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Diary of the end of the world?


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Diary of the end of the world?

For those who know of me I quite enjoy logging my experiences in property.  I started 3 years ago through this very forum and have logged my journey since before I bought my first ever property.  If you are feeling bored and would like to read my story then feel free here:

First Ever Post

My FULL Journey (19 pages long!!)

I have been scribbling away a little bit over the last few days and thought that I would share it.  I wondered whether this should go in the journal section or the general property section, but as this is more describing what is happening in the current climate I thought it may be more relevant in here.  I also thought that this may well be interesting to read once the world has got through this current pandemic as this is something completely new to the property market as we know it.  Not sure if that will be 3, 6 or 12 months, but one day it will be over and hopefully we will still be here to tell the tale.  I personally think (as I type on 22.03.2020) that this will of course affect property prices; not many people will be buying if we are all locked up in our homes!  I do however think that once this is over the property market is going to simply explode, and those who have done something about it now and the months previous will reap the rewards.

So this is my current property situation.  I have my own flip company, my own BTL's, a sourcing company, renovations business and finally a lettings agency.  I think that I am touching quite a few areas of the market:

  • Owner of 8 active BTL properties

  • Currently selling 1 flip (that has all of my cash tied up in in).  Due to complete in approx 2 weeks.

  • Owner of a 7 bedroom apartment block in need of full renovation (partially completed but has no building regs sign off!)

  • Owner of an end terrace with PP to convert into 2 apartments (currently back to brick)

  • Owner of a mid terrace in need of full renovation (Just completed the purchase)

  • Currently purchasing BTL number 9. 1 bedroom end terrace requiring minimal work (due to complete in April)

  • Own a lettings agency that manages 33 active properties, 1 property currently actively advertised for rent

  • 8 properties currently under renovation for clients

  • 24 client properties currently being purchased

 

Thursday 19th March

Whilst having a shower I had the thought of diarising what is actually going on in my own personal property bubble. Not sure if anyone else has thought of this but the way the world is going right now I figured it might be interesting. To put the situation into context they announced last night that schools in the UK were to close from Friday and as I type interest rates have just been cut to 0.1%.

This current situation has been bubbling for quite a while. Around 2 weeks ago I started to take note of what was happening in the world and thought that it would be a very good time to start getting some cash back into the business. I began to invoice my client base for money that I was owed and looked forward to see what work was upcoming and what other invoices I could have ready to charge out. Usually I am not so quick to charge people but I thought it might be a good time as I was uncertain as to what was coming ahead. Move forward these 2 weeks and it certainly is looking ominous, but the business bank account is positive and I know we have enough funds to keep the business going for a number of months.

I would say that things started to look serious on Monday of this week. I have been following the news almost constantly and have been seeing patterns emerge. On Monday of this week there were noises about mortgage payment holidays... sure enough tenants put 2 and 2 together and I almost immediately had 1 tenant tell me they could no longer pay. Tuesday was the 2nd tenant. No payment, no response to any communication from ourselves. Yesterday there was confirmation that there were no evictions that could take place.... roll on the 3rd non payment today. We currently manage 40 properties and the main bulk of tenant payments are due very soon. I have a feeling that most are simply not going to pay as they will be expecting that the government will be covering the bill. I might be wrong but I reckon at least ¾ of tenants wont pay moving forward. My rent tracker is already looking red with these few so I dread to think what it will look like in 4 weeks time.

It is amazing just how the demand has dropped off a cliff this week. Last week we had a property up for rent on Inkerman Street. HUGE demand, property rented on the first viewing. We had even upped the rental by £25 to £475PCM because there is a shortage of decent rentals. At the weekend we listed Alma Street, next street along, same style house... 4 interested tenants booked in for Wednesday, only 1 showed up.. no other interest. Just had 1 tenant get in touch today to arrange a viewing. If this had been last week I would have had 20 applicants.

On a personal level I currently have a house sale that is just a few weeks away from completion. I signed up on Tuesday and my buyers are due to sign up tomorrow. We just have the buyers buyers that need to sign. I have been pushing with my solicitor to get everyone signed up in case someone is made to self isolate. We have targeted the 3rd April (2 weeks away)........ to say that this is one of the most important property sales of my life is an understatement. This was my 19th property purchase (I have bought another 4 now), but they are all shells that need money from this sale. I have approx £110k cash tied up in this deal so you can see the importance to me, especially when I have a block of 7 apartments sat there going mouldy whilst I wait for this cash to pay for the work on those! It feels as though I could be very close to it all going pretty tits up and everything is riding on my buyers buyers! If one of them lose their job (when jobs everywhere seem to be vanishing) I am pretty much fucked. I am going to try and not dwell on that side too much for the moment.

Oh yes, we are on self isolation as well... this is day 1 for us at home. My daughter literally coughed in school on Wednesday and was immediately sent home. I currently feel unwell but I think this is more likely to be from the usual illnesses that go round at this time of year. I haven't told anyone who works for me and I haven't posted it on social media. I want us to operate the best that we can for as long as we can as ultimately I have wages to pay. I have asked everyone who works for me to keep washing/cleaning their hands and I am also trying to keep all trades working on their own and stretching out the renovation timescales.

 

Friday 20th March 2020

Day 2 in isolation.

8am - Morning, I have been up since 5:30am (usual get up time) so have been working since then. I may have been a touch OTT in regards to tenants not paying rent as suddenly overnight I have received all of the outstanding rents! I have just sent the payments through to the landlords so that is positive (for today!).

Our property on Alma Street has had 2 more enquiries since I wrote yesterday so I have messaged each applicant to see what their viewing availability is.

I have had another client pull out of a property purchase. This isn't because of the current climate but because a recent revaluation of a property was well under what we expected. I think an element of the down-valuation could be because it has not been owned for very long (couple of months) and I know lenders are much more strict with valuations like this.

On a personal note I am feeling a bit woozy today. Headache, chest is slightly tight but I do not have a fever nor do I have a repetitive cough. It hasn't stopped me from getting on with things and the kitchen has been cleaned and tidy and the living room is straight and organised! These kids wont know what's hit them with me being off now for a week or two!!

7:30pm Well, that was an interesting prime ministers speech. The country has almost been closed and they have announced various financial support for businesses and people who are facing losing their jobs. There is mention now of grants and loans available for businesses from Monday so this is something that I am going to be looking into.

On the sale of my property my buyers went in to sign up today so that is another tick in the box. Just need their buyers to get it sorted. My solicitor said that he is now working from home from Monday and that there are no visits to the firm moving forward.

Tomorrow I am listing a clients property for rental tomorrow. I cannot see there being much demand for it but I may well be wrong. I have had no new interest in Alma Street.....

 

Saturday 21st March 2020

Day 3 in isolation

As normal I have woke up, made my brew and put sky news on to keep myself up to date with what is happening in the world. Currently Itlay is at complete breaking point. We will be going this way but its almost like people don't believe this is going to happen to them. Crazy.

Matt who works for me has messaged to let me know that he needs to go on reduced hours now as his parents can no longer have the kids. This means a reduction in his working week now to just Mon-Wed. Just adjusted the renovation planner to adapt to this latest change.

In the morning I would usually be at the gym from 7am and then stuck on my laptop working away, trying to keep up with viewings on rentals, managing upcoming renovations and chasing new purchases. This morning feels quite eerie as I haven't really got much to do. My thoughts have now moved towards some worst case planning scenarios.

As I have previously touched on I have a property that I am selling (Newchurch Road). We are still aiming for completion on Friday 3rd (2 weeks away). This was meant to be the start of a chain of properties that I currently own:

  • Remortgages of Newchurch Road (3), David Street, Mill Street

  • Mary Street – An end terrace that is ready to rent out

My plan here was to renovate and sell the block of apartments on Rochdale Road as individual units. The sale of Newchurch Road that is due to complete would give me over £100k in working capital as I literally have every single penny tied up in this (Seemed a good idea at the time!).

Rochdale Road I had estimated will need approx £70k. These are partially completed units that do not having and building control sign off!! There are kitchen and bathrooms in some of the units. I completed on this back in September 2019 and used a private loan to purchase it. I had expected to be able to start work on them when I bought them but Newchurch Road over ran in costs from £40k to £65k so that ate up every penny that I owned in the world! 1 month ago the market was starting to boom up here. EA's were telling me that they had been having their busiest months on record since the crash in 2008 and I was thinking that my units could end up being worth more than what I had originally factored in. The units consist of 4 x 1 bed apartments and 3 x bedsits. I had estimated that the apartments would sell at 65k each and the bedsits at £60k each. This would give a total sales figure of 420k and a projected profit of around 150k. The problem now is that I cannot see the market being buoyant again until people are back in work, and this is not looking likely for quite a while. I am now looking at what my exit strategy would look like if I was to renovate and keep the properties. From a cash flow perspective this is approx £2k per month after all costs (which would then push me well into my rental target and also secure my retirement by a considerable margin). This would however mean that my working capital would dramatically drop from where I had estimated it to be at £250k after selling the 7 units to approx to £100k if I keep the 7 units (I have worked in a drop in value of £50k over the 7 units).

The plan was to then use this money to renovate and keep Newchurch Road (5), then move onto Abbey Street and renovate and keep that (both to be refinanced after 6 months). The plan was to keep a large amount of working capital and then just add to my BTL portfolio when I found a property that I could see that I could extract as much cash out of it as possible so that the physical total cash spend was as low as possible. The plan was that this would enable me to keep a significant war chest but still add to my portfolio and build it up.

My worry now is how the market is going to be in 4-5 months when these apartments are finished and what the hunger in the market will be for selling onwards. The plan was to separate the titles and start to sell the units on, as 4 are pretty much ready minus cosmetic bits with the rest needing a little more work on them. I think it would probably be best now to speak with my broker and ascertain the options for potentially keeping the block of apartments. I could then always renovate and sell Newchurch Road (5) and Abbey Street and maybe even Mary Street. I would not make anywhere near as much money as I would if I had sold the full block but I would still have a good chunk of working capital and hopefully by then the market would have picked up so I could get my original estimation figures for Newchurch 5, Abbey St. and Mary St.

I could probably make £10k on Abbey Street, £30k on Newchurch (5) and £10k on Mary Street. That's potentially £50k to add to the £100k in theory if I keep the apartments. Still massively off where I would have been but there is the fact that I would have an additional 7 units on my portfolio generating a great income and also there would be at least £90k+ in the deposit on the units. It isn't like I am losing money its just tied up more rather than being liquid.

This could potentially be the better option now as I am not sure how long it would actually take to sell 7 units in the current climate? There is also the potential to revalue in 2 years when hopefully the market is back up and extract the cash that I have missed out on (if I need it in 2 years). Definitely something that I am now going to speak with my broker about.

6pm – We only had 1 viewing turn up at Alma Street today. 1 tenant was booked in for 2pm and another for 2:15pm. I confirmed with the 2pm just 2 hours before and they didn't show. The 2:15pm said they loved the house and they wanted it. I have sent them the link to reserve the property but as of yet not had a reply or a reservation. You do get this quite a lot where people say they want something and then you don't hear from them ever again!

Co-operation Street has been listed today for rent. This is a 3 bedroom property and we have listed at £550PCM as this is what we were looking at before this crisis started. It is now live on Rightmove so will see what interest we get from it.

 

Sunday 22nd March

Day 4 in isolation

6:50pm – What a strange day it has been. My workload as expected has completely fallen through the floor so after a few hours of planning this morning I haven't really had anything else to do today! I set up a home gym since they are now all closed as I have a bench and a good set on dumbbells and then after a workout sat in the garden with the Mrs and kids in the sunshine and just dozed for an hour or so. If there is anything that can be positive from this it might be that this forced break is going to be good for me after another massive run of working every single day for multiple months. My job is 7 days per week so I never have a day off really, even on holiday in October when we went to Tenerife I still had to work each day.

This morning I listened to a couple of podcasts property related that were speaking about the Covid-19 virus. Although it is difficult for anyone to know what is happening it is good to hear what experienced developers/landlords are feeling and thinking. I have been thinking more and more about keeping the apartments and the more that I do the more I feel it will be a better decision for my own security. This property would literally mean we could retire on paper and give us over £5k per month rental income. The big factor now in this decision is what amount would the apartments be valued at? Ultimately this would be the deciding factor.

Some good news today, Alma Street has gone! Tenants placed the holding deposit this afternoon. We have had 25% of the usual tenant enquiries but the property went on the 2nd viewing (that attended!), so that is really positive. Not had any enquiries for Co-op yet but we are only 24hours in.

In the sourcing business I now have 8 active clients looking for property.

 

Darren

 

 

 

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      BTS -- BTL -- Lettings -- Sourcing

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Monday 23rd March 2020

Day 5 in isolation

06:55am - Later than usual wake up! My alarm usually goes off each day at 05:30am. This allows me to work for an hour and set up the day and the jobs ahead, im then at the gym for 7am until about 08:30am and then at the office for just after 9am. As I no longer need to do the above I have just allowed myself to wake up when I wake up. At first this was still at 05:30 as that was my body clock, but today we have hit the dizzy heights of 06:30am!!

I have just watched a very interesting interview on sky news from a submariner. He said to get through periods of lock-down (as they have) routine is the best way. It helps break down each day and prevents bad habits forming. Funnily enough this is something that O have already set for the kids, and as of today I am setting up my own for my own piece of mind.

Sky news have just flashed up a potential lock-down within 24 hours.

On a positive, had an initial viewing enquiry of Co-op!

15:00 – I think today is the first full day where the world might actually be imploding! I had a call this morning from one of my joiners who said that his tile place was shutting and it might be worth stocking up on everything we need for other jobs. Later on this afternoon my carpet fitter rang... same story...... I am now planning all 8 renovations and trying to get all of the materials purchased in advance and then stored. My decorators are organising about half a wagons worth of paint (slight exaggeration) but its a lot of paint!!

Add to this the farce of the sale of my property. I have literally had to grab this one by the horns and manage it throughout the full process. I have basically pretended to be the agent for my buyer and have rang her solicitor who is acting for the sale of her house and then the solicitor for her buyer. Considering where we are up to from my side (we can complete any day) here is where the chain is up to:

Her Buyer:

  • ONLY just instructed the solicitor last Thursday 19th!

  • ID has been verified

  • Searches started on Friday 20th

Her Sale:

  • ID certified

  • Help to buy redemption pack completed on Friday 20th and just waiting on this to be posted to the solicitor.

 

It turns out that my solicitor knows the her buyers solicitor so we are going to see if we can get things moving along. They said that they would be making contact with her sale solicitor this week.... will chase up on Friday....

15:46 – Just got off the phone to my carpet fitter. He is going to order in 3 houses worth of carpet and I am paying him upfront. They are all due to be done in the next 2 weeks so if we are not on full lock-down that will be 3 houses that we can get on the rental market.

21:30 – Well, that escalated quickly! We are now on lock-down. I have just messaged all of my clients to inform them of the potential disruption. I am assuming the worst case scenario and that we can no longer work on any site that we operate as the information was very sketchy. I am sure there will be clarity tomorrow once everyone voices their concerns.

Darren

 

 

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      BTS -- BTL -- Lettings -- Sourcing

          www.fmp-investments.com   

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Tuesday 24th March 2020

06:32 – I have been up for the last half hour and have already knocked back my first brew. Email just sent to my solicitor asking him to make contact with the solicitors further down the chain to see if they are working during this period. I have also asked him to speak with the people who complete local searches to see if that is still operational (as it is an office based role).

This morning I am waiting on clarification as to whether builders merchants/plumbing merchants will be open for emergency call-outs.

07:23 – Just found this update on the B&Q website:

The Prime Minister has announced that all non-essential retailers will close to help stop the spread of Covid-19. We have learnt that the DIY and Hardware store sector has been categorised as an essential retailer by the government.”

19:27 – Well that turned into a busy day! My phone hasn't stopped ringing all day. I did want to sit in my self isolation in the sunshine listing to a podcast or two but that wasn't to be. The trades have been busy at it, we have had a new boiler fitted today, a bathroom fitted, one house being gutted, another having en-suites fitted, one being plastered and another being decorated! This is the strangest lock-down I have ever known. Builders seem to be classed as key trades so the lads have all been working. I gave them the option not to with everything that is going on but they are all cracking on. I have made it so that it is just 1 trade per property at any one time.

Had my solicitor on the phone, mortgage broker and a couple of estate agents. I even have 2 properties completing tomorrow for a client!! My solicitor has managed to speak with the one at the bottom of the chain and hopefully enquiries will be getting sent out this week. I will chase that back up on Monday to see what has happened.

I am confused as to how this is a lock-down?

Darren

 

 

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Wednesday 25th March 2020

Day 7 in isolation

Day 2 of national lock-down

 

07:00 – Morning. Up for the last 40 minutes. Currently sat in the living room with the sun shining down and a brew. Sat here you wouldn't think the world was going to shit.

Wasn't planning on updating yet but just had a sky news story flash up that they are now looking into stopping all non-essential building works now. Informed the trades via text this morning that this could be the case. Feeling tough on my trades as they are all self employed and this is their income.

 

09:30 – Another busy day from home! We completed on 2 properties today for clients. I just need to organise the collection of the keys from the EA. I am however in no rush to enter these properties with everything that is going on so for now they can sit there until next week. Apparently the virus can only live on surfaces for up to 36 hours and I have no idea if the owners (as this is a house someone was actually living in) have had any symptoms. Plus the lads are all busy on other properties. The benefit however is that this is another property that some of the trades can work on (and earn an income) whilst they are still permitted to.

I am also looking at completing a remote tenant handover of a property tomorrow. Inkerman Street referencing is now completed and the tenant has asked if they can move in. The last thing that we wanted to do was to come into contact with anyone and then I had a brain wave! We have a key box on the door (so we do not need to be at the property) and we had taken the meter readings and images last week so all I need to do is get them to digitally sign the remaining paperwork and then I can simply give them the key code! This means we are not coming in contact with the tenant plus my client can start replacing the income that they lost when their previous tenant moved out. Win-win!

Renovation wise Lodge street rip out and 1st fix electrics is now completed, Dale Street decorating is almost ready and Newchurch Road bathroom is continuing to be fitted and plastered.

We do still have Co-operation street listed for rent and have had someone else enquire but for now we are not completing viewings. We also have Parker Street which is ready to be dressed and will look at possibly doing that over the next week, again depending upon how things are progressing.

One of my clients also received his re-mortgage valuation back today. It was £10k down on what he was looking to achieve. I think with the current state of the market its one of those things you just need to take on the chin and then wait until the 2 year point where prices will have risen and you can extract the funds again. I have 3 going through and it will no doubt cost me a fortune in the amount that I am now going to lose on revaluations. But what else is there to do? The money will come back over the next few years but it will be yet another hit to the working capital.

In some positive news (if it can ever be positive) the number of deaths in one day dropped yesterday to 43 in one day.

Stay safe everyone.

Darren

 

 

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Thursday 26th March 2020

Day 8 in isolation

Day 3 of national lock-down

17:55 – Eventful day..... I had my 4th tenant get in touch to say that they will struggle to pay. 3 of these are my own personal properties so I am now £1,419 per month down on income with mortgages still to pay. For my clients I have just the 1 property so far. This isn't putting me into financial difficulty just yet but I am hoping that I do not have too many more personal properties that stop paying. My Mrs is currently off work and no longer receiving sick pay from her job to my son having a major operation and her needing to be at home, so my business is having to cover two incomes.

Personally I spent most of the day in the back garden sat in the sun. If I am being forced to sit at home then I suppose I should make the most of it whilst the weather is nice!! I do have some bits for work but as you can imagine not much! I still haven't started on my year end accounts but I think they will be done next week.

Today we completed our first ever remote tenant handover (as mentioned in yesterdays post). It has worked well and the tenant was in the property before dinner time once we had received the rent and deposit payment. All paperwork was completed online which in some ways was quite useful as we did not need to print, complete and then scan into the system, so in some ways this may be something that we adopt with paperwork moving forward if I can spend some time streamlining it.

The government announced measures today to pay the self employed up to 80% of their income. The problem being that the payments are not kicking in until June I think they said. Had a few texts from a couple of lads who were less than impressed. I am sure more detail will start to filter through as it seems to be the case that they announce something and then it takes 2 days before the detail is fully understood. My initial feeling of it from the feedback that I have got is that it isn't enough for right now.

I cannot understand why the government simply stopped all mortgage payments, all utility payments, all council tax payments. Surely they are the items that take up most householders bills? Anyway, I am not a politician or an economics master so that's just my opinion.

Darren

 

 

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Friday 27th March 2020

Day 9 in isolation

Day 4 of national lock-down

06:54 – Been up for approx an hour and now on my 2nd brew. Today feels slightly different for some reason. I do not feel as though I currently have a purpose (if that makes sense). With how my usually hectic life has calmed almost to a stand still I am feeling a little bit lost today. Not sure where this has come from. Maybe finances are starting to dwell on my mind. After today there are no mortgage completions being conducted. Most of the lending is starting to disappear from the market place. I am starting to worry about rents not coming in. I suppose in some respects the underlying fact that what I have grafted for over the last few years could partially collapse all around me. My remortgage process is going through on 3 properties and lending has drastically reduced from the market place over this last week. At the moment the lender I am looking to use is still active, for now! The next issue with this though is that of course the valuations will be drastically lower than what they were a few weeks ago. My hope is that I can revalue them at just enough so that I can pay my lenders back and it not cost me and physical cash contribution. The numbers that I need are:

 

David Street

I owe my lender £45,000 + £4,500 interest, so a total of £49,500. Call legal fees £1.2k so I need to extract £50.2k from the remortgage. The minimum revaluation for this needs to be under £68k. Cannot see this happening now in this market. I am estimating that it will likely be around £60k (if I am lucky) so I will need to find £8k.

 

Newchurch Road -

I owe my lender £35k + £3.5k interest. With legals again it is approx £39.7k. I require a £53k revaluation as a minimum for this not to cost me anything physically on the remortgage. This could happen. TBH as long as it hits £50k in these uncertain times I will be happy! I was expecting it to achieve £60k+ a few weeks ago. Potential of a £3k bill.

 

Mill Street -

I owe my lender £40k + £4k interest, so £45.2k with fees. This will need a £60k valuation which should be achievable. I have on street comparables from December at £72k.

Looking at the 3 revaluations I have a potential bill of £11k that I need to find. I might be lucky and get some better numbers than expected, I might be really unlucky and this number increases.

The above wasn't too much of an issue to me pre end of the world. My house sale on Newchurch was going through and that was about to release me £110k working capital after paying off my lender (this is not all profit by the way!). This would of course have covered any shortfall that could have occurred above with the remortgages. As you know this sale is no-where near where I though it was! I was all set to complete with my buyer next week but unfortunately their buyer wasn't on the same page and has only just instructed their solicitors a week ago and only just paid for the searches! My biggest worry here is what their job roles are and how the current crisis is affecting them personally. I won't take much for this to fall apart now. My solicitor is going to ring the solicitor at the bottom of the chain today and see where things are up to. I have also asked him to try and find out the personal circumstances of the buyers as I may need to look at what my other options are. I have quickly looked at the figures if I kept the property and if I was able to get a £160k valuation it would only release £70k after paying my client back. I am wondering whether my client would be happy to extend the loan period again and I pay them their initial 10% back now and then another 10% back once my cash flow improves again (and basically keep the initial money they lent me). This would allow me to then have a potential cash flow (if I were able to get the 160k valuation) of £110k. It would also allow the valuation to be lower by £20k or so and still leave me with enough money to get the 7 apartments completed and ride the next few months of uncertainty. I think this is something that I will look into right now. BRB.

A few hours later – I have emailed my private lender explaining the current situation and my exit strategies. I may have thought of a solution but this will all depend on if they want to lend again in these troubled times.

My recent cash purchases are on 12 month loan agreements so they should not pose any issues at this moment in time, just the bloody council tax bills that I will start getting at 150%!!!

20:00 – An eventful day. After sorting out the above I dived onto the phone to the utility provider for Co-operation street. We have had no power or gas for 2 weeks in the property. It has had some previous water ingress issues which have been fixed externally but the damp is still sat there in the building. I want to hook up my multiple dehumidifiers to dry the house out fully so we can prepare it for rent. Anyway, long story short I kicked off massively over the phone and they finally agreed to send an engineer out to the property tp clear the debt on the meters. This has meant that I had to venture out into the world and spent 3 hours sat in my car outside the house. The engineer did turn up and we now have gas and electric! Woohooo! Whilst out I also popped into Rockcliffe Road that we completed on Wednesday. Fully protected I might add; I have no idea if the previous inhabitants were ill or not. House is a mess. Furniture has been left, crap piled up outside, its grubby and smells.... not what I saw when I visited on the viewing many months ago. It isn't the end of the world, just a bit more work on our part.

We also completed on another client property today. Bit of a surprise to me as I didn't know it was happening. This is already tenanted so we are going to complete all of the AST work via email and then arrange for a visit once the Covid-19 stuff has passed through and it is safe to visit peoples homes again.

 

Darren

 

 

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Saturday 28th March 2020

Day 5 of national lock-down

Nothing new to report on the Covid-19 front. Daily deaths have doubled now so it is looking like we are about to reach the steep curve where everything gets very grim indeed. I dread to think where we will be this time next week.

With the work side of life I jumped in the car today and visited a few of the empty properties. One reason was to check on them to see how they are with them being empty, the 2nd reason was to get updated jobs lists for the properties so that I can get them allocated over the next 2 weeks (if the lads are still permitted to work) without me needing to be in contact with anyone. I do not mind working on my own so this self isolation doesn't bother me in the slightest. I jumped in the car armed with a large bottle of water, a box of disposable gloves and a big pack of antibacterial wipes!!

First stop was to my apartment block. I haven't really been in this for a good few months. Whilst here I was looking at the rear car park that I have and had one of those potentially genius ideas... I can easily fit a number of storage containers on this site. As I am now going to keep the property I am now wondering about the feasibility of having a few and renting them out as storage.... site is measured up so I will be playing around with plans over the next few days to see what can be achieved. I then visited Co-operation street, Lodge street, Mary Street and finally Lynwood Street. Jobs lists all wrote down and sites all inspected.

Today I also signed the contract for Alma Street with the tenants moving in next Sunday. I will repeat what we did on Inkerman Street with the remote handovers.

First big issue now reached today; carpet fitters are no longer operating and wont be doing any more work on any properties. This is amazing since I paid them for a number of houses just before the lock-down. Stock in their shop and no-one to fit them. I have also lost one of the lads who does my tiling but this isn't a major issue and I have someone else who is still working who can do this job.

With it being a Saturday there haven't been any new rent payment failures.... we have quite a number that are due though with it being month end/start of a fresh month... fingers are still crossed that they all come in.

 

Darren

 

 

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Sunday 29th March 2020

Day 6 of national lock-down

Unfortunately we have had another high number of Covi-19 deaths (207), showing that we are now on the steep climb of the curve. The pattern seems to be 3 days of similar numbers before it doubles again, so the expectation is another 200-ish number range today before we have 400-500 on Tuesday. Scary stuff.

Today's mini nervous breakdown was over cashflow. My renovations business outgoings this month have been £21,409.53 and I suddenly thought “have I got enough cash?!?!” It is almost the start of the new month and I have multiple mortgages, wages and my own income to come out of the business. After a couple of hours going through all of my accounts and checking through existing renovations I finally established that my cash flow is still in the green. I over-estimated a few bills to try and give me a buffer and at the moment we are tracking at a credit of £4k. This is covering the planned outgoings this month of £11,800. That £11.8k figure includes 6 renovations that are underway. I have not included any rental income into the business this month to stress test the funds. At the minute we are looking at 2 months worth of bill coverage if we did not receive any rent at all into the business from personal or the lettings agency. I know that it wont come to that but sometimes it is best to plan for the absolute end of the world just to see how things look on paper. Going through the accounts was very positive though as I found a few where works had been completed and not invoiced so they have been sorted and emailed out. I think its time to seriously tighten the belt this upcoming month; April will be a very challenging month for everyone in the UK and I intend on getting through it in one piece.

On some more positive news the client who I owe money to for Newchurch Road has said that he will help me financially in relation to my potential sale issue. Again I have planned for the worst case scenario and at the moment it does seem positive, but it is good to have a back-up plan. All I need to do is get this sale completed and I would not have a single thing to worry about on the financial side..... so close yet so far as they say! It really is crazy to think that 3 weeks ago I was looking at generating some amazing profits for this year then it has all been wiped out just like that!!

 

Darren

 

 

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Monday 30th March 2020

Day 7 of national lock-down

Had a bit of a feeling sorry for myself day today. Well, not sure if I could say it was that but I was extremely tired and lacked any form of motivation. I even went to bed just before dinner time and fell asleep. Maybe all of what is going on is playing on my mind more than I would like to admit?

Today we lost another sourcing sale where the client has pulled out. They were concerned over current values dropping. I spoke with the EA who has actually said that she is finding that prices are still static and they haven't seen any reductions yet. It is still early on though. I have also had 4 new potential clients get in touch with me over the last few days, so there are definitely people still buying. I suppose this is a better time to purchase as you would have much less competition. Just before all of this started we were gazumped on one property and then were massively outbid on 2 more properties. We were struggling to get our offers to stick as people were offering well more than what properties were currently worth.

The death toll announced today was 180, which is down from the previous day. Current evidence is showing that the death rate is doubling every 3.3 days, so counting backwards – 180, 207, 259. The expectation will be that we will have a sharp rise tomorrow/Wednesday. We are 1 full week into the lock-down now so another 7 days to go to see if the national lock-down makes the difference that we all hope it will.

This afternoon I did pull my finger out of my arse and started working. Funnily enough just as 1 client pulls out its the day that we are starting to wind up the sourcing side again. I wanted to hold off for the initial start of this pandemic so put the pause button on everything over the last 2 weeks. We emailed out a property this afternoon and had 2 interested clients reply within a few hours, one of which will be placing an offer tomorrow after we have had a telephone meeting. At the minute I cannot see the massive drop in prices that has been touted around. You would only sell for significantly less if you were motivated to do so. If you are not in a rush to sell then you would simply just leave it. There are still lots of properties being listed new for sale and my email notices were the busiest today than they have been in the last week. I think now that people are getting used to this strange reality the world in some respects is still turning. EA's are now competing video viewings of properties as physical viewings are no longer being conducted. I don't think people will completely lock down a purchase without seeing but they may view online, discuss and agree a potential purchase price with the seller subject to a physical viewing. That would be my preferred route as then you have the ball rolling and can get the property secured as soon as you are granted access again in a few weeks time.

Tomorrow I am venturing out again. I need to visit a few sites very early doors (to avoid contact with any of the trades) as I need to measure up kitchen spaces and generally do a check on some of the empty properties that we have. I have completed on one myself the other week and I still do not have the keys! Renovation works are still moving forward. Cooper Street is now being plastered, Mary Street (one of mine) is being decorated, Larkhill is still having the en-suites and bedrooms built and Newchurch Road is in the process of having the new bath suite fitted. I am just glad that I have been able to help the lads out with paid work through this tough period.

 

Darren

 

 

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Tuesday 31st March 2020

Day 8 of national lock-down

 

14:00 – I am struggling again today. This lack of routine is killing my head space! I usually have quite a set pattern for everyday:

05:30am – Wake up, plan the day ahead, allocate out tasks to the trades

07:00am – Gym for 1.5/2hrs

09:30am – Arrive at the office

16:00-17:00 – Leave the office and head home

17:00 – Tea, bit of time with the family, back to work until bed.

 

Very simple, but needs to be with the volume of work that I usually have. I am not really one for “down-time” as get bored very easily. My routine is broken and this is messing with my head-space, I suppose in some ways maybe its a bit like work OCD – I like to know what is happening for the day at a set time. This morning was a prime example, didn't wake up until 7am as I hadn't set my alarm (why would I?). I already feel miles behind in my day. Headed out in the car at 8am to drive over to some of the empty properties to check on them. Arrived back at 10am. Feeling a bit lost with what to do; very little motivation. Went to my “home gym” that I have had to create; couldn't get into it so stopped and grabbed a shower.

And this is hopefully where my answer hit me! Set up a proper (if you can call it proper) home office. Up in my bedroom (we have the attic room) it is away from the Mrs and kids (which tbh I really need as they just make noise all day long) where I can be left alone to work. I have cleared a space, set up a cheap folding desk that we have and also found a large board that's from the bottom of a draw to extend the space. Its very make-shift, but already typing this I do feel like my head is clearing slightly. I have the en-suite so my own private facilities, TV on the wall (so I can pop sky news on later) and most important its quiet! I just need my brew machine from the office and I have cracked it! Lol.

Tomorrow I am going to set my alarm for 5:30am as I normally would and then I will do an hours worth of work with a few brews before heading to my home gym at 7am and working there for a couple of hours. This basically means that by 9am when the family get up I will be set, showered and ready to work as normal. If I don't have a lot on and I am done for dinner then so be it, but in all honesty my work load does not seem to have subsided one little bit. Time to get my head back in gear and get through this lock-down. I found when I first moved to my office (which was 12 months ago now) it made a huge difference to my mind-set and how I approached work. Time to try my hardest to replicate my office environment and keep pushing the business even when time are the way they are.

20:00 – We placed an offer on a property today and had it accepted! This is one that we had viewed before the current crisis which meant we had an advantage over most people as we had been on site. The property was listed at £50k and we secured it at £44k. A positive for today. We also unfortunately had a new property rental fall through; tenant was due to move in next week. The property was placed back on the rental market this afternoon and we have had 2 interested potential tenants already which has surprised me as the property has been listed at a high monthly amount. I suppose there are lots of people with time on their hands realising they want to move?

Tomorrow we are set to complete on 2 client purchases, Inkerman Street (our 3rd on this street) and Hickes Terrace. Inkerman requires minor renovation work (new kitchen etc) where-as Hickes terrace is ready to be dressed and ready to rent. We also had the remaining rent and deposit paid on Alma Street today, so this will be all set for handover on Sunday. Again with this one we be doing this one remotely; all handover documents will be completed online and the keys will be waiting for the tenants in the key box that is located at the property.

Working from my home office was a god send! I had piece and quiet, I got lots of work done and my head feels a bit more levelled and focused. I know the world is on pause for a huge amount of the population but my business seems to be ticking over and my work load hasn't really reduced too much. Hoping the make shift office can keep me sane and help me get through the lock-down weeks (plus keep paying my own bills!). Tomorrow is the 1st of the month so it will be interesting to see how many tenants can still pay now. I have had 1 tenant in a HMO state he can no longer pay as he has lost his work; and another tenant has made mumblings towards it (even though he had stated his mum and brother are temporarily living in the same house). The rent is only £425PCM so I am sure between 3 adults that can be covered? 5 none payers now from 43 properties.

Unfortunately the death toll today was 393, which is almost double the previous 3 day average. If the pattern continues then this will have doubled by Friday of this week to 800 (per day). We are 8 days into this lock-down so we still have a number of days left before we have hit the critical 2 week marker that seems to show if restrictions have taken effect. It would not shock me if we did get a spike in certain areas as the pubs/bars if I recall were closed on the Friday night (it might have been Saturday) and we saw thousands of idiots all going into bars packed out for “one last drink” because this virus did not affect the young and healthy; oh wait, young and healthy people are dyeing from this and it seems to be affecting more and more “normal” people every day. If more people would have just listened from the start the numbers would now be significantly lower. We placed my Mrs mum and dad on lock-down weeks ago off our own back and my Mrs has not left the house (apart from to walk the dog) for nearly 2 weeks. Its the stupid people who will have likely got away with this. Anyway, mini rant over.

 

Darren

 

 

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Wednesday 1st April 2020

Day 9 of national lock-down

07:13 – I didnt quite make it to an 05:30am alarm but I did do 6am! I didnt get to sleep until late as I have very follishly downloaded and old game from when I was a kid (sim city) to help me pass the time.... oh it passed some time and massively consumed my evening!! I am usually in bed for 10pm every day but I didn't go up until gone 11pm and then it took me nearly an hour to drift off. I know this isn't particularly late but as I do prefer to be up very early whilst the world is asleep it doesn't help!!

Feeling a touch more positive today (I have only been up for an hour though!). 2 brews down I have caught up with some bits that I have needed to and will proceed to skim through what is required for today and get my jobs list together. I did plan on getting into the home gym (aka washing room) for 7am but that is slightly delayed as I want to get through some bits of planning first. I also have a slight niggle in my left shoulder from yesterday which has been giving me headache as it is very tight. As its 1st of the month its bill day... time to go through all of the accounts and make sure everything has gone out and that there is something left over! (Both business and personal). I suppose at home we are now spending less (as we cannot go anywhere) so the reduction in our own income that is necessary at this time should not be too difficult. Better get on with things instead of rambling along here!

 

19:31 – Interesting day at work. We completed on 2 purchases today for clients so plans are now underway for getting these turned around as quickly as possible. All tenants have paid their rent (so far). I have been as busy as ever, the amount of work at the moment is relentless and I have only just decided to call it a day. I have 2 rents due tomorrow; one of the tenants has a very patchy history paying on time so I am not holding my breath on that one! No doubt I will have to chase and chase (despite the fact they have been paid on the day they are to pay rent! - We moved the payment day so it lined up perfectly).

Renovation works are moving along nicely. Cooper Street plastering should be completed by the end of tomorrow. The bathroom swap at Newchurch seems to be taking longer than I had hoped, they have plastered today but still waiting on the bathroom to be fitted. My property in Mary Street has just been decorated and is being dressed tomorrow so I should be able to photograph and list it. One that is very interesting is Lisbon Terrace. We had the tenant pull out of this so had to list it again; 5 enquiries in the first 24 hours, and it is a much more expensive property at £650PCM! Really surprised by the interest in this one. We have set the viewings for 2 weeks time.

Unfortunately on the pandemic deaths shot up again, today they are 563 which was an increase of 170 people. The biggest story on the news is regarding the lack of testing that is going on for NHS front line. I am sure the government are doing everything they can, I find it quite annoying sometimes when watching the news and smart arse reporters are always scrutinising everything that is being done; I doubt very much that the people at the top are all sat there scratching their arses rather than doing everything they can. I suppose it is quite easy to sit there and pass judgment!

 

Darren

 

 

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Thursday 2nd April 2020

Day 10 of national lock-down

08:21 – Tenant at Garnett Street hasn't sent her rent... what a shock! Other rents have been received.

Forgot to mention yesterday that I spent the afternoon streamlining the lettings agency tenant sign-off papers. Using Docusign I have created templates now for all documents so that we can remotely sign off everything. This was needed due to the current circumstances but it will save time moving forward. We can now get everything completed a few days before so all we need to do now is hand over the keys; plus it drove me crazy having to scan in paperwork for the system!

Today has seen 568 deaths which is level on yesterdays figures. Hopefully this figure can stay level now for a couple of days, if so there may finally be some light?

19:32 – The tenant at Garnett sent her rent! Couldn't believe it!! Today has been another busy day from the office side. Had lots of interest in Lisbon Terrace so far rental wise which has really surprised me. Also had a few more enquiries on our 3 bed at Co-Operation street. My property on Mary Street has now been cleaned and dressed and I will be heading over to it tomorrow to photograph it for its rental listing. It should achieve £325-350PCM in this area but as always I like to test the boundaries! I am not in a rush considering the current climate so I am going to throw it on at £450PCM and just see what happens. We have just decorated and it looks really nice with good access to the local amenities and a side yard, so lets see! I would be happy at £400PCM.

Cooper Street plastering is now completed and tomorrow Lodge Street is started. Today I needed to try and acquire tiles, kitchen equipment etc.... Hard work! Wickes has the items but their deliveries are not until the end of April so we have a forced delay on some of the renovations. To be fair we have done well to continue as we are so I shouldn't really complain.

 

Darren

 

 

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Friday 3rd April 2020

Day 11 of national lock-down

Yet another busy work day today. I think it is pretty fair to say that the property market has not stopped, its just a bit slower than used to be a few weeks ago. Trades can continue to work although finding materials can be a challenge at this moment. Tenants are still looking for rental properties. I suppose if they are being forced to stay at home then it might make them think a bit more about where they want to live. On the whole the majority of tenants are paying their rent; I have just had one who has asked if she can pay slightly less for 2 months so she can manage her money, but apart from that the majority are paying. Houses are still being sold. The prices have not dropped as anyone who doesn't need to sell simply wont.

My conclusion at day 11 is that we are indeed on pause, but there is also a massive amount of our industry that is carrying on as normal but taking extra precautions. Things are simply taking longer (1 trade in a house at any time) and materials are being difficult to find. The jobs however are still being done.

I think this is the point where a daily update of what I am doing isn't really required. If anything dramatic changes in the market then I will update, but at the minute I would say that things are challenging, but its still pretty much business as usual (just at half speed!).

If you want to follow what I am doing daily I post absolutely every renovation, rental and purchase on my Instagram/Facebook feed. Have a look if it interests you what we are up to:

Facebook

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And if you have lots of free time then feel free to read my full journal (its a long one!).  I started just over 3 years ago with £20k and now have quite a large property company that does lettings, flips, sourcing, renovations and property management.  It has been a really tough few years and a lot of work has gone into it, but definitely shows you want can be achieved!

My first ever post

Journal of my story

 

Stay safe everyone!

Darren

 

 

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