Transcription
We were working 70, 80 hours a week, sometimes 100 hours a week. And it just felt like all those people out there that were having property success were just lucky. We were trying to save as much as we could and then buy properties. So, we managed to buy three units and we were just losing money on those. But we were still hungry and and we wanted more. But then we realized that serviced accommodation is the way forward and we're going to tell you why.
Hang on, that's his lease option. Lease option letters. For lease options. So, every day I send five letters out for lease options. A lease option is a property that you offer a price now and then you pay for it 5 to 7 years down the line. Just properties I find online that might be negative equity. So, yeah, every day I send five, seven days a week.
We are on Weymouth seafront. We have got our commercial to residential HMO and it sits one road back from the main seafront. Weymouth is a traditional seaside town. So, it's yeah, very Is it Georgian or Victorian? Victorian. Beautiful, really seasonal for serviced accommodation, but yeah, just a beautiful seaside town. So, it was a Thai restaurant, so it had a commercial kitchen downstairs and a restaurant to the side. We purchased it for 100 401,000 and we've now converted it into a seven-bed HMO with a serviced accommodation unit at the on the side. So, as you can see, our HMO is really central. It It was three buildings at one time. So, we've got six Bond Street, one and two Maiden Street. And every time I look at it, it's just so impressive, the size of it. Come on in. Let's have a look.
It's actually quite tidy, you know. It is actually quite tidy, although the hob needs a clean. Well, HMOs normally generally are a little bit messy and the heating's normally on 40 degrees, but I mean, at the moment we're still coming here weekly. We're keeping an eye on everything, making sure if it's running well, but it's nice to come and see they're looking after it. Absolutely. So, this used to be the restaurant. This is These are actually the original restaurant seats that were around the outside of the building. Um but yeah, this was a massive restaurant, all seated. Um we stripped everything out and then we got the build team in. We rerendered the walls in here and then fitted the kitchen. It wasn't operating. It was It was closed down. I think it was closed down for about a year and then I think the owner that bought it last, they still planned to have an HMO upstairs and then continue the restaurant downstairs, but we were like, nah, we're done with restaurants. We're not having another restaurant.
We had three public houses, didn't we? One that had letting rooms, so it had six letting rooms upstairs. We had one that was a larger-scale sort of 200-seater restaurant. And then we had the newest one to the edition, which was our house and our our pub, which was in Walkford in Christchurch. Various things, COVID, not recovering from COVID as a business, um the industry, the 70 hours a week, the children. There was very good reasons why we decided it was time to move on, wasn't it? So, when on the 21st of March, when Boris sat in front of the TV and delivered the news he did, for many and including us, it meant that your business is closed. We had Lottie was what, a month old? She was a month old, so our youngest was a month old. We had no income, no way of making money, no stability. Um and we had a lot of money that was that was obviously going to go out. We had staff that at that point we didn't know what we were going to do with. It was absolutely terrifying. They made us realize that saving 20,000 pound at a time, 30,000 pound to put down as deposits just wasn't scalable. We needed a direction forwards. We didn't know what coming out of COVID was going to look like, but we did know very, very early on in COVID the major, major bonus was time, wasn't it? If you can get your time back and whatever you're doing can become passive, that just gives you opportunities galore because you're free enough to be able to take the opportunities, aren't you?
We originally were going to go for eight-bed HMO. Um planning has been a nightmare, to be honest with you. When we bought it, it had planning for seven rooms and we were just trying to extend it to to have eight. So, originally this was going to be the kitchen for the building and that was going to be like the communal seating area for the building. We thought, oh, hang on, that's big enough to have a kitchen and dining space, so we'll turn this into another room. We went all the way through it, got rejected. Like everything just took so long, didn't it? It was just crazy. So, now we've changed strategies. What we're going to do is we put planning in and hopefully get planning agreed very shortly to turn this into a a serviced accommodation unit. This was my major happiness point with this. So, course I wasn't celebrating that we didn't get the planning on the eighth bedroom, but I was celebrating because in the back of my head I thought, serviced accommodation. Um so, we've got It will be a double, so it have double occupancy. It's got its own entrance, which is attractive, so it is completely separate to the actual main house. We've got in there a shower and toilet and sink. And again, it was one big space to begin with, but you can see very quickly that it's a really nice, spacious, perfect-size bathroom um for guests to come for a week's stay. Great location. We're 500 m from the beach. We are aiming for it in around conservatively around the 150 mark per night for this in summer peak season.
So, we paid 401,000 for this um and we spent 55 on the refurb. We paid 10,000 for stamp duty. Stamp duty was reduced because it was mixed use. We're thinking about 630,000 would be the revalue. This is good for us because obviously we didn't put any money in, so the investor put all the money in. We oversee the project. When we refinance, he gets his money back, so then no one's got any money in and we just split the profits. It cash flows around three and a half grand a month. We set up a company with the investor. The company's called six Bond Street. So, yeah, then we'll draw dividends on that every year. We're starting to do this more and more. Our letting agency, we done the same thing with that. We done a kind of lease option with that or vendor finance with that. Whereas we paid a deposit for the letting agency, then we pay for the letting agency out of the profits of the business. So, there's loads of ways you can do business without any money.
To have that within our property portfolio is just I don't know, it's incredible. And I can see the sea. It's unbelievable. So, I was watching YouTube and like in in the midst of like thinking of what we could do because of COVID and then I I found Samuel and I was watching it. Nina came into the room and said, "Who's that annoying guy on the telly?" And I was just like, "Just watch it for a minute. It's really interesting." And then I think within an hour we booked a crash course. Yeah, well, it just didn't make any sense though to me because there's this guy that is shouting and raving about property um about all of these, I know I know, alternative creative strategies. But for us, our journey to that point had been only one exit, save the money, get a property, let it to a tenant and then pay a managing agent a managing fee to look after it. None of it was kind of making any sense. So, when you then said to me about this guy, I thought, no, it just can't be real. It can't be true. Otherwise everybody would be doing it, right? We now know that, don't get me wrong, there's a lot of hard work, but being open to those different strategies has has been key to success, hasn't it? And then there was this whole concept introduced to us about the academy and Rich just jumped out of his seat, ran to the back of the room and signed us both up to this academy. And I remember thinking, my first initial thought was, I really need a new car and you've just spent this money on the academy. But Rich very clearly said, "But this is going to be our way out. This is going to be learning about strategies that is going to be property and property done well."
In Elite Lettings alone now, we have grown it to over 90 properties within the portfolio currently and we're still growing. Rich, what's the turnover on Elite? So, the the client account is millions, but the actual the profit account what we take is just under 90k a year. So, just below the VAT threshold.
This area for us just screams development. I mean, I think we're pretty blessed. This is beautiful, like Hot, sweaty, pub kitchens to being in control of our time, running our businesses with that as a backdrop. Yeah. So nice. I'm just grateful. I'm unbelievably grateful that I trusted the scam that clearly wasn't a scam. We speak to Samuel quite regularly. Just been out to Dubai with him. He knows we're grateful. That goes without saying. Alongside being eternally grateful, we're now excited to see where the academy can take us next. Absolutely anybody can do what we've done. 110%. If they've got the will and the grit and they've got a really good work ethic and you put yourself out there and you embrace the connections through the academy, you can't fail.