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TIGER CUB
The Celtic Tiger has been and gone but young entrepreneurs who grabbed on to its tail are emerging as significant benefactors of an era of prosperity. With a flare for brokerage and a keen eye for property, John McGuire talks to Niamh MacSweeney about the Irish property market As a nation we seem to be addicted to property, we crave it, we talk about it incessantly and it is the drug of choice for the Irish consumer all too eager to get in on the action. One person who was bitten by the property bug at a very early age is 34 year old John McGuire. By day he runs a successful mortgage brokerage, First Credit, by night he graces our television screens on the popular property programme “I’m an Adult Get Me Out Of Here,” where he imports invaluable advice, expertise and guidance on first time buyers eager to leave the comforts of home and take the first, all important step, on the elusive property ladder. A VALIANT BUSINESS MINDMcGuire deserves to be placed on a plinth as a shining example of an intrepid entrepreneur who, through perfect timing and calculated risk taking, rode high on the quest of a wave and emerged a triumphant benefactor of the resounding Celtic Tiger.Fresh out of school he hit the ground running and initially became a broker advising on general insurance investments. Realising he had a talent and flare for brokerage it was not long before he took a leap of faith and journeyed along the self-employed route, a direction that would prove critical to his since eminent success. Albeit a short track record in general insurance sales, and although still a minor player in insurance circles as a whole, he was confident, unstoppable and self-assured that he could sell and advise on finance, mortgages, pensions and investments. THE PROPERTY BUGWhile taking a chance with his career, and still in his early twenties, he took yet another gamble and negotiated his first property purchase in 1996; a house in Bray, County Dublin, was his for a mere £80,000 Irish punts.Much to the surprise of family and friends; who had endless raging debates about McGuire’s ‘insanity induced purchase;’ this was a pivotal turning point in this young entrepreneurs endeavors and signaled quite clearly that things were only getting started for this aspiring property guru. While his first property continued to appreciate in value, to the tune of 30k within the first year of purchase, McGuire already had his sights set on his next conquest. A plot of land in Sandycove, would be where he would spend many a labourious hour wearing the ‘jack of all trades hat.’ Working on the site from seven in the morning and dashing into the office until late in the evening McGuire admits, “it was a tough year and it was a very steep learning curve, because I hadn’t built a property before and by building some unusual features there was a massive amount of research involved.” Even now, McGuire recalls this was the hardest year for him and by the tone in his voice it’s obvious that the stress and strife endured during the build, by a person with little or no previous experience in the trade, took its toll and he admits “anything life throws at me will be easy after that.” AVANT-GARDE APPROACHAfter some time spent traveling McGuire returned to Ireland and with endless energy and gusto he was intent on setting up his own business. Unsure of the type of business he wanted to be at the helm of, he took a rather unconventional approach and basically advertised himself in a Sunday newspaper as a young business man with capital, wishing to purchase a share in a business. “I took an ad out advertising myself to see what businesses were out there and to decide whether or not to buy a portion in an existing business where I could learn something new,” he explains. Although he got many responses, they came mostly from people, who appreciated his unusual method and wanted to have him working for them. But he was drawn to what he knew and felt that property and mortgages would be a huge growth area. “I thought that property might be going on another bull run, because at the end of 2001 there was a slow down in the market. Once I came up with the name First Credit and once I realised that nobody was using it; that’s when it all suddenly kick started,” McGuire proudly reveals.Although First Credit was a start-up business McGuire was determined to give clients the impression that it was a large, well established company. This was no easy task and McGuire admits he was more or less a one man show trying to be available to customers 24/7. However difficult it was getting First Credit up and running and however challenging it was building up the companies reputation, he says that he found the experience enjoyable and thrived on developing the business. So was John McGuire a flippant risk taker or a calculated ingenuous entrepreneur, who just happened to be at the perfect time in life to cash in on the golden era of prosperity? “My opinion at the time on property was based on demographics. It was less to do with anything other than the fact that we had a young population who would all need properties to buy. That was the gamble I took; it was based on the fact that young people were going to need houses over the next ten years,” he admits. MARKET UNCERTAINTYObviously the property market has changed considerably in recent years but McGuire is adamant that any suggestions that the market is going to crash is mere scare mongering. He does agree there has been a slow down in the market, but says this is a welcomed development. “We have needed interest rates to rise for a while and although from a personal point of view it costs me a fortune every time they do, the Irish market needed these rises in order to slow down the market which I think is a positive thing,” McGuire says. He predicted that there would be no growth in the market for this year or that it would experience losses of up to 4% and has warned people not to accept the guide prices; instead they should haggle. On predictions for the year ahead he says, “I think next year could be a year of stagnant growth and that is exactly what I’m looking for. We are in a soft landing, house prices have jumped up over a number of years, they are stagnant now and that is exactly what the market needed.”McGuire agrees that the two uncertainties in the market have caused people to air on the side of caution. With regard to interest rate rises he says these were needed in order to slow down the market and reduce the chances of a crash. Now that stamp duty has been abolished, the property market is getting into gear again, which means there will be more house sales than at the beginning of the year. “I don’t think that it is going to put pressure on house prices and I don’t think prices are going to increase again; there will just be more sale agreed signs,” he says. CONSTRUCTION DOWNTURNIn recent months the future of the Irish construction industry has been debated extensively and early indications signal the sector is experiencing a downturn. The threat of job losses and a drop in house building is fuelling speculation that the sector is past its peak. According to McGuire it’s not all doom and gloom. “Clearly we have reached our peak but with there being less demand, it is better because there are fewer houses up for sale. With stamp duty now abolished there will be more people looking to purchase second hand homes who would have been steered towards new properties because of the stamp duty exemption,” McGuire explains.BARGAIN BUYMcGuire maintains that the value in buying property is all down to what you can purchase it for. Regardless to what the market value of the property is, price is negotiatable and so he insists that buyers have to haggle to get the best deal. “Regardless of where you are purchasing haggle and try to get yourself a good deal. There are properties there waiting to be sold and you can get it at below market value if you are prepared to haggle. But you have to remember that it can be a long drawn out process,” he warns.Until recently the environment for bargaining didn’t exist in the Irish property market mainly because there was huge demand and not enough houses to fill that demand. Also the old stamp duty system was flawed and added to spiraling house price inflation. According to McGuire, previously people were afraid to haggle because it was a different market then and they weren’t in a position to do so. “At the beginning of 2006 I remember viewing properties valued at €210,000 and a day or two later there was an offer of €315,000 to cut out everybody else out of the market. Now with higher interest rates realism is being injected into the Irish market which is really healthy,” he says.
Published in the September 2007 Issue of Irish Entrepreneur |
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| © 2007 Irish Entrepreneur Irish Entrepreneur is published by Morrissey Media Ltd. 3 Dublin Road, Naas, Co. Kildare. T: + 353 45 866200 F: + 353 45 883709 E: info@irishentrepreneur.com |
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