In my latest video I went to Andrew and Yillian’s amazing 5 Bed HMO in Newcastle. They showed me around the property and shared their plans for the different rooms. I love seeing people doing awesome things in the property space and I expect to see great things from them both.
These two have got so much right with this property and I hope that others can learn from them. In this article, I will be taking a look at three lessons that you can take away from Andrew and Yillian’s Buy Refurbish Refinance Rent HMO for your own projects.
1. Buying near an Article 4 area
Article 4 areas are areas designated by local authorities where you are required to get planning permission to create a new HMO. This is normally because the area is very popular with people looking to rent out a room. The council, generally speaking, will refuse most applications for additional HMOs in these locations. If you can get in before an Article 4 direction is put in place; this is excellent as your property is then grandfathered in and you can continue operating your HMO. However, if you are too late it is a great idea to look for property just outside of the Article 4 area as Andrew and Yillian did.
That said, you do need to be careful doing this. While being next to an Article 4 area is a good indication that an area could be popular, that isn’t always the case. Sometimes even the same street may have differing levels of popularity depending on which end the property is on. Therefore, make sure to do careful research on the demand for the exact property you are looking to purchase as well.
2. Borrowing from an investor
Another great strategy used with this HMO was borrowing from an investor. You don’t always need to get bridging finance for your refurbishment costs, you can also borrow from private investors. This can often be more flexible and avoid a lot of the fees that bridging companies charge. Building relationships is the best way to access this sort of private capital and is something often overlooked by newer investors.
Property is a people business and the better you are at networking, sales and communication the more money you can make. Make sure to learn and develop those skills and take every opportunity you can to be in a room with other investors.
3. Combining BRRR with an HMO
BRRR deals allow you to build your wealth by refinancing and reusing your capital. HMOs are an excellent way of maximising cash-flow from a property. Combining the two allows you to get the best of both worlds. BRRR HMOs are an excellent way to build both your net worth and your passive income and thus should be on the radar of every property investor.
If you would like to learn about how to do BRRR deals (including BRRR HMOs) I would like to invite you to join me and other property investors at the Property Millionaire Intensive, where I will walk you through the process. So how much is this going to cost? What if I told you that I was willing to give you a free ticket? Then there would be no excuse, right? Well, okay, have a free ticket on me! You can book one here. Let’s talk there, see you soon.