July has seen been a good month with some good progress and some great prospective deals. I’m buying my first flat in Manchester at a genuine 23% discount off it’s market value; have agreed to buy 4 flats and their freehold in Bristol, and getting close to 3 other deals.
1) Lease Options – The 3 Bury flats I’m acquiring on lease options are progressing. We’ve had some remedial work done (damp proof course and wood worm treated) and have started interviewing tenant buyers, with one interested in taking all 3 flats for his extended family.
2) LHA HMO – I’ve finally got read of my most troublesome tenant so far. He was a pleasant and intelligent enough chap… when sober, which wasn’t too often sadly. However I used some of the techniques taught by Jim Haliburton (the HMO Daddy) from his DIY Eviction course which I went on last year, and the tenant left without any issue and without the need for expensive and time consuming court action. Marvellous, thanks Jim!
The tenant who intercepted 2 months worth of housing benefit has started to pay that back by earning his keep and I’ve put him to good use cleaning up after the tenant who left and painting his room. So far, that’s working well.
Now I need turn the same eviction techniques on my second to worse tenant. As I’m writing this I’ve just had a call from one of the local bobbies asking for access to the HMO as one of the neighbours have called the police due to his arguing with his girlfriend. *sigh*
3) Property Sourcing – The repo properties I mentioned last time haven’t come off. It’s a long story but unbelievably, 3 houses within 20m of each other have all been repossessed within 2 months of each other. The insider info I had was that one of the houses splitting them had been sold setting a new sealing price for the road, which was what I was basing my post-refurb value estimates on. Sadly that property has fallen through, so I’m no longer confident of the end value and have withdrawn my offer… just as the bank were saying they would accept it next Thursday when they dropped the price again!
Last month I was hoping to try a rent 2 rent / lease option, with advanced LHA strategy with a local landlord I’d contacted. However my powers of persuasion are clearly not yet perfected as I’ve been unable to convince him to go for the deal. Which was a shame as a fake ad on GumTree has resulted in about 15 possible tenants, of which 4 or 5 were serious possibilities.
It’s taken some looking but I’ve finally found a property sourcer who’s doing things what I would call “properly”. There are many wannabe property sourcers out there, many of whom are really nice and earnest people, but who aren’t able to come up with the goods. This guy can and is though and I’ve already bought 1 deal off him: a cheeky little flat. I’ll give you the full details once we’ve exchanged but it’s a genuine 23% BMV (Below Market Value) deal, from another property investor how just wants a hassle free and quick sale. Perfect.
4) Flats, Flats, Flats – You know it’s funny, I never had any intention of buying flats, but like London buses, 3 deals seem to have all come along at once.
As well as the flat above, I’ve agreed to buy 4 flats and their freehold down in Bristol as a JV with a southern investor friend of mine. I’m putting up the cash, he’s doing all the work and we’re splitting the deal 50:50, nice and simple. Hopefully I’ll be able to give you more details next month. This deal also has the benefit of leveraging my friend’s previous relationship with Shawbrook for the financing, which gets me an “in” with them for future deals.
I’m also looking at a block of 15 flats in the NW that I’ve come across, which I think I can pickup for less than £20k per flat! It’s early stages at the moment but I suspect there’s a planning issue, so I’ve booked a call with a planning consultant; if I can fix that problem, that’s a game changing deal for me. It’s been helped by using a bit of internet sleathing to get the phone number of the vendor directly. 🙂
5) Pub to Flat Conversion – Yet another flat deal is a pub that I’ve found that’s half way through a conversion into flats, but the project has been stalled for several years. The developer who owns it just hasn’t got the time & resources to finish it, so I’m negotiating with him on a price to take it off his hands. The tricky bit is working out how much it will cost to finish the job, as he’s a thumb in the air kind of guy, so there’s no schedule of works to go off.
6) Direct to Vendor – As I mentioned last time, I’m still working on improving my patter for direct to vendor negotiations, and it’s improving. One deal I’m working on for example is a divorcing couple, however the relationship has broken down and they’ve both said to me that they’d be happy for the property to be repossessed before they see the other half benefit from it!
As June was, July has been another good month, with some real progress and some tantalisingly large deals within reach.