Advice (And Caution) On Commercial Valuations, Investor Finance & Is Base Rate About To Drop? With Ellie Broadhurst

In this episode, I’m excited to have our specialist mortgage broker, Ellie Broadhurst, back on the show. Ellie is our expert when it comes to mortgages and finance, and we always turn to her for advice.

We’re going to chat about what Labour’s policies could mean for the property market. We’ll also look at whether we might see our first base rate cut in years—could this finally be happening?

Ellie has some important tips on commercial valuations and using private finance along with mortgage lending. This is key information for anyone involved or thinking about getting into these areas. We’ll also discuss whether now might be the time to consider two-year or three-year fixed-rate mortgages instead of five-year ones, as things might be looking more positive.

So, if you want to hear what Ellie thinks about all this, make sure you stick around!

Interested in discussing your HMO mortgage and finance needs? Contact Ellie Broadhurst here.

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Got any questions? Ask us in The HMO Community Facebook Group or follow me on Instagram @andygraham.hmo for daily HMO tips and advice! 

If you want to join my 1-2-1 mentoring program, you can enquire here. 

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Transcript

Andy Graham (00:00) Hey, I'm Andy and you're listening to the HMO Podcast. Over 10 years ago, I set myself the challenge of building my own property portfolio. And what began as a short -term investment plan soon became a long -term commitment to change the way young people live together. I've now built several successful businesses. I've raised millions of pounds of investment and I've managed thousands of tenants. Join me and some very special guests to discover the tips, tricks and hacks, the ups and the downs, the best practice and everything else you need to know to start, scale and systemise your very own HMO portfolio now.

Andy Graham (00:40) Today I'm joined by our good friend and regular on the show, Ellie Broadhurst. Ellie is of course our expert when it comes to all things mortgages and finance. It's Ellie that we rely on. Today I want to ask Ellie what she thinks labor means for the property market. I want to talk to Ellie about whether we could be on the cusp of the first reduction in the base rate that we've seen in years. Could it finally be happening? Ellie's got some important advice about commercial valuations and using private finance alongside mortgage lending. This is really important stuff. So for anybody out there listening that is doing that or planning to do that, make sure you stick around. I want to ask Ellie about whether we should be thinking about two year and three year fixes versus five year fixes as things could be about to change, could potentially look a bit more positive for us. And we've got a whole lot more to cover. If you want to find out what Ellie thinks about all of this, make sure you stick around. Please sit back, relax and enjoy today's episode of the HMO Podcast.

Hey guys, it's Andy here. We're going be getting back to the podcast in just a moment, but before we do, I want to tell you very quickly about the HMO Roadmap. Now, if you're serious about replacing your income, or perhaps you've already got a HMO portfolio that you want to scale up, then the HMO Roadmap really is your one -stop shop. Inside the Roadmap, you'll find a full 60 lesson course delivered by teaching you how to find more deals, how to fund more deals and raise private finance, how to refurbish great properties, how to fill them with great tenants that stay for longer, and how to manage your properties and tenants for the future.

 We've also got guest workshops added every single month. We've got new videos added every single week about all sorts of topics. We've got downloadable resources, cheat sheets and swipe files to help you. We've got case studies from guests and community members who are doing incredible projects that you can learn from. And we've also built an application just for that allows you to appraise and evaluate your deals, stack them side by side and track the key metrics that are most important to you. To find out more, head to theHMOroadmap.co.uk now and come and join our incredible community of HMO property investors.

Andy Graham (02:49) Good to have you back on the show.

Ellie Broadhurst (02:51) Hi Andy, good to be back as always.

Andy Graham (02:53) So we've got a Labour government. Every time we catch up, every few months we catch up, something pretty major has happened. So we're under a Labour government. There's a few things I want to talk to you about today. First of all is just to get your thoughts on what you think that means for us as property investors, as HMO investors. Secondly, we've had some consistently positive inflation data recently. So I think it's only right that we have a little bit of a chat about base rate, ask you to get your crystal ball out. Of course. And then some questions that I've seen in the community being asked about is now the time to maybe look at two year fixes, longer fixes, perhaps what do we need to think about and maybe valuations and where things are at in the market. I potentially, and I think you might've seen some quite bullish opinions on values from investors. So I think there's probably a discussion to have around there, but let's start with just high level labor and just what you think this could mean and your opinion on this for the property market and us at the minute, Ellie?

Ellie Broadhurst(03:51) Yeah, I it's an interesting question. mean, everyone's going to have their own political opinions, but we're not here to have that discussion. But I think a change is always good. Conservatives were in power for a long time, and I think it's good to have some fresh faces. We've got a very diverse government, haven't we? Lots of ministers from different places. We've now got a chancellor, I've just mentioned to you, who is, I think, very qualified to do that job.

Yeah, I'm excited. think they've come in and they've made some changes and yes, some people are going to agree with something they've done and things that they haven't done, but planning rules, I think is a big push, isn't it? And I'm sure everyone, we've had this discussion, where I live, there's new plans that have come out to build another 400 houses, which is going to be the new view from my back garden, which I'm not entirely happy about. But anyway, we need new houses, don't we? And everyone's like, yes, I'm happy to have new houses, but not where I live.

Andy Graham (04:43) We are all NIMBYs. That is the problem. I agree with you, Labour, they've definitely come out of the gates very focused on property amongst a few other things. But the property market, obviously sort of going straight after the renters reform bill, which I think it's now that's of the renter's rights and very much like looking for these methods of getting more provisions to tenants in, which I voiced my opinions not long ago on the show about this But certainly the planning reform, think is great. And to me, that looks like them really shaking the tree. So I think as always, proceed with sort of caution. I think at the end of the day, we have heard this sort of stuff. We've heard the 300,000 new homes a year, haven't we?

Ellie Broadhurst (05:25) We have, we absolutely have. There's been some things that have backed that up already, haven't there, around like planning. And I know not everyone's going to agree with it, but it is moving in a direction of it's enabling us to build more homes about reclassifying green belts and grey belt and things like that. So there are things that are happening, which I think will make that house building process easier than we've seen. Again, whether you agree with what they're doing or not is a different matter, but I think it is moving in a direction of allowing people to build more houses, which is a good thing.

Andy Graham (05:57) This summary of a podcast that I did recently about what Labour means for us all. I think that the real summary was, look, some of the stuff that's going to come through is really is not favorable for us as landlords particularly, but actually shaking the trees is almost always going to present some opportunities. I think for some of our listeners who are out there, certainly in the social space, very interesting, I think for small developers who rely on planning and working with the councils, I think there could be some really interesting stuff there. And I think just zooming right out of the detail, I think, and I hope more than I think, but both that actually, this period of stability that we've been yearning for for so long, like since pre -COVID could now be around the corner. And to me, it feels like maybe we could be moving into that sort of spring economy where actually things start to look more positive. We feel like we've got the confidence to make those plans. It starts to prop up the housing market, transactions start to pick up and the inflation data has been consistently sort of positive again this month. I mean, it could still be better, right, with core inflation, but I think that's another key thing we've obviously got to hold on to. But what do you think about that, Ellie? And I guess off the back of that, where does this leave us with the next Bank of England meeting in your opinion and what this could mean for base rates, which to be honest is the big one for all of us as investors

 Ellie Broadhurst (07:24) That is the big one. Yeah, I mean, it is and it isn't. I'd say two things. I mean, one, you mentioned core inflation there and I think that's a really important point is that if you dig down into inflation figures, actually it's particular things that are coming down that are pulling all of inflation down because they're coming down quite rapidly. So when it was this month, was it food? There was a few bits and pieces on there that was pulling it down. But if you look at core inflation, wage inflation, hotels, wasn't it? Yeah, services. mean, I know we're all blaming Taylor Swift on that one, but.

If you look at the core inflation figure, it is significantly higher than that 2% that we need to get it to. So there is an argument for both ways. Yes, we're seeing green shoots. Hopefully all of this sort of investment into the economy means that we will have a higher GDP over a prolonged period of time. But I can see an argument for both as to keeping it the same and to reducing it. I think the split last month was 7 to 3, I think it was. So there is a bit of a mixed bag with the Bank of England as well. So we'll see. But I think the important thing to remember is I'm not sure how much effect this is going to have on interest rates.

 Andy Graham (08:34) As in consumer interest rates? As in consumer interest what we're actually paying as investors.

Ellie Broadhurst (08:38) There's so many people that are having a conversation with me at the moment around, do you think I should wait? Do you think I should fix it for a short period? We're going back to those sorts of conversations. And I mean, I'm not here to give anybody mortgage advice, but all I would say is that if there is a base rate reduction, it will probably 0.25. I can't imagine that it would be any more than that. Generally, lenders pass on around half of the reduction. So that's 0.12. And actually what we're seeing from lenders is that the move up and down with their rates is based on the type of business that they want in and the business volumes that they've got. So there's a couple of lenders that got quite aggressive rates at the moment, particularly on a normal five -year fixed and a standard buy to let.

But one of them had an update from them yesterday to say that they're not looking at new applications for six days. And normally that is one to two. So that aggressive rate is having a really big impact on their business volumes, which is having an impact on service, which means I imagine in the next week or so, we will see that rate go back up again because they are at capacity and they don't want any more in. So that's having a much greater effect on the rates, consumer rates that are being offered rather than base rate.

Andy Graham (09:52) Okay, so what you're essentially saying is that some of the lenders are so busy with the business that they've already got and are getting that actually there's almost no great incentive to reduce the rates because they can fill their workload.

Ellie Broadhurst (10:07) Well that's, I mean, with that particular lender, they have got a really quite aggressive rate. So yes, they have reduced their rate and they're getting the business in, but that business volume is not sustainable because I mean. We don't work like this because we are one more specialist broker, but most brokers will have a database system where they put in the criteria of what it is that they're looking for. And then they'll get a list of lenders up and they will go for the top one. There's no reason not to go for the top one. So if you've got one at 5.09 and then you've got something else at 5.12, you're going to go for the 5.09. So that doesn't need to be hugely better than anybody else's. It just needs to be top or in the top three and you will get a significant chunk of that business. And that's how things adjust, will adjust.

Andy Graham (10:54) Behind the scenes. And I say this from personal experience, I've made decisions before almost entirely on rates and absolutely regretted it sort of three months into that process as well, just because some lenders who are maybe not as familiar or sort of relaxed with things like HMOs have just found the whole process and transactions more challenging the valuation and their opinion on valuation and how they interpret commercial valuations has been a bit different. So again, I guess a caveat for me and I'm not sure whether you share this, it's actually, it's never exclusively about the rates anyway, is it? It's got to be about far more than that.

Ellie Broadhurst (11:34) Absolutely. And I suppose that's how we do things differently because we do work with investors. So there is generally quirks in there in terms of the lending's normally limited company. A lot of our clients are only their own income, sorry, is only from property related business, which a lot of high street lenders don't like. You may be using inter -company loans or investor funds. You know, there's loads of quirks in there, which is going to immediately shut down probably, I've got at least three quarters of the sort of high street type lenders that you'll go to. So with us what I would do is talk to the client, find out exactly what it is that they're looking for. And then from that information, there's probably only two or three lenders that we would potentially go to. And then we'll look at those couple of lenders and the pros and cons of using them. But yeah, there's not normally a huge difference in rate. Obviously, if you want a commercial valuation, that kind of sets it to be slightly different, is more expensive. But generally with the other lenders, there's not a huge difference between rate. But if it means that you can complete in eight weeks versus four months and you're on a bridge. That's a big difference, isn't it?

Andy Graham (12:38) It is, yeah. Well, I'm going to stick my neck out and I'm going to bet that the rate does come down. I'm going to say 0.25. I don't think it'll be a unanimous verdict, but I do think it's going to come down, but I'm absolutely going to take on board what you said, which is don't necessarily expect all of the lending rates to necessarily jump down with that. I think absolutely seems to be at the end of the tunnel now, but it's not the brightest light in the world just yet.

Ellie Broadhurst (13:08) No, but I think it would be a lovely thing to do in terms of, like you say, we should be entering a period of more stability. We've had, Keir Starmer already talking about better relationships with the EU, which I think is a good thing in terms of prices, know, the problems that we've had with food prices, for example, over the last few years, of course, in a manner havoc with inflation. If we can try and have some better relationships with EU, think that would be helpful. Moving into a period of more stable economic life and a base rate reduction to start that off, I think would be really nice, really lovely.

Andy Graham (13:41) I think the sentiment, the sentiment is what we want is that the sentiment says things are actually looking better. Yeah. I hope that actually maybe some of the sort of real mainstream high street lenders, certainly for residential stuff, would be able to cool off their rates a bit. And I think that that's really going to help because people, we live in a little bit of a bubble as property investors, but take the average household and their income. Actually a lot of what's going on more widely speaking, it's kind of driven what the average person has to spend at the end of the month. I think it would be great if actually we start to see the benefits of some reductions in rates trickle through. Personally, I think I've got possibly eight figures worth of refinancing to do later in the year.

Ellie Broadhurst (14:26) Like, even 0.25 on that's going to make a difference, isn't it?

Andy Graham (14:30) God, it'll certainly pay for the Christmas party. So, okay, thanks, Ellie. Well, look, I've got off the back of this then an interesting question. I've seen this coming up a few times in the community recently, and it's about how long we should potentially be fixing for. We talked about this on the show, and I think it often boils down to a personal decision, but interested to get your thoughts on that and where the favorable products might be. I mean, when I look at refinancing, I'm usually looking between a two and a five year. I very rarely look at a three year, unless there's something particularly attractive about it. But usually I'm looking at between two and five years and trying to make a sort of an economic decision. And obviously hazard might make my best guess about where I think over the average of that period, I'll end up being on in terms of payments versus where the rate might go. As things do seem to be looking a little bit brighter at the minute. What are you seeing in terms of people coming to you at the minute for lending and what just interested to gauge your thoughts on this decision at the minute?

Ellie Broadhurst (15:25) There's definitely more clients looking at two years. For some clients, a two -year fixed or a three -year fixed doesn't work because the stress test that you're looking at on a shorter term fixed is so much higher. So normally you're adding 2% to the rate and you've got to stress it at that. So your renter's got to cover its limited company lending, standard lending is 125% of the mortgage payment, assuming the mortgage payment is 2% higher than the fixed rate that you're taking. So if you're taking the fixed rate of 5%, stress is seven.

Andy Graham (15:57) Right. So basically the actual, so because the actual lending rate is just so much higher, it significantly impacts the stress testing and the deal.

Ellie Broadhurst (16:07) Yeah. So this is without boring too much about mortgage regulation. This is something that was brought in about 12, 13 years ago and it was designed, the FCA brought it in, it's designed to ensure that over a long period of time, your property is sustainable and will wash its own face over a prolonged period of time, which is, I suppose, probably more important when interest rates are low and have the potential to go up. It's likely that we're at the top of the market at the moment, so therefore it's less important, but it's still, it's an FCA requirement. So if you're on a five -year fix, then we stress it at the pay rate, but if it's any lower, any shorter term than five -year, then we stress it at usually it's 2% above pay rate. So if you've got a simple buy to let in the south of England, and even some HMOs to be fair in the south of England when we're taking off the value is now taking 20 or 25% off the gross rent to cover bills, we are seeing that it's not sustainable to get to 75% on a two or three year fix. So that's the first thing to think about. And then in terms of whether you go through two or five or three, I think. You mentioned about looking at the economic forecast and trying to sort of second guess almost what the interest rate would need to go down by in a period of time in order to make it worthwhile during a two year. And the only thing I would say to that is just bear in mind, particularly when you get into HMOs and more commercial lending, you're paying legals and you're paying a valuation fee on every time you refinance that. You're looking at about three, three and a half grand for a dual rep on a refinance now. Significant sum of money, particularly with smaller house values is a big percentage. And also interest arrangement fees are now pretty much 3% across the board, if not higher. So if you've got that 3% over two years, that's an extra one and a half percent a year, isn't it? If you've got 3% over five years, that's only an extra 0.6 a year that you're adding onto the rate. So the interest rate is going to have to come down by a significant amount in order to overcome all of those additional costs.

Andy Graham (18:05) You're right. I think one of the key things I'm often looking at as well is whether or not I think there'll be a benefit in me trying to refinance that property between now and the five

Ellie Broadhurst (18:14) That is exactly it. That is what I would say. I would say personally, and again, this is not mortgage advice, but as a mortgage advisor, this is how we're taught to give advice, probably more for residential than investment. But what are your plans? Are you going to sell it in the short term if you refinance it in two years time or three years time? Do you think that there's going to be an uplifting value? Could you pull some money out? Could you use that for something else? Where there's some benefit like that, I think it's worth considering. But I think for the sake of second guessing base rate patterns, I think it's definitely a more difficult question. And you've got the added uncertainty, I suppose, around property values. If you're gearing at 75 plus adding an arrangement fee, property prices have got to go up in the short term in order for you to then refinance at 75% in two years' time

Andy Graham (19:03) It's certainly not a no brainer of a decision, it? No, it's not. Really presented with this option, anyone looking to refinance at the minute, guess, thoroughly discussing these options with somebody like you to then try and find that best solution is really the only way you're to get to the right answer. It's not actually as simple as doing what somebody else on Instagram is doing because they got a really good rate.

Ellie Broadhurst (19:25) Exactly. Exactly. I think, yeah, there's definitely more to it, but I think I would err on the side of looking at what's best for you and the property rather than second guessing economics. Although, mean, maybe the ratio will come down by more than we all expect. I don't know. I can't see it though.

Andy Graham (19:41) Me neither. I really can't see it. Let's talk about commercial valuations then Ellie. This is something that I wanted to pull up today because I feel like I've seen some quite bullish sort of valuation expectations from investors in the community recently and I'm not in a position to say whether they're right or wrong. I don't know enough about where everybody's investing and the rents they're getting, but just sort of been picking up on a few conversations and just seeing some pretty, pretty chunky figures banded around. And I was just wondering whether, you know, you're at the coalface, you work with lots and lots of people, you get the valuations back. Just wondering what you were sort of seeing and feeling and whether or not you had any thoughts on this point at the minute. Yeah.

Ellie Broadhurst (20:26) I would agree with you. I am seeing some quite high figures and I think a lot of it comes down to social media and this social media lifestyle. I know that everyone's trying to sell something, aren't they, on there? think you can get sucked into the property world in the same way as you can get sucked in. I don't know, my personal Instagram is all full of fitness people or makeup or whatever it might be like that. There's filters, isn't there? There's filters everywhere. I think instead of having filters, we're seeing snippets of things which don't show you a full picture. I've seen clients say to me, you know, I know somebody else in the area that's got X, Y and Z on their valuation, but unless you've actually seen that report, seen the figures, seen the rental that they're getting and seen the square footage of the property as well, how do you know? Just because yours is a five bed and theirs is a five bed, that does not mean that they are equal. I've seen a couple recently where the rental on an eight bed has been very similar to the rental on a six bed because the room sizes are much bigger on the six bed, it's a much nicer property. So actually the yield based calculation is likely to be quite similar on those two. You can't just take the six bed divided by six and times it by eight to give you the eight bed valuation necessarily. So I think you do need to find some more information out. And also I think a big thing for me, and I've said this a few times, is don't take the information from the people that stand to make money out of you as gospel.

Andy Graham (21:56) I know it seems so that that concept is so easy to understand yet. It's so easy to be influenced by what we're seeing in social media.

Ellie Broadhurst (22:03) You get sucked in, don't you? And I think if you've got like, if you've got a sourcer that's saying to you, got this property, it's going to cost you this much to refurbish, it's going to be worth this at the end. This is the rental that you're going to get. And people go, yeah, that's brilliant. Like that whole thing really works. They're the ones that are going to make the money out of sourcing you the property, project managing the build and then managing the property at the end. So yeah, sense check.

Andy Graham (22:24) As you know and always have been especially cautious with valuations. I'll always look at best worst case scenarios in the deals and stress that, but always very much sort of will work on the basis that, you know, if in this worst case, is it still okay? Is it still acceptable? Is it tolerable? And one of the conversations that I always have with anyone I'm working with, any of my mentees, they've maybe bought properties before refinance things, but haven't necessarily been trying to refinance things on a commercial valuation before, we'll do as much work as we possibly can trying to establish what we think that that will be. But there is always a point at which I say, what you need to understand is until you actually have that data yourself and you've done that first one, you've got that valuation in hand and you've got that opinion from the valuer and the bank, there is still a lot of risk in it. And you've got to, I think, still be really, really careful. So I always walk my mentees through that process. Get as close as we think we can. But then the caveat is always like, there is still an element of risk here. You just, you just don't know.

Ellie Broadhurst (23:26) Of course. Yeah, you do. And it does vary between valuers as well. And as much as I can try and be in control of that as much as I can, there is an element of that that I'm not in control of. And even if we end up with a value that we want, it could be somebody else from that particular firm that's gone out to have a look at your property. So there is always, that is the one part of the process that we are not in control of in any way really. And I think a lot of people will say to me, know, it's all, it's all worked out based on this figure. And if we don't get that figure, then it doesn't work. I'm like, but that's a really high, really punchy figure. You can't base your whole business model on everything being perfect because that's not real life.

Andy Graham (24:11) Absolutely. I think as a quick sort of reminder for all of our listeners, commercial valuations is, it's not simply taking the rent and determining the value directly off that. It's actually, there are a number of variables and Ellie did a fantastic masterclass for us, which is inside the HMO roadmap, where she breaks down exactly how lenders, how valuers, and then how lenders interpret this sort of information and how you as an investor need to actually use that information and make your assumptions and best guesses and how do you plan around what those risks might be. So go and check that, that's inside the HMO roadmap.

So, okay, just be careful everybody on setting yourself unrealistic expectations on valuations. We're certainly not in an environment at the minute where value is, are feeling especially optimistic about anything. think their opinions tend to usually lag. I think there was a time in 2007, 2008, they were feeling quite optimistic, you know, that soon. We've reached that peak. Ellie, before we hit record, you spoke to me really sort of interesting scenario that you've come across a few times that actually I'd never really thought about. And it was about using private finance that we've talked about many times on the show before, but using the right lender and doing it all in the right way, because the lenders will want to understand where that's come from and be able to sort of track where that originally sourced from. You talked about an interesting example that I'd never thought about before, which actually I think is absolutely something that we should make our listeners aware of. Can you talk us through that point around using investor finance and then what an implication could be further down the line on a refinance?

Ellie Broadhurst (25:56) Yeah. So the example that we were talking about before we hit record was an auction. I mean, it happened to be an auction. It doesn't really matter that it was an auction, but it happened to be, as it gave us a tighter time to go to deal with it all. where the client was borrowing a small amount, he was putting most of it in, but a small amount was coming from an investor. So we had the loan agreement, that was all fine. We had all the bank statements going back six months, but it was the same amount of money, it was 25,000 who's putting in, the same amount was sitting there for six months, and I think longer, which is fine from a proving that the money is their point of view. But what the lender wants to understand is the source of funds, so where those funds have originally come from, and where you've got money that's been sitting around, maybe it's from, I don't know inheritance 10 years ago or something like that, or just a buildup of funds from saved money over a period of time. It can be quite tricky to prove. The investor was being a little bit difficult. In his defense, he had provided a loan agreement and six months bank statement, which I think is fair. But the investor didn't want to provide any more information around that and where the money had originally come from. So we weren't able to use the money, which in this instance was a bit of an issue because we were on a tight timescale. We've sorted it. I suppose if you were buying property that's outside of auction, if it just didn't work and it genuinely didn't work, you would just have to walk away from that and accept that you have lost a bit of money in the process. But what I haven't seen yet, but I'm sort of thinking, is this going to crop up more and more because the due diligence that lenders are being asked for, and there's a couple of lenders that have said to me that it's the Bank of England and the FCA that are leaning on them. So it's not something that they're choosing to do. Fraud numbers are through the roof and they have been since COVID. So I think that's really where it's coming from. But lenders are being leaned on. They need more information. But if you have bought a property cash without a mortgage, and then you've come to refinance it, the horse is already bolted. You've probably got a loan agreement or we can backdate a loan agreement. That's not really an issue. You've probably got bank statements or you may not have even asked for bank statements from an investor, you may have just asked for the money and it's appeared in your bank account. And then when you come to refinance, lenders are being more and more cautious around where that original sort of funds, original deposit monies have come from. And the refurb money as well, actually, where you've done a big refurbishment, because it is a money laundering haven, in my opinion. It's such if you've got illegitimate money. You use it as cash, buy a property, refurbish that property and then refinance it. That is cleaning that money up really nicely to then have an amount back in your bank account, isn't it, from a solicitor. So I can see why lenders are concerned around this. It makes absolute sense. But yeah, if you've bought that property cash, you've got the documentation when you bought it. And then when you come to refinance it, you'll then ask for additional information. You may not be able to access that. And in theory, although this hasn't happened, so this is just my forward thinking, I suppose. In theory, you could create an un -mortgageable property through your original source of funds.

Andy Graham (28:59) Well, there you go, guys. You have been officially warned by how you've got to be really careful on this one. This is not something that I've ever personally even given thought to and can only imagine that scenario where you've bought something, you've used some private finance, you've done your refurb and then you can't refinance it.

Ellie Broadhurst (29:16) Yeah. And then you can't pay that back. And then that's your whole business model stopped, isn't it? And I think, and again, I suppose it comes back to a big benefit of using bridging. And I know that a lot of people choose to use private investor money over bridging. I do see the benefits. I absolutely do. But if you have gone through that purchase process using bridging finance, that's one, you know that you've covered off your original source of deposit. You know you've covered off where you get your refund money from. You've obviously got your bridge. And then when you come to refinance, you'd like to think that all those things have all covered off. No dramas moving on to the term loan.

Andy Graham (29:49) Well guys, this is exactly why we have Ellie on the show because this is the sort of insight that can be the difference of getting out of a deal or not. So make sure if you are investing in HMOs, if you are doing these sorts of deals, you are working with private finance and doing refurbs, make sure you go and speak to Ellie. If you want to drop an inquiry with Ellie, you can go to thehmoroadmap.co.uk, find our services tab, and then there's a drop down there for finance and mortgages, which is of course Ellie, and you can get in contact. Ellie, it has a real pleasure as always. I think that was a really interesting conversation. I feel like even I have learned a lot of stuff today. Every day is a school day. So thank you for coming and sharing that with us. And I guess, well, fingers crossed that rates do start to come down and that all this positivity that we've sort of talked about that could be on its way. Let's hope that we do start to see it trickle through.

Ellie Broadhurst (30:44) Let's hope so. I was reading the other day, Introduce a Magazine was saying that they're forecasting that 65% of the business this year will be done in the second half of this year, which means that we're having a significantly busier second half than first half.

Andy Graham (30:59) Well, get ready guys. Ellie, thank you. As always, it has been an absolute pleasure to have you back on.

Ellie Broadhurst (31:04) Thank you, Andy. I'll speak to you soon.

Andy Graham (31:13) That's it for today's episode, guys. Thank you for tuning in. Hope you enjoyed that. Hope you found some value there in that conversation. What a privilege it is to be able to get those sorts of insights from Ellie that you and I as investors wouldn't normally be able to get. Don't forget if you are building a HMO property business, but perhaps you're feeling overwhelmed, perhaps you're unsure about what steps to take next, perhaps you're unsure about what it is you actually need to know to do it effectively, then head on over to theHMOroadmap.co.uk. Go and check out the roadmap itself. That is our online, our e-learning tool. It is the biggest by a long, long way, vol of comprehensive resources you can possibly find in the HMO market. Everything you could possibly need from downloadable resources to case study examples from our community members, deals that they've done. We've got dozens and dozens and dozens of lessons, expert master classes, like I mentioned in today's episode, one from Ellie. In fact, we've got more than one from Ellie. We've got them from architects, interior designers, planning consultants, and a whole lot more. If you haven't checked it out, go and see what it's all about. I promise you will not be disappointed and it'll cost you less than the price of a cup of coffee every single day, which is obviously a fraction of what it could save you in time spent and mistakes that you could otherwise make. Go and check it out. That's it, guys. Thank you once again. And don't forget that I'll be right back here in the very same place next week. So please join me then for another installment of the HMO podcast.