It’s been a bit of frustrating month to be honest, lots of work going on but not a lot to show for it. My primary focus has been sourcing my next property, which I intend to renovate and sell on (flip) for a profit. The DSS HMO continues to be a frustration too.
1) Refinance my existing portfolio – the 2 remortgages have finally completed and I’ve got another £70k sitting in the bank now, which is nice. Well actually I have an offset mortgage on my own home, so really that money is sitting in the mortgage account and reducing my home mortgage interest significantly, but is readily available to spend.
At the moment I’ve put re-mortgaging the HMO on hold. You may recall I had a wholly unsatisfactory valuation last month, and whilst I’ve found another lender, the fees and interest rate are exorbitant. On a £100k loan, the first year outlay will be approx £6k in fees (broker, arrangement, solicitors, valuation etc) and another £6k in interest.
So if you know anyone who’s interested in funding a private mortgage, fixed for 5 years say, on this HMO then please let me know.
2) Lease Options – I’m continuing to progress the acquisition of lease option properties and am very close to picking up 3 flats, but the vendor is a nightmare to get hold off and keeps leaving the country for 6 weeks at a time without getting me the information I ask for.
I remain hopeful that this will come off.
3) LHA HMO – Last month I had 2 of my tenants sent to jail, since then one has returned so the housing benefit for him should be reinstated shortly, however I’ve had a 3rd arrested now!
The VOA (Valuation Office Agency) who are responsible for council tax have visited the property and decided to reband each room as a separate unit for council tax. Actually I’m not that bothered about this, as it means the tenants pay their own council tax and as they’re all on benefits, they get council tax benefit anyway, so that will actually save me £1000 per year.
The fact that they backdated the change to September 2014 and sent me a bill for over £2000 was rather annoying, but I’ve got an appeal in for that.
4) Property Sourcing – I continue to call estate agents, view properties and offer on them, as well as working with local sourcers. I’ve also upped my game at the property auctions, however there’s nothing new to report so far.
The tricky bit is that with houses that require refurb, the estate agents over price them, let alone leave any profit in. E.g. a £120k post refurb house, that requires a £20k refurb, will be valued at £105-110k. Whereas I need to buy a house like that around £80k, bearing in mind there’s about £5k of buying and selling costs to factor in too.
In summary, work output is good and it’s just a matter of time. As people say, property is a marathon not a sprint.