I listened to an interesting podcast yesterday whilst taking my daily 1 hour walk on the beach. The podcast was about a doctor in Georgia who got burnt listening to his financial advisors in 2007 and there after got into “alternative investments”. These alternative investments as he called them…were private lending on property and doing property projects. I can relate as my family owned a bridging company in the US before the crash ( we closed down in Jan 2006). This radiologist started very cautiously lending money at 1% a month plus 2 percent to originate. Rather standard stuff. He did this for several years and then realized he could make more than this 14% by doing refurbishment projects. We ended up running a bridging company….JVing with a local builder and we were building 9 houses at a time….and every year one big project.
Ironically my family is in the same situation and looking to emulate what we did in the US. We make more money by JVing with local Manchester property investors who know the city extremely well as they have spent their whole lives there. Really nothing unique in what we are doing other than creating value with our Professional HMOs in Manchester. It was hard to find the right people to work with. Integrity is everything. So many promised or said leave it with me and did just that. We know we can not do property remote control. We know that so many of these sourcers promise the world and fall down. I heard a story yesterday of a London investor working on a Professional HMO since Sept of 2016.
We actually are buying another property to convert into a Professional HMO – 4 bed ensuites with our JV partners. We prefer 5 bed en suite HMOs as that extra room is simply more profit. In a professional hmo, you have the same council tax….same internet…almost the same electricity…but you have another 500 a month.
Besides doing Professional HMOs…we also do Social Housing HMOs & selling one today actually to a London investor…and hopefully a conversion project is shortly on the horizon. This conversion project has a lot of hoops we are trying to jump through. GD willing it comes to fruition and will share the learning process.
If you are a passive private lender…you can contact me …willing to share information…