that government have used to help incentivize and make the planning process slicker to overcome. You know, what we all agree is, is we’ve got a fundamental housing crisis, and this was back in the day, this was 2016 and that problem still hasn’t gone away. So permitted development rights is a fast track system low risk that enables developers just like us and just like you and. To secure great opportunity at low risk. So the developer, sorry, the the vendor, the building owner, he’d got permitted development rights for eight apartments. And these apartments were, they were two bed apartments. They were luxurious. I mean, the they were over 100 square meters each.
That’s a huge two bedder and the problem there in the sales price per square foot, put those on the market, and they’re competing with a three bed semi, where you can park the car on the drive, so it’s merging into a different asset class. So what we did together was we protected ourselves. We decided we’re not going to take any planning risk, which is part of the process and systems that we have. We do not take planning risk. And we did a subject to offer where we increased permitted development rights from 8182, bed apartments to 16, one bed apartments, and that added another half a million of gdv on the bottom line, all that work happened between exchange and legal completion. So it really did reduce the risk, maximize the opportunity. Investors were happy. Joint venture partners were happy. Vendor was thrilled to bits as well. Great. Great, creating shared value. Great. So how did you actually find that deal?
So Nigel was walking down the road to have his haircut in Colchester. Having a haircut in Colchester, he parked his car, was just walking into town, and he saw somebody screwing up a sign, a for sale sign, and he asked the guy, and the guy said, yeah, it’s going on with this agent, just for Nigel, sat in the hairdresser’s chair, you know, 10 o’clock in the morning, phone the agent and said, is that property coming on the market? Yes, it’s going on the market tomorrow. He said, I’m just having my hair cut. Can I have a look at it in half an hour’s time, went and had a look around the property by 111, 30. That afternoon, we’d put an offer in, and it was rejected, which is a no, not yet, yeah, mindset, a lot of people, they freak out when they don’t get their offers accepted, right? And it’s quite normal to have most offers.
Why was that rejected? Just purely down on the price? Yeah, on price. Maybe the vendor was thinking, well, it’s going on the market tomorrow. I’ll let it go on the market and get some great value. And many people would think that we put a counter offer in at two o’clock that afternoon, and that was also rejected. It was a little bit higher. You know, as you and I both know, you know, just a small incremental higher. We’re not going up by 10s of 1000s. That was also rejected four o’clock in the afternoon. We put our third offering of the day, and that was accepted.
All right, great, yeah. And that was a good 10% lower than the the expectation of what it was going to go out on the market. So that deal never went to the open market.
Well, what? What a great deal for the vendor as well, because they got a quick sale. Yeah, money in the bank. Lovely. Thank you. Thanks for playing Yeah.
And the vendor had no debt in their lives whatsoever, no debt. And we didn’t end up doing a joint venture with the vendor. But you can see how that conversation could quite easily have turned into a vendor finance conversation. Maybe they could have been an investor on another deal. You know, just it’s about relationships. Yeah, I was saying last week at an event that I ran relationship capital is more important than financial capital, and people should be spending at least 70% of their time building new and nurturing existing relationships, because that’s when doors open. You just never know what you can do together, bringing two or three or four people together, great minds. Think alike, share risk, share responsibility. You have a lot more fun together. You push each push each other a long, long way. So so that was found for a particular agent. The funding we’ve mentioned came from private investors for what’s known as the equity piece. And then where did we get the rest of the funding from? Mark for this deal that came from development finance. So development finance contributed a significant sum to the purchase price, and then every month, we drew down development finance to pay for the construction and professional team throughout the course of the development they were great, absolutely fantastic. And that’s part of step five in the process, system and how we fund deals, making sure that we’ve got all the checks and balances in place, having great members of our professional team, yeah, and together the funder, they were paid back fully on the exiting of all 16 apartments, investors were paid back as well, and then we have that wonderful tax efficient distribution of profits. Yeah, love that.
So when we’re talking a. About the funding side. If there’s people tuning into this now and it’s their first development can they go and get development funding? Is it slightly more challenging? What could be a solution to someone that’s never done a commercial conversion before? Just talk us through because I think that holds a lot of people back because they don’t have the money themselves. They then freak out about borrowing maybe half a million or 600 or 700,000 from the bank. Just talk us through some of those solutions, please.
Yeah. Look, we’re solving problems that have always been around, and nothing is unique. Every single developer out there did their first deal once and development funders, they absolutely get that. They understand it, so there will be development finance available for every investor on their first deal. Great. Now, being realistic, the loan to value might be a little bit lower than if you’ve got experience, but that means you just need that little bit more private capital, which we can talk about in a short while. But development finance is available. Generally, we see a sweet spot somewhere between, if it’s Commercial to Residential conversion, from three units to 12 units. That’s a great ideal sweet spot where there’s plenty of development funders out there that could fund great. So you know, if you’re looking
at maybe coming in first deal, five or seven units typically, what sort of profit could you make on a relatively small first deal?
So we always focus on an absolute minimum, a quarter million pounds net profits. Great. That’s the absolute de minimis there, because it’s got to be worth your time and your energy. There’s got to be something in it for everybody. And the beauty of operating at this scale, Liam, as you know, is the leverage that we can create with the professional team. You’re not doing everything yourselves. You are engaging and employing a fantastic team who have got dozens of years of experience. So the two different scenarios of approaching the bank saying it’s my first deal of no experience, can you lend me some money? Versus it’s my first deal, but I’ve had the good business acumen to engage a professional team between them that have 150 years of career experience. Yeah. So you’re always putting your best foot forward, one with the investors, one with the banks, one with the agents, one with vendors. You’re always going in with your best foot forward. You’ve mentioned a few times there mark and this is going to be really interesting for the for the listeners, about a professional team. So if you’re coming into this new what would be the main task that someone coming in doing their first or next commercial conversion should focus in on. And also, who is this team? So Who have we got in the team? Who are they? Where do we find them? Give us some insights, please.
Yeah. So the two core things are finding the deal, finding the money, but engaging in those relationships with your professional team and just a few professional members of the team that you’ll need a great planning consultant, a fantastic architect, a good quantity surveyor and a great main contractor, but the Quantity Surveyor and the architect will help you select the main contractor, so that gives you a great framework to act within. Of course, you’re going to have a brilliant accountant and a brilliant solicitor. And the beauty of being involved in a great mastermind is you don’t have to find these yourselves. You’ll be working with people who have already done the hard work, done the legwork, found great people asked their opinion as for introductions, great. But I think the thing that many people miss that when they’re approaching commercial agent, commercial agents, estate agents, for deals, they’re looking for the individual deal, and what they miss is the power of the story of what you’re trying to create. Because when you can create an opportunity that is going to net you a minimum of a quarter of a million pounds. Chances are you’re not just going to do one deal. You’re going to do multiple deals. So what is your why? What is the driver? What’s that vision, mission, purpose, values. You know, is that to create 100 homes in the local community, is it to take 10,000 people out of street homelessness? Whatever that vision is, and that is so compelling and makes you a lot more memorable when you’re speaking with a professional team. The professional team don’t want to try really hard just to secure one deal with you. They want to know there’s a pipeline beyond that as well. So just to be clear, you don’t have to be a builder, you’ve not got to be an architect, you’ve not got to be a broker, you’ve not got to be a Qs. You’ve not got to be a main contractor. You don’t have to be on site with your hard hat on lifting bricks, and you don’t have to do any don’t have to understand first fix, second fix, plumbing, electricity, none of that. You sure? Yeah, okay, great. I’m glad, because that’s how I got started as well. I’m none of those things, and I’ve now done over 31 million pounds worth of development. So how many. Million pounds worth of developments. Have you and your group done now? We’ve done nearly 90 million. Wow, 90 million. So collectively, between us, we’ve done over way over 100 million. Raised 10s of millions of pounds in joint venture funding. You recently just had a book launch, which was all of your top graduates and also business partners. It was great to feature in there as a business partner of yours. We do undercook it at a quarter of a million pound per deal. How many case studies were in that book? What’s the name of the book? How many case studies? And what’s the average profit per deal in that scenario?
Yeah. So, that was my sixth book. It went straight to Amazon. And number one, it’s called Game Changing commercial conversions. And this was, as you say, it’s a collaborative effort, bringing together 19 associates, joint venture business partners, mentees, and they each did a very deep dive, commercial commercial case study of what they’ve achieved. And there was almost 9 million pounds worth of profit in that book, 9 million pounds of profit. That’s an average of around about 475,000 pounds of profit per deal. So when we say a quarter of a million, we are undercooking it. We like to be conservative, you know, leaving that little bit of tolerance. But that’s the power. And when you look at, I mean, this is about lives. Liam, you know, you see it on a day to day basis, as I do, it’s about changing people’s lives, their perception on wealth, time, relationships, energy, mental and physical, well being. It just brightens your whole life up completely.
Yeah, yeah. You know, it doesn’t take much one or two deals, and it can literally set people up for the rest of their lives. They could work the next 10 or 20 years and just literally not have enough money end of the month, no savings. You get two or three of these deals under your belt in a tax efficient structure. You literally can really change your life forever. What would you say to anyone mark that’s listening to this now that has potentially at the start of their commercial conversion journey, they’re on the fence. They’re a bit nervous. What would be some great top tips and tricks to really give people that that motivation
they need to get started? Well, I think a few nerves is healthy. Turn that nerves into adrenaline. Focus on creating relationships, focus on understanding systems and processes. Get somebody to help guide and support you, who’s been through there, it’s just madness to go rush into something and make the same mistakes somebody’s made previously. So get a great mentor. Use great, proven systems that the banks adopt as well. It will impress investors. You’ll be tax efficient. You mentioned tax efficiency earlier on. There is, quite frankly, no point in working really hard, creating a lot of money if you’re then going to give it most of it.
I was just saying, Do you think I think we should do a part two, and we just talk about tax efficiency, because I think that’s going to be a game changer for everyone. So we’ll actually do that while we’re
here.
Great, cool. So just go out there, just get it, get the right help and support. Well, it’s been incredible mark. We’re 10 years into our relationship now. I know we’ve got many, many decades ahead of us. I’m sure we’ll do some more deals together. We’re now business partners. We are now helping and training and mentoring people within the assets for Life Group. We’ve got our three day commercial conversion boot camp certified training the commercial conversion Academy. You’re just out recently on the first ever commercial conversion retreat in Marbella. So there’s a lot of great stuff going on right now. And, you know, I feel like we’re only just getting started, and I do feel that this is a big money strategy. Anyone can do it. And I do believe that everyone should at least give it a go for 12 months, do one deal and then see where you’re at.
Absolutely 100% couldn’t agree more. Great.
Also look mark, I’ve been absolutely brilliant. Thanks for coming in, and
we’ll be doing part two.
There we have it. Mr. Mark Stokes, a real iconic individual within the UK property space, an expert with commercial conversions, tax efficient structures, we’re going to do part two. So stay tuned for that. And if we can do it, you can do it too. I tell you what. We’re now going to give you the opportunity to come and spend time with Mark and myself at one of our up and coming commercial conversion events, and we’d like to do that for some of you right now, completely free.
If you head over to www.assetsforlife.co.uk, go and look at the events tab and get yourself registered for one of our commercial. Inversion events. Come and hang out. We’ll take you behind the scenes, and ultimately, who knows, we could become your next business partner. We could be doing deals together, but whatever happens, it would be incredible to see you secure that first deal at some point in the near future and bag yourself at least a quarter of a million pounds. Now for those of you tuning in right now, if you could please, like, subscribe and share this episode, we really want to get this in front of as many people as possible, and that will really help the algorithm. If we can do it, you can do it too. So please, if you don’t mind, all I ask is that you like, subscribe and share right now and listen to the next episode.
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