In my 19 years as a landlord, I’ve been involved in a few refurbs. Like the refurb that allowed me to pull all my deposit money from rental No.4 in late 2019.
This little refurb stressed me out to be honest as I was worried about money at the time. But over the last few years, I’ve been working on my mindset and things have improved.
Our little extension
After 3 full years of resistance, I finally gave in and agreed to get an extension on our home. We could have done it a few years earlier, but I convinced Mrs Duffy that we needed to focus on building DUFF PROPERTIES. We needed some more assets so that we could move closer to early FI.
To start with, the first issue was getting in touch with our builder. He was due to start in mid-April and wasn’t answering his phone. His communication skills were poor to say the least.
When we eventually got hold of him, he’d been having a nightmare with the job before ours. There are 2 reasons for his poor communication skills: 1. When he is on a job his only focus is that particular job – old school 2. He is not a fan of phones … Not ideal when you are trying to find out the start date when trying to arrange kitchen fitters etc.
The extension started at the end of May and the builders (x2 brothers) have been good as gold. They are just old school and not a fan of using mobiles.
As well as the delayed start, we have had quite a few delays due to materials and tradesman. We’ve had a leaky roof and a few other issues. The builders covered the flat roof with tarpaulin whilst we waited for the roofer. This was 2 weeks and it pissed down most days and there was a leak in the corner for a few days. The builders sorted it after one of the weekends – I didn’t want to bother our old school builder over the weekend and just got a few pots and pans out for the leaks.
After several delays, we were finally going to get our kitchen installed on Monday the 19th of July. But COVID had other plans. Our kitchen fitter and his apprentice had COVID so that meant another 10 days delay. And 10 days extra without a functioning kitchen.
Me and Mrs Duffy smiled through everything and were able to keep positive throughout. Sometimes you just need the right perspective.
Going forward with BRR (Buy Refurbish Refinance)
BRR is something I am seriously considering going forward. Even though I haven’t fancied it in the past because of tradesman. To be honest, this was partly down to the poor mindset I had (did I mention my negative mindset between 2008 and 2018 …).
Me and Mrs Duffy have had to deal with tradesman regularly over the last few weeks. It wasn’t always smooth and there were lots of delays due to unforeseen circumstances – like materials and COVID. But we remained calm.
Any issues, we genuinely laughed at and even enjoyed the process. And this whole process of getting the extension done, has made me realise that I’m more than capable of overseeing some BRR projects as I move forward.
Working on mindset over the last few years is paying off and this extension has proved it. Shit happens and you must adapt and go with the flow.
DUFF PROPERTIES are looking for investors to come on board and help us grow our portfolio. We will be looking at doing BRR (Buy Refurb Refinance) on properties in Middlesbrough and surrounding areas. If you are interested and want an excellent return on your money, please contact us for more details.
We have a proven track record of refurbs and have 19 years of property experience. See below for a little case study of rental No. 4:
- Rental No. 4 on the market for £140k
- Purchase price £90k (75% LTV therefore £22.5k deposit)
- Renovation costs £10k
- Total investment £35k (£22.5k deposit, £10k renovation plus £2.5k legal fees)
- Profit pa £3.6k (£550 rent – (£180 Mortgage + £20 Insurance + £50 maintenance) = £300 pcm profit … £300 x 12 = £3.6k pa)
- 6 Months later we done a re-mortgage to recycle the deposit money
- House valued at £120k which I thought was low, but I decided against contesting the valuation
- Mortgage now at £90k so my £22.5k deposit is now recycled
- Money left in the deal now stands at £12.5k – therefore total investment £12.5k
- Profit pa £3k ((£550 rent – (£230 Mortgage + £20 Insurance + £50 maintenance) = £250 pcm profit … £250 x 12 = £3k pa)
Although the market has been crazy over the last few months, there are still potential deals out there if you look hard enough. Now that the extension is complete, DUFF PROPERTIES are looking for a little BRR project. The aim is to get to 10 properties over the next few months (another x3 properties). At this point, I will either continue with BRR or look at increasing cash flow with HMOs (House of Multiple Occupation).
What to do
Before any property investing, look to work on mindset. Property is not easy. It can be relatively passive (which I have found with BTL properties) but it takes work getting things up and running. You will make mistakes along the way but it’s about remaining calm throughout. Or at least, trying to remain calm.
If you fancy BRR, don’t let self-doubt kick in or procrastination. Get in there and give it a go. You might have issues and you might make mistakes. But if you keep at it, you will make a success of BRR or whatever else you decide to do.
Book of the week: The Monk who sold his Ferrari, by Robin Sharma. There is a reason why this book has sold millions of copies. As far as personal development books go, this is probably the best one I’ve read. If you are a bit stressed out and suffering from overwhelm, this book is a must read.
For a hard copy visit the excellent Imagined Things Bookshop: https://imaginedthings.co.uk/