0-10 HMOs: 5 Key Lessons for Bigger, Better & Faster Results [REWIND]

In this special rewind episode, I’m sharing what is hands down one of the most important and most downloaded episodes I’ve ever recorded. Originally a talk I gave at the HMO Awards, it’s packed with the 5 biggest lessons I’ve learned from scaling my own portfolio and from some of the most successful investors I know.

If you're working towards 10 properties, aiming for that £10K/month milestone, or just need a bit of motivation to cut through the noise, this one's for you.

These are the lessons that genuinely moved the needle in my business and still do today.

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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 (00:40.662)

In today's episode, we are rewinding on what has been one of the most popular and one of the most downloaded episodes on the show. And I think that this is also one of the most important episodes that I ever recorded. Now it was originally done for a presentation that I gave at the HMO Awards in front of a packed out audience. And then subsequently, because I had such incredible feedback and it resonated with so many people, I recorded it as a podcast, but that was 18 months ago and things have changed a little bit since then. There's a bit of nervousness out there amongst investors. I get it. It's not a predictable, it's not a stable environment right now. It's difficult to know what the best thing to do is. 

But thousands of you have found the podcast since then, and I'm sure many of you who listened to this episode have quite possibly forgotten some of it or maybe just let a few things slip. And if that might be you, if you're finding it difficult, if you want to build that portfolio, if you want to hit that 10 property mark, if you want to do things right, if you want to build a successful and sustainable business, this is definitely the episode you want to stick around for. 

This episode was a little bit different because the advice that I shared in this was actually from some of the most successful people that I know in the industry. The people that I know have built the most profitable, the largest, the best businesses that I have seen in the property space. And they shared their advice with me so that I could share it with you. This is jam packed full of some incredible advice. And I think that if you are finding it tough, if you need that dose of inspiration, that little bit of motivation, a little kick, then today's episode is definitely the one for you. 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.

Andy Graham (02:47.153)

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 (03:28.399)

So today we're going to talk about what I think are the five most important lessons or learnings that I've taken from all of the great conversations that I've had with other successful investors in our industry. If you're trying to build a HMO portfolio, maybe get to 10 properties, maybe get to that elusive 10K a month goal, today's episode is the sort of episode that's really going to help you. I said at the beginning of today's episode, it was really difficult to whittle this down to five pieces of advice. I've had so many great conversations and listened to so much advice and there is so much advice out there and this isn't all of it, but these five pieces of advice that I'm going to share with you today, I think pack the most punch. I think these five pieces of advice, when I implemented them in my own business had better results than anything else. And I still implement them all to this very day. 

So these are really, really important and they have been a key part of being able to build my own portfolio, being able to build my own business. And I think if you follow this advice today, simple as it may be, but just wait, because it's all about the implementation and it's the consistency, you could get great results too. So let's get straight into this. The first thing that I've learned over the years from all of these great conversations, from all of these people who've achieved incredible things, is that you need to be prepared to work exceptionally hard and sacrifice an awful lot.

There's just no way of getting around this. I know that we talk and see a lot about building sort of time and financial freedom. I know we sort of read and see a lot about systemization and processes and the idea of investing in property is actually to give ourselves more time back to make our lives better and more enjoyable so that we can use our time to do the other things that we enjoy. But the real cold hard truth is that the process of certainly getting to that place is really, really tough. It's so tough that the only way that as far as I have found and have learned from all of these people is that you have to be prepared to work so so hard and sacrifice an awful lot. Now, let me give you a couple of examples. If I use myself as an example here, there was a point in my early investing career, so for about four or five years in, where I realised that I wasn't really making much progress. I was only bag about.

Andy Graham (05:47.063)

on property a year, it was mainly coming from a bit of capital appreciation, plus a bit of savings. And it just wasn't quickly enough. And I really had to step this up. I really had to just do more. And at one point I remember I was traveling 700 mile round trips at the weekend, just so I could get up to some of my properties and do viewings to work through the weekends. It was so, so difficult. It was expensive. It was exhausting. I had to sacrifice time that I could have otherwise been spending with friends, with maybe even family. 

It was time that I wasn't putting into my professional career. So there really was a commitment there to my investment business as opposed to my professional career. And it was really, really difficult. And a lot of my friends did not understand it. They just couldn't get their heads around why I would travel that sort of distance, why I would spend my time, why I would even prioritise it like this. And for a lot of people that I've met, a lot of really successful people, this is not uncommon.

This necessity to sacrifice an awful lot and just kind of almost work hard enough to not have to work again is so, so, so, so true. I've met people who have had to refinance their home, huge sacrifice, a huge amount of financial commitment. And they've had to sell their businesses. They've had to leave exceptionally well-paid, but very demanding jobs simply just to engineer more time back. It's a huge sacrifice and they've had to work very hard. I know people who've had to work really demanding jobs, run a house, family, and do this on the side in the two to three hours in the evening and all their hours at the weekend. That's just hard work. And I don't want to sugar coat this because as far as I am concerned and as far as I've experienced and as far as all of these people that I'm taking this advice and getting these lessons from, it was the same for them. They didn't just sort of saunter in and happen upon one or two or 10 HMOs. They had to work really, really hard. They had to give up a huge amount. They had to put other things down. They had to prioritise this. They had to really, really commit. They had to sacrifice an awful lot. And the truth is, the faster you want to move and the more you want to acquire, the more you're going to have to give up, the harder you're going to have to work. Now the good news is, and the real caveat to this point is that property is an incredible asset class and you can achieve some incredible

Andy Graham (08:12.697)

things in fairly short spaces of time. But the more you want to achieve, the more you're going to have to give up and sacrifice and the harder you are going to have to work. You're also going to have to work really, really smart. But that's just me being incredibly honest. This is what I've learned. And if you're not there, if you're not prepared to do this, if you think that this is going to be easy, if you don't want to sacrifice the evenings, the weekends, the time with unfortunately the kids and your family and friends, if you don't want to get off the PlayStation, these things will all hold you back and it's you who has to decide whether or not you're prepared to make those sacrifices. 

Are you prepared to double down for a 12, 24, 36 month period? Are you prepared to make these sacrifices and work incredibly hard to get these sort of results? Because from what I've experienced and from what I've learned from others in our industry, that is what is required to build a property business. The second thing that I've learned and the second thing that I want to share with you today is that the most successful investors out there, the people who get the best results have a real appetite for risk. Now you need to have an appetite for risk in this industry. Property investment for me has proved a fairly safe bet. And that's the case over the last 200 years. It has been a really well performing asset class over 200 years. Of course there are peaks and troughs, ups and downs, but building a modern business and certainly a modern HMO property business does have a significant number of challenges and it's your job as an investor to be able to overcome these challenges. 

Now, if you want to grow quickly and beat the competition to things like deals, you need to be prepared to take risks. Sometimes you just don't know the answer to everything. It's really difficult. It's not a nice position to be in. You've got to trust your gut instinct. You've got to trust the maths. You've got to trust that the economy isn't going to wobble, but you have to take action and you have to be able to accept a certain level of risk. If you don't, other people like me, like these other investors that I'm talking about, that I'm taking advice and learning from, these people will get in there, they will get deals before you. They will find ways to be slightly more creative and push the boundaries a little bit more. Push the value, get that little bit more out of the deal at the back end, let them pay a little bit more for it in the first instance. You have to be able to move fast sometimes.

Andy Graham (10:29.715)

You need to get to the auction and that's the only way that you're going to pick up a good deal. It's not all going to fall on your lap and you need to be prepared for this. So you do have to have an appetite for risk. Some of this risk could be around financing. It could be a risk around planning permission, buying something without planning, hoping that you are going to get the planning. It's not ideal, but it's that sort of appetite for risk that I've seen consistently amongst the people who've been most successful in our industry that is obviously a part of why they are successful in the first place. 

Some of the risks might be around location. Until you start investing and start running and operating HMOs, and I mean, for much longer than six to 12 months, two, three, four, five years in, you don't really know how it's going to perform. Will all of these infrastructure plans, all these regeneration plans that the council have got, will they actually come to fruition? good, this place just still be a shit hole in five years time.

Yes, you've got to do your research. Yes, you've got to make a calculated risk, but it's a risk nonetheless. Now the best in our industry, and I found this, the best guys in our industry, they know which risks are manageable and which aren't. And that's really, really, really important. The third thing that I've learned over the years from the most successful in our industry is that they prioritise access to finance pretty much above everything else. I work with a lot of people on a one-to-one basis and a lot of my mentees come to me with limiting beliefs around finance, they're limited by what they think they can achieve by the pace at which they think they can acquire because they don't have the finance in place. And of course there are lots of solutions to create finance. There's lots of solutions to recycle finance and the best in our industry understand this, but not only that they prioritise this, a lot of their actions and activities revolve around making sure that that finance is there.

Whereas what I see in people who are newer to the industry,people who are less experienced, they prioritize their activities and actions on how to find the deals. And they think that it's all about that and finding the right deals where they can recycle all the most of their capital out. The most experienced in our industry understand that that is always going to be very tricky to do. What they do is focus on solutions to raise finance, always have finance in place, be able to move finance around, be able to swap finance in, have a cushion, have a buffer of things don't quite go to plan.

Andy Graham (12:52.725)

Plan A, Plan Bs, the best in our industry really understand this and they work with money in this way. And that's the real difference I see between people with the experience and people who are really successful and those who are less experienced and struggle to get those sorts of results. The truth is buying and developing property is just not a strategy conducive to low capital. Without a clear plan and a continuous supply of funding, it's very difficult to grow a property business. That is just a fact.

Now, the best in our industry, know this, they get it, and that is why they prioritise finance. Now, if you're listening to this and thinking, well, that's all well and good, Andy, but how do I actually, for example, go and raise private finance? Well, there are lots of ways to do this. It doesn't all have to happen online. It could be from family. It could be from friends. It could be from friends of friends. It could be from online. And I've raised a lot of money through all of those different methods.

If you want to learn more about it, head over to the HMO roadmap, because we've actually got a whole module of the roadmap dedicated to raising private finance, all the things that you need to do and think about how to create investor decks, what you should be saying, what you need to be demonstrating to investors. And I talk about the CRES model, the credibility, the returns, the exits, these sorts of things, the importance of how you communicate the message to potential investors.

If you want to recycle capital out of deals, again, inside the roadmap, there's a whole module dedicated to raising finance and also recycling capital through deals and also using things like commercial mortgages to help get more out of your deals, which is so important. It's the combination of all of this, that the most experienced in our industry, the most successful in our industry know they understand and they put to very good work. So if you're sitting there and have been thinking that you can only do so much because you only have so much capital in place, but your goals are bigger. You've got bigger aspirations than this is definitely something that is going to be really important for you to get your head around. You've got to believe in it, but you've then got to go away and you've actually got to implement the key activities to make it happen. 

Okay. The fourth thing that the most successful investors in our industry understand is that you can't do this alone. There are so many moving parts when it comes to property, not least HMOs. And what I've found over the years is that

Andy Graham (15:09.621)

the best and the most successful in our industry. They really embrace this. They embrace the relationships. They understand that it's the people that they work with that make it all possible. When you're just getting started out, it's difficult. It's so tough to know when to reach out for support, when to reach out for help. And I see all too often people trying to do far too much, trying to master areas that they're never going to be masters in. These relationships, these people that can really help you are your sales agents. If you've got the right agency on your side, if you've got that sort of rapport and relationship, it can be the difference of making this successful or not. I'm not saying that you can only be successful if you have an agent on side who really wants to work with you and it kind of gives you a heads up when deals are coming online. I'm not saying that they're giving you favorable turns or anything like that, but just sort of making your life a little bit easier. I'm not saying that without a person like that or that sort of relationship, you can't do this. You can but it makes it a lot easier if you've got those sorts of relationships. Multiply that, if you've got several of those relationships happening in different agencies, in different places, then it's gonna be much easier to get your hands on deals. You're gonna be top of the queue, first in the door. You're gonna have somebody who's sort of fighting your corner when you're putting offers in and things like that, and that's really going to help you. 

Mortgage broker's so important to have a really good mortgage broker. That is why I brought Ellie in to the HMO roadmap to be our partner, because I work with Ellie myself. She understands HMOs in such acute detail that you and I are never going to understand. And she's got those relationships with the lenders at the other side. She knows exactly how they operate. She knows who to speak to in their office when things aren't going well and there's a problem and the underwriters aren't happy. She knows how to handle those sorts of problems. If you haven't got a broker on your side that's doing that, it can be the difference of getting a deal through or not getting it through. It can be the difference of being on a 5% rate and being on a 7.5 % rate. It can be the difference between 60% loan to value and 75% loan to value. Honestly, it's not until you've done this, until you've worked with enough people and until you've perhaps made some mistakes that you see this, but it's so, so important. Other investors can really help you. I've got a lot of pals in and around the cities I work with that invest in similar sort of stuff. And we've got good mutual relationships. Sometimes they get stuff, sometimes I get stuff. That's just the way it is. But sometimes

Andy Graham (17:32.895)

something lands on my lap that I can't do much with and I can make a call to them and vice versa. And I've picked up a number of good deals over the years through relationships like that. Architects, planning consultants, mentors, all of these people are there and able to help you able to speed up the process. Yes, there's a cost to working with these people, rightly so. But the amount that they could save you, the time that they could save you, the mistakes that they could help you avoid making could be priceless. So make sure that you understand the importance and the value of working with other people in the industry. It'll make it much easier. It'll streamline your efforts. It'll save you a lot of heartache and I guarantee you will get significantly better results. 

Okay. That brings me on to my fifth and final point that I want to share with you today. The fifth thing that I've learned from the very best in our industry is that they get better results than anybody because they play a long game. Time in the market really is your greatest ally. Now I've bought a number of HMOs over the years. They all generate a really good rental income and my priority has always been cashflow from rental income. But the truth is, and I've done this exercise, I've put it all on paper, I've made more money through capital appreciation than I have rental income. I just want you to pause for a moment and let that sink in. That's hugely significant. Even though I've been prioritising my efforts on cashflow, which is still incredibly important and should be a number one priority when it comes to HMOs.

Capital appreciation has still been better for me over the last 15 years. Now, when I started buying, I was at the bottom of the market in the last crash. I didn't know that. I had to accept there was a certain amount of risk, but it didn't really matter in the end. Whether you buy at the top or the bottom of the market, if you plan on holding and you're sensible with your kind lending, it really doesn't matter. And it's important to remember that it's worth remembering that because we can get lost in the minutiae of the detail of investing in HMOs and what might go wrong and all of the speed bumps that will be sort of slowing us down. But it really doesn't matter. And I've seen this from the best in our industry. Now, what I'm not saying is that you can disregard the short term, you still need to make the short term work. But if you focus on getting results over the longer term,

Andy Graham (19:47.893)

You will find that you ultimately achieve your objective much more quickly. There's a few things to think about aside from capital appreciation here as well. When you think about your own personal objectives, think about where you want to have your portfolio. Where do you ultimately want to end up and live and what do you want your life and time with the family to look like? Do you want to be managing lots of professional HMOs or would you rather be managing a few smaller HMOs that perhaps were less profitable made you a bit less money, but we're much closer to home and we're much easier to manage. So you actually had more time to spend with the kids. It's that sort of long-term planning as well that I've seen the best in our industry do. They build portfolios and businesses that suit them really, really well. 

One of the things that worries me is people new to our industry coming out of the gates, charging at professional HMOs simply because it's a little easier to recycle capital to add value. And while I totally get that and while it is important and it must feature if it's one of your priorities, it's not the be all and end all. I've seen people do incredible things and I'm going to use Mike Clay as an example. Mike's been on the podcast a couple of times. Mike achieved incredible things, but actually turned his initial strategy on its head. He was looking at professional HMOs elsewhere in the country with slightly better yields and potentially better returns and actually shifted focus somewhere much closer to home. That was more expensive to buy the results weren't necessarily as good as they could have been, but he was able to do a lot more, a lot more quickly. His black book of contacts built up much more quickly because it was all on his doorstep. He enjoyed it much more than he probably would have traveling several hundred miles from down the country. He made a very important decision with his long-term goal and objective in mind. And that's just one example.

So there we go. Five things that I've learned from some of the very best in our industries and from my own experience over the last 10 to 15 years that I think will help you more than anything to get better results, to build a bigger portfolio and to make it all happen much more quickly. 

So let's recap. The first thing I shared with you today was be prepared to work very hard, incredibly hard and sacrifice an awful lot. It's just what it takes. Number two, the second thing I shared was have an appetite for risk. It's okay.

Andy Graham (22:01.405)

make calculated and manageable risks, but you do need to take risks if you want to get results and you want to beat people to it. Number three, prioritise your access to finance. It's so important to continuously have a supply of funding. So make sure that you do always have that in place. That means you've got to prioritise whatever actions and activities you need to make sure that that funding tap is on. Number four, understand that you can't do this alone. The more people that you know, the more people that can help you, the easier it will be, the quicker that you will get results, the more money you'll save, the less heartache you'll have, the more enjoyable the whole experience will be. And finally, number five, play the long game. Understand that investing in property is a long game. If you invest for the long game, you'll get much better results, you'll be much happier, you'll actually achieve your results much more quickly as well.

That's it for today's episode guys. Thank you so much for tuning in. I hope you found that enjoyable. More than anything, I hope you found that really, really useful. If you're building a portfolio, if you want to get to that 10 property goal or 10K a month, whatever it is, make sure you go and implement all of this advice today because I guarantee if you do, you'll get better results, you'll get bigger results and you'll achieve everything you want much more quickly. 

Now don't forget that I'm on hand over in the HMO community. So if there's anything that you want to come and ask or discuss about today's episode, come on over to our free group on Facebook, it's a great place to have these conversations. I'm there to offer you some guidance and support, as are our over 6,000 members. No, that's right, over 6,000 members. It's a huge achievement, and I'm so proud of what's going on in our group every single day. So come and check it out if you haven't already joined. Don't forget, if you do want to level things up this year, then you need to come and join the HMO Roadmap.

If you combine everything we've got waiting for you inside the roadmap with what I've talked about in today's episode, you will be unstoppable. I wish the HMO roadmap existed when I was just getting started, but it's where you'll find 60 plus lessons teaching you how to find deals, how to fund them, how to refurbish them, how to find tenants, how to run and manage your properties. You'll find over 40 inspiring case studies from our community members.

Andy Graham (24:05.619)

You'll find the deal stacker where you can actually stack your deals up and compare them side by side to other deals that you're looking at. You'll find our expert master classes, including our brand new master class from architects, Andrew and Mary, giving you an architectural insight into what's involved in converting HMOs. Because if that wasn't enough, you'll also find all of my downloadable resources, my cheat sheets, swipe files, templates, everything that you can download and use in your business today. This will all save you hours and hours and hours. It'll save you thousands and thousands of pounds.

I guarantee for the 48 pound a month that it'll cost you, it will speed up the process of getting to wherever you want to get by two, three, four times at the very least. And it could save you hundreds and thousands of pounds. And finally, guys, if you did enjoy today's episode, please, please, please, can I ask you to find just 30 seconds to leave a quick review of the show? It helps us continue to spread the message. We are managing to spread that message further and further. Recently I was on GB news. Recently I was interviewed on the BBC as well, so it really is working. And of course it helps us continue to bring great guests onto the show as well. You can now leave a review on Spotify and on Apple Podcasts. So if you do find 30 seconds and you do enjoy the show and you do find it useful, please, please, please do leave a quick review. That's it, thank you so much. 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.