Leveraging Experienced HMO Developers To Build Your HMO Portfolio With Kevin & Angelina Artwork

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The HMO Podcast

Leveraging Experienced HMO Developers To Build Your HMO Portfolio With Kevin & Angelina

March 19, 2025 • Andy Graham • Episode 300

In this episode, I’m joined by Kevin, a former mentee of mine, and his wife, Angelina. Together, they run a property business called Nouveau Living.

And for the first time on the show, we’ll be discussing turnkey services. Most of our guests talk about how they’ve built their own property businesses, but Kevin and Angelina are taking a slightly different approach. While they’re building their own asset-based HMO portfolio, they also offer a turnkey service.

We’ll explore what that looks like, covering everything from investing in HMOs, refurbishments, and interior design to creating products for your customers.

Topics covered in this episode:

02:51 - Kevin and Angelina’s Journey to HMO Property Investment
14:56 - Understanding the Turnkey Service Model
25:00 - Meeting Investor Expectations
27:43 - Adapting to Changing Trends in the Rental Market
30:32 - The Importance of Durability in Property Design
33:00 - Managing Contractors and Development Risks

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Andy Graham (00:02.67)

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 (00:40.672)

In today's episode, I am joined by a previous mentee of mine, Kevin and his wife, Angelina, who together run a property business called Nouveau Properties. Now today, we're going to have quite a unique conversation. For the first time on the show, we're going to be discussing turnkey services. Usually our guests are talking about building their own property businesses, how they've done things for themselves. Kevin and Angelina do have and are building their own asset-based HMO portfolio, but they also run a turnkey service. And I want to put myself in the shoes of an investor that might benefit from a turnkey service because, for example, you don't have the time or because, for example, you're based in a different country.

Well, today we're to explore what that could look like for you. And we're to get into some of the nitty gritty of investing in HMOs, refurbishments, interior design and building products for your customers. Please sit back, relax and enjoy today's episode of the HMO podcast.

Hey guys, it's Andy here. We're going to 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 me, 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 you 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 (02:46.741)

Hi guys, thank you for joining me on the show today.

Kevin and Angelina: Hi Andy, Thanks for having us.

Andy Graham: It's a real pleasure, Kev. We've obviously worked together in the past, so I know you and your business pretty well. And I'm really pleased to have you on the show today. And I think actually this is going to be quite a unique episode because I don't think we've discussed a lot of what we're about to discuss on the show before. And I know that for a lot of our listeners, this is going to be a really quite valuable episode. But before we get into that, just for the benefit of all of our listeners, Kev, can you tell us a little bit about yourself? Your background is in engineering. And you've got an MBA, if I remember rightly. You're an Ops Director. You've worked for some big companies like Amazon and Marks and Spencer. And here you are investing in HMOs and running a HMO business. So tell us little bit about how we ended up where we are.

Kevin (03:34.07)

Yeah, I mean, I was always, you could say a massive nerd when I was younger. And I was always obsessed with getting all these degrees and designations and things. And now I'm doing something where I really didn't need to do any of that. And I think it's, I went through this journey of not knowing what I wanted to do. And that's why I did all those things. I didn't know what I wanted to do. So I wanted to just build up these credentials that would help give me choice once I figured it out. And the thing is, when I worked for these companies and doing these degrees, I realised I wasn't really passionate about them.

I like the learnings and I like going through that journey and exploring things, but I wanted to create my own thing. And it wasn't until I discovered property that I realised, here's this opportunity for me to do that and own my destiny and leverage these different skill sets. So now in terms of what my background was, as you mentioned, I did an MBA, I did an engineering degree, and I did that both in the UK and in Canada, because I'm half Canadian.

After I graduated from engineering, I worked between Canada and the UK for an engineering firm, forwarding my MBA and then moving off to US for Amazon to work in logistics and supply chain. And I did that for many, many years before going off to Marks and Spencers in logistics as well. It was super useful for me in terms of the type of skills and the experience and working my way up. But I knew I wanted something more. I wanted to own a business.

And I can see those in property were able to do that and flex this level of creativity and not just creativity in terms of things like design that you see in on Instagram, which is obviously great and things that really draw your attention. But for me, it was a creativity of assessing deals and finding opportunities that others haven't seen. And I was like, I want to do some of that. And I think I could do that better than others can as well.

Yeah. But I also did a bit of construction management too. And then I discovered that I wanted to leverage my background to do this for others because I could see how complex this could be. And there's so much conflicting information out there. So, and that's what kind of moved me into developing these for other people as well.

Andy Graham (05:44.588)

And Angelina, when Kev told you that he had maybe had enough of the corporate life and wanted to build his own real estate business, how did you feel about this? Or was it actually something that the two of you planned together?

Yeah, I mean, it was very much a shock when he first said it because you get used to that salary coming in every month and then all of a sudden you're like, okay. This is a big step. This is a big risk. But I knew that he had the skill set and the drive just to make something of it because he has passion in everything that he does. So I trusted him and I've always trusted him to go for it. So I'm always there to support him. And yeah. Initially, I was in the thick of motherhood, so I wasn't always there in the beginning. So I've only joined in the last two years, would you say? Focus-wise, yeah, in the last two years.

Andy Graham: Am I right in thinking that a large part of your role is the design element of the projects and actually of the brand itself? Because this is actually more than just a portfolio for you guys, isn't it?

Angelina (06:48.866)

Yeah, that's right. Yep. I mean, for me, the design is it just comes straight from my childhood. I have a stepfather who is a developer himself. So he's developed a number of family homes for us as children. So I was always surrounded by it and always I have a passion for design. So I did it through high school and that ultimately led to a career, funny enough, in fashion. That's where I started out. So I was a personal stylist.

So I guess how that translates across to investors is really understanding their needs and wants when it comes to design. And if you're not hitting that mark, then I guess they want to contribute to that. So it's listening to what they're saying and translating that through the colors and the design itself.

Andy Graham: Kev, I've always thought you were well dressed and actually now I understand exactly why.

Kevin: Yeah, well I'm used to that and I I was always, I spent the last 10 years around VPs and directors and executives so and from start of the morning to end of night but doing that as well while trying to develop your first few HMOs and I would be up painting at night and covered in paint the night after. Rock into meetings on camera and my business up top that I'm covered in paint from down below is kind of the situation.

Angelina (08:16.086)

Yeah. Yeah. So, you know, I feel that background has really set us up for success because then when I met Kevin, we actually developed three family homes of our own, one in Arizona, one in Chepstow and now in Cardiff. throughout the years, I've had my skills in that area just through developing our own brand in our own home. So I know how to get this high end design at a budget, which is massive for the investors.

Andy Graham: Yeah. And such an important part of the process of investing in HMO as well, finding that sweet spot, really intersection of getting the very best bang for every book that you spend, which is an absolute critical skill to master. You guys are obviously life partners. You're also now business partners. How is that? Does that present challenges of its own? Are you a great team together or do you have to keep things in check?

Kevin: I know you definitely want to answer that one first, so I'll you take the one.

Angelina: Definitely requires a lot of patience. Now, if I was to summarise it, I would say that three sort of main things to focus on is it takes time, communication, and actually understanding skill sets. So when I talk about time, I mean, it's actually taken us years to get to the level we're at. I said before Kevin started out on his own and I came in and later on, so he had to learn a whole new way of working with me and finding our balance. So it's taking time to get to this point. And then communication, huge for us. We have a meeting every Monday and every Friday. Monday is let's talk about the priorities for the week, where Kevin needs to be, what marketing have we got, what social media have we got. We recently hired a operations manager to Angelou. She's fantastic to look at our social media and she looks after our tenants. So we're talking about all those elements and making sure that Kevin is where he needs to be most of the time because he very rarely looks at his diary.

Andy Graham: I think that that's a really great insight into actually the realities of being sort of a business partners and life partners. And I know a lot of people listening today, it will be the same for them as well. I'm interested to know, you mentioned communication. Do you guys have really clear and quite well set roles and responsibilities in your business? It sounds like you obviously operate it like business owners. There's jobs that need to be done. You sit down and have meetings, but do you have quite clear roles and responsibilities and therefore a certain amount of accountability to one another?

Angelina: Yes, 100% and that would be my third point is actually skill set. So understanding each other's skill set and then from there the job roles are formed. So Kevin is 100% the numbers man. He's there on site on a weekly basis managing the build teams and he finds the properties for the investors. And then I'm back at home in the office and I look at the design side. I'm the social media side. Running the office elements. So you've got the invoicing, you've got the tenants, and that's a huge one for us, tenants and marketing. We've really learned a lot in the last year in relation to the marketing, because we broke away from the agencies marketing our properties and we now do it ourselves. So very clear roles because if they do cross, then it just adds another element of difficulty, but we've definitely fine tuned that.

Andy Graham: I'm really glad to hear that. And it does worry me when in fact, not even life partners and business together, but any business partners don't have those sorts of roles and responsibilities very clearly spent set because I think it's so incredibly important with so many moving parts and businesses like this to have that kind of chain of command on certain tasks and projects and things that need to be done. Kev, tell us a little bit about what the business looks like now then, obviously when we were working together, we were just kind of getting the strategy right and getting the first few projects off the ground and you're making some great progress but it's really moved on since then and actually I think you found a whole new arm this passion that you were really just doing for yourselves to actually help other people now but I'm really interested to know a little bit more about what the business looks like today.

Kevin: Yeah, I mean, I knew I was going to really focus on portfolio building for others right from the outset. I knew construction was something I was really passionate about and I knew that my background was really well suited to this and I could offer something to other investors that may have had some opportunities from others that may have been in this space. So I've always had an eye on that and how I could build this up. In order to set ourselves up ideally for that, we've got one main arm that is sourcing development, to find these properties, design them, develop them, manage them, license them, everything to get an HMO ready. It then moves into our lettings business that we've set up to offer best in class, all these things that others in the area just do not offer, specifically for our target market. So that way, when we do our sourcing development, we know exactly what our target market is after.

And then we've got a final round, which is the construction side, which we're continually to develop so we can bring all of the development and construction in house and make additional savings for our investors as well and having better control and scalability. And then finally, we've got our own investment arm of where we do our own portfolio as well, of course. So and that's the final piece of the puzzle for us.

Andy Graham: So for the benefit of our listeners then, this sounds to me like what I would call a really bespoke, almost turnkey service, like an armchair service for investors who perhaps can't do this sort of thing themselves. I imagine a whole host of reasons. What sort of people do you tend to find you end up working with, Kev? Why is there a demand and even a need for a service like the ones that you guys are offering?

Kevin (14:01.858)

Yeah, absolutely. I mean, this type of service could be suitable for anyone interested in HMOs. And I'll just walk you through what that could look like. Okay. From the outset, as you can imagine, those who want to get involved with HMOs, they don't know how to do it. It's really risky to get involved into this space now if you don't know what you're doing, especially with labor coming in, right? Because there's a lot of legislation which almost feels like they're trying to catch you out. If you miss a single thing or an admin error, they'll catch you out. Okay.

So you need to make sure you follow everything by the book. You've got to know your code. You've got to know how to get it to an EPCC rating. You've got to know how you ensure you've got your contracts written correctly and how you manage them through. And we do that day in and day out. So it's very systemised for us. It's not difficult when you do this all the time. If you do it for your first one, it can be really challenging on how you approach that. But on a day to day, that's our business. It's very straightforward for us, right? So we take care of all of that.

You've got to know where to find the properties, what type of property, what is that build cost going to be, what is that revaluation. But as we're doing the same properties in the same area with the same markets, with the same rents coming out of them and very similar designs and inputs with the same refurbs, those are all elements that we already know the numbers and we've got case study after case study after case study where it's rinse and repeat and then removes all that risk and uncertainty for an investor. So for someone that's starting out, it's very simple.

But also you've got all these other benefits such as trade discounts and making huge savings. Where a builder will tell you their retail price and putting a billed margin on top. We do everything at our trade discount that's taken years to build up which has 20 to 50% saving. And we do that at cost with receipts on everything so they can see everything and get the benefit from all that.

So whatever management or sourcing fees that would be, your savings and then some from those trade discounts as well. So there's those benefits. So that's obviously a great incentive for those who are just entering the space, but even those who are experienced and want to take advantage of that and allows them to scale, hey, I want to do more of these. I can actually save you more money with you. So if you can then get 30 % with it fully managed and taken care of still, they're able to take advantage of that.

Kevin (16:11.768)

But there's also an additional market of those who might be international, for example, right? So those who can't get access to the locations to do this, we're able to take care of it for them. And the level of detail and reporting and systems in place, it makes it gives them lot of confidence to know, hey, my investment from afar is well taken care of.

Andy Graham: It's so funny because we've been, I think, recording now for three years on the show, think with 300 and something episodes in. And this is the first time we've really had anyone on and discussed in detail Turnkey HMO services. And actually for so many people, you've just outlined all of those reasons why it's actually incredibly valuable and sometimes just completely necessary. And you can see it, can't you? If you're an overseas investor, but want to get involved in the real estate property market, that is such a big challenge, isn't it? Logistically just actually viewing properties. I mean, let's make it really simple for a sec. Just that's the arranging of viewing in a timely fashion. Then there's all the hurdles of actually meeting builders. Before we hit record, there was a couple of funny examples I think you shared, Kevin, and it was really simple. was like, actually you're waiting for Ikea or wherever you might get your furniture to come from and they get the delivery wrong and it all arrives the following day. And actually it sounds really small and almost menial, but as a business owner or a busy person with family and a corporate job, whatever it might be.

That is a huge problem because a missed delivery then actually can result in an overrun on the program. That costs time, it costs money. There's all sorts of circumstances. You might even miss the deadline on a tenant moving out, something like that. So there's actually so many reasons why just having someone to handle everything for you makes so much sense. Not just from a time of practical point of view, but actually even just from an economic point of view as well.

So I guess let's put myself in an investor's shoes for a minute. Can you, Angelina, just explain how the process would work? So if I'm approaching you guys and I'm interested in investing in HMOs and I really like the sound of you, I've heard you on the HMO podcast, I'm thinking these guys are great and I've seen their stuff and it looks really good, but I don't quite know how it all works. What's actually involved? What sort of risks am I actually taking? Can you explain the sort of process that a turnkey investor would go through working with somebody like yourselves with a service like the one that you have?

Angelina (18:23.47)

Your probably best place to talk about this.

Andy Graham: Is this one for Kev? back to you then, Kev.

Kevin: Yeah. We do a lot more than just finding a property and then handing the keys of an HMO at the end. Our goal is to do everything to setting them up on understanding what they're dealing with in terms of finances, how they approach it, as well as managing that property at the end. And that allows us to know, give that confidence to an investor to know that your investment that you're hoping you're to hold for 30 years plus, right, is well taken care of. It's built to last, not just to have an HMO or how is that going to tenant? How are going to feel that? What is the meters down the road? So, you know, that's properly taken care of to hit the ROI that's it provides what it says on the tin. Well, as I mentioned, we are really focused on the target markets, locations, the refurb and rinse and repeating. So we already know that detail. So we know exactly what we need from an investor and we're able to communicate that really clearly. So it's a very clear roadmap of what we need that we've rinsed and repeated. So that removes all that uncertainty, which is the first thing an investor thinks of.

Kevin (19:30.094)

Yeah, but what if, what if, what if? Well, here's all the examples to show you about how that's such a consistent, repeatable process and it removes that risk.

Angelina: You have an investor pack, don't we, that we put together. So when somebody comes along, this is what Kevin puts together to know what to expect, basically, the numbers.

Andy Graham: And on that one Kev as well, and I think this is one of the great things, if you're just starting out and even just trying to figure out where to invest, that process of area evaluation, it's really, really important understanding that local market and understanding the data. actually you've done this. This is what you're talking about. That consistency is actually you saying, look, here's the data, here's the rents, here's the sales values, here's the valuations that we recently had, which is so difficult for a new investor getting into the market. And I completely appreciate it. And it's one of those things that you realise over time that it does come with experience. There's only so much risk that you can actually mitigate as a new investor. You are ultimately, if you haven't done it, always going to be relying on best guesses, maybe even assumptions, taking other people's word for it. There's still, it's really important. There's a space for that, but actually you are that expert. So it's actually people and investors can entrust you with all of that information because you are that single point of contact with all of that data to support the entire model. And I think that's worth highlighting because I think that the value of that is sometimes overlooked. So many people think that it's quite easy just to pick a location, pick something on a map and understand the numbers or try and get their numbers to work in that location. The reality is actually, it's really not as simple and it's really not that easy to actually get hold of all of the data that you need to build that picture. So there's that element of you guys being able to provide a lot of information to give a degree of reliability and a picture of consistency. What else as an investor would I be able to get from a service like yours and what sort of problems can you take away from me?

Kevin: Yeah, absolutely. I mean, I was just talking to an investor earlier today who wants to get involved and it's their first time doing that. And when you're just starting at your first rental property, you're in a different position than those who have other HMOs in your portfolio. Okay. A lender has different checks they'll do on you and experience, and it reduces how many lenders are available to you. How do you approach a broker? What sort of information will they need? What AML, anti-money laundering checks would they want to do? If you're an international vendor, that's a little bit different and what you need to check, how you go about certifications. All this can take a really long time if you don't know what you're doing, but because we've done it before again and again and again, we can already go to the investors and say, look, I'm going to say, all right, now you're going to need this, this, this, and this. And it saves a lot of time and uncertainty and thinking, would I always be asked this? And we can explain that very clearly. It makes it really efficient for them. For investors that just do not have time to mess about, they're really busy with their day jobs, right, at senior levels.

They'd love to see this just laid out and that's what we do for them. And then it's holding their hand and through the conveyancing, we do that annoying nagging to the solicitors and the agents to check on things to make sure they're not just doing this and we'll chase them to get it through. And what in parallel have it lined up with detailed scope of work to what the build is needed. And that's really hard to balance that as a new investor, whereas we've already got that systemised on what to do when, so they can feel confident that that's getting done at the right time. So as soon as they have those keys, they can hit the ground running with that build.

Andy Graham (22:56.12)

For so many people, that sort of reassurance and almost shortcut will be completely invaluable, won't it? But I suppose it's not the entire picture. And I suppose part of the confidence in from an investor's perspective and working with a company that can provide a turnkey solution is actually what that product at the end looks and feels and functions like and how it actually performs in the market. Angelina, you're the design expert. And by the way, for anyone listening, go and check it out because it's next level stuff. I mean, it is absolutely incredible. But how do you approach the project to try and actually manage, I suppose, that product at the end to make sure it delivers the results that investors and that you guys are looking for?

Angelina: Well, initially, actually, when we talk about the sort of beginning stages and that initial chat with the investor, I actually come up with a design pack based on initial conversation with them and their kind of wants and needs. And we found working with a particular investor that we have, he's on our third property with us.

Kevin: We’ve got six in conveyancing now. who's with us? Yeah.

Angelina: Yeah, his personal style has actually evolved. So I will use Canva as kind of my main tool, as well as Pinterest looking for design and inspo. And initially, he started off with, okay, I want to do exactly what you're doing, which is your branding, your colors. So we just talk about the elements that they want to nail from the get go. And then that's produced. Then they're like, yep, okay, I love this. Next time, let's try and go to this. So second time around then.

Angelina (24:31.586)

I produce more design packs, we go away, we have a discussion. It's sort of back and forth, trial and error. Then they find out what the newest trend is on the market in terms of color. So we've now, the second project we did with him, he said, right, love this element. Now I'd like to take it a little bit darker. So we went sort of more moodier tones for Project Henry, which I loved. I love experimenting and moving away from what our brand is. And then we saw the result of that.

It was fantastic project. Henry is actually one of my favorites. And then the third time around, he changed his mind again. And he was like, I'd to go more for the sage color because this is kind of the popular colours now. So yeah, it's just that continuous communication about trends, what's popular in the market, their personal life because of the game. I think we touched on it earlier, what they see on Instagram. They ask us to bring it to life through their property. So yeah, it's that sort of back and forth conversation about meeting their needs.

Kevin: And they evolve with time, right? They do, yeah. definitely changed. But I think the big thing is, and me being the numbers person as well, is controlling the extent of that, right? Yeah. Because we have a very target market, which is students, and we have a specific price point that we go through, okay? A student will not pay above that amount. They cannot do it. We are at the top end of the market, and we know what we need to produce for that. But then I will always be the one to say, everything we do has an ROI to it.

And there's a lot of temptations out there on Instagram. And we definitely work through you to make that very clear to investors to say that marble tiles doesn't make sense for this market. That's not what we're going for. Okay. That will not get your revaluation increased and the ROI and that the payback won't make sense. Okay. So we'll hit maximum evaluations and maximal rent in our markets. And here's the limit of what we can do. And we have to design within the structures of that.

Angelina (26:31.074)

So, for example, the wood slats is a popular thing, if the budget is low, then we can use, go back with a, we found a fantastic wallpaper that can be used. And it actually looks, it looks great. It looks modern, fresh, the students love it, and it lasts.

Andy Graham: This is the sort of stuff as well, isn't it? That if you haven't done these sorts of projects before and you haven't got the experience of producing that product, testing it in the market, getting that feedback from customers, it's really difficult to know whether or not it works or whether or not it's even worth it. And of course, by the time you spent the money or even the time trying to deliver it, of course it's done, it's too late. So another great advantage. And I've got some questions that I want to ask you guys today about just really your thoughts about the direction of travel.

RiskSaspo's more macro than micro to the model, to the HMO space, and maybe even just to the wider property market. But before we get there, just sort of on the theme of design and that customer piece and trying to produce that result with confidence, are you finding that from the tenant's perspective, from the customer's perspective, there are changing trends that you're having to adapt to as well, or new opportunities that you're discovering? because you're doing the sort of volume and the amount of activity that you're doing.

Angelina: Definitely, mean, yeah, styles are always evolving and changing and investors always come to us with new ideas. I think Kevin touched on it with we just obviously have to keep them in check with budgets, getting the right lighting in every property. And that one is a tough one to manage because, yeah, lighting can be expensive. But yeah, and I think to appeal to the students, they want to stay with the current trends. So...

Angelina (28:16.79)

Yeah, making sure we do tick those boxes for investors is really important and always doing our research on what those current trends are and presenting it to them every time we do a new property. And as it happens, the investor that we do work with, he's changed slight tweaks every time. So it's learning to move with that. Initially, I was like, well, we can't do that. This is our brand. But I slowly realised that actually evolving is fun. Change is fun. And people are interested in that.

Kevin: I'd say you what, that's actually something that's super gonna really degress from what others I see saying on Instagram actually of what's important for our market. Okay, because we're designing for students at the premium end of the student market, not professionals, okay? So students and all of us are on joint group tenancies, severely liable tenancies, okay? So not individuals. So all en suites is not required for us by any means. Good ratios of bathrooms is required.

But that could mean for a six bedroom HMO, we go for a two to one ratio at least. So three or four bathrooms, six bedrooms is perfect. More than that is overkill. We don't see it in the revaluation and we don't see it in the rent that we can get. Cause we're at the cap of what a student can make. So more bathrooms doesn't benefit us. What is important though, location is always critical. Always. Access to the property is critical.

And depending on which university or campus we're going for, there's different ones in our location. Parking may be important as well as bike storage. Okay, so those are always critical for us. The design though of being clean and fresh and maintained that way is important. So you can have an HMO that looks great year one, but you need to design it in a way that it's going to look great in year four or five.

And that's important. So if you've got these big lush carpets, for example, they look great on year one, but they get flattened out in sections by year three or four. It just doesn't look fresh anymore. So we've actually moved towards LVT, even in bedrooms now for that reason, because it stays fresh all the time. So a little bit more money, but it really stays fresh for the test of time to look you the best in class for years to come. But also you've got to have processes in place to make them look

Kevin (30:32.024)

consistently clean and fresh throughout. If you have a group of students and they're a bit messier and you have to do showings now for that property later in the year, you've got to make sure that is very easily cleaned and you can hold them to keeping it clean throughout. So if your systems aren't in place to do that, you can have a beautiful property, but if it looks like a hoarder in there, when you do a showing, it's not going to look great. those elements actually are really critical as opposed to just what type of panels you use.

Andy Graham: There's some great advice around durability there and I completely agree. And actually on your latter point about maintaining HMOs, again, for investors that probably know that this is all a bit too much for themselves, the importance of regular inspections, of regular maintenance, from having policies and processes that are managed in the right way is that value can't be underestimated, especially in the kind of the higher end space of the market. It's very easy, I think, for properties that look great day one to look not so great, almost on day two. And it's quite disheartening actually when you go in, isn't it? I think there's expectations that we have to manage. Properties are going to get lived in. It's like cars, they're not going to be brand new forever, but you can absolutely kind of stretch out the lifespan of properties. I think make sure that year on year rooms are filled, properties are filled, because if you get that bit wrong, nothing's working. If you end up with a property that's vacant, actually that's pretty, it's about as bad as it really gets.

And it can boil down to something as simple as just good management, good policies and procedures. And if you're an investor that doesn't live near your investment or you live overseas or you're just too busy to get there or you don't know how to do this sort of stuff, actually you might be able to figure out how to buy something, even do the refurbishment. But can you service this property over the longterm? Can you give it what it needs to actually deliver over the longterm? think that is a big piece that a lot of people do overlook and it's much more challenging than people think.

Kev, you're obviously managing a lot of the projects and for investors that are using a turnkey service, one of the great benefits is that you will handle the contractors and the actual development process. But that doesn't necessarily mean that the problems that exist with builders and contractors and development disappear. How do you manage that? That you've got this background in operations and things like that. What sort of advice could you share or what sort of things are you looking for to help mitigate those risks yourself.

Kevin: I mean, number one most important thing without question is an extremely detailed scope of works. And new investors will always underestimate this to say, I'll figure this out and I'll deal with this some later or add it on later. Even if the builder is absolutely honest to God, the best that's out there, they're very busy and builders, they need to keep busy to manage their overheads, right? So they plan other works as soon as they finish your project and the time you wanted, they need to move on to other ones. So if they are going to take on other aspects for your project, they need to make it really worth their while, which won't be the normal rate per hour. It'll be a much higher rate because they have to, okay, to say, is it really worth me to add these pieces on? Plus the risk if I allow myself to add these things on. But if you get that from the outset, you'll get the best rates and it removes all that disagreement that you can have later on, okay? So really important, really break down that detail from the outset and work with your architect to make sure you've got it all planned on the plans because they will follow that like it is exactly the roadmap for that project. So if it's not on there, it won't be on in your building okay, so don't expect it to be

Andy Graham: Great piece of advice and it horrifies me when people go into projects without full sets of drawings, and many plans and things like that. Because inevitably what happens is that the builder expected something was meant to be done in this way, you expected it to be done in a different way. And of course there's a cost to the fact that it may need rectifying afterwards. So, so, so important, but actually not that straightforward if you don't know what you're doing and if you don't even know who to get to do this.

Andy Graham (34:44.654)

And I think one of the big mistakes I've seen many, many times is relying on builders to also do the project management and all of the planning kind of scope to do what they want. Actually contractors need managing. They need to be given plans. The plans is what holds them to account, isn't it? So it's so incredibly important to get that piece right. And actually I know for a fact, because this is a conversation I had that some builders, not all, but some construction groups, they will actually have a target internally to raise a certain number of extras as a percentage of the contract value on the job. There's some big construction firms and their targets are in the regions of 50%, 50% on top of contract value through extras. They will actively, they won't make the issues, but they will take advantage of any opportunity to give you a bill for an extra. And it may well be legitimate if it wasn't speced out, but that is the difference of actually making sure it's well-speced and it's all on the plans and not doing so.

Some really good, good advice there, I think. Kev, we're probably sort of towards needing to wrap up our episode today, but do you have a bit of a high level example of a project that you've done for a client that you could just share with us? Just help us understand numbers and timelines and I suppose give a bit of context to this sort of a service that some of our listeners might want to take advantage of.

Kevin: Yeah, absolutely. So I'll take an example of one we just complete refinance on, which is a really typical project for us. It's called Project Henry. Okay. You might have seen it. It's got quite dark ceilings. We're in something a little bit different on this one because the investor wanted more blacks and a bit of a darker theme, moodier theme for it. So this was a four bedroom property in decent condition. Normally the properties we buy are absolutely stinking. And this one was a, was a little bit bad condition to be honest. So we bought it for 280.

Okay, because it was in better condition and it had really the size and scale. This one absolutely had the size we could have gone sui generis if we wanted to because it was larger, we could easily make it larger, but we knew we'd have challenges with planning permission to go for seven bed and up as is required for that. But it was very much a straightforward, quick turnaround project as a six bed, which is permitted development in our area as it was a non-article four area.

Kevin (37:00.942)

Okay, so 280, four bed property and we converted it into a six bedroom, four bathroom HMO. And we needed to add three bedrooms to the property. We also had to take care of some damp on the ground floor. We always do a complete full rewire anyway, because we plan for the investors to hold these for 30 years plus. So full rewire, new heating system. We do not go back to brick unless we need to. If the existing plaster is good, we overskim.

Completely unnecessary in my mind if it doesn't add value or longevity to the building. Other than the area obviously where the damp was corrected, which we get certified for that longevity and security. And the total build cost ended up being about 110,000, which matched extremely accurately to what our pre-determined build was. And all labor is fixed when we do builds. The only variable would be materials, which is all receipt driven. So very close to previous projects as well.

And the revaluation we got for this was 450,000. So, and that's on a bricks and mortar as well. So that ends up being about a 30% ROI for the investor based on the rent that we get for the property. That's after all bills included. Obviously, how they go about financing changes what their numbers end up being, but this is a very standard property for us. We do have others that have come in much higher ROI as well, but that one's a typical result they typically see.

You'll see it on Instagram and it's rented really well. The demand has been great for students in the area. We've managed to put in some really big showers in this one, which they really loved. loved it. And because it's a bigger property, has really nice sized rooms and we did full landscaping as well with a great outdoor theme for this one, which has been a great result for the students in the area as well.

Andy Graham (38:47.214)

I imagine there's a few people listening and just sort of scratching their chin at the minute thinking, hang on a minute, I'm doing all this work myself for a similar return or maybe even not quite a return as good as that. And actually there's people out there that could just do it all for me, streamline the process, take advantage of all of their discounts and their skill and experience and contact and produce a better result. Really, really, really interesting. Guys, it's been a fascinating conversation. And I think, like I said, at the beginning of today's episode, quite a unique episode because we haven't talked about something like this on the show.

Actually, we know there are a lot of people in our community that want to invest in HMOs but just don't have the ability for a whole host of reasons. So chatting to you guys about something like this, I think will help a lot of people almost believe in the possibility of actually doing it in a different way and still achieving really incredible results, which I think is so hard sometimes when you look at the figures very sort of bird's eye view without understanding all of the detail.

It can be really tricky to even get to a point where you think that there's any scenario where it could be possible to do all of this and pay for the service and bring in the of the numbers that I need to make it all worthwhile. So thank you for sharing this. Before we finish up, do you have any advice for aspiring investors? Whether it's investors that wanna do this themselves, investors that wanna work with anybody else, but do you have any advice for aspiring investors that wanna start or grow their portfolios? Perhaps to ensure that they make kind of the most of whatever it is that they decide to do.

Kevin: Yeah, for sure. I think the most important thing is focus on who you're trying to service with an HMO. Right? So HMO is absolutely a targeted product because the market you're trying to service, the area that you locate the property in and how you develop it is critical. So you need to understand how you can approach that. Whether you use a turnkey solution like us or someone similar, or you go about it yourself, getting that right is critical.

Kevin (40:42.71)

Spending time to figure that out is very important and nailing down the scope of works and how you're going to approach it is key as well. Okay. If you're going to approach a turnkey developer to do that for you, you want them to show you not just how they approach that, but case study after case study and how they've done it before. Because you want to go into that and know, okay, you're telling me it's this, prove it to me. How do you know that? They should be able to show you a whole list. You don't want them to be learning with you.

You want them to have gone through those learnings already because that's what they're there for and take care of it. Plus you want to make sure, well, show me how I can trust you. When you go to a builder, right, there's always a risk they're putting margins and margins and things like that. And are they hiding things in their numbers? But that's what your project manager is there for. I want to see all that data and information and how are you going to respond to these issues and problems that could arise? What is your approach? What are your systems in place? What's your reporting itemization of all that information? So have them show you that and if they're not prepared with it, they haven't expected that question and they haven't been through that journey before.

Andy Graham: I think there's some absolutely brilliant advice there and I suspect for anyone who's listening that hasn't got a pen, they're thinking, God, I really wish I'd have been writing some notes. So some fantastic sort of little nuggets there guys. Look, it's been an absolute pleasure to speak to you today and hear a bit more about the progress that you've been making and the services that are out there for investors that can't do this themselves. Angelina, for anyone listening to today that perhaps wants to connect, find out a little bit more about what you guys do specifically and maybe is interested in even working with you, how best can they contact you?

Angelina: There's several ways. We have our Instagram and our website, but more specifically, we have our Instagram. There's a link there to connect with Kevin for coffee chats. So there's a diary link there. So you can just complete all the information and you can speak with Kevin. What was the battery there? Yeah, he's available every day from four till five, I think we've reserved slots for an initial conversation just to get the ball rolling. And I would say and I think it's worth doing that.

Andy Graham: Fantastic. Well, Kevin, I suspect you're going to be going out for a few coffees, mate.

Andy Graham: Guys, thank you for joining me on the show. It has been an absolute pleasure, really interesting, fascinating conversation. And I can't wait to see where you take all of this because the progress that you guys have been making as a business in the last couple of years has been really phenomenal. So well done to you. But thank you for joining me on the show today.

Kevin & Angelina: Thanks Andy, great to see you again.

Andy Graham (43:19.758)

That is it for today's episode guys. Thank you for tuning in. I hope you enjoyed that conversation with myself and Kevin and Angelina. I said it was going to be a unique one. The first time we've really discussed in detail turnkey services for HMO investors. And I thought that that was really insightful. Don't forget that if you want to level things up, if you want to build on your knowledge base, just increase your confidence level of understanding of HMOs. Head on over to thehmoroadmap.co.uk. Whether you're planning on building your own portfolio yourself or outsourcing some of the services to somebody perhaps like Kevin and Angelina, all of the information in there is gonna help you make a better and more informed decision.

The more you understand about the process that you're about to go through, the better you can benefit from all of the case studies, including a case study from Kevin and Angelina and about 80 or more of our community members, all of our downloadable resources and templates that'll save you thousands of pounds and hours and hours and hours of time. You can find expert master classes from architects, planning consultants, interior designers.

Everything you need to know on raising private finance and a whole lot more plus about 60 lessons walking you step by step through the process of how to find deals how to fund deals how to refurbish them how to manage tenants and how to actually manage your hmo property business all that and a whole lot more is waiting for you inside the hmo roadmap And it will cost you less than a price of a cup of coffee every single day. Look if you're spending hundreds of thousands on HMOs it is an absolute no-brainer at the very least just to double-check what you think you're doing is right, so go and check it out now. That's thehmoroadmap.co.uk.

And of course, if you're looking for a bit more general guidance and support, head over to the HMO community. That's our free group in Facebook. It's a great place to find people like you and I who are investing in HMOs. You can ask questions, you can answer questions, you can get involved, you can see what people are up to, you can get ideas on best practice and a whole lot more. Look, it's a fantastic resource. There are 10,000 of us now. An absolute no brainer if you're investing in HMOs to just join our community and take advantage of all of those useful conversations in there. That is it for today's episode, guys. Thank you 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.