A Return On Investment of 113.99% in just 4 months... Does it really work?

• Posted by Ben James
• Date 19th March 2016
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This is a question we're regularly asked when speaking with joint venture partners for the first time. Our response is always the same, the proof is in the pudding. And one particular joint venture we wish to share with you involved a gentleman who came to us with GBP 66 k to invest and we returned to him GBP 141,233.40 (Including his initial capital back) within 4 months. As always his capital was secured in bricks and mortar and the venture was that of a conversion of a 3 bed terrace in Norwich into a 5 bed student HMO that's now producing GBP 24,000 per annum in rental income. The refurb job start to finish was completed within 6 weeks as we successfully negotiated a works access clause into the contract on exchange meaning our build team was able to complete the refurb before we'd even completed on the property. This is what is known as using leverage and being creative with the property law in the UK.

Once we completed on the property, we rented the property ourselves to students, thus saving HUGE Lettings Agents fees (We like profit), and outsourced the inventory and moving in reports which cost a mere GBP 150. We manage both our own and partners property portfolios and use a system that is cloud based and very advanced on the current property management systems available today. For example, a system we have with all our tenants is that should they have an issue they can register it using an app on their phone (perfect for modern day students) which then sends an alert to the relevant tradesman to attend to the property to investigate the issue further. This works great for us as it saves a lot of wasted time in what a lot of landlords and property managers currently do, and that's ring round trying to arrange the inspection. Extremely beneficial in terms of time, cost and convenience.

When it comes to selling or renting a property, presentation is key. Because this was a fully furnished student HMO, the property already created the lifestyle to prospective tenants of what it would be like to live there. A big part in achieving this is the photos taken to present the property - both on-line and in the brochure. We can't emphasize enough the importance of taking quality, wide angled lens photographs. Our strategy involves using the same professional photographer on all our properties who understands what we look for in terms of use of light, space and angles. Once the shots have been taken and edited, we then forward onto the Estate Agent to use. 

Another key element we pay a lot of attention to is making sure the Estate Agent sends the listing description to us for approval before the property goes on the market to make sure it is a) correct and b) targeting the type of buyer a ready made HMO producing a yield of 10% per annum is for. 

We put the property on the market with a local city centre agent and within 7 days the property was sold for the full asking price of 240 k. What's ironic is that the local city centre agent didn't find the buyer, we found him in-house by looking through the various groups on Facebook for buyers that like 10% yield property investments. 

As you can see we're very much hands on property investors that manage the lifecycle of the joint venture investment from start to finish. Plus, the more 10% yield property buyers we can find, what do you think will happen next time we develop another Student HMO producing a 10% yield per annum with an agreed exit to sell? Who are we going to call and avoid paying necessary agency fees? :-) 

The joint venture partner on this particular investment earned an ROI of 113.99% within just 4 months. This is because we know what to buy and when, how to refurbish it to cater for current demand, and how to achieve a profitable exit within the fastest time possible. Most people with spare cash to invest don't have the time to teach themselves extensive years of international property investing knowledge so they partner up with us instead, leverage our knowledge and experience, and enjoy very fruitful returns that they wouldn't be making on their own.   

If you'd like to learn more about joint venturing with Estateducation, then please contact us via our contact page

Oh, and here's the album showing the property before and after shots:

Facebook Album

Thanks for reading,

The Estateducation Team.