Not a day goes by without me getting at least 1 phone call or numerous emails asking if we can source them a Professional HMO. It seems too many have paid too much to be on property courses. They believe they can get a bank to lend them 75% of all the money and then immediately run that into the next property. Most do not have enough money even for the deposit. The reality in Manchester and Salford is good properties that can be converted into a Professional HMO sell VERY quickly. No vendor is going to wait for a mortgage. They simply do not have to in this market.
The nightmares of sourcers are endless. I am sure there are honest & good sourcers yet we have not met them. Promises…promises…promises…I have seen first hand one gent ( if to call him that) source properties….get money for the refurb and never start the projects. What would you do if that was your money? The other main point with sourcing Professional HMO properties…who will manage your property even if it gets finished. I am not exaggerating. The vast majority of HMO property managers are sub par at best. That is why we manage our own…plus look to manage properties that we sell ( LHA type in Liverpool- complete package).
Conversely our model is to sell ready made cash flowing Professional HMOs, Social Housing HMOs plus below replacement value properties rented by LHA in Liverpool. You know exactly what the income is. You know the property is cash flowing. You have management in place. Yet so many vacillate because they think they can do it themselves and make more money. We looked at our emails. Some of the same people have been thinking and speaking to us for more than 6 months to a year and have done nothing. In the interim prices have shifted upwards….and more importantly article 4 is coming to Salford. This will shift prices upward and probably rents in our opinion. Yet people think they can find a honest builder and a property manager who will manage their property as if was their own. Sorry to say in the real world of property…Good luck!
We are looking for the right JV partner to scale up 20 Professional HMOs in Salford before the Nov 2018 Article 4 deadline. Our interests our aligned with the JV investor. We want the property finished to a high standard within the allocated build period. No delays and constant inspections. Doubt you will have that with a sourcer. More so, we will manage the rentals. If we have voids, it costs us all money. We are not an estate agent trying to juggle 100 properties and claim to fill the rooms with non credit worthy tenants who only cause problems. Have seen this….fill up a HMO…regardless of quality of tenant…then the owner gets stuck with evictions…and worse.
After a discussion amongst us….comes down to one simple thought, Greed. People think they can make more on their own them working with the right people. Our JV partners made a lot of money last year. We made great money. Only one reason….fairness…honesty and mostly hard work.
No one is going to source you a property and work as hard if they are on a marginal return. Once they have a sole vested interest in the success of the property will they work hard & should be compensated.