For many property entrepreneurs who enter their projects into the annual Property Investors Awards, gaining recognition as a finalist in one category is quite a big achievement, given the ever-higher entry standards. However in this month’s investor interview I met up with Sam Patel, who literally swept the board at the 2023 event by winning four separate awards for some of his HMO projects.
Award winning large HMO deal in Watford
Just a few weeks ago I found myself in north Watford in a busy retail parade looking at a large mixed-use corner building, which clearly had a good amount of square footage on offer for use by its occupiers. This was made more apparent when I met with Sam and started to look around inside the building, as it really is quite a large indoor maze.
Sam firstly explained about the property he had acquired in April 2023 and his plans for it in the future. - “With my team we had first seen this when it was listed and bought it pre-auction. We saw that the existing floor plans were of an 11-bed HMO but also noted that the licence was for 15 people. However, we knew if we did some minor changes by taking out a kitchenette in one room and putting an extra sink into a communal kitchen and by moving two walls into the hallway, we could then increase the occupancy levels up to 18 people. We also noticed the original Sui Generis approved application from some 10 years previously had no restriction on the number of tenants.
“The vendor had been using it for temporary accommodation provision and given its previous internal condition they had little appetite to spend much on improvements. So a typical tired landlord.
“Once we had acquired it for £750k plus fees we then spent £21k doing a tidying up refresh and some minor refurbishments including repositioning the two walls and to increase the occupation numbers from up 15 to 18. We then let the rooms out to nurses who work at the local hospital and then re-financed it with a new uplift valuation of £1.41m and with an 88% increase in value (£660k). So we then got all the acquisition cash back out and with an extra £250k returned, once the commercial financing was done.”
It is at this point that some readers, as I did myself, may have a sharp intake of breath and absorb just what Sam has said, and at the same time may also realise why this particular large HMO deal resulted in one of his award wins.
