The Playbook Behind Jake & Lucy's Multi-Award-Winning HMO Property Business

They’ve won awards, they’ve grown their portfolio steadily and strategically, and they’ve done it all while raising a young family. Jake and Lucy of Innova Property—mentors at the HMO Roadmap and recently crowned HMO Property Investors of the Year at the Property Investors Awards—are back on the podcast!

In this episode, we’re pulling back the curtain on what’s been going on behind the scenes in their business. You’ll hear how they’ve continued to grow in a tough market, and the practical strategies they’re using to stay on track and scale sustainably.

If you’re looking to grow your own property business—whether it’s recycling more cash, accessing funding, finding great deals, building better systems, or simply freeing up your time—this episode is packed with actionable insights. Especially if you’re trying to juggle it all alongside family life, travel, or other commitments.

Topics covered in this episode:

• 02:59 – The challenges of scaling a property business
• 06:02 – Diversifying your property portfolio strategically
• 11:56 – Systemising operations to boost efficiency
• 15:09 – Knowing when it’s the right time to sell
• 18:06 – The importance of rental confidence in today’s market
• 20:30 – How the HMO landscape is evolving
• 25:14 – The three key pillars of successful property investing
• 28:09 – How to build and nurture strong investor relationships

Listen to other episodes with Jake & Lucy:

Ep 14 - Jake & Lucy - Building A Portfolio Using Parallel Strategies & A 25% ROI Case Study

Ep 143 - More Properties, Bigger Projects And Even Better Results with Jake And Lucy 

Want to join Jake & Lucy’s 1-2-1 mentoring program? You can enquire here.

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

Feeling overwhelmed and don’t know where to start? Join The HMO Roadmap on a Premium plan and get all-access to our award-winning library of 400+ resources to help you start, scale and systemise your HMO business. Get instant access here.

Transcript

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 (00:40.664)

Today I am very pleased to be joined by my good friends and fellow mentors at the HMO roadmap, Jake and Lucy. Jake and Lucy are in fact the current HMO Property Investors of the Year. They scooped that award up with the Property Investors Award in December. And if you're a regular listener of the show, you will know Jake and Lucy have joined me more than once on here before. 

Well, today they are back and I want to find out exactly what has been going on in their business and how they have continued to scale things up despite what has been a very turbulent last couple of years in the property market. So what can you expect from today's episode? 

Well, if you want to scale a property business up yourself, perhaps you're thinking about how to recycle more cash, how to access more cash, how to find more deals, how to create more time and systemise and operate your business better, how to do all of this alongside doing things outside of business, perhaps like raising a young family, perhaps doing things like travelling. Well, today's episode is all of that and a whole lot more. 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.

Andy Graham (02:36.12)

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 (02:57.673)

Hey guys! Thank you for coming back onto the show.

Jake: Good to see you mate!

Lucy: Thanks for having us.

Andy Graham: And unbelievably, you reminded me two and a half years since you were last on the show, which was the second time you featured on the show. But I couldn't believe that because honestly, I thought it was maybe sometime last year, which is crazy. 

Jake: Same. Time flies, right?

Andy Graham: Yeah. You and I Jake, we've been skiing a few times since then, spending some time in the mountains. You guys have been incredibly busy and now obviously you do.

Andy Graham (03:25.454)

Some consultancy for us and our members at HMO roadmap, which is incredible. You work with sort of at least 10 of our community members helping them on their business. So there's been a lot going on. So I followed you guys in your journey really, really close as you know. And I think your approach to how you've built your property business has always been an interesting and great example of how it can be done. Not necessarily just following that path of one single strategy. You guys managed to accelerate the growth of your business really, really quickly.

And I know that that has continued. So perhaps just to kind of kick us off, maybe Lucy, you could give us a summary as to where the property business is at the minute and how that has started to change over the last couple of years.

Lucy: Yeah. So I think last time we were on your podcast, we sort of explained that we had two kind of core fundamental strategies in our business, which was sort of capital generating through flips and then reinvesting those profits into properties we were holding for the long term, which was fundamentally HMOs. So we're still very much kind of focusing on those two core strategies, but we do also have kind of a third avenue now to our business, which is our sort of consultancy side of things.

So like you say, we've kind of maintained a steady number of mentees through the roadmap platform, but we're also picking up some project work for other clients and we've kind of diversified our strategies a little bit as well in terms of the stuff that we're holding for the long term. So yes, we have acquired a few more HMOs into our portfolio, but also blocks of flats. So we can kind of touch on that a little bit more around what we're doing with those.

Andy: And last year, if I remember rightly, you were quite about 15 properties. So just for context, while you've been ramping up, that is a lot. I mean, yeah, so 15, and are they different types of properties?

Lucy (05:13.504)

Yeah. So with the blocks of flats, obviously you end up acquiring more properties in sort of smaller transactions. So we've had four purchases of which were 15 properties and that comprised one HMO and then three blocks of flats. So yeah, it was quite a busy, busy year for us. We already had some HMOs that we were finishing off from a project management and development aspect as well. And we also did a little bit of client work as well. So last year we had a lot going on on the refurb.

Jake: Yes, as well as obviously the 15 that we acquired. I think we finished four of our own HMOs and fully turned into those. We did a 13 bed HMO for some clients and we also renovated, I think, eight flats. So all in all, it was quite a busy year. It wasn't always enjoyable at times, we'll put it that way. It was quite stressful at the peak kind of busyness for sure.

Andy: And not forgetting Joss as well, of course. How old is Joss now? 16 month. Okay. So last year, Joss was a really iconic young baby and you had your hands full with that as well. 

Jake (06:14.83)

We had every intention, obviously when you're expecting a baby, it's not like it comes out the blue. You've got a nine month run up, right? So we knew it was coming and we had every intention to slow down towards end of the year. But as you well know, Andy, you can't always control the timeframes of projects and one in particular, I think we had a block of flats in conveyancing for over a year and the previous vendor had some difficulties with the existing tenants. And so we couldn't complete and our lender wouldn't let us complete and it tracked on for a year. that then obviously pushed that project back and back. And yeah, we had a few HMOs and Probate and they didn't get granted for a while. So it ended up all kind of landing at once, it? And yeah, just at the time where we thought we were going to be sort of taking a bit of a backseat and sort of easing off the business growth was kind of. We’ve done the opposite just when everything landed really.

Andy: And just, suppose, a bit of additional context for our listeners who may not have heard either of the first two episodes that we've recorded together over the years. You guys are based in Bristol. I know you do a little bit of stuff just outside Bristol as well, but most of your activity is Bristol based. And you guys also like to get around and travel a lot. You've got the van, which was one of your lockdown projects. And I know you like to get away in the van a lot and things like that. So I guess the first question for me today is about why you've decided to scale things up and actually what was the business decision behind that because scaling, yes, does economics involve, we want to grow the business to achieve certain financial targets. 

But as we all know, especially in property, there's a whole lot more to consider if you're going to start really squeezing a property business and start scaling a job. You guys already knew this and it's like the curve has continued to accelerate. So talk me through that decision and what sort of things you had to start changing, possibly even breaking and kind of where are you trying to gets the portfolio of the minute. What's the current vision for it all?

Jake (08:04.942)

Well, it's actually an interesting topic of conversation because I guess the vision up to this point is possibly slightly different to the vision going forwards. So we've changed our kind of vision slightly. So obviously our kind of goal is to earn a decent level of income and have a business that supports our lifestyle. So be able to have the freedom and the flexibility to do what we want, to go away traveling and work from abroad or the freedom to say yes to things. If friends say, want to go skiing or there's something going on, we want to be able to say yes to those activities without having to book annually or anything like that. 

So for years, our focus has been on growth. So we've been focusing on acquiring more properties to build the rent roll, to build the equity, to keep going, to fund that lifestyle. But that, as you rightly say, comes with some challenges. So quite often to fund growth in any business, you know, it's quite a capital intensive thing to do, especially in property and especially in HMOs.

You're quite often funding growth through debt and leverage and that's got to be serviced. So actually on the one hand you're growing, but then on the flip side, you're quite often the trade off is profitability. Cause you're almost trading today's income for future growth because you're raising, whether it's mortgages, private finance to keep growing.

So we've been doing that and obviously that's all fine, but it comes with stresses because you're taking on more projects. You've got more investors to repay, more bridging loan applications, more mortgages to keep refinancing and all that sort of stuff. So going forwards, we've kind of changed our strategy a little bit. So we've kind of looked at where we are right now and we've decided there's different ways that you can grow. You can obviously keep acquiring more and more and more, but currently we run quite an efficient kind of operation. It's Lucy and myself and we work with Tracy, our virtual assistant.

We call our portfolio manager. If we just keep growing and keep growing and keep growing, it's going to become a full blown kind of letting agency style business where we're to have to start bringing people on board to have boots on the ground, conduct viewings and that sort of stuff, which doesn't really align with the goals that we set when we started this. So actually we're kind of looking at our business from a slightly different angle now. So growth was great last year, but actually what we've kind of

Jake (10:19.822)

decided for the next couple of years is focus on quality over quantity. Probably not do 15 projects a year. Probably scale it back a little bit. Focus on projects that we're passionate about. Focus on probably properties in slightly higher value areas with better rental confidence that are a bit lower maintenance and a less risk. But ultimately to focus on more capital generating projects. So whether that's more flips, whether it's title splits, whether it's a bit more on the consultancy side of the business.

And use that to consolidate and optimise the existing portfolio. Ultimately with the aim to make more profit from the existing portfolio without increasing workload. And then ultimately that's where we want to be right. Make more money for doing the same work or less, which gives us the freedom. Actually, that's why we set out to build this business in the first place. We didn't set this business up to running around like headless chickens, stressed out

Lucy: Opening evenings, weekends, not having that kind of time freedom or location freedom that we set out to achieve.

Andy Graham (11:26.744)

This I think is a really interesting conversation and actually something that I went through myself. I think our daughter being born was what really prompted me to start thinking about what I was doing and where I was spending my time and what I really wanted the business to be like. I'm sure it's the same for you guys, but I've got a real passion for property. I know you do. I would also consider myself an entrepreneur and I know you guys absolutely are. And that combination can be quite difficult because often you want to do more and more and more because that's what in itself quite a fulfilling part of the process.

But like you said, there are repercussions of that. And as the project scale and the volume scales and the number of people and tenants and things that can break and go wrong and require your attention all start to increase as well. It gets very difficult and that requires more and more of your time. So you end up with this bottleneck and the tough decision is, do we want to grow through that and bring in more systems, processes, more people to do this? Or actually do we want to try and shape this around our lives? And I went through the exact same thing and focused almost exclusively on capital growth. 

And what I would describe as longer term wealth creation after having spent years building the cashflow through the portfolio and my other trading businesses. And that's a really nice position to be in, but I think quite an important one. And it's interesting because the way that you look at projects is then quite different and the way that you look at how you carve up your time and allocate your risks is, is a little bit different. 

Tell us about how that decision for you guys has actually shaped what you are now starting to look at doing in terms of maybe some disposals, the product or finish on some of your properties, maybe even the type of tenant and maybe even the project itself. I know you're doing more flats and other types of commercial conversion. So how was that decision to become, try and be more profitable and try and consolidate stuff shaped the decisions you're making on the ground and what you're actually doing.

Lucy: So I think bringing Tracy on board that Jake mentioned has really helped us to kind of systemise and optimise the way we just run our business day to day. So she's taken on a large sort of side of the lettings and the compliance. And we've also kind of received feedback from some of our tenants and like our other stakeholders to make sure that we're delivering a really good service and that that's all running really smoothly. We've brought our student lettings in house.

Lucy (13:46.114)

And we've really kind of improved our quality of the way we run our business over the last couple of years. So we're really kind of happy with that. And that kind of enables us to think, well, our HMO portfolio as it stands is in a good place and everything's running efficiently, which enables us to then focus on some of the other acquisitions and the things that we're working on. And in terms of the blocks of flats, we kind of know the HMO model really well now. And it's been really enjoyable to diversify into this different strategy. It kind of came about in terms of while we were buying and selling, we were struggling to find sort of profit margin in your kind of standard family homes. We were just going to buy residential property and flip it. We were really struggling to actually make any profit in that sort of strategy when you're kind of up against homeowners, first-time buyers that maybe are going to pay a bit of a premium for something that they're emotionally sort of tied to.

With blocks of flats, we've been able to actually kind of realise a good profit from that strategy. But with that comes a little bit extra workload because we're juggling more properties in one go. And actually where there's one bed, two bed flats, you're maybe working with individual trades or bringing in subcontractors rather than putting like one big project manager on that refurb. So it can actually be a bit more labor intensive for us managing those trades or Jake sometimes finds himself going over there to just do some little jobs, but then that actually takes up a lot of time. So there's definitely kind of been pros and cons to that strategy, but it has also enabled us to acquire some, well, one in particular property that we're really sort of excited to hold into the portfolio for the longterm. So we're really focusing on good quality properties in good areas that's going to have good capital appreciation for the long term. So we're able to kind of pick and choose a little bit about what we retain in the portfolio. And then we're open to sort of selling on other things that, yeah, we were sort of less interested in holding onto.

Jake (15:48.686)

As you know, Andy, we built our portfolio off the foundation of selling properties. So we're not afraid to sell properties. Obviously a lot of people have kind of a dear to hold onto everything, but that's fine. But you're leaving cash in most deals. We've done all money out deals, but the vast majority of deals you might leave between 70 and 150,000 pounds in every deal. So obviously if we'd have tried to hold onto everything from the very start, we would not have got very far. We would have done one deal and then that would have been that way that we've started and been able to keep getting our portfolios to keep selling stuff. 

So obviously on one hand, it's black and white. If we buy within this structure, that business is only ever going to sell stuff. So that's black and white. But also we do quite often revisit some of the investment portfolio. And whilst we never buy an investment property with the intention to sell, occasionally you look at certain metrics like potentially the return on capital employed or the return on investment when you bought the property was good, but maybe now it's gone up in value and maybe the return on equity is not so good. So maybe actually it would make more sense to sell that property, crystallise that gain and then redeploy that capital into a different project where the return on capital employed or return on equity would be much higher. And I think a good example of this is a flat that we owned in Cardiff.

It was a second flat that we bought. So ages ago, eight, nine years ago, 10 years ago maybe. And there's probably about £70,000 worth of equity in that flat. And after the mortgage costs and everything, it really didn't make much. It made a few hundred pounds every single month. So we were looking at that and going, whilst we probably got most of our initial investment back from that property, the return on the equity is not great. Whereas we might have been looking at doing a seven or an eight bed HMO in Bristol where you might leave 70 grand in. So actually we're like, well, why don't we sell that cash out, take that capital and redeploy it into HMO that might be worth six, seven, 800,000 pounds rather than the 180 for the flat and has a much higher return on cash. So we're always open to selling stuff if it makes logical sense to redeploy that cash elsewhere. And I think for us, it's just shifting slightly. So we're more looking towards that side of things to sell stuff and cash out or pay down debt rather than trying to hold onto everything.

Andy Graham: I think at the minute in the current climate, it's also very difficult just to hold on to everything. The stress testing and the loan to values that the banks want, the cost on materials and on labor, the cost of just acquiring assets. It's not like property values of debt and actually looking ahead, who knows what 2025 is going to look like from a values perspective. It has definitely become increasingly difficult to get that money back out of the deals. And one thing that I found with a lot of our community members is that sometimes when you look at deals on paper, it's easy to conclude that the deal doesn't work because there's not enough cash coming out. And actually the deal could be a pretty good deal. It might make a certain amount of money. The cashflow could be pretty good, but because there's not enough coming out of the deal to recycle it to the next deal, they often won't do it. And they go round and round and round looking for that perfect deal where they will get the money out eventually in many cases, never actually finding that deal. So never actually getting started, which is this, which is really sad. And sometimes I think you've got to be quite pragmatic looking at the market and acknowledge that to take a couple of steps forward, forward, you may have to take a step back. And I look at our portfolio and what we do in exactly the same way. 

You simply cannot just recycle your way through to the next deal, the next deal, the next deal every single time. And as the projects scale up and you guys will know this, but as you start buying blocks and you come to refinance blocks, the banks want more equity left in the deal. So all of a sudden 25 % no longer enough, it's 30 or 35%.

And actually 35 % of buildings that cost millions of pounds, which is where some of our listeners might want to take their property businesses one day. It's an awful lot of money and it's quite hard to think about leaving millions of pounds on the table at the expense of possibly doing other things. So it's a really difficult, but often really important decision. And we haven't talked about this on the show much. I'm glad that this has come up today.

Jake (20:04.396)

I remember Andy, so obviously we were on the HMO mastermind with yourself back in 2019, right? And something that you always used to talk about was rental confidence. And for years, rental confidence has not really been a major influencing decision in our strategy because there was a shortage of accommodation and you just simply just could not build HMOs quick enough. And they would just fly off the shelf and rents would only going in one direction and it just felt like a bit of a boom period really, but that's definitely changed. It's definitely changed in Bristol. And we're hearing across the board that it's kind of softening across the country. It's really interesting because we've done HMOs of all different shapes and sizes. And actually we found there's a bit of an inverse correlation between returns on paper and actually kind of rental confidence and capital growth. So the HMOs that we've got that have been all money out deal and on paper, fantastic. Actually, if we were to ever sell any of our portfolio, they'd be the first ones to go. They're the ones that rent the last. They're in slightly less desirable locations. They're not going to be getting the same capital growth or there's not going to be the same demand to buy those properties as the ones that may be in more central or primary locations inside the Article 4 closer to the university campuses where

Jake (21:27.598)

actually on paper, they're probably our worst performing assets in terms of just a pure kind of return on rent basis. But actually they are always the first to let. When we advertise them, if they're student properties, we advertise them all at the same time. They get more inquiries. Some of them, the group stay for two or three years. And actually they would be the ones that we hold onto the longest, even though they're the worst on paper. So yeah, it's an interesting dynamic there.

Andy: This is a really fascinating thing. And I think that this is one of those things that you learn through experience. It's really difficult to try and infer. I've found over the years how important rental confidence is. And for me, rental confidence, of course, it is important because you want to know that your stock is filled, but actually it's more about will it stay filled for a long, long time and how much time and money and effort and energy will I have to employ to keep it like that.

And I have always thought and found from experience that location is the single biggest determining factor, especially with students and young professionals who are picky about where they want to live. They want to live within walking distance of certain things. And of course there is money to be made around the edges. You've done numerous deals yourselves, but they aren't necessarily the ones that you want to keep forever. The ones that you want to keep forever.

Like you say, the ones that maybe don't perform quite as well on paper or certainly on the spreadsheet when you first buy them. But probably outperform over time because people just want to live there because the location is first choice. And it's such a difficult thing to get your head around at the earliest stages of building a property business because the returns are just not as attractive. And sometimes the only way to get there is to hustle really hard and do the deals around the edges and gradually and over time.

You could start to consolidate your portfolio, hold onto the very best assets and let the other stuff go. Let other people, you know, who are prepared to work a little bit harder. And that sounds like this sort of change in the rental market has also played into your decision to start just evolving your portfolio and maybe consolidating the type of stock and the quality of stock. Is that right?

Lucy (23:37.698)

Yeah, definitely. And if we're to acquire more HMOs, I think we'd be definitely looking at existing HMOs within the Article 4. Only, I'd say. Yeah. Probably just looking for something that's maybe a bit tired, rundown, three beds, four beds that we could actually improve the quality and the standards that are on offer, but maybe maximise into a six bed. But yeah, kind of keeping that rental confidence, keeping that, those really good front-dimensionals of the locations. And that would be our approach to our next sort of HMO acquisition.

Jake: Don't get me wrong, we're not saying we're not buying anymore help more HMOs. We are buying another block of flats at the minute, which has, it's eight properties on one title. And there are two HMOs within that block, but it's inside a well-established Article 4, you're not going to get any new HMOs cropping up. It's got scope as Lucy mentioned to take it from a one from a four to six, one from a, well, it's just a three bed masonet. But yeah, I think when the rental market softens.

You have to start competing harder and what are you going to be competing on? You're either going to be competing on spec, you know, location. You can renovate houses, you can increase the spec, you can't change the location or you're going to be competing on price. That's right. And then obviously you're to have to drop the price to fill the rooms, especially if you've been chasing yield into cheaper areas and potentially relying on commercial valuations. If rents start dropping and yields change, you know, that can be a bit of a double edged sword. So it all kind of plays in and we're seeing it kind of play out a little bit in Bristol at the minute. And it's just something that, yeah, I think we're just using to influence our strategy going forward.

Andy Graham (25:13.902)

I'm just going to highlight what you said there, Jake. Spec, location and price. They are, in my opinion, the three pillars of your product and you can influence two of them and you cannot influence the location. You've got one chance to get that piece right. And maybe if you plan and have a good sort of time horizon, you might find some infrastructure and some popularity grows around your asset. But generally speaking, there's not much you can do about the location once you've bought. And those three critical factors I think for anybody should be front and center of every single purchase decision. And it's all a compromise. If you want the best spec and you want the best location and you want to achieve the best price, you're probably going to pay a lot for that property. And it's probably not going to be the property on paper that performs the best, but that's the one that is not going to give you any sleepless nights because you know, you're going to wake up day after day, week after week, month after month, and year after year. And it's just going to rent, but getting to a position to be able to do that is the tricky one. 

And actually I can absolutely relate to what you guys are talking about because perhaps almost subconsciously for years before I really consciously sat down and thought about the evolution of my business, I had started to get really picky about my HMOs because I had seen from running the agency and managing thousands of tenants, just how fragile it can be. The slightest shocks, somebody coming in and buying a portfolio and doing something really special and taking hundreds of rooms in that have been in a not particularly good condition, but in a great location, all of a sudden bringing them back to market and making them very competitive. 

And actually the tenant demographic as well. I like to be really picky about my tenant. A lot of my tenants are veteran students and those sorts of tenants. They suit me and my portfolio and my plans really well, but I need to produce a particular type of product in a particular location for that. And years ago, I did a big consolidation piece and sold as part of a business deal, a lot of my HMOs in peripheral areas and also in different towns and cities, some of which I would consider were not sort of any one locations and it was definitely harder to let them. 

So I think what you guys are doing is evolving your portfolio because both the market and the circumstances are changing, but also what you guys want to help your portfolio is starting to change as well. And I think it's great to be able to talk about this because often people start to plan their property business and they get always has to look that way forever. And because they can't see the solution to getting to that end goal, they never get started. I would never do this for a few deals, but actually.

Andy Graham (27:39.724)

You can do a few deals. You can be opportunistic, buy some, sell some, trade some on and gradually work up to a portfolio like the one that you're talking about. So I'm glad that you've shared this today. Let's talk about funding. You've been doing more deals. It's been expensive to borrow over the last couple of years. This is obviously a really, really key part of your business. And I know, and we've talked about this on the previous episodes with you guys, that private finance plays a really big role, but can you talk us through how, if anything has changed there? Have you needed to raise more finance? you just recycling finance with current investors? Are you doing and structuring your deals in a different way?

Lucy: I was just going to say, we find the majority of our investors have stayed with us for several years now. We kind of have a core group, haven't we, that just funds your most top projects.

Andy Graham (28:30.894)

Can I just ask a very quick question on that? Because why do you think that is Lucy? Because that is so valuable, isn't it? And that has allowed you to build your property business in the way you have. But why do you think they have stayed? Other than the obvious, which is you've probably paid them their money back. But there's other people or other opportunities out there and other stuff going on. So why do you think that they have continued to invest?

Lucy: All of our investors probably have similar values and kind of align with us and we find it very easy to get along with them on a personal level as well. And I think I've heard a few times people say like what you put out, you kind of get back. I think people are come to us who, maybe like what we're doing and kind of relate to us in a certain, in different ways. We're very, very personable with our investors in terms of we are always contactable, we make it a priority to never miss our investor updates. We always want to have time for our investors and we try and actually keep our pool of investors to a smaller group so that we can maintain those relationships. If they're ever in Bristol, we'll always make ourselves available to like meet for coffees or whatever it may be, show them around our projects. 

So in that regard, I think we do things slightly differently to some other people out there. We always make it an absolute priority that we always pay people back on time. We’re never late. Interest, it goes the same way. So I guess that's probably why people have stayed with us. We're kind of offering a good service and a good level of interest and they've not really had any reason to take their money back. But actually I see a new challenge coming our way, which is because we do want to reduce that debt. Actually, it's going to be paying people back. I feel like this conversation is going to be challenging in a way because lots of them don't want their money back and we're going to have to say, actually, sorry, but yeah, we do want to pay you back now.

Jake: It’s easy to raise the debt. It's harder to pay it back when they're willingly giving it to you to do more projects and it's too tempting. And also the more you do, I think action leads to opportunity. So the more projects we do, the more projects come our way. So out of those 15 that we bought last year, well over half of it off market, direct from vendors that we either dealt with before or maybe come through our website or electric campaigns. So when the deals keep getting better and the cash is readily available, it's quite hard to say no to them. We used to kind of worry about funding the deals, but

Jake (30:45.614)

But we had an example last year where I had a vendor bought us a block of flats. We bought a couple of things from this vendor before, phenomenal price, easily 30% low market value based on valuation that she had recently. And we didn't have any funds because all of our cash was in other projects. It took three WhatsApp messages to three of our investors. They funded it in cash and yeah, we're just about to put those flats in the market to sell them. And so when the deals are there and the cash is there, it's kind of tempting to keep saying yes, but like Lucy said, the bigger challenge is going to be weaning ourself off it and trying to pay it down.

Andy: Well, hopefully none of your investors are listening yet, but if they are, I don't think this is bad news just yet. I mean, you guys have come on so far and I remember sort of when we first met many, many years ago now. What would you go back and say to Jake and Lucy then, given what you know now, what it is all transpired into and has become and has the potential to still become? What would you go back and say to your younger selves when you were just getting started and you had all of those questions and uncertainties and doubts?

Lucy: It's a good question. It's quite thought provoking. I mean, I definitely think, I kind of always say we are where we are in terms of like, I think you're always looking ahead and you're always kind of like ambitious and wanting to maybe move on to the next step, but actually just sort of trusting the process and sort of taking things one step at a time. It just, does work because a lot of the opportunities that come our way, we don't actually market ourselves for them. We don't put things out there looking for them. They kind of just come to us.

Because we've built our network, we're active as much as we can be on social media to just sort of show what we're doing. And people just reach out with different opportunities. And I think everything we've done has been a natural progression that we haven't really kind of forced or pushed for. It's just sort of, we've taken opportunities that have come our way and we've grown at a pace that we're comfortable with. Yeah, we do push ourselves out of our comfort zone because you have to, but not in a way where we felt really out of our depth or that we're taking on like.

Lucy (32:44.064)

risks that we're seriously uncomfortable with. It's just been very organic. So I think when you're sort of young and hungry and motivated, you can be a bit impatient, but I think just by letting things run organically, we've just sort of been able to grow at the rate that we have.

Andy: I think my observation from working with you guys and knowing you for so long would be exactly that. And you can often see it, people who want to start building a property business, they're really excited and motivated and enthusiastic, but don't necessarily focus on the detail and just want to get deals done. Almost for the sake of any deal. And I think with you guys, you've always had a very calm and measured approach to what you wanted to do. You've never tried to grow and do things at the risk of maybe imploding.

You've always managed your sales and your business the way that you like to do it. You've sort of stayed in your own lane and nurtured really good relationships. And I think because you're incredibly genuine and honest and very authentic and obviously you've got results to deliver it, but it's interesting that your approach has been just very steady, very consistent. Focus on the numbers. Don't make mistakes.

And over time, look at all the opportunities that have come in. And of course, that's why you guys are the only people that mentor alongside me for our community, because there are, I think, not many examples of that. A lot of people are a little bit sort of all over the place and sort of chasing the shiny pennies. I think the, you know, I'd encourage anyone listening today to go back and listen to the first couple of episodes with Jake and Lucy. I think there'd be some incredible, I think there'd be some incredible context there. 

And also I think it'd be great to listen back just to see how things have changed and just acknowledge that it's absolutely fine that things can change and things evolve and we learn from the good and we learn from the bad as well. But yeah, you guys, the way that you've built your business has always been quite unique and it's strange because it seems so obvious when we talk about it like that, just stay in your own lane, just do things consistently. Well, don't make the mistakes, manage your relationships and the people that you work around well, it can be hard to do, especially with so much stuff in life going on. The temptation is always to sort of.

Andy Graham (34:51.767)

Maybe try and juggle a few too many plates. The risk is, obviously that does something drops. I want to ask you a question about what you think the next year or so looks like in property. And I'm not sure whether I've even got an opinion on this yet myself as we're recording this, the stock market and you know, things sort of coming over from the States is definitely starting to raise eyebrows. And we've discussed today that the rental market softened a little bit from a professional perspective, you know, as experienced investors. What are you thinking about looking ahead and are you making any decisions based on those thoughts at all?

Jake: We don't claim to be clever enough to know what's going on with the economy. So I think all you can really do is lay the hand that's dealt to you and control the variables that are within your power to control. So I think a big one is what we've touched on is quality over quantity, focusing on things like rental confidence and de-risking deals and just moving forward in a sustainable way, not being over leveraged, not taking on super risky deals, anything like that.

And just keep kind of plodding along that way really, which is not that exciting. Just yeah, slow, sustainable growth and not kind of pushing the boat up too far. I think we're seeing it. I do think the rental market, has, like you mentioned, the top has very much come off it. Rents are not increasing at all where we are. They're even dipping slightly. And that kind of creates a bit of a different, yeah, set of challenges really, where you have to compete harder to secure tenants who are our customers to maintain occupancy, maintain profitability within the business. And we choose to do that by running an efficient operation by bringing things in-house, by not using letting agents buy, know, a lot of maintenance is done in-house. I'll see we work tracing and all of that to maintain profitability. So we can absorb any shops that come our way. If, you know, we did have a void or if.

Jake (36:49.07)

I don't know, rates went up further and any shocks we can kind of absorb. I guess if you're working on very, very thin profit margins, you don't have much scope to absorb that kind of thing.

Andy: And I guess the other thing that could be impacted by the rental market softening is valuations, especially in HMO space. And I think that's something that we've got to be aware of. We should never be over optimistic in, you know, when we're analysing deals, but I've seen some pretty punchy valuations over the years and when that people have asked me to look at deals and, and yeah, sometimes they come off, but I think we've also just got to be mindful that they might not and do we have a contingency, do we have a workable contingency? 

And I think that the fallback for me has always been let's hope for the best, but sort of maybe plan for the worst. Have that downside covered as much as possible. And especially when there are things going on elsewhere in the world or even the country that we don't really understand and can't really do anything about. I think it's important, especially if we're buying very expensive assets that at the end of the day can be influenced by this stuff. It sounds like you guys have got your hands full with lots of deals. sounds like you probably don't need any more money at the minute. Although I'm sure you won't turn down echo from a potential investor, but let's let everybody know where and how they can contact you because there's a lot of people I'm sure listening to today's episode who have got aspirations themselves of building their own property business like yours. 

So Jake, your mentorship program with us, Jake and Lucy, for anybody listening, if you want to contact Jake about that, head to thehmoroadmap.co.uk and on the top there's a tab for mentorship and you'll see a drop down there for Jake and Lucy. You can enquire with the guys directly for any other opportunities. So maybe just to have sort of a good old ogle of what you guys are doing and up to where should all of our listeners head to Jake.

Jake (38:33.94)

So Instagram's probably where we're most active, although yeah, we are going off Instagram a little bit. It feels like the algorithm just pushes a load of nonsense nowadays, doesn't it? But yeah, so Instagram, we still share a lot of our projects and like day to day what's going on or LinkedIn. So LinkedIn's just, which is on there personally. So it's Jake and Lucy Davis or Innova property on Instagram.

Andy: Fantastic. Guys, it's been an absolute pleasure as always catching up with you guys. It's always exciting finding out what you've been up to, watching what you're doing, seeing the projects come to life. And I think you're a fantastic example to anybody who wants to build a property business. So thank you so much for sharing it all and joining me on the show today.

Jake: Cheers Andy, good to catch up.

Lucy: Yeah really good.

Andy: Cool, thanks guys.

Andy Graham (39:23.5)

That is it for today's episode guys. Thank you so much for joining me. Hope you enjoyed that conversation with myself and Jake and Lucy. What an incredible couple of property investors they are and what a power team they are as well. Do you know what I think I love the most about Jake and Lucy as well as of course how honest and down to earth and transparent and in the nicest way possible, how normal they are. It's just how consistent and persistent they've been in doing the right thing again and again and again. And actually when you step back from what Jake and Lucy have done, they've not made any incredibly wild or super high risk decisions. 

They've just made really smart decisions and they've repeated it and gradually built up the size of the project and the volume of their projects. And now they're building on the team and the operations. And I just think that that's an incredibly inspiring story and a great example for anybody who wants to build a property business themselves that can perhaps allow them to travel, have more time and do just more of what they want. Now, if you are building your own property business, but perhaps benefit from some guidance and support in the form of mentorship, then Jake and Lucy do offer our flagship HMO Fast Track mentorship program alongside myself at the HMO Roadmap. 

Now, both myself and Jake and Lucy, we only work with very small numbers of people because the HMO Fast Track is a bespoke program. It's tailored to you very specifically so that we can help deliver exactly what it is that you need and help you get to exactly where you want to go. Now, if you're interested, if you'd like to have a conversation with Jake and Lucy about their mentorship program and how they might be able to help you, all you need to do is head over to thehmoroadmap.co.uk. You'll see a navigation bar for mentorship. Hit that drop down and you'll see a link for myself and Jake and Lucy. Hit it for Jake and Lucy and you can drop an enquiry directly to them and they will come back to you. You can also find a bit more about the program, what it entails and costs and things like that. That is it. Thank you once again, guys. 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.