Creating Cash Flow & Safety with UK Property Investing

Cash flow is the life blood of real estate investing. The greater the cash flow the greater the safety. Everyone has their own way of investing in real estate however our focus is cash flow and safety via HMO properties. We know once our refurbishment is finished we should have immediate cash flow via rentals.

We had an interesting dilemma this week. We have a project of 4 semi luxury flats to convert from industrial to residential as well as a 7 bed HMO en suite project. Firstly neither offer on either property has been accepted yet…but we are leaning towards the 7 bed HMO en suite. The reason for the 7 bed HMO en suite is cash flow. Cash flow via rents within probably 8 weeks from the time we convey.

We met an estate agent who will be managing another HMO en suite project in Swinton yesterday and he felt on a bad day he could rent the en suites for 475 and possibly even 525. When we do the math, this HMO project will cash flow on a gross basis of 39,900 to 44,100. Due to the fact it will cash flow so quickly we have increased our safety net. We are looking to have this HMO property in the pipeline of works in approx 2 months.

We should have the 2 Professional HMOs we are working on now, completed, tenanted and up for sale.

We are assuming on a gross basis of 7 times income.

Considering the money to be made in the bank, we are in more discussions with potential JV partners.

Now, of course many would say that at least keeping your money in a bank is safe. And it is certainly true that all property investment involves a certain level of risk to your capital and the returns are never guaranteed. So if you have no appetite for risk, keeping your money in the bank where it will be protected by the FSCS up to £75,000 may be the best option for you.

But if you do understand the risks and are prepared to accept them you can earn much greater returns in development projects. You just need to find the right people to work with and make sure your interests are secured either by a first charge or you own the property.

Safety and cash flow. Our pillars of our real estate business via HMO properties..