Who knows your property business as well as you…or maybe even better than you? Probably your accountant and solicitors. We reached out to our accountants and solicitors in order to see if any of their clients might be interested in our HMO properties as well as our upcoming Liverpool properties. There are HMO property companies who have built funds and raised initially private finance. There are many examples of successful players in the HMO market such as Kexgill (http://kexgill.com/), Student Cribs (https://student-cribs.com/) and Megaclose (https://www.megaclose.com) that each have over 500 rooms plus.The model also has been presented by Pike Intl….http://www.pikeintl.
We have successfully completed on approx 45 HMO properties. Our goal is to build & hold a portfolio of Professional HMOs & other undervalued properties that are high yielding & create a synergy where the whole is greater than the sum of the parts. At some point in the future we sell the entire portfolio….
While we are holding them, they are generating double digit returns & at some point in the future sell the complete portfolio. All the while the properties are managed in house. Our colleagues successfully have been managing our Professional HMOs as well as 50 of their own LHA/working tenant properties.
Simply to highlight the power of this concept was a 5 bed HMO we did on the border of Walkden. We purchased the property in mid Dec 2016. By the end of Feb 2017 the property was finished and started to be occupied March 2017. We held the fully tenanted property until Aug 2017. Our total cost of purchase, holding and refurbishment was approx 141,000. We sold the property for approx 175,000 plus generated rents of approx 11,000. This represented a profit of approx 44,000 over 8 months of approx 31% (48% yearly). This was cash on cash. The property could be geared at 60% and greater returns are generated.
Unfortunately we have had so many that have picked our brains or tried to learn from us….Promise yet not deliver. I had one gent I was speaking with who wanted to invest one million. Simple deal…the property would be under his name or company which protected him….we split 50/50 rents and uplift & place a RX1 on the title to protect ourselves. After lengthy discussions and showing properties…he simply stated he preferred doing it all himself. I wished him good luck and chuckled. He had no property experience….no knowledge of costs …no idea to manage…but he simply thought he could pull it off long distance.
When we had our bridging company…we also went through numerous investors until we built up 5 honest and reliable investors. Integrity is the key to property. Too many do not look at the big picture and are very greedy.
Recent Comments