As mentioned in my biography , I started investing in property towards the end of 2005. As is a common theme in most of the stuff I’ve done in property, I generally do things differently to most people(!) and started buying investment properties before I actually owned my own home.
I spent money going on a number of property investment courses and seminars and learnt a great deal about what you can do in property but didn’t find that one person who could help me actually get started and find a strategy that worked for me. I needed a proper helping hand to take me forward – and a kick from behind to take the necessary action to be a success – and this is where my mentor, Steve Bolton, came in.
One of my main goals was to be able to leave my full time job and initially survive on the income generated by my property portfolio. The strategy I was shown, which would help me to achieve this as quickly as possible, was investing in high quality HMOs. If you’re wondering what they are, the term stands for House in Multiple Occupation. These properties are where individuals live in shared accommodation by renting a bedroom in the house or flat and then sharing the communal areas (kitchen, bathroom and living room) with the other tenants. For an investor this usually triples or even quadruples the amount of income you would get from renting that property to a single person or family. This high-income strategy allowed me to leave my full time job in early 2007, having acquired several of these sorts of properties during 2005 & 2006.
With more time on my hands, I focused on investing as a full time job and rapidly grew my HMO portfolio (by working with passive investors) in 2007, at which time I also started mentoring first time buyers in replicating the system I had followed. I also employed my first member of staff to help me manage the properties and provide support for the lettings part of the business. To continue my personal growth and development, as well as that of my property business, I became the first franchisee (Franchise Partner) of Platinum Property Partners.
In 2008, the property market started to take a bit of a tumble and mortgage finance changed virtually overnight with reducing LTVs (Loan to Values) as well as increasing fees and charges. Whilst slowing down the pace of growth I had experienced the previous year, I still continued to grow the portfolio, but also began sourcing and investing in BMV (Below Market Value) properties. The definition of this type of investment is often questioned, but essentially it means you buy properties with inbuilt equity from day one. HMOs were still high on the list, and that side of the portfolio continued to grow, partly due to my business starting to manage HMO properties for other landlords and investors in Chelmsford. By this time I was also mentoring most of the new Franchise Partners that joined PPP, to help them get started with their HMO franchise businesses.
In 2009, still more properties were purchased (HMOs and BMVs) and there was much more of the same, in terms of mentoring, managing more properties and also taking on more staff. Most property investors were struggling to make ends meet (unless they were on base rate tracker mortgages and benefitted from the dramatic fall in the Bank of England Base Rate dropping to 0.5%) but I continued to grow and develop my portfolio, while also helping others.
The deals got bigger and better in 2010! The actual business side went through more changes, which were needed to ensure that the portfolio performed as well as it had previously, and could continue to grow effectively in the future. As such, my role in the day to day activity has reduced to virtually nothing, enabling me to work ‘on’ the business, rather than working ‘in’ it. To see more about my property business, please visit my Chelmsford Rooms to Rent website.
2011 started with my completing on another BMV purchase as well as taking on another HMO property to manage, and has seen continual improvement and performance of the existing portfolio. I am now looking for opportunities to invest in commercial property and small development projects in Chelmsford.
In 2012 I launched my ‘Top 5 Tips To Starting with HMO Property Investing’. Click HERE to sign up to receive the report for FREE!