We have been in property since 1994. Have seen good times…as well as some very tough times in property. We always seem to JV with people who bring to the table skills and ideas. We can even say humbly we have taken the approach of the boring path of property success. All of this was without course sellers some of them known as snake oil salesman. We look for local experts that have an existing property business. We look for a way to bring value to them and ourselves. Usually builders are good JV partners as they have the skills….however builders are a commodity as well as money is a commodity. The key is to find integrity and develop trust.
Laughingly my wife would say….
- “You don’t know anything until you do it.”
- “You want to work with people you like.”
- “The harder you work the smarter you end up.”
There are so many times I have read BMV…etc. Yes BMV and creating value is important…but we have seen first hand more importantly is simply holding, have rents come in, pay down a mortgage and a little of price appreciation kicks in. You can create property success simply by holding the right properties. We like holding Social HMOs and Professional HMOs. They generate nice cash flow. To lower our leverage we sell some. Investors want good deals…but too many times they miss the point.
For example we are selling a 5 bed HMO in Manchester that is on a 5 year contract…no voids…no management and maintenance covered up to 5,000 per year. We want 140,000 and it generates 14,950 a year NET! We have this so called investor who first offered 125, then 127…130 and best and final 135…Each time we told him no…and come Monday if he does not purchase we are putting a mortgage on the property. In 5 years we generate NET 74,750….10 years…you do the math….
This is the power of holding cash flowing properties. Not to over simplify, management is important, right builders, right solicitor etc. I am amazed at so many who look for BMV deals and miss the picture of simply holding the right portfolio with the correct leverage.
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