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Well done mate, been great following your journey. Amazing what one can achieve through setting goals and working hard. Keep up the success! 

Personal Blog: https://abcdad.co.uk
Property Spreadsheet and Deal Analyser: https://abcdad.co.uk/property-spreadsheet
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  • 7 months later...

Wednesday 25th December 2019

Firstly, merry Christmas!! It has been a while since I last posted, and tbh I had no idea just how long!! I have just checked back and August was my last post, which has shocked me. I have just been so busy these last few months. I kept thinking about popping on for a quick update but then I would become distracted with something from work and another 2 weeks would pass by.

It has been a very busy past few months. If you are interested in what I do then I do post daily updates on Instagram, which is probably the easiest way to follow what I am doing:

https://www.instagram.com/finnigan.mcneill.properties

 

All properties have their own unique hashtag so you can simply click on one and see everything about that property.

Soooooo..... where are we up to? Probably easiest to give you some headline numbers I guess:

Properties:

  • Now the owner of my 21st property!

  • Property number 20 has just gone onto the market – this is a 5 bedroom monster!

  • Currently have 8 active rentals with 2 more due to start renovation in the next few months

  • Managing 28 rentals for clients with another 17 in the process of being purchased, renovated or advertised online for rent

Figures:

  • Sold only 5 properties this year with a net profit before tax of £71,325 (I ended up keeping 5 of my flips as BTL's).

  • Personal rental income after mortgages is currently £3,100 (£37,200 per year)

  • Current income from my new businesses before tax approx £62,000.

  • Current value of owned rental properties - £620,000

  • Working capital approx £120k once project #20 sells

 

There is probably more numbers that I could find but I think they are good headliners. One thing that I am very happy with for this year is how I have increased my personal BTL's to get me to the point that in my own head I stopped worrying about an income. The flips are great, but if they suddenly dried up how would I pay the bills? This was something that was on my mind at the start of the year, and I ended up keeping 5 properties that were intended for flips as renters. I even ended up purchasing the first house that I had ever tried to buy (for more bloody money I might add) and I get £500PCM for it! Its due to be remortgaged very soon.

The next area that has been a massive success has been the introduction of my new businesses. I offer a combined package of sourcing, renovations and then lettings so that I can basically offer clients a completely hands off package. This has been hugely popular and we are on 45 properties at the moment and negotiating on another 3. These renovations have varied massively, some requiring complete rip outs, others have been ready to rent after a lick of paint and a gas safety check.

The growth over the year has been nice and steady, so it hasn't felt overwhelming. Adding a property or two every week or so and having various properties at various stages has meant that it has been ok to manage. Yes of course there are bumps in the road but I allow myself the time to plan and organise. I don't work on any properties now myself and I am purely office based and project management orientated. There have been some growth pains, and this has been in getting the right people with me. We have had a couple of labourers that have been and gone (one of which decided to drop at attic ceiling the day before the house was being decorated, which cost me personally around £800 to repair and clean up – no idea why he did it and he didn't see the problem....). The other labourer turned out to be bat shit crazy. Was lying to me about working shifts in houses he did not do and we also think he pinched some of our tools from site as they mysteriously vanished!! Also been let down with a few trades (poor workmanship) so have been trying to find replacements. It can be a challenge but you always get through it in the end.

The biggest challenge that I have had this year has been the shop to residential conversion:

https://www.instagram.com/explore/tags/newchurchroad3_fmp/

 

My god this has been a challenge. As we peeled back the surface of this property we found issue after issue after issue, and the renovation figures got bigger and bigger and bigger. At one point I almost lost my mind when the basement almost beat me. I am not sure what I have wrote about this one before but here is what happened.....

Purchased an old paper-shop that is spread over 4 floors; basement to attic. The original plan was to convert to 2 x 2 bedroom duplex apartments and sell to a client at £120k. The works started and one of the main challenges was the basement, which was to become a living room and kitchen. We removed the stone flooring and started the dig out, to find flooding issues, clay soil, a flood next door, rotten ceiling joists, stone stairways that needed moving, broken lintels on every window which were as thick as the walls and took over 2 weeks to replace. Add to this 2 new concrete floors and various other issues and the basement literally ate up money... lots and lots of money.

We had the planning permission in place for the two apartments and then one day I was going to a viewing of one of my rental properties down the road. I had got there a touch early and as you do jumped on Rightmove. I had seen a similar property to mine go on the market earlier in the year at £160k. I laughed when I saw the listing price, thinking the EA must be off their head. It had SOLD on the listing. I rang the EA up and she explained that they had loads of interest and it had ended up going to sealed bids and the seller got above the £160k asking price!! Straight away I realised that the apartments needed to become a single dwelling as it was worth more. Rang my architect and we submitted an application for conversion. Now shop to living should be granted quite easily.... not with my council who decided we needed to go through a full planning application. This did not delay my renovation but added more cost onto the figures. Eventually this was passed.

Next issue was that the empty building next door had an application for it to become a takeaway!!! As you can imagine my heart sank. It had already been a massive challenge without a bloody takeaway wiping tens of thousands off my selling price and also putting off potential buyers. I ended up printing a letter that I had typed up and posted it through the door of everyone in the area. I think there ended up being 14 objections and the planning was refused...... until I got a letter last week saying the owners were appealing the refusal and now it is going off to an independent to make the decision.......

After this it was simply the scale and cost of everything. The property is 5 bedroom so it is literally 2.5 terraced houses... so the re-wire cost was huge, the plumbing cost was huge.... the plastering alone was over £9k!!! Then there were the “bits.” Lots and lots of “bits.” Boxing in here, adding things there. The last 2 months consisted of me checking every bank account daily, forecasting money coming in, forecasting money going out (and when it was due out) and checking the end figure. Most of the time I simply did not have enough money to pay for the work. Somehow though I made it and last week paid my last of the “big bills,” which left me £310.83 in my company bank account. This isn't a made up figure, genuinely had no money left. The last week cost me £12k alone, and the previous 6 weeks around £35k!!! It was a lot of money but somehow managed it. The kids savings accounts are empty again, our current account is empty again, and it was Christmas coming up. I had the biggest smile on my face when I paid the last wages on Friday as I knew I had 2 weeks with no out-goings across the business. To put in perspective I had put an estimated renovation of £40k on the project, and it stands me at £64,664 (and there is still some money to be spent finishing off).

Over the renovation period I did have some expenses that I hadn't planned. I had a few large council tax bills from other properties and also bought 2 more properties whilst renovating this one (I will go into them later). These cost me an additional £16k+ in funds that I had put down myself. They were opportunities that I could not miss so did the standard “I will find the cash.” Yes, pressure added by myself but I suppose it keeps us on our toes!

So, I suppose everyone wants to know the numbers on the latest project? The total cash input including my clients loan, interest and all legal expenses is £119k... so its pretty lucky that I established a single dwelling is worth more!!! I had planned my re-sell figures on an updated property sale of £150k, which would give a pre-tax profit of £31k. I have however listed the property at £200k. This makes it the 2nd cheapest 5 bedroom property in the entire valley. I doubt I will get this figure but I have had someone showing an interest at the £170k price range, which would make a nice profit of £51k. The actual return on effort, stress and renovation spend isn't actually worth the return. I can make more money off multiple smaller projects that are far less stressful. What I have taken away from this is probably worth more than the cash return. I have been through planning (twice) and dealt with more issues in one single property than I have in probably every other property put together. This has given me more confidence and more experience, and the major major learning is to ensure you have reserve funds, especially on target projects. A smaller terrace would obviously only need a few £k put to one side, but something as big as this one needs significant cash on one side just in case.

 

So here are the images of the shop to house conversion.......

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2020

So what are the plans?

Personal BTS

I am going to assume that I have mentioned this one before but I have bought a block of 7 apartments for £158k (of which £150k is loaned).

https://www.instagram.com/explore/tags/rochdaleroad_fmp/

 

This is an interesting project as the apartments are almost fully completed. All have kitchens fitted, some have bathrooms fitted. All are plastered with doors, there is even a building fire alarm system set up. The catch? No building regs have ever been signed off! That's right, the inspector came on site at the very start and was never called back through any of the subsequent work, which there has been a lot of!! When I viewed the property I knew that I had to buy it, and I knew it was going to be a gamble. I should make money regardless, but how much could vary immensely! The property was initially bought under auction conditions but we had this changed to a regular sale (just paid the EA their fee and they were more than happy to change the sale type!). This enabled my solicitor to do a tonne of digging and enquiry work. It also enabled me to delay the purchase as long as a possibly could. I knew that I did not have the available cash to renovate fully so a delay was going to be helpful to me (I didn't realise that the shop would over spend of course so this money vanished). I spoke with the firm who did the initial building regs meeting and even found the actual guy who did it, and started communicating with him. I have established the steps that are needed to be taken to establish if the property will pass. The first step is to get the sound proofing tested. Next is to get the inspector down to have a look around. We have made holes in a few walls to establish that they have used fire board (one tick in the box) and I think the appropriate insulation has also been used (from what we can see so far). The next boxes to be ticked are to sign off the ceilings to make sure they have the adequate fire protection. The property already has the wiring in place and the plumbing, which in theory is a good thing.... but may end up being a pain in the arse if there are issues as locating them when plastered is difficult. The worst case scenario is that we have to strip sections back and re-do them. I also have a leaking roof and the 2 basement studio apartments did not get the correct tanking so they are damp and full of mould. There are however 5 apartments that look in good condition and hopefully can be put on the market quickly. My plan is to upgrade the bathrooms and kitchens so that they are similar to the shop conversion above. To achieve maximum re-sale values these apartments need to look amazing, and this can be done without spending huge amounts of money.

The budget..... absolutely no idea!!! I have put £10k per apartment (so £70k). It could be more (if building regs work is needed) or could be significantly cheaper if I am only having to decorate and fit bathrooms in a few of them. What I will be doing is keeping the cash from the shop sale fully to one side until the project is completed. I cannot go through the stress of worrying about cash again. Priority is to have the 4 central apartments completed and listed asap (2 ground floor and 2 first floor). Then the next apartment will be the attic (which I am considering keeping), then the two basement bedsits as they require the most work. I am already 4 months into a 12 month loan term so I really need to get moving on this one.

Potential numbers...? If I can renovate the property at the £70k budget then I should be looking at a pre-tax profit of approx £159k, which would move my working capital pot to approx £259k, a significant increase!

Here are some images of this property:

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After this, I am not entirely sure. I will have a significant pot of funds so might start to look at larger renovations where the return on paper is bigger. I could of course simply buy smaller terraces fully in cash, renovate and sell on (or keep if all money can be extracted). I am unsure and will make this decision as things progress. I would like to start building and have seen a plot of land that stacks up for a decent profit. Who knows.....

 

Personal BTL

Another Newchurch Road Property!!

For those who follow my Instagram the shop was labelled as Newchurch Road 3 (although it is actually the 4th as my first ever renovation is just down the street!). My next BTL purchase I already own, and its a complete shell! This is actually my SIXTH purchase on the same road!

https://www.instagram.com/explore/tags/newchurchroad5_fmp/

 

This compete shell has planning permission for 2 x 1 bed duplex apartments. The initial planning is pretty poor so I have changed it. Speaking with my architect the plans should be ok and would make a better living space as the property is a strange angled design. The spec on this one will again be very high and I am aiming for a minimum rental return of £450PCM (but will be aiming for £475PCM). The rough figures for this property are:

£42k purchase price

£50k refurb

£98k total spend including fees

 

Will be looking to get a revaluation of £120k, which should enable me to extract £88k, leaving me with a total cash cost of the property of £10k!!

These are the type of BTL deals that when I am looking for my flips I am going to hopefully keep. This would enable me to expand my portfolio without costing a huge amount of cash.

The Other Businesses

The sourcing, lettings and renovations/maintenance businesses are just going to continue as they are. I am looking to take on a part time person once the shop renovation has sold. The person I have in mind was one of my estate agents who left her job for something that works better around child care needs. I had a chat with her and floated the subject of running my lettings business and also starting to look into sourcing for me. She is only on minimum wage at the minimum at 30 hours, so her cost is low. My plan is to offer a slightly higher basic wage but incentivise the sourcing side. This would mean that she could earn a significant amount the more properties that are found and purchased, and would take a lot of pressure off myself. I already have someone who now conducts the tenant interviews and also the 3/6/9/12 month tenant checks, which has saved me a huge amount of time, so this would be very helpful for me. I would still deal with all clients directly, but would have a lot of the admin side covered freeing me up to give my clients much more of my time, as at the minute there are simply not enough hours in the day. I think the key for 2020 is to try and have other people start to do the tasks that take up the most amount of my time so that I can concentrate on pushing the business forward. What I have to keep note of is wage costs though, as regardless what my bank account shows wages still have to be paid. The lettings business currently generates £1k per month which is due to increase by another £800PCM once the next 17 are added. I will require £300 per week basic salary for the new member of staff for the lettings business, which equates to £1300PCM, so this business will start to make enough money to pay for its own upkeep. I think the knowledge that my target employee will bring for that money will be fantastic and having someone spending more time looking for properties and crunching numbers will also increase the revenue of both the sourcing business and the renovations business.

Specific Targets

The last few years I have set specific targets, so I want to flip X properties etc. Here are last years targets:

 

2019 Goals

1/. Complete 20 flips/BTL's

2/. Increase rental income to £3k per month after costs

3/. Manage 10 properties for investors through Finnigan-McNeill Boutique Lettings

4/. Increase working capital to £300k

2019 Results:

1/. I completed 5 personal flips, 5 additional BTL's and have completed 26 renovations for my clients, so I would say that this goal has been achieved.

2/. Achieved (just!)

3/. Achieved.... and a bit more on top!

4/. Missed. Adding the additional BTL's massively ate up my funds as well as having everything else tied up in the current shop conversion.

The truth of the matter is is that I simply made those targets up. There wasn't a specific formula or any thought, I just threw in what I thought were big numbers. With this in mind I think my goals for this year will be slightly more structured:

 

2020 Goals

1/. Try to make all of the businesses require less of my personal time

2/. Add £1k to my BTL personal income

3/. Achieve working capital to £350k (or have that amount being used in various renovations plus the cash pot).

4/. Develop and improve the sourcing, renovations and lettings business through my new employee and set up a structure to reward them to improve and keep developing the businesses.

5/. Post an update on here once per month.

 

OK. that's my update done. I could have just gone on and on and on in all honesty but its actually Christmas day as I type this (14:37) and really I could do with getting ready for my tea. 2019 has been an amazing year, and really I should be patting myself on the back for achieving so much. The reality is that you don't actually think about it, its just another day of the week, another property purchase secured, another property let out. I think the fact that the growth has been nice and steady has really helped me to simply acclimatise to everything that is going on. We currently have the keys to 5 client renovations at the moment with another 2/3 to land in the new year, so it is going to be a really busy start to 2020. Ultimately I would like the growth to continue at the same rate, but be in a position to be able to add people in to help me. People always expect a huge team to be working for me but its just myself and then a few people who work on site. All planning, sourcing, media, renovations, emails, texts, arse scratching is done by just myself, so adding the team member mentioned to take the bulk of the fluff away should really help me to move forward. Ideally by the summer I should have a large amount of working capital, so in a perfect world I will have possibly had discussions with lenders regarding larger purchase amounts for properties. We have a number of large buildings in the area that are screaming out to be renovated, but will need substantial amounts for the initial purchases.

Anyway, ramble over. Hope you all have had a great 2019, any movement forward is movement, so as long as you have done just 1 thing you are a step closer. I have been lucky enough to help a large number of first timers pop their property cherry. Looking forward to 2020 and hopefully keep pushing forward.

Have a great New Year everyone!

Darren

701670177_HighQualityPNGfileSMALLER.png.5f70ca4cb0d136ae226eb81e0e3e2155.png

       BTS -- BTL -- Lettings -- Sourcing

          www.fmp-investments.com

 

 

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On 12/25/2019 at 3:30 PM, darren mcneill said:

Wednesday 25th December 2019

Firstly, merry Christmas!! It has been a while since I last posted, and tbh I had no idea just how long!! I have just checked back and August was my last post, which has shocked me. I have just been so busy these last few months. I kept thinking about popping on for a quick update but then I would become distracted with something from work and another 2 weeks would pass by.

It has been a very busy past few months. If you are interested in what I do then I do post daily updates on Instagram, which is probably the easiest way to follow what I am doing:

https://www.instagram.com/finnigan.mcneill.properties

 

All properties have their own unique hashtag so you can simply click on one and see everything about that property.

Soooooo..... where are we up to? Probably easiest to give you some headline numbers I guess:

Properties:

  • Now the owner of my 21st property!

  • Property number 20 has just gone onto the market – this is a 5 bedroom monster!

  • Currently have 8 active rentals with 2 more due to start renovation in the next few months

  • Managing 28 rentals for clients with another 17 in the process of being purchased, renovated or advertised online for rent

Figures:

  • Sold only 5 properties this year with a net profit before tax of £71,325 (I ended up keeping 5 of my flips as BTL's).

  • Personal rental income after mortgages is currently £3,100 (£37,200 per year)

  • Current income from my new businesses before tax approx £62,000.

  • Current value of owned rental properties - £620,000

  • Working capital approx £120k once project #20 sells

 

There is probably more numbers that I could find but I think they are good headliners. One thing that I am very happy with for this year is how I have increased my personal BTL's to get me to the point that in my own head I stopped worrying about an income. The flips are great, but if they suddenly dried up how would I pay the bills? This was something that was on my mind at the start of the year, and I ended up keeping 5 properties that were intended for flips as renters. I even ended up purchasing the first house that I had ever tried to buy (for more bloody money I might add) and I get £500PCM for it! Its due to be remortgaged very soon.

The next area that has been a massive success has been the introduction of my new businesses. I offer a combined package of sourcing, renovations and then lettings so that I can basically offer clients a completely hands off package. This has been hugely popular and we are on 45 properties at the moment and negotiating on another 3. These renovations have varied massively, some requiring complete rip outs, others have been ready to rent after a lick of paint and a gas safety check.

The growth over the year has been nice and steady, so it hasn't felt overwhelming. Adding a property or two every week or so and having various properties at various stages has meant that it has been ok to manage. Yes of course there are bumps in the road but I allow myself the time to plan and organise. I don't work on any properties now myself and I am purely office based and project management orientated. There have been some growth pains, and this has been in getting the right people with me. We have had a couple of labourers that have been and gone (one of which decided to drop at attic ceiling the day before the house was being decorated, which cost me personally around £800 to repair and clean up – no idea why he did it and he didn't see the problem....). The other labourer turned out to be bat shit crazy. Was lying to me about working shifts in houses he did not do and we also think he pinched some of our tools from site as they mysteriously vanished!! Also been let down with a few trades (poor workmanship) so have been trying to find replacements. It can be a challenge but you always get through it in the end.

The biggest challenge that I have had this year has been the shop to residential conversion:

https://www.instagram.com/explore/tags/newchurchroad3_fmp/

 

My god this has been a challenge. As we peeled back the surface of this property we found issue after issue after issue, and the renovation figures got bigger and bigger and bigger. At one point I almost lost my mind when the basement almost beat me. I am not sure what I have wrote about this one before but here is what happened.....

Purchased an old paper-shop that is spread over 4 floors; basement to attic. The original plan was to convert to 2 x 2 bedroom duplex apartments and sell to a client at £120k. The works started and one of the main challenges was the basement, which was to become a living room and kitchen. We removed the stone flooring and started the dig out, to find flooding issues, clay soil, a flood next door, rotten ceiling joists, stone stairways that needed moving, broken lintels on every window which were as thick as the walls and took over 2 weeks to replace. Add to this 2 new concrete floors and various other issues and the basement literally ate up money... lots and lots of money.

We had the planning permission in place for the two apartments and then one day I was going to a viewing of one of my rental properties down the road. I had got there a touch early and as you do jumped on Rightmove. I had seen a similar property to mine go on the market earlier in the year at £160k. I laughed when I saw the listing price, thinking the EA must be off their head. It had SOLD on the listing. I rang the EA up and she explained that they had loads of interest and it had ended up going to sealed bids and the seller got above the £160k asking price!! Straight away I realised that the apartments needed to become a single dwelling as it was worth more. Rang my architect and we submitted an application for conversion. Now shop to living should be granted quite easily.... not with my council who decided we needed to go through a full planning application. This did not delay my renovation but added more cost onto the figures. Eventually this was passed.

Next issue was that the empty building next door had an application for it to become a takeaway!!! As you can imagine my heart sank. It had already been a massive challenge without a bloody takeaway wiping tens of thousands off my selling price and also putting off potential buyers. I ended up printing a letter that I had typed up and posted it through the door of everyone in the area. I think there ended up being 14 objections and the planning was refused...... until I got a letter last week saying the owners were appealing the refusal and now it is going off to an independent to make the decision.......

After this it was simply the scale and cost of everything. The property is 5 bedroom so it is literally 2.5 terraced houses... so the re-wire cost was huge, the plumbing cost was huge.... the plastering alone was over £9k!!! Then there were the “bits.” Lots and lots of “bits.” Boxing in here, adding things there. The last 2 months consisted of me checking every bank account daily, forecasting money coming in, forecasting money going out (and when it was due out) and checking the end figure. Most of the time I simply did not have enough money to pay for the work. Somehow though I made it and last week paid my last of the “big bills,” which left me £310.83 in my company bank account. This isn't a made up figure, genuinely had no money left. The last week cost me £12k alone, and the previous 6 weeks around £35k!!! It was a lot of money but somehow managed it. The kids savings accounts are empty again, our current account is empty again, and it was Christmas coming up. I had the biggest smile on my face when I paid the last wages on Friday as I knew I had 2 weeks with no out-goings across the business. To put in perspective I had put an estimated renovation of £40k on the project, and it stands me at £64,664 (and there is still some money to be spent finishing off).

Over the renovation period I did have some expenses that I hadn't planned. I had a few large council tax bills from other properties and also bought 2 more properties whilst renovating this one (I will go into them later). These cost me an additional £16k+ in funds that I had put down myself. They were opportunities that I could not miss so did the standard “I will find the cash.” Yes, pressure added by myself but I suppose it keeps us on our toes!

So, I suppose everyone wants to know the numbers on the latest project? The total cash input including my clients loan, interest and all legal expenses is £119k... so its pretty lucky that I established a single dwelling is worth more!!! I had planned my re-sell figures on an updated property sale of £150k, which would give a pre-tax profit of £31k. I have however listed the property at £200k. This makes it the 2nd cheapest 5 bedroom property in the entire valley. I doubt I will get this figure but I have had someone showing an interest at the £170k price range, which would make a nice profit of £51k. The actual return on effort, stress and renovation spend isn't actually worth the return. I can make more money off multiple smaller projects that are far less stressful. What I have taken away from this is probably worth more than the cash return. I have been through planning (twice) and dealt with more issues in one single property than I have in probably every other property put together. This has given me more confidence and more experience, and the major major learning is to ensure you have reserve funds, especially on target projects. A smaller terrace would obviously only need a few £k put to one side, but something as big as this one needs significant cash on one side just in case.

 

So here are the images of the shop to house conversion.......

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2020

So what are the plans?

Personal BTS

I am going to assume that I have mentioned this one before but I have bought a block of 7 apartments for £158k (of which £150k is loaned).

https://www.instagram.com/explore/tags/rochdaleroad_fmp/

 

This is an interesting project as the apartments are almost fully completed. All have kitchens fitted, some have bathrooms fitted. All are plastered with doors, there is even a building fire alarm system set up. The catch? No building regs have ever been signed off! That's right, the inspector came on site at the very start and was never called back through any of the subsequent work, which there has been a lot of!! When I viewed the property I knew that I had to buy it, and I knew it was going to be a gamble. I should make money regardless, but how much could vary immensely! The property was initially bought under auction conditions but we had this changed to a regular sale (just paid the EA their fee and they were more than happy to change the sale type!). This enabled my solicitor to do a tonne of digging and enquiry work. It also enabled me to delay the purchase as long as a possibly could. I knew that I did not have the available cash to renovate fully so a delay was going to be helpful to me (I didn't realise that the shop would over spend of course so this money vanished). I spoke with the firm who did the initial building regs meeting and even found the actual guy who did it, and started communicating with him. I have established the steps that are needed to be taken to establish if the property will pass. The first step is to get the sound proofing tested. Next is to get the inspector down to have a look around. We have made holes in a few walls to establish that they have used fire board (one tick in the box) and I think the appropriate insulation has also been used (from what we can see so far). The next boxes to be ticked are to sign off the ceilings to make sure they have the adequate fire protection. The property already has the wiring in place and the plumbing, which in theory is a good thing.... but may end up being a pain in the arse if there are issues as locating them when plastered is difficult. The worst case scenario is that we have to strip sections back and re-do them. I also have a leaking roof and the 2 basement studio apartments did not get the correct tanking so they are damp and full of mould. There are however 5 apartments that look in good condition and hopefully can be put on the market quickly. My plan is to upgrade the bathrooms and kitchens so that they are similar to the shop conversion above. To achieve maximum re-sale values these apartments need to look amazing, and this can be done without spending huge amounts of money.

The budget..... absolutely no idea!!! I have put £10k per apartment (so £70k). It could be more (if building regs work is needed) or could be significantly cheaper if I am only having to decorate and fit bathrooms in a few of them. What I will be doing is keeping the cash from the shop sale fully to one side until the project is completed. I cannot go through the stress of worrying about cash again. Priority is to have the 4 central apartments completed and listed asap (2 ground floor and 2 first floor). Then the next apartment will be the attic (which I am considering keeping), then the two basement bedsits as they require the most work. I am already 4 months into a 12 month loan term so I really need to get moving on this one.

Potential numbers...? If I can renovate the property at the £70k budget then I should be looking at a pre-tax profit of approx £159k, which would move my working capital pot to approx £259k, a significant increase!

Here are some images of this property:

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After this, I am not entirely sure. I will have a significant pot of funds so might start to look at larger renovations where the return on paper is bigger. I could of course simply buy smaller terraces fully in cash, renovate and sell on (or keep if all money can be extracted). I am unsure and will make this decision as things progress. I would like to start building and have seen a plot of land that stacks up for a decent profit. Who knows.....

 

Personal BTL

Another Newchurch Road Property!!

For those who follow my Instagram the shop was labelled as Newchurch Road 3 (although it is actually the 4th as my first ever renovation is just down the street!). My next BTL purchase I already own, and its a complete shell! This is actually my SIXTH purchase on the same road!

https://www.instagram.com/explore/tags/newchurchroad5_fmp/

 

This compete shell has planning permission for 2 x 1 bed duplex apartments. The initial planning is pretty poor so I have changed it. Speaking with my architect the plans should be ok and would make a better living space as the property is a strange angled design. The spec on this one will again be very high and I am aiming for a minimum rental return of £450PCM (but will be aiming for £475PCM). The rough figures for this property are:

£42k purchase price

£50k refurb

£98k total spend including fees

 

Will be looking to get a revaluation of £120k, which should enable me to extract £88k, leaving me with a total cash cost of the property of £10k!!

These are the type of BTL deals that when I am looking for my flips I am going to hopefully keep. This would enable me to expand my portfolio without costing a huge amount of cash.

The Other Businesses

The sourcing, lettings and renovations/maintenance businesses are just going to continue as they are. I am looking to take on a part time person once the shop renovation has sold. The person I have in mind was one of my estate agents who left her job for something that works better around child care needs. I had a chat with her and floated the subject of running my lettings business and also starting to look into sourcing for me. She is only on minimum wage at the minimum at 30 hours, so her cost is low. My plan is to offer a slightly higher basic wage but incentivise the sourcing side. This would mean that she could earn a significant amount the more properties that are found and purchased, and would take a lot of pressure off myself. I already have someone who now conducts the tenant interviews and also the 3/6/9/12 month tenant checks, which has saved me a huge amount of time, so this would be very helpful for me. I would still deal with all clients directly, but would have a lot of the admin side covered freeing me up to give my clients much more of my time, as at the minute there are simply not enough hours in the day. I think the key for 2020 is to try and have other people start to do the tasks that take up the most amount of my time so that I can concentrate on pushing the business forward. What I have to keep note of is wage costs though, as regardless what my bank account shows wages still have to be paid. The lettings business currently generates £1k per month which is due to increase by another £800PCM once the next 17 are added. I will require £300 per week basic salary for the new member of staff for the lettings business, which equates to £1300PCM, so this business will start to make enough money to pay for its own upkeep. I think the knowledge that my target employee will bring for that money will be fantastic and having someone spending more time looking for properties and crunching numbers will also increase the revenue of both the sourcing business and the renovations business.

Specific Targets

The last few years I have set specific targets, so I want to flip X properties etc. Here are last years targets:

 

2019 Goals

1/. Complete 20 flips/BTL's

2/. Increase rental income to £3k per month after costs

3/. Manage 10 properties for investors through Finnigan-McNeill Boutique Lettings

4/. Increase working capital to £300k

2019 Results:

1/. I completed 5 personal flips, 5 additional BTL's and have completed 26 renovations for my clients, so I would say that this goal has been achieved.

2/. Achieved (just!)

3/. Achieved.... and a bit more on top!

4/. Missed. Adding the additional BTL's massively ate up my funds as well as having everything else tied up in the current shop conversion.

The truth of the matter is is that I simply made those targets up. There wasn't a specific formula or any thought, I just threw in what I thought were big numbers. With this in mind I think my goals for this year will be slightly more structured:

 

2020 Goals

1/. Try to make all of the businesses require less of my personal time

2/. Add £1k to my BTL personal income

3/. Achieve working capital to £350k (or have that amount being used in various renovations plus the cash pot).

4/. Develop and improve the sourcing, renovations and lettings business through my new employee and set up a structure to reward them to improve and keep developing the businesses.

5/. Post an update on here once per month.

 

OK. that's my update done. I could have just gone on and on and on in all honesty but its actually Christmas day as I type this (14:37) and really I could do with getting ready for my tea. 2019 has been an amazing year, and really I should be patting myself on the back for achieving so much. The reality is that you don't actually think about it, its just another day of the week, another property purchase secured, another property let out. I think the fact that the growth has been nice and steady has really helped me to simply acclimatise to everything that is going on. We currently have the keys to 5 client renovations at the moment with another 2/3 to land in the new year, so it is going to be a really busy start to 2020. Ultimately I would like the growth to continue at the same rate, but be in a position to be able to add people in to help me. People always expect a huge team to be working for me but its just myself and then a few people who work on site. All planning, sourcing, media, renovations, emails, texts, arse scratching is done by just myself, so adding the team member mentioned to take the bulk of the fluff away should really help me to move forward. Ideally by the summer I should have a large amount of working capital, so in a perfect world I will have possibly had discussions with lenders regarding larger purchase amounts for properties. We have a number of large buildings in the area that are screaming out to be renovated, but will need substantial amounts for the initial purchases.

Anyway, ramble over. Hope you all have had a great 2019, any movement forward is movement, so as long as you have done just 1 thing you are a step closer. I have been lucky enough to help a large number of first timers pop their property cherry. Looking forward to 2020 and hopefully keep pushing forward.

Have a great New Year everyone!

Darren

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       BTS -- BTL -- Lettings -- Sourcing

          www.fmp-investments.com

 

 

Hi Darren,

Have followed your progress since back in 2017 and had wondered where you had gone over the last few months - having read that though I now fully understand! Congratulations on amazing progress, it's highly impressive to those of us on a slower trajectory. You seem to have got to a really advanced stage in such a relatively short space of time but it's clearly taken a great deal of effort, commitment and no little bravery so well done! 

 

Nick

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  • 1 month later...

4th Feb 2020

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Well, 3 years ago today I posted my first ever post on this forum.  Bright eyed and very innocent for some reason I decided to open up to a bunch of people that I did not know.

To be where I am today still amazes me.  Full time property, I now employ people!  I have 8 active personal rentals, another 2 that I own but need renovating and an 11th that I am about to buy.  I have just sold my 20th property, started a sourcing, renovation and lettings business and currently manage 30 rentals for clients with another 20 being purchased, renovated or advertised for rent!!

I'm still sat in the exact same chair as when I wrote that first post.  Considering how much has actually happened not much has really changed at home.  There is no Bentley in the drive, we haven't bought a mansion and there still isn't a Rolex on my wrist.  Strange as considering I have achieved more in these few years than most who flash all that sort of stuff around you would think there was something wrong...... (Don't believe anyone who flashes riches at you as they are full of shit).  Do not get me wrong, on "paper" we are doing well.  In the real world we live off almost the same income.

Its been a great last 12 months and the business has literally exploded.  I moved to my first office this year as working from home was just not practical.  Having a place of work really helped me focus on moving the business forward.  40+ renovations later and 30 rentals on the books and its definitely been  a busy 12 months.  I had a period between June-August where I had worked so hard at the start of the year that I literally stopped giving a shit and got myself into what i would probably call a depression state.  I didn't go to the office, did the minimum for work and basically felt very sorry for myself.  Not sure the reason why.  Probably just very very tired and very stressed.  In the August we went away to out annual stay at Ladram Bay.  Caravan park in Devon.  Its my favourite holiday as it is so simple.  This seemed to be the break that I needed and I came back full of energy and smashed the 2nd half of the year.  We sourced a large number of rentals, renovated a similar amount and then put them on the market for rent.  After Christmas I had another dip in energy.  The start of Jan was tough for me and I wasn't feeling massively motivated.  My 20th Property had just gone onto the market (Newchurch Road 3).  This was a major renovation.  £65k total renovation spend which was £25k over budget.  I spent 3 months scraping the barrel of my various companies bank accounts to pay for trades and materials, and literally covered the renovation with the last few pence in my pocket.  I am not joking when I write that I had emptied the kids savings accounts and we had no money in the bank to buy food!  Somehow though we got through it.  Jan was tough as I could not pay myself a wage and again just managed to cover the various mortgages that came out on the first working day in Jan.  Despite feeling fed up I continued to graft away and have now managed to get some distance in the bank account from the dreaded £0!!  The best news is that there are no more costs for Newchurch Road... and.... I accepted an offer 3 days ago for £160k!!! I am just waiting on the mortgage valuation to get in touch.

Just to make things a little more spicy I purchased a block of 7 apartments (not been able to start work on these yet) as well as another unit with 2 apartments!  Why make things easy when you can push yourself to the limits!

I am laughing about it to myself now but its been a stressful year as you can imagine.  The completion of Newchurch Road will leave me with a bank balance of £110k.  The renovation and sale of the 7 apartments should leave me with a final working capital balance of £250,000.  I have vowed to myself that I will not allow myself to get to £0 again, but I know full well that another opportunity will turn up along the way and I will go for it.... especially as I have just had an offer accepted on another  property at £36k!!  This will put me at 22 personal property purchases.

Do I still love it?  Some days I will feel stressed and sorry for myself (the phone literally does not stop ringing), but then I will remember where I used to work and how utterly miserable I was, and that changes things.  What I don't think people quite realise is just how full on this job can be if you really want to grab it with both hands.  Fair enough if I was just concentrating on my own flips and rentals it would be a piece of piss, but now that I have the other businesses I have to be more cautious as I am looking after properties for people, and its their hard earned money that has bought these properties.  What really keeps you going is knowing that everything that I am doing is really getting me closer to never having to "work" as such.  I have 9 years left where the kids are at home and me and the Mrs are stuck.  Once they are old enough I know the companies with be self sufficient with someone running them and I will have the luxury of time (and the money) to really enjoy my life.  I will never retire, that's boring, but I will have the option to just stop and do whatever I want, when I want.  Now that is true freedom!

Darren

701670177_HighQualityPNGfileSMALLER.png.5f70ca4cb0d136ae226eb81e0e3e2155.png

       BTS -- BTL -- Lettings -- Sourcing

          www.fmp-investments.com

 

 

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Darren - I’ve watched your journey and it is phenomenal - when you don’t retire you could def write a book! I never understood the cash flow risk taking you did...until now! Instead if stopping at 2 I couldn’t help myself and bought a third! You start seeing opportunities everywhere!!! keep your the great work - and fab that you are taking some breaks as you are such a grafter . 

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  • 3 months later...

Happy 3 Year Anniversary Danitaogandaga.com! – Danita Ogandaga, MSW 

 

12th May 2020

3 years ago on this day I received the keys to my FIRST ever property. It was a 2 bed end terrace with a rear garden that I some how managed to secure for £25,800 and I sold it on for £70,000 making £30k profit and sending me on my way (below).  My original goals when I first started were:

Goals - Feb 2017
2017 - Purchase 3 x flip properties

2018 - Purchase 3 x flip properties and 1 x BTL

2019-2029 - Purchase a minimum of 3 BTL properties per year, with an end goal of £4,000 rental income after tax/expenses

2031 - Be in a position at 50 years old where I am able to choose whether I wish to work, or not.

£4,000 Rental income achieved - Continue to build the business for my children.

 

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I learnt more in this first purchase than you could ever learn with any course. I was completely hands on, and did everything myself where labour was needed, working 6 weeks every minute of every day. This property was my THIRD purchase attempt.  I had 2 failed purchases where my first ever was only about a week from completion and my 2nd didn't get past the mortgage stage.  Even selling this property had issues!!  I actually accepted an offer the day before it officially went to market (June 2017) and the sale did not complete until the November! I had issues over land ownership so straight away it was tough mentally.

In December 2017 I quit my small part time job to allow to to fully focus on renovating houses:

At this period in my life I was only working 3 days per week 6am-12pm, but after that I was going straight into a renovation and working until late at night.  This was happening 7 days per week.  I do not recall having many days off back then (although I do not have a day off now!!).  Although this was only a pert time job I had been employed since I was 16... so that's a good 20 years.  This was quite a nervous decision and as can be imagined my Mrs wasn't best pleased.... worked out alright in the end though!

This first year was hard in a number of ways.  After I had completed the first renovation I had a lot of free time (June-November).  Only working part time I did plough a tonne of time and effort into reading books, researching online and most importantly VIEWING houses and planning out pretend renovations.  My dad used to ask me why I was wasting my time but in my head it made sense to be prepared and to know my market.  This has massively helped me long term as I can view a house and work out what is needed in around 10 minutes.  Decisions are made much quicker and I can often put an offer in whilst sat in my car outside.

12th May 2018 - 1 Year In Review

It's quite interesting looking back on my post below.  I had FIVE failed purchases in my first year! Wow...  I only remember the very first 2...

* 2 personal purchases
* 1 personal BTL’s
* Personal rental income £500PCM (1 property with no mortgages)

 

12th May 2019 - 2 Years In Property


* 19 personal purchases
* 7 personal BTL’s
* Sourced 19 total properties for clients
* Managed 7 rental properties for clients
* Personal rental income £3,143PCM (multiple with no mortgages)

This was the year that I saw significant growth.  I had decided to dip my toe into managing properties for other investors and also looking to sell on my services for finding properties.  I think I recall targeting 10 BTL's to manage bu the end of 2019, slightly beat that figure!  I do find it quite hard to think back to what I have done as it has been a bit busy.  The moment I finish one project I forget about it and move onto the next project, so eventually they become harder to recall.

 

 

12th May 2020 - 3 Years In Property


* 24 personal purchases
* 9 active personal BTL’s (will be 18 end of this year after renovations of multi unit blocks).
* Sourced 54 total properties for clients
* Managing 45 total properties for clients
* Personal rental income £3.2k after costs. (This will be at £7.2kPCM by the end of 2020).

Well... 3 years in Property!  In some ways in feels like 5 minutes, in other ways it feels like an eternity.  Today has started off like every day, up well before 6am and working working working.  The last 12 months has yet again been a bit of a crazy one.  The various businesses have grown massively and its quite often now that I am renovating 8-10 properties at any one time.  Next week I have someone starting to work for me who will be managing the lettings agency.  I have been talking about this for some time now but I have decided to get on with it and take that financial plunge.  I am run off my feet managing the various businesses and really I need to step back and focus on growing things, and this is the way to do it.

Over the last 12 months I did take on someone to conduct the tenant viewings, inspections and property dressing for me.  This was a massive time release for me and helped me to target other areas of the business.  At the start of 2019 (I think approx Feb) I also recruited an ex-estate agent on a bonus scheme.  Her role was to spend time searching for properties and viewing them, taking the pictures and compiling the local area statistics etc.  This for myself took up HUGE amounts of time.  People do not quite appreciate just how much time is needed to find a suitable property, view it, compile the figures and then negotiate on price.  Since then however the days for myself have continued to fill up and again I now need someone to help me.  Peta (who has been finding properties for me) is the one who is moving into the Lettings agency to manage that and continue with property sourcing.  This will release a vast amount of time for me and really help me to continue to grow my business and more importantly give my clients the time that they deserve.  I doubt my working hours will reduce much as I simply find new projects and have new ideas, but this way the companies will slowly become self sufficient.  Peta is completely passionate about this project.  I have explained to her how she can grow with this business and the potential for herself income wise.  I believe it is good to have a combination of passion as well as hunger for increased income, but the balance needs to be correct.

My personal rental income is soon about to more than double by the end of this year.  I have a block of 7 apartments that were originally going to be a flip project, but the current Covid situation and potential flattening of the market has meant that I have changed my own view point.  For me now income is the biggest driver.  I have decided to make sure that by the end of this year I never have to worry about income for my family again (unless of course Labour come into power and take all of our properties away from us! lol).  The 7 apartments alone will as you can imagine will generate a good income.  On top of this I have a unit that will be split into 2 apartments as well as another property that I completed on at the start of the epidemic that was purchased for 32.5k.  I should be able to refinance all of these and pull out most of my spend.  My working capital will have massively dropped from where I had planned with keeping the apartments but it is still sufficient to keep me going.  I will likely go back to flipping small terraces for small profits, just more volume of them.

The eagle eyed of you will notice that my personal flip numbers fell off a cliff this year.... this is because my Newchurch Road project (conversion of a shop to a house) has been a time nightmare and also swallowed up a tonne of money.  I have not been able to do anything else this year as at the minute the property has still not completed on the sale (due next Friday) despite the offer being accepted 4 months ago.  This has been a bum twitchy time for me.  Just before Christmas I literally spent my last pennies on this project as it was listed on the 23rd December.  We had no money in the bank, no money in the kids savings, simply no money.  The only thing keeping me afloat was the new businesses and we just managed Christmas  and paying the bills at home.  Jan was again another hard month.  Every penny that came in went straight out... then I was offered an amazing property at £36k.... despite having no funds I made an offer and ended up buying the property.  I borrowed the purchase price from a client (same as previous) and again managed to scrape together the legal fees.  I only needed to spend a couple of £k on the renovation so using my personal rental income, the lettings agency income and any other bits of payments I was able to get this one done and rented for £425PCM!!  An amazing result as it is worth well over £50k.  I then went and bought ANOTHER bloody property.  This was a repossession and a bit of a sh-- hole!  £32,200 I think I paid for it.  Again I used private lending and again I scraped together the money for my legal fees.  The result was 3 empty properties needing approx £140k of renovation work between them.  The income from the businesses continued to come in and my outgoings stopped (I didn't buy anything else and I wasn't renovating anything) so I finally started to build up a small buffer of cash to where I have about £4k now in the account.  My sale of Newchurch is as mentioned FINALLY due next week.  The buyers at the bottom of the chain have transferred their deposit and now everyone is requesting the funds from the lenders.  I have been told that lenders are currently taking the full 5 days to release funds as they are under so much pressure at the minute with everything going on which is why completion is taking longer.  As with everything in property though it is not over until that money hits my bank account, which is why I have not started any work on my apartment block.  At the minute the best thing that I can do is to sit here and not spend money, just in case!  The sale of Newchurch will release £110k of working capital (I have the renovation of the apartments pencilled in at £70k) and I will not start work on the others until the apartments are completed.  I cannot risk spending money for an issue to be found and I do not have the funds in the bank to sort them, as this would probably pull all of the cards down.  Most would see buying the 2 properties that I have as risky, but my thought process was to stack them up.  Apartments, then the twin apartments, then the single dwelling.  As I have been sat on the first two now for so long by the time they are completed I will be able to start the refinancing of them straight away so in theory should release some funds back within a couple of months of completion......

... you think that I would learn from the above.... just had an offer accepted on 6 bedsits in one unit....... time to work hard now and find the money for those as yet again I have gone feet first and had the offer accepted to then try  to find the required funds!  How I sleep at night is beyond me... its lucky that I do not tell the mrs!  What this would result in (if everything goes to plan and my calculated risk pulls off) is a monthly personal rental income after mortgages and insurance of approximately £7.2k and financial retirement before I am 40.  Pretty crazy.... or it could all come crashing down?

 

Darren

 

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      BTS -- BTL -- Lettings -- Sourcing

          www.fmp-investments.com   

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  • 2 months later...

ive started reading your journey from 2017, im at the point of your first sale. So fascinating following this journey as im about to start mine. It will probably take me a few days to catch up to 2020 but loving your tenacity!!!

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