Transcription
So you want to know what happened on the property I bought from Sandra Leeds? Well, in this video, I'm going to tell you everything. My name's Mark, I'm an entrepreneur and property investor, and in this video, we're going to be talking about a property that I purchased from Samuel Leeds' company, Buy Low Rent High, back in 2017. And this seems like a lifetime ago for me now.
But before we get into the video, before we get into the figures, I'm going to talk you through all the figures, including on the next sheet, the rent and the profit and all the rest. I want you to smash that like button, absolutely obliterate it for me. It would really help me out on the algorithm. And if you're not already subscribed, please consider subscribing to my channel, where I'm going to put out videos every Monday, Wednesday, and Friday, all property investment and entrepreneurship related. So let's get into the video.
So going back to 2017, I just read Samuel Leeds' books, Buy Low, Get Rent, Buy Low Rent High, and I decided that I was going to start looking at HMOs in cheaper areas. Before that, I'd only invested in the South of England, and my average property purchase price at that point was around about 350k. For the first time, I was looking at properties sub 100k, and I was looking for someone to help me do that. So what happened? I paid Buy Low Rent High three and a half thousand pounds for a deal up in Sheffield, and they sourced for me this semi-detached, three-bedroom property, which they had already agreed the purchase price of 99,000 pounds.
It wasn't for a further seven months until I actually managed to complete. There were some issues with the seller. They were moving to Spain, their property in Spain fell through for whatever reason. It took what seemed like an age, but come May, we got the keys and we were ready to start the renovations. So we ended up doing the work ourselves. It cost a total of around 6,000 pounds, and at the end of the work, we had a property that was ready to rent out. We put furniture in it for a further three or four thousand pounds, and we rented the rooms out in actually what I would consider very good time. It took us only two weeks to fill all four rooms. Okay, some of them didn't move in for sort of five, six weeks because I had to give up notice, but within six weeks, the property was completely fully let. We then ran that property really well for about two years.
Fast forward to 2019, and we'd found another deal on the same road on the other side, and one of my friends bought that deal for 80,000 pounds. Now, it required a lot more work, it was uninhabitable, and it was done under the BRR strategy. So I think he spent about 15,000 pounds doing it up. He was in it for about 95,000, and then towards the end of 20, towards the end of 2019, beginning of 2020, he had it revalued at 110,000, allowing him to refinance some of his money back out. It wasn't certainly wasn't a no money down deal, but there was a lot that came back out. I, on the other hand, wasn't quite so lucky. COVID came along, and guess what? My property in 2020, when the revalue came through, which was in May, got down valued. Unfortunately, I only got a value of 105,000, despite my property being about 20% larger than my friend's. So timing really did matter on this occasion. I'm confident if we could go back in time pre-COVID, I would have got a 120,000 pound refinance value.
So what does this mean for my deal? Well, I bought it for 99,000 pounds, I spent 6,000 pounds on it, and today it was worth 105,000. Not too bad, really. But let's have a look at the rental figures, because this property has rented out very well for a long period of time. So the rooms up in Sheffield rent from anywhere from 375 to 425 per room per calendar month, and actually, we get a conservative income of around about 1,500 pounds a month. The outgoings on this property are fairly cheap. There's a very low mortgage, so the mortgage is only 200 pounds a month. The bills are only 300 pounds a month, and the management fee 150 pounds a month. This brings a total cost of around about 650 pounds a month. When you minus the cost from the revenue, you get a total profit per month on a cash basis of 850 pounds. However, as anybody who watches my channel knows, I always take 10% off for voids and repairs. So this would give us an actual profit of around about 700 pounds a calendar month.
I always look at this sort of deal and think about how much money I've got left in it and how many of those I would need to make me financially free. So in honesty, in this deal, I probably have about 25,000 pounds in the deal. But that doesn't tell the full story, because I've had this property now over two years, and during that two years, yes, I have had some repairs to be done. A roof needed to be fixed, that was 1,400 pounds if I remember rightly. There was also a couple of issues with a sofa, that was another 300 pounds. Have I hit the voids and repairs of 150 pounds a month? Probably not. But at the same time, it's useful to use that as a figure so that you know what roughly where your figures will be. When you take into consideration all the rent I've received and the profit I've made over the last 30 months of owning the property, it's probably now at the point where it's giving me an infinite return, and I'm essentially left with a free property.
So how did I find my experience with Samuel Leeds' company? To be honest, it was fine. If I was to go into a bit more detail, the person who dealt with me on the first instance, Elliot, was fantastic. He was very knowledgeable, he knew exactly what he was telling me about, he guided me through the whole process very, very easily, and I felt completely at ease when I parted my money. At this point, I was handed over to the person who would source the deal, and unfortunately, that individual hadn't done as much research and clearly wasn't as knowledgeable. So for me, at that point, I started doing a bit of the work myself. As things weren't going quite as smoothly as we'd have liked, we decided that we'd use our own building team in order to get the building work done, and we decided that we'd rent the rooms out ourselves and see how we got on. But I don't hold this against the company at all. To be honest, I'm extremely grateful with the opportunity that I had, and it opened my eyes to new strategies. I started buying in cheaper areas, I started buying properties that ROI'd far superior to my local area, and for that reason, this is a real game changer for me.
Since 2018, I've gone on to purchase several deals that is very similar to this and have ROI'd fantastically. I've continued to purchase in Sheffield as well as other cheaper areas, and I've done really well out of it. So for that, I'm really happy. So hopefully, this video has been of interest to you. It highlights the importance of taking advice from other people who might have a slightly different viewpoint from you, and also might know things that you don't know. And sometimes that advice can be really, really useful. Also highlights the importance of paying for service when you're just not sure, because by making that commitment, it actually forced me out of my comfort zone a little bit and gave me someone to hold my hand and get me over the line. Ultimately, this worked out really well for me, and over the last couple of years, I've built up a very sizable portfolio using this strategy.
So have you used deal sources before? Would you let me know in the comments? Equally, if you'd like to have a conversation with me about this house or about any of my properties or investing in general, have a look in the description. Until I've got a thousand subscribers, you'll see my email address. Pop me an email, and we can have a one-to-one conversation. I've been Mark Parham. I hope you've enjoyed this. Thank you very much, and we'll see you soon.