Latest BRRR Property in Barnsley | HMO Before Article 4
Hello everybody. This is your property guide Samuel Leeds. One of my students Pete is working fabulously in the field of property and I am really proud to see my students growing so fastly. Pete bought an amazing deal in Barnsley so I decided to visit and see how greatly he is doing everything. I always suggest renting a property that: buy low rent high. This formula works wonders for and brings immense profit as well. Pete followed my advice and bought the house in Barnsley at a low price and is now renting on high. Let’s see how he did this and it will be helpful for you all to learn how you can do this.
Inside Visit of Pete’s House
I went to Pete’s house and he showed me a three-bedroom, lounge, terrace. There is a fire exit at both the entrances to meet the fire regulations for HMO. So, he made the entrance for people to get through from the front without any danger of fire. He turned the open space double room into a corridor and a bedroom. It is about nine foot by twelve. He is making changes to make it a bedroom. The house will be a 4-bed HMO. The price on which he bought this house is 66,000 pounds in a centre where everyone can come in easily. It is a good area.
Pete also changed the doors of the house to proper FD which means if there is fire, it will take 30 minutes for fire to get through. This is great he is installing these safety measures for the tenants and it is really important to be safe because hazards can happen. So, it is better to take a precaution and being the owner you should know how much safety you can provide to your tenants so they can live with satisfaction and whenever they leave, all ends on good terms. Pete told me it does not even require any license, he is just taking precautions by himself and that’s a good act.
He showed me an area which he is going to convert into a dining room lounge. It seemed open and beautiful. I was really impressed to see how Pete got this pretty house at a very low cost. Pete said that it was all because of my Youtube videos, training and courses that he learned and implemented. He is renting this house for 1500 per month and making profit after exploring my videos.
The amount he spent on the wall was around six hundred quid and 650 quid for the kitchen and the same 650 for the bathroom. So, the cost of the kitchen was just over a grand for him. The door locks are thumb turn which means if there is any fire and you have no key or may be in panic you are not able to find the key then just put your thumb to open the door. It is actually very good and when the property is HMO then you should put a thumb lock.
Outside the kitchen there is a big space which seemed good for barbeque. I asked Pete how much rent one can get for a single lap? He said, market in Barnsley is quite high so if it is BTL it would go for 600 and for HMO it would be 1500. But the bill which he is going to pay would cost him about 700 including council tax. It looked like a lot but the council tax is 140, electric and gas bill is around 150 and five pounds per day, while the mortgage is around 200 and then wi-fi and other things so it includes all.
Refurbishing and Total Cost
Pete has made a lot of changes to the house like in the kitchen, bathroom, furniture. Renovating and refurbishing all of this cost him 12 grand and three grand for roof revamping so it's like 15 grand in total. He didn’t spend a lot on furniture like the table he bought for 70 quid from Facebook. He said his wife is really good at finding stuff from Facebook so they shopped from there in a limited amount. The price of the bed is 160 which he got from one of the companies through Facebook.
Coming to the value of the house, I asked Pete how much worth it holds now as he bought this house for 66,000, spent 15 grand for refurbishing and furniture and going to rent it for 1500 per month. He said he talked to three estate agents out of which two gave the value of 120. The other one valued 110. Basically, he will refinance it and pull his money out. Mr. Benchmark mortgages can refinance it. So, calculating the amount, we assumed 115 thousand and Pete is going to get 75 loans to value up and pull out 86. He bought for 66,000 and put 15 grand so in total he is just putting 81,000. The profit he is going to make after all the cash flow is 800 per month. Isn’t it cool? He did a great job. I predicted in my book and it is exactly working. Wow!
Pete’s Property Journey
Talking about the property, Pete shared he bought two flats in Sheffield in 2008 for five grand and the builder gave 10 percent cashback. The mortgage was about 5 grand and the value didn’t go up. At that time, he didn’t know my strategies and was unaware about all these, otherwise he would have bought two houses and pulled money out from that.
After that in 2019, Pete borrowed loads of money and began his first renovation.
The area in which he bought this house required no license and no planning permission and is soon going to be article 4 area as the 25th council is bringing in it.
What is Article 4?
Article 4 is basically where you are not allowed to have mini HMOs and cannot start doing it without any planning permission. You cannot convert the houses with terraces into HMOs without planning permission and they don’t like giving the permissions. That means you cannot do this but Pete did this before 25th and that’s his smart move. Because after the 25th May this area will be article 4. So, this house has already got planning permission and it is killing all the competition. The rent and the value of this house will go up.
What I suggest to people that go for the area where there is no article 4 so you can easily turn the houses into HMOs without planning permission and can make good profit. Just take the advantage and put your efforts into it.
About the Tenants
Pete told me about the tenants, they work in a building company in Barnsley and are looking for 24 rooms in a good area and in the center of the town. It is good if they are a company, that would be less hectic for Pete in terms of rent as well as living style.
The view of the house is also calming and refreshing. I love the room from where the view is visible. If I rent that house I would love to stay in that room. Pete got an amazing deal of this house at such a cheap rate.
Pete shared that in 2019 he started watching my videos and joined Samuel365. In March 2020, he added the freedom challenge in his portfolio. We talked about the Wednesday conference where people showed up with achievements and amazing property work. Pete also said that many of the students work together and help each other. It’s great to encourage and help each other and it really teaches you a lot. Samuel365 provides a bunch of knowledge to its students, you have access to all the mentors, you get a coaching call in just 95 quid a month. And if people like this then they can upgrade on academy and can avail all the courses. It has physical events also.
Pete did a great job and bought a wonderful deal. To him Samuel365 is a game changer which brought so much for him as gained a lot of knowledge and learned strategies and everything. So this property was HMO (House in multiple Occupancy) where you can rent room by room and a BRR (Buy Refurbish Refinance) rent property. If you appreciate this deal of Pete so do like this video. And if you find my videos informative then do hit the subscribe button of my Youtube channel. See you in the next video, take care. Bye!
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