Multi Let Refurbishment underway

Date Posted February 10, 2011  |  Author Author Julie Hanson

We’ve just completed the purchase on our first multi let property.  It’s very exciting as the cash flow could be fantastic.  We have JV’d with a family member to buy this property.  So we have split the risk and the capital required but of course the profit is split too. However we liked this approach as it was our first one so we wanted to test how things go.

It also helps my Mum in Law to progress her property portfolio.

The deal looks like this:

  • Purchase price – £82,000.
  • Refurb & furniture: £8,000
  • 3 bed property which we’ll turn into a 4 bed multi let.
  • Expected cashflow =£500 per month

It’ll take approx 4 weeks to refurbish the property.  It’s in an area which is popular for professional multi-lets, so shouldn’t be difficult to let out.  If this property project is successful then we’ll repeat the formula.  We wanted to make sure that this one worked out before we commit to any others.

We did have a bit of a set-back last week though as the property was broken into (7 days after we had completed!).  We couldn’t believe it as the property had been empty for 6 months prior to this!

The property was empty and had nothing of value in as the refurb hadn’t started yet, so they decided to rip the copper pipes from the walls!

In doing so they ripped out all the radiators and the bathroom suite.  They must have been celebrating at getting all of thirty quid’s worth of copper pipe!  In doing so they did about a thousand pounds worth of damage!  Nice….. but you know what I think if you’re in property investing you have to just expect that things like this will happen.  You can’t dwell on it, you just have to move on and get on with it.

The good news is that the burglars got £30′s worth of copper pipe and we have an asset which will bring us £500 per month!

Has anybody else had their property broken into whilst it was empty and being refurbed?  We’d love to hear your stories….  the good ones and the bad ones!

Julie Hanson


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Category Categories: HMO, Property  |  Tag Tags: , , , , , , , , , ,  |  Comments 2 Comments »

  • Kasim

    I went on an HMO workshop. They gave us a 90 minute lecture on what HMOs are all about; then had lunch; then went to view 3 potential HMOs that were up for sale – In Northampton. When we returned to the course, they dropped a bombshell – their fees were £8995 per property, reduced to £6995 per property or 5 for 4 if you signed that day. Then we have to pay £5000 for furniture and £5000 for fire regulation fittings! That's £19,000 per property plus £60,000 working capital.

    In 3 years, they'll use the working capital to build 9 HMOs providing we pay 9 X £19,000 = £171,000 and, in the 4th year, they'll give you your working capital back leaving you with a total outlay of £111,000. The 9 HMOs will positively cashflow £32,000 a year from which you'll pay income tax at 20% currently.

    Your experience is much simpler: 3 bed property (£82K) converted to a 4 bed multi-let property for £8K total outlay £90K. I bought a 3bed property for £71.5K and refurbished it for £13.5K giving an outlay of £85K. Becuase it has large square lounge, I couldn't convert it to a 4bed multi-let. But it rents for £600 pcm making it cashflow positive by £320. I remortgaged it recently releasing £19.5K but the new mortgage is £324 thus the cashflow has reduced to £231. However, I can use that money to leverage another property with the help of money released from another property and I'll have 3 properties for the price of 2 with a lot of money in the bank for a rainy day or further investments.

    I really hope you get positive results with this project. Everyone can use £500+ pcm cashflow positive from a £90K Investment. This is better than my £231 pcm from an AST on an £85K investment.

    • Julie Hanson

      Hi Kasim,

      Thanks for your really interesting comment. Yes we hope to repeat our experience as these figures are great and should provide a fantastic yield. It sounds like you have also been successful with your HMO investing. A cashflow of £320 is excellent. Releasing £19.5K is also excellent!

      Keep in touch as it's always great to hear how other people are getting on.

      I'll keep updating the blog about this one, but fingers crossed it's all good so far!

      Kind regards,

      Julie