Frequently asked questions
Why should I partner, can’t I buy a property on my own ?
Yes, you can buy a property in the UK on your own and many investors do that however, one of the biggest secrets to being a successful real estate investor is buying right. It takes a lot of local knowledge and experience to know how to buy the right investment property. Things such as: the right location, demand and supply for rental in the area, what kind of property to buy to maximise occupancy, how to find the local team to refurbish and manage the property, how to add value to the property, etc. will all contribute to a smart investment decision. When you partner with professional investors who not only try to sell you a property but are willing to partner with you to get the RIGHT property, your chances of success grow exponentially.To add a new question go to app settings and press "Manage Questions" button.
Buy-to-Let and HMO. What is the difference?
When we refer to the buy-to-Let market, the meaning is renting a house or a flat to a single house hold or a single family. The rent is paid monthly by the tenants.
An HMO is a property rented out by at least 3 people who are not from one ‘household’ (e.g. a family) but share facilities like the bathroom and kitchen. It’s sometimes called a ‘house share’.
An HMO is rented by a room and the rent is usually paid on a weekly basis.
It is clear to see that renting the same property as an HMO vs. a single let will result a higher income to the landlord. On the other hand, management and expense are higher on this kind of property.
Why do you need to change the use of a building and what is a use class?
Each building in the UK has a use class category which defines to what purpose it can be used. The classes are categorised from A to D:
When a building is purchased with the intent to change its use, a planning application needs to be submitted to the council to allow the change of use.
For example, converting an office building to HMO will require a change of use from B1 to C4.
Changing the use of a building can significantly increase its value and the rental income it produces and is a great opportunity for a professional investor.
Use Class A1 – Shops
Use Class A2 – Financial and Professional
Use Class A3 – Restaurants and Cafes
Use Class A4 – Drinking Establishments
Use Class A5 – Hot Food Take Away
Use Class B1 – Business
Use Class B2 – General Industrial
Use Class B3-7 – Special Industrial Group A, B, C, D, E
Use Class B8 – Storage or Distribution
Use Class C1 – Hotels and Hostels
Use Class C2 – Residential Institutions
Use Class C3 – Dwellings, Houses, Flats, Apartments
Use Class C4 – Houses of Multiple Occupations
Use Class Sui Generis – Does Not Fall Into Any Class
Use Class D1 – Non-Residential Institutions
Use Class D2 – Assembly and Leisure
What is the best investment strategy for me?
This is a question that require more information about you and your goals and we will be happy to set a call or a meeting to further discuss it with you.
There are two major investment strategies which are: investment for capital gain, investment for a cash flow income, or a combination of both.
Each investment strategy can be achieved by choosing different location, target market, kind of property and a combination of additional element. Please contact us to discuss the best strategy for you and how to acheive it.
How do you find your investment opportunities?
We have created a network of personal relationships with estate agents, fellow investors, vendors, providers and sourcers within our investment areas to find the best opportunities in the market.
We spend a significant amount of time searching our investment areas for the best opportunities and have many below market value offers on properties. This allows us to find the diamonds in the rough and the greatest opportunities available for us and our partners.
We hand pick the most superior opportunities in the right location to which we can add the most value and those that will produce the best rental income and return on investment.
You say you treat your investors money as if it was your own. What do you mean?
When we approach a joint venture investment with our partners we take as many steps as possible to protect and minimise the risk to that investment.
All investments come with an element of risk and we take our role, to minimise that risk as much as possible, very seriously.
To achieve this, we take the following steps:
A thorough research of the area we chose for the investment
Checking the rental demand for rooms, flats or houses in the area
A detailed comparison of prices and comparable to verify we pay the right price for the property
We create an exit plan that consist of at least 2 or 3 options for exit, all of which needs to be profitable.
We use legal, financial and professional surveyors to check all aspects of the property and the project.
We seek the advice of our mortgage broker to verify the financing options we have, to recover most or all of the initial capital investment.
We check all the financial parameters creating a conservative net yield and ROI to make sure the investment meets the minimal threshold of profitability.
These steps and more are all designed to make sure we make a smart investment with minimum risk to you and us.
How can I be sure my investment money will be used to buy the property?
Once you decided to partner with us and we chose and agreed to purchase the designated property, a solicitor is instructed to do the transaction.
The capital investment funds are transferred directly to the solicitor account and are transferred to the vendor’s solicitor only when all searches have been made and the contract is signed.
Usually, during the exchange, 10% of the agreed price is transferred to the vendor and the remaining 90% is paid upon completion.
Once the purchase is complete, the solicitor will transfer the ownership of the property to our partnership and will register it in the Land Registry.
The conversion project funds are managed by paying the builders in steps that are correlated to the project progress.
You can read more about this process in the “What does it take to buy a property in the UK?”
How do you align your interest with mine?
Our partnership model creates a full alignment between us and you where each part contributes differently but the profits are split equally between you and us.
You will contribute the funds to purchase the property and preform the conversion or refurbishment project while we will manage the entire purchase and conversion project as well as the ongoing management and operation of the property.
We are only paid from the profits the property generates after the entire project is done. This means that we are focused on getting the right property in the right location and are encouraged to finish the project as soon as possible to get the building to produce income which we both share. This is a true win-win for you and us.
What is the information I need, to make the right investment decision?
Making an investment decision can be scary. Especially if you’re an international investor and the property can be hundreds or thousands of miles away from you. In some cases, you might never even physically see the property. This means you need to have someone you can trust that will be aligned with your interests.
But finding the right partner, is not enough. You need to get as much local and financial information as possible to make your own analysis if this is the right investment for you.
You should ask for the following:
Area analysis – Why was this are chosen
Property analysis – Why was this property chosen
Cost analysis – a detailed estimation of ALL costs including closing fees, property cost, project costs, taxes, contingency, etc.
Profitability analysis – Net ROI and Yield
Risk assessment and mitigation plan
How do I get a return on my investment?
Your return on investment can come from several streams:
A great investment is measured by achieving one, few or all of these.
We strive to have our property investment gain from all of them by choosing properties:
Your monthly or quarterly income from rental
Retrieving most or all of your capital investment as fast as possible through financing
Immediate appreciation from the value added to the property through the planning permission, conversion or refurbishment project
Capital appreciation achieved over time from the increase in the property value
These steps will create the best return on your investment.
In the right location
Negotiating the price and buying below market value
Increasing their value through conversion or refurbishment project
Refurbishing our properties slightly above market standard to attract good tenants and maximise the income and our ability to finance them.
What happens if the property market change?
It is not a question of “if”, it’s a question of “when”. The property market works in waves and it will change.
The secret is to buy right, make the smart decisions, not overspend on the refurbishment and have exit plans for each scenario.
Here are just 4 examples of how we plan for changes in the future:
These steps will create the best return on your investment.
We prefer to convert building to smaller (studio, one bedroom, two bedroom) flats because we think that demand for smaller properties will always be strong. In good times, there are young professionals, smaller families and students that will need this type of accommodation and in bad times, people will scale down and the need for these kind of accommodation will be strong.
We buy distressed or empty commercial buildings for below market value, apply for change of their use and convert them to residential units. By adding the value to them from the beginning, even when the market will turn, our profit was made at the beginning and is less depended on future appreciation of the property.
We rent some of our properties as HMOs by a room so our monthly income is significantly higher than a single let. This mean that even if the rental price per room go down, it is still highly profitable and cover all expenses
We refurbish our properties slightly above the normal market standards. In good times this will attract better tenants and higher rent. In bad time, this will allow us to minimise the vacancies as we can reduce our rent to the market level and still gain the tenancy due to the superiority of our property.