February has been all about starting the end phase on both the Darlington & Ripon Projects.  At the same time look forward to creating and securing new opportunities to keep the pipe line full.

The markets continue to be strong with an increased response rate to our marketing campaigns.  The team are busy assessing the many opportunities becoming available and are in a position where the opportunities are fulfilling both our own and designated investors needs. 
 
Section 24 is definitely having an effect and will do for the next couple of years as the reality of this tax policy really hits home.  I truly believe that we are entering one of the best periods of property investing we have had for years. The masses are leaving the market and the banks continue to compete with each other to keep lending costs low, it has never been a better time. 
 
 A word of warning and hopefully a little bit of advice and help from me to you.  This is not meant to be a sales pitch just a plea for you to manage the risk you may face.  Property investing is all about risk management and this is something that you should always keep very much in mind.  You can make money but you can also lose money if you get it wrong.  Getting educated and help and assistance from those with experience can be invaluable.  I don’t just say this because I offer a mentoring service, I say this because I have seen so many people get their fingers burnt and it really pains me to see it.  I myself have learnt hard lessons over the last 20 years I have been investing in property, most of which cost me more money than they should have.  The reason for mentioning this is that this month I had a very unfortunate the chat with a new property investor who embarked on his first major project developing a property into a large HMO.  We did have a discussion prior to him starting this project on my helping and advising and doing a possible JV with him. However he decided he wanted to do this project by himself.  The conversation we had this month was about how he is now in a position where his development spend is 3 times over his original budget, his builder has stopped talking to him and has taken a very aggressive stance, his money has run out and he needs to borrow in order to finish the project and he still has no end date to the development.  This has taken a huge toll on his and his families health and the whole situation is in his words the worst time of his life.  This story is all too familiar to me and managing development projects, builders and the trades is very important.  Get this wrong and it could be very expensive indeed.  There are many good builders out there but there is also many poor ones who are just waiting for the inexperienced investor rocking up to them saying they want a nice shiny new property.  Please get educated and experienced help if you are in this position if not with me but with somebody else.  Invest with knowledge if not with yours get someone else’s. People like me do cost money as our experience has cost us and our time has a cost as this is how we make a living.  In my humble opinion though this cost can be well worth the investment if it saves you more money than it costs.

PROJECT UPDATE

6/7 bed HMO in Darlington

This is now in full advertising and marketing stage.  The professional photos have been done and the property is ready to take it’s first tenants.  The rates are some of the highest in the area but relate directly to the quality of the product we have produced.  This property has been secured on a PLO basis so investment in this property has been tailored to this strategy.  We have focussed on the important areas.  It is a huge property with over 200m2 area.  Although the property has currently only planning and license for 6 people we have developed an additional room with en-suite so that this property can be turned into a 7 bed property once the relevant legal requirements are gained.  Interest in the property has been high with viewings this week and more booked in next week.  The first tenant moves in on Tuesday 10th March.  We do have an excellent conversion rate from viewings to tenancies again due to the quality of our product.  Our on boarding system is very systemised and streamlined to make sure it is quick and easy as well as being rigorous.  Our policy and mantra is to get the right tenant for us and for the house and our systems are designed to achieve this. 

6 bed HMO in Ripon

Conversion continues on this property with the end date scheduled now slightly earlier than planned on the 16th March which is always good news.  See below of a sneak preview picture.  Compliance is now almost in place although you always end up waiting for the final electrical certificate etc to come through.  Fire, HMO and Building Regulation Officers have all visited and are happy we just need to get the paperwork in position.  The advertising system will now start to take over even though we are not quite finished yet.  Starting this early is always a good idea.  Should have some good pictures next month.

6 bedroomed HMO in Barnsley

This has been bought now and drawings done.  The schedule or works is being written as I write and building costs are being fine-tuned.  The rip out stage will have begun before the end of the month.  Anticipated build time from start to finish should e circa 16 weeks. 
 
This property is currently in a very poor state and will be taken right back to brick and reconfigured into a high end 6 bedroomed HMO for the professional market.

7 bed property in Cumbria

This property has now been surveyed and drawings and designs for a 7 bed HMO have been created.  This property has a garage connected to the property so using the current PD rules we can utilise this and make a fabulous living space for the tenants.  An initial Schedule of Works have been drawn up and building costs are being worked on as I write.
 
This property was slightly unusual as we bought this as an extremely distressed sale and had to move quickly.  It was bought in a total of 7 days so we are playing a little catch up on this project.  What was important is that we had enough experience and understanding that we were comfortable with our risk assessment on the property. 

We continue to work towards keeping the pipeline full and the investors happy.  We are looking at a total of  8 new opportunities, these opportunities range from a single property, a portfolio of HMO properties through to a new build land for 6 x 6 bed properties on it.  Busy and exciting times and I wouldn’t have it any other way. 
 
I don’t mention out SA portfolio very much but this has had a strong start to the year with the trend being high booking rates with people staying in the UK for their holidays.  We have had however our first possible enquiry about cancelling due to Covid-19.  We did recently update our cleaning procedure in all our properties to stipulate the use of anti-bacterial cleaning products and where exactly to use them.  We have put this into a document which can be distributed to our guests.  No one really knows where this will take us but we will try and stay ahead of the issue.  It may prove positive for the UK SA industry as people stay in the country.
 
 
See you next month.