Rapper Krept Gets a Free House!!
Hey, Samuel Leeds here. Over the recent years, I've been helping Krept, a London-based rapper and songwriter, build his property portfolio. He is one of two members of the legendary UK music group, Krept & Konan. One of their hit singles is “Freak of the Week”, which features American singer Jeremih. Krept recently renovated and converted a house in Liverpool into a 3-bedroom HMO, which he agreed to show us around.
How Much Did He Buy the House?
Houses in that area in Liverpool typically cost around £100,000, £110,000, but Krept bought the house for £43,000! He managed to get it for that price because the property was in poor condition. However, the state of the house was not a put-off, because as he explained, he saw its potential.
Additionally, he bought the house right before the area introduced an Article 4 direction. Article 4 directions require property owners to get planning permission to convert single homes or residential properties into HMOs. So Krept's house will become “a special edition house, which means the value is going to shoot up. The rents are going to shoot up.”
“I got a unicorn now,” Krept said.
“They don't call you a GOAT for nothing,” I remarked.
“Dude, this house is fresher than your jacket,” I remarked as soon as we got inside. The house had undergone a remarkable transformation evident in the “before” and “after” photos. The living room now has a new grey carpet, stylish and comfortable furniture, and unique wall art, all of which brighten and jazz up the room.
Krept also expanded the kitchen by removing the downstairs bathroom. Initially, you'd have to walk through the kitchen to get to the toilet. Each room is an ensuite. And to give each its own character, there's a feature wall, which varies in colour from room to room. There's an orange room, a green room, and a blue room.
Krept revealed that the builders were initially against having an ensuite in the orange because of the piping arrangement. But “where there's a will, there's a way.” So they installed a Saniflo toilet. “As long as you don't put nappies or anything down there, it should be fine,” I remarked. The blue room, which is the biggest of the three, is renting out for £395. It has a bathtub in the bathroom, so it's definitely worth it.
KREPT has also installed motion sensor lights that turn on and off automatically. The reasoning being since the tenants won't be paying the electricity bill, they might not be so keen to switch off the lights when not in use. So if the tenants forget to turn off the lights, “it will just do it for them.”
The cost of refurbishing the house came to £30,000, which was slightly under budget. So including the buying price, refurbishment cost, and stamp duty, Krept spent a total of £75,000. Following refurbishment, the house value increased to £110,000. So after refinancing, he pulled out all the money he invested, essentially leaving him with a free house.
Where Did He Get the Money?
“Where did you get the money?” I asked Krept. “If I tell you, I'll have to kill you,” he answered jokingly. Anyway, as previously mentioned, Krept is in the music industry. I've actually seen him in concerts. He's pretty good at what he does and makes good money, which he, in turn, puts into property strategically.
“We've got three tenants moving in … Next week?” I asked. “Yes,” Krept confirmed. The rents of the three rooms are between £350 and £400, so fully occupied, he expects a rental income of just under £1,200 each month. After expenses, that translates to a monthly profit of £500 to £600. Remember, this is ongoing income from a property he's already pulled out his entire initial investment.
- Buying Price: £43,000
- Refurbishment Cost: £30,000
- Total Amount Invested: £75,000
- After Repair Value: £100,000-£110,000
- Monthly Rental Income: about £1,200
- Monthly Profit: £500-£600
“Bro, it's been an honour to work with you,” Krept said. “This is the man, the GOAT, the legend,” I said in response. “No, this is the man, the GOAT, the legend,” Krept responded. “Appreciate you, brother,” I said, marking the end of the house tour.
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