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What is the best hands-off strategy for cashflow?


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Hi, this is my first time posting on here, and would love to get some opinions! 

 

I've got a couple of BTLs, own my own home, and am expecting by the summer to have a reasonable pot of cash (£300-400K) to accelerate my property journey. The thing is, I have separate non-property business so I don't have a great deal of time (evenings & weekends). I'm trying to work out the best strategy both for cashflow now & compounding/reinvestment longer term, but don't want to directly project manage refurbs, or HMOs. I'm also comfortable that I'd be able to assemble a good team (my other business is recruitment).

 

Option 1 - work with a company like Fossey Taylor to build my portfolio, they will manage refurbs on standard BTLs plus the odd HMO in the midlands, add value, but their fees will eat in heavily to the cash recycling. I love that it's totally hands-off, but am not yet totally convinced on the returns.

 

Option 2 - buy high-end city center apartments for AirBnB, kit them out with nice kitchens etc.. Initial cashflow would be best, but there's less chance of quickly recycling deposits, and who knows what legislation will change surrounding short-term lets as the sector keeps growing / putting pressure on standard rental supply. I already have an agent I trust who could get kitchens sorted & manage them for me.

 

Option 3 - buy a plot of land & build to rent. I can get a good project manager for this, it allows for profits built in / cash recycling, it's possible for me to get financing to do it, but there's a significant delay on cashflow (which I could live with but might be stressful in the interim). 

 

I've run the numbers, and given the access to financing the development route clearly has the most potential (but also requires the most education & involvement from me). It is also the most attractive from a tax perspective. No doubt there are factors I've not considered through lack of knowledge. What would other people do in this situation?

 

Any thoughts or opinions would be gratefully received...

 

Thanks,


Tom

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Hi Tom, you're in a strong position with some good options. I am a full time landlord / investor with a portfolio of HMO's in Bedofrdshire and sinlge lets in Manchester. I am currently working with a number of investors on projects in those areas. What I am finding is that the opportinity to buy below market value can sometimes direct the strategy.

 

Obviously there is a lot more to consider and you need to do your due dilligence in each option. But given the size of your investment pot, don't underestimate the power of buying at the right price.

 

Option 1: Read their T&C's with a fine tooth comb. Negotiate well, you're bringing a sizeable investment pot.

Option 2: the link below should answer a few of your quesitons. Would you do the online bit yourself? Listen to episode 171 of the 'inside property investing podcast'. Not quite as good as Rob and Rob, but that one should interest you specifically.

https://www.airbnb.co.uk/help/article/1379/responsible-hosting-in-the-united-kingdom

Option 3: Doesn't sound very hands off to me! Depends on your experience and attitude really. Hard for me to comment.

 

If you would like to discuss the opportunities I am currently working on I can be reached at nikork900@hotmail.com.

 

You can also read more about my Luton portfolio in the Feb 2017 edition of the Propertyhub magazine.

 

Good luck!

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  • 6 months later...

Hi Thomas

 

How did you get on? The Fossey Taylor is probably the only true hands off option.

 

I've been following FT for nearly two years. They are good but I'm also looking at some alternative providers and some sperate  hands off options too.

 

Please contact me if you want to discuss further on dramjedkhan@gmail.com.

 

Amjed 

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Good morning Thomas

 

The re-posting of your enquiry has rightly generated a lot of new interest in how you got on! I may be able to offer you a couple of additional options too, for consideration, if you're still considering your options - especially given the strong situation you're in with regard to your budget and ability to move quickly.

 

Firstly, I own two businesses - one of which is a luxury apartment-hotel business. We operate in Derby, Nottingham and West Bridgford (affluent suburb of Nottingham). We opened the 'jewel in our crown' at Bridgford Hall in May 2017 and are already full all the time. So we're looking for 3-4 apartments (all in one block) in West Bridgford to satisfy demand. Most likely a nice house that's been converted into apartments so that we can still control the entire guest experience. This would satisfy your Option 2 but be a more reliable income stream (we'd pay you each month rather than you having to generate bookings) and therefore it would also meet your 'hands-off' criteria.

 

Secondly, the other business I own is an estate and lettings agency - again based in the above locations. We have one individual investor who is steadily releasing 100 residential BTL properties to us (some are HMOs, some are single-lets). There are opportunities here to take these on as BTL properties in areas that are proven to be good for that. Or you might be interested in some quick and relatively easy flips. We work with a couple of large regional housebuilders and do 'Assisted Moves'. When someone buys a new-build plot on one of their sites, we get their existing home to sell...but because it generally has to sell within 28 days - sometimes 56 - we have to put it on the market at about 15% below market value for a quick sale. We have a bank of investors who are snapping these up at 15% BMV, then putting them straight back on at 5% BMV...making 10% (less fees) quickly with no capital outlay or work needed to improve the homes.

 

If you're still looking at the options you outlined and want to discuss either of the potential opportunities above, please let me know - I'd be very happy to meet you. 

 

Kind regards

Carl

 

 

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Hi all,

 

Judging by the date of this post and their number of posters, it doesn't look like Thomas ever came back to the forum after posting this message. It's a real shame, as it's quite an interesting topic.

 

Has anyone that's responded developed a strategy that might have been suitable for someone like Thomas since he originally posted back in April? The last message from Carl is pretty interesting. I'm from Nottingham myself and am looking to grow my portfolio - perhaps you could send me a message and some details of your business?

 

Kind regards,

 

Henry

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Hi Thomas

 

How did you get on? The Fossey Taylor is probably the only true hands off option.

 

I've been following FT for nearly two years. They are good but I'm also looking at some alternative providers and some sperate  hands off options too.

 

Please contact me if you want to discuss further on dramjedkhan@gmail.com.

 

Amjed 

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Hi,

 

Thanks all for responding - sorry I’ve only just received a notification! 

 

Disappointly in terms of giving an update (but happily otherwise), I had change of circumstances which meant I needed to buy a new family home in London... which has eaten up some cash (including £42K SDLT!). All of this has set my time frames back slightly, but I should have a good chunk to ramp up by February... Had to buy quickly, and am still selling my other London house to reinvest somewhere with higher yield. 

 

I met with Fossey Taylor. They’re nice guys, and very credible. No BS. If I was already making millions elsewhere, I’d probably go with them. They clearly know their stuff, offer a de-risked service, but ultimately I didn’t want to sign their restrictive covenants for the Nottingham area, and need to work my cash a bit harder to hit my goals! The fees really hit the compounding. 

 

I’ll post back when I have a better update, and would be interested in other views in the meantime!

 

Carl, if you offer a hosting service around the midlands it’d be great to catch up in the new year to discuss.

 

Many thanks,

 

Tom

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  • 5 months later...
On 24/10/2017 at 10:38 AM, Max Eastgate said:

Hi Tom,

Congratulation on the purchase of your new home – 42K in stamp duty – Ouch!

 

Can I ask if Fossey Taylor’s fees were a percentage of their transaction costs, or a flat fee per deal?

 

All the best,

 

Max

 

Check post on propertytribes regarding Fossey Taylor https://www.propertytribes.com/fossey-taylor-review-t-127621513.html

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Hi Tom and others interested in this topic of hands-off investment.

I am interested in this topic particularly since Nottingham is my area of choice (and where I live and work).

All of the options are possible and may well work but require increasing levels of experience and appetite for risk. How about working with a business that does things on a smaller scale allowing you to build a portfolio of high yield, low capital single B2Ls that generate a regular and reliable income stream?

I run such a company in NG6, NG3, NG5 and NG8 of Nottingham - a great area with lots to go at and can offer a full end to end service if wanted.

Currently sourcing for 2018 so if anyone is interested and hasn't explored the delights (from all perspectives) of Nottingham please get in touch.

Regards
Jonathan, Bespoke Property Services, Nottingham
M: 07847 303273

Jonathan-Challis.jpg

The Nottingham Meetup takes place on the first Thursday of every month, find out more here

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