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Property experts from The Property Hub were left stunned after one woman shared her unusual story. Rob Bence and Rob Dix shared Elly’s success story on The Property Podcast where she was offered a unique deal – “buy two houses and get the third one free”. Elly, who is in her mid-50s, lives in West Sussex but decided to invest in property 350 miles away in North East England where property prices tend to be a lot cheaper.
At the beginning of last year, Elly already had one rental property under her belt which she had refurbished and rented out.
She was then planning to use the “buy, refurbish, refinance” strategy to get more properties.
“Buy some properties in need of work, get the work done, rent them out and pull her cash back out to go again,” the experts explained.
However, after talking to her broker about refinancing the first property, Elly was offered a unique proposition.
Elly said: “A deal came my way, which wasn’t part of the strategy…
“It was three two-bedroom terraced houses in the colliery villages in County Durham and it was a buy two get one free.
“It was another one of my broker’s clients who was refinancing their whole portfolio and needed to offload three properties.”
Elly said she was unsure about the deal originally as it wasn’t in her plan.
She also explained that in these particular villages, most of the tenants would be on Universal Credit which is something she wanted to pursue further on down the line once she had more cashflow from her HMOs.
She added: “It’s something you have to have knowledge about – it’s quite a specialised area. I wasn’t sure whether I had enough experience.”
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The experts said it is a strategy that can “pay off” but it can be difficult and comes with challenges.
Luckily, Elly said she met a letting agent that specialised in that field and looked after the tenants as well as the landlord.
Rob and Rob said it sounded like Elly had found an “absolutely brilliant letting agent” and that local knowledge is really important.
The three properties Elly was offered were terraced houses; one had been empty for five years and the other two with tenants already living in them.
She continued: “The deal was that I bought all three on an exchange delay completion.
“So I would exchange and then three months later I would complete and in those three months on exchange I would have key access to the empty property which would give me the opportunity to refurbish that one and then be ready to refinance all three just before completion.”
However, unfortunately for Elly, she ran into some complications which resulted from the start of the coronavirus pandemic.
The vendor wanted to pull the sale forward, which Elly agreed to.
Elly exchanged, got the keys for the builders and hired a team of builders to renovate the empty property.
A few months into the project, the builders got Covid, so they had to self-isolate and in the meantime, the tenants in the other two houses decided to vacate without warning.
Elly got the keys to the other two properties and decided to refurbish those too.
However, she said it was difficult because builders were in short supply and so were the materials.
She added: “The house the builders were working on, was broken into so all my builders’ tools and supplies were stolen.
“And the kitchen that was about to be fitted was stolen.”
When Elly was about to put the refinancing in place, two of the lenders pulled out.
Luckily, Elly had kept her cash so she managed to use her own money.
Now, two of the properties are let, with Elly working with the local council to rent to tenants who are in need of housing.
The third property will be rented out soon to tenants.
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