🌟 REVEALED! Our first ever rent to rent HMO deal!

After years in property the Girls regularly get asked all about their deals - from sourcing the property, doing the market research to ensure success through to putting together and negotiating a deal that everyone loves and then onto the real work - tenanting and running their properties! 
This week Julia asks all these questions and the girls reveal every bit of their first Rent to Rent HMO deal in the new Bournemouth franchise of ROOMS. 
With a listeners question plus Property Disasters to round out a fact- and fun-filled episode!

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Transcript

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Sophie: 0:04

You're listening to the Girls in Property podcast, where we explore the world of property, meet amazing guests to hear their stories and support you in your property journey. Hi, everyone. You're here with me. Sophie Ann. Athena.

Athena: 0:21

Hi.

Sophie: 0:22

And Julia.

Julia: 0:22

Hi.

Sophie: 0:23

And Simon's. Recording hello. And today we thought we would cover Athena and my first ever rent to rent HMO deal and we thought it would be nice if Julia interviewed us. So, handing over to you, Julia.

Julia: 0:36

Thank you. So, should we start with how everyone's doing and what we are celebrating?

Athena: 0:43

Yes.

Julia: 0:43

So, Athena, what are you celebrating?

Athena: 0:45

Oh. What am I celebrating? Good question. I should have been ready with this. Okay, so what I'm celebrating is Star Collective. I think I will celebrate this week, which is amazing. So we are literally just launching, which is really exciting, and it's going to go really well. We're going to be basically people's accountability partners and we can't wait to get started.

Sophie: 1:04

Amazing. And Sophie, I'm celebrating managing half term at the moment because the kids are off all the business, things are happening and we are managing it fairly well with the help of Mum and dad. So it's going quite smoothly, which is nice. It's not too stressful. How about you?

Julia: 1:23

I'm celebrating growth. I think all of us have grown so much and we're juggling so many things and it's just really incredible to just have a group around us where we can see us handle day to day issues and just deal with them like they're not even a problem. So, yeah, I'm celebrating all of us.

Sophie: 1:39

Amazing.

Julia: 1:41

Okay, so I thought I'd let you guys know that obviously we're going to be interviewing Athena and Sophie. And if you're looking to get started in HMOs and you're potentially looking to get your first deal, then Athena and Sophie are going to go more into depth of how they acquired their first deal and what they needed. Any ups and downs, the non sexy bits and the sexy bits. And I think this would be a great episode for you. So, yeah. Should we start?

Athena: 2:05

Let's do this.

Sophie: 2:06

Let's dive in.

Julia: 2:07

Okay, so, for people who don't know, what is Rooms? Bournemouth.

Sophie: 2:11

Okay, so Athena and I went into business end of last year together and our business is called Rooms, and it's part of a national franchise and we specialize in rent to rent HMO.

Julia: 2:23

Amazing. And so you specialize in rent to rent HMOs. What sort of deals for rent to rent HMOs do you look for?

Sophie: 2:30

So they've basically got to be five bed plus in order to give us that margin. That is a profit margin on a good deal. So four beds sometimes work, but kind of the bigger the better. It depends on the property.

Athena: 2:42

Yeah.

Julia: 2:43

And is that dependent on how much renovation it needs or the standard? What does it particularly mean?

Sophie: 2:49

Yeah, this is a funny one because every deal is so unique. So, like, we've had houses in the past that need no renovation at all. And then we've had other ones that spend ten or 15 grand on that. I think I've spoken about on the podcast before. But, yeah, we basically look for, what, five, six beds plus, and then every time one comes up, we'll try and get a viewing and then analyze them one by one.

Athena: 3:13

Yeah, definitely. It's very case by case. I always find no two deals are the same and no two landlords are the same either. They all want different things and done in different ways. And some people it's about the end margin, some people it's about how long you do it for, the level of work that you actually take on in terms of management. So very different.

Julia: 3:30

And how do you know if a property is profitable?

Athena: 3:34

Well, we have our deal analyzer that we use, which is amazing. So it's always spreadsheet decisions, always, never emotional. So we literally plug it in. Does it work? And if it doesn't work with what the landlord wants, what do we have to go back with? With a counter sort of agreement. And if it's not to do with money or we can't come in agreement there, then what we'll do is we'll look at other ways to do it. So is it, for example, how much of our own monies will put into the actual refurb of it? Or are there more creative ways that we could get with it as well?

Julia: 4:01

I think that's a really important thing you said, where it's never emotional, it's always like a numbers game. And the more viewings you do, the more opportunities you get. And you never go of a deal that doesn't stack.

Athena: 4:12

Yeah, always.

Julia: 4:13

So how did you guys get your first deal? Because I heard you've done it quite a few months ago. But how did it come about? Who found it? How was it?

Athena: 4:24

So I remember what basically happened with this was that I went and was calling around agents, but I actually was doing it as if I was calling them for my sister, my imaginary sister, who was going to be going to Bournemouth University to try and get some information about the different HMOs across Bournemouth, if any. Agents listening, sorry, but I did do that. And then what happened was that I actually called about this particular property that we took on, and I spoke to the agent about it, but for my sister wanting it. And he said, yes, it's available, all this. And I called Sophie and I said, Sophie, you need to call this person, because I think this is a really good HMO to take on. But he's going to recognize my voice if I do it. So you're going to have to do it.

Athena: So Sophie's like, okay. So Sophie called and overhauled. Sophie came back going, we've got a viewing at 03: 5:04

00 tomorrow. I was like, amazing. You just get vibes from agents as well. Some agents are straight up like, no, we don't do it. And some agents are like, Yep, we do it. Or they'll be like, we're not sure. And then you can kind of convince them. You definitely get feelings, I'd say, just by being people person. So always double check that.

Julia: 5:27

And when you first viewed it together, how did it go? Did it go well? Was there any hiccups?

Sophie: 5:34

It was good. It was funny because the agent we work with is so casual, he doesn't really look like an agent.

Athena: 5:40

Well, we almost walked past him, didn't we? Yes, there's building refurb work going on. So we literally almost walked past him going, oh, hello, where is the agent?

Sophie: 5:50

I just went, oh, hi, what's your name? And clocked him. And then were in and they were refurbing it at the time to quite a high standard, which was really nice.

Athena: 5:59

All the carpets were up, weren't they? So we had literally all the carpets. It was almost hard to imagine what it could because there was so much work going on, but at the same time you were like, yes, all the work is being done now. Which was great with our wonderful random showers in the rooms.

Sophie: 6:14

Yeah, pretty much all of the showers. The rooms have just got a shower in the corner, which I hadn't seen much of before. It's weird.

Athena: 6:23

It was weird.

Sophie: 6:24

And I was coming up with all these like we could put a screen up, we could put a curtain up, we could divide the room, but the rooms are massive. Really, really big rooms. So were like, yeah, we can work with this.

Athena: 6:34

Exactly. And a fantastic location as well. Literally about a ten minute walk to the beach. It's b h five. It's an amazing location on Boscomb High Street, so it was great.

Julia: 6:42

And do you think location is key for HMOs?

Sophie: 6:45

100%, yeah.

Julia: 6:47

And is there like a particular target market you look for within your HMOs that you look to rent out?

Sophie: 6:54

I would always view an HMO on the basis that would I live there and can you get around easily? Because a lot of our tenants don't drive, they have bikes or they walk. So there needs to be transport buses and cycle storage, basically.

Julia: 7:09

So I think it's really important for listeners to understand if they're looking to get their first deal, like focus on the target audience you're looking to rent it to. Look, put yourself in their position and what are they going to use facility wise and structure the deal. Sort of see if that deal works.

Athena: 7:23

Well, that's actually a really good point because we're just coming back to then demographic as well. So, for example, Rooms specializes in working professionals, so you only do professional househares, whereas some renters out there will actually do students. We don't do that. So if you're going to be doing. Students, you need to think about, are you near to where the uni is? Are you near to where they can go out and sort of be social or working professionals? As Sophie said, there needs to be near bus routes or things and thinking about, is there a hospital nearby? Is there schools? Like, what type of work would they be able to be doing?

Julia: 7:53

Okay, and so contracts, let's talk about contracts. How did it go? Was it smooth sailing? And in that aspect, what sort of contracts do you use? Would you recommend using a lawyer? How is it?

Sophie: 8:06

So we have our own contracts, which were made by the franchise legal team, basically, so they're really solid. But on this one, didn't we use his contract?

Athena: 8:14

Yeah, it didn't go smoothly at all. No, we wanted to use our contract. We insisted that were going to use our contracts. And then the agent came back and said, if you want us to use your contracts, the landlord has insisted that you have to pay what was it? 600, 700 pounds for his legal fees in order to check it. And I was thinking, oh, my goodness, what is happening right now? So we looked over the agent's contract and realized that with a few tweaks.

Sophie: 8:40

We made amendments, loads of amendments.

Athena: 8:42

It actually wasn't too bad. We were all always going forward once he was our own. I mean, we're looking to take on some other properties with the same agent. Actually, we built that rapport and that relationship. We've already made him aware we will be using our own contracts. But because he kind of knows us now, knows what we're about, he's a bit more open and willing to accept that.

Julia: 8:59

I think you made a very clear point, which is like building that relation, building that rapport, because it's like you don't know who to trust. You need to sort of build that foundation of a relation and then it should be only up from there. But that's why the first deal is the hardest deal, because you need to learn to build those relations. And it takes time sometimes.

Athena: 9:17

It absolutely is the hardest, the first deal, because you're also learning as well at the same time. So the first time, you can try and plan as much as you want, but things are always going to go differently than how you think they're going to go. So what I've done particularly is I've made lists as I've gone, so the next time I know exactly what to do. As best you can at each point when it actually needs doing.

Julia: 9:37

Yeah, 100%. And so how did you guys structure the deal to get it across the line?

Sophie: 9:42

Can't remember now. We had a rent free period. We had a rent free month.

Athena: 9:47

Oh, he wanted a deposit. I don't know if we're coming on to that, but he wanted a deposit, which weren't sure if were going to give or not, but we had a rent free period and then we kind of just thought, well, what does he want? Does that work with what we can actually offer with our cost? Because, of course, in a rent to rent, you have to counter all of the bills, council tax, utility bills, et cetera. So we just looked at the numbers, didn't we? And actually we offered him less than what he wanted.

Sophie: 10:12

Yeah, I think we did a three year deal with one month rent free so that we could market, furnish and tenant it.

Athena: 10:18

Yes.

Julia: 10:18

So you're telling me that the landlord renovated the property? It was pretty much new carpets, fully painted. You didn't have to do any of that. All you had to do is spend about six grand on furniture and any unforeseeable cost. But how the h*** did you get into agree for a rent free period? Because if you're not really changing anything or adding value to him in aspects of structurally, which is what you'll take all the furniture that you put in, so why would anyone, regarding the agent or the landlord allow you a rent free period?

Sophie: 10:49

So I always get a rent free period on my rent to rent, and I think you just have to firstly build a good relationship so they know you're not an idiot and you know what you're talking about. But to these landlords, we're actually offering a three year or a five year deal, so we're saying to them, you're going to have income every single month, fixed income. It's not up and down like it would be with a typical agent, as people come and go and you have to pay for maintenance and things like that, guaranteed income for that time. So it's just one month free. And it's understandable because we're not making any money to give you money during that time. So no income for me, no income for you, but then you're then going to get your fixed income for three years.

Julia: 11:29

I think what you've displayed there is just being completely transparent. And I think it's so important for people to understand who are listening that building a relation comes from sometimes being the most honest person and just saying it. Look, I'm not going to be making money this month. We're going to be adding our furniture, spending a lot of money on that. And once it's tenanted, then we don't want to give you any empty promises. So we'll start after that one month.

Athena: 11:53

And we're always improving the property as well, so we're always going to be improving their home, their investment as well, and then they're going to have peace of mind. So I think it's a two way street, really, and that relationship has formed perfect.

Julia: 12:07

And how much money or budget did you put into the property, you or the landlord?

Sophie: 12:12

So they had pretty much painted and decorated it, new carpets, they ended up refencing the garden as well, didn't they?

Athena: 12:19

They paneled it. Yeah.

Sophie: 12:20

So we just had to furnish it. So I think we spent about five and a half grand yeah.

Athena: 12:24

On the furnishings. I think the furnishings were actually just under five, but then we had the little add on. So, yeah, I'd say five and half is accurate. Then we had the whole key situation. We've had to change the locks, et cetera. So that was obviously bit more money as well. So all in at the moment. What do you think that property was? Six.

Sophie: 12:42

Yeah, maybe six, which I think is.

Athena: 12:44

Actually what a rent to rent usually is. It's about six.

Julia: 12:47

And it's six grand for how many beds?

Athena: 12:50

Six beds.

Julia: 12:50

Six beds. It's about a grand for each bedroom. And that's also counting any unexpected costs, because I'm sure you would calculate that in those. And how much percentage wise would you calculate for any unforeseeable costs?

Sophie: 13:02

So we always build in a void period, a maintenance budget and a cleaning budget. So I think our void percentage was about 6% on this one, which gives us a little contingency.

Julia: 13:14

Okay, so perfect. So let's move on to the marketing techniques and aspects of right, you've put in the furniture, you've obviously signed the deal, you found the deal. How did you market the property to get the tenants that you desired for that property?

Athena: 13:30

So basically what you do is you go on to the various platforms where you can, of course, sell rooms. So the main one being, of course, Spare Room. You can also do Facebook and just local ads in and around your chosen area, ours being Bournemouth, et cetera. And because you've already done the demand, you've already done the market research for your area prior to starting the rent to rent business that you want to do, which you must always do, you know that there is going to be the demand there for it. So, for example, what we did the first thing was before we decided what were going to put the price on for, which always must check, we checked what the competition was in the area. So what our other is offering, what the price margins, and then we base ours based on that, put it on Spare Room and wait for the phone to start buzzing.

Julia: 14:13

And let's say in the worst case scenario, take us back to, I don't know, like the worst case, say there's a zombie apocalypse and the phone wasn't ringing, what would happen?

Sophie: 14:23

We spoke about this.

Athena: 14:24

What did we say that we would do if the phone didn't ring?

Sophie: 14:27

So I think for anyone out there who's got an ad on Spare Room and not a lot is happening, you then start messaging the people looking on Spare Room because people put their own ads on there. So there's a whole sea of hopefully, potential prospective tenants. So if they don't message you can start messaging them.

Athena: 14:43

That's it.

Sophie: 14:44

So that's plan B. Yeah.

Athena: 14:45

And when they start coming up, because they literally come every day, you have to get religious about checking spare room, almost, and then just do like a copy and paste message, but make it a little bit personal and then invite them for a viewing.

Sophie: 14:55

Yeah. And the other thing you can do is just start contacting local employers in the area. You could flyer, you could contact like care homes, the hospitals, any big employers, things like that. Perfect.

Julia: 15:08

And I think for any people who are starting out, they must be quite scared to take their first leap. Is there anything that sort of helped you guys get this all across and keep each other sane?

Athena: 15:19

I think having each other was the right way to do it. I obviously had Sophie, who had walked or walked before, which was really helpful in knowing what was coming up and what to do. There were moments, for example, where there was a lull period of literally about a few days, and I was like, oh my God, nobody's taking these rooms. Which later definitely happened, but you need somebody there to go, it's okay, this is normal, this is what happens. So I think an accountability partner is essential. And speaking to people that have already done it before, so that you can get some advice and kind of be like, well, this is what's happening to me. What happened to you? Every area will be different because there is a HMO demand different in different areas. But I think that's what I would do. Yeah.

Sophie: 15:59

And I think you nailed it earlier when you said do your market research. If you've done your market research and you've concede that there's demand, then you should be fairly confident you can fill your rooms.

Julia: 16:08

So your market research would obviously be surrounded by working professionals. So the viewings that you would go ahead with would be working professionals. And I've heard so many different stories from different people, and how working professionals might not always be professional. So how did the viewings go?

Athena: 16:27

So it was a mixture. There was a mixture. I have to do it because it's funny. So one particular bad example, because let's face it, that's what our viewers want to hear was when there was this really weird guy. And you know what? I knew he was going to be weird when I said, I'll see you there. Are you still coming to the viewing? So I reconfirmed 24 hours, poor hand, and he said, yes, I'm coming. It's not every day that you get to meet a goddess. Pause.

Sophie: 16:57

Yeah. Greek goddess, Athena.

Athena: 17:00

Yeah. And so I just thought, I don't want to go to this viewing. But I thought, no, come on, Athena, let's go to this viewing. Lo and behold, he was a weirdo when we got there, and he was.

Sophie: 17:10

On you and you were like, if you don't hear from me by seven. Can you please come or can you please let my boyfriend know? I was like, yes, I will call you.

Athena: 17:18

And you know what, this is what you have to do when you're starting out a business. So I was supposed to be at an Indie. Sorry I'm going off peace now, but I was supposed to be at a dinner with my mum and my boyfriend at the time and I had to leave that dinner to go and do this one view doing. And you just have to do that in business. You're just going to have to give up your time to kind of do that because that's what you do. And so I went and he was asking about the cameras and he was asking about this, and he kept asking me or wanting me to walk in front of him. And when I said, no, you walk in front of me after you, because obviously going up the stairs, he said, Why is that? So that you can kill me from behind. So hold on. So that did happen. Don't worry. I'm fine. Unharmed. Everything's fine. He, of course, is not living in our HMO. However, what I would definitely say as a top tip is if you are going to be managing your own HMO, go and do the viewings yourself. Because if you're doing the viewings yourself, you'll instinctively get a good feel from the people that you are meeting. Do they look decent? Have they arrived? Do they answer all of your questions? Do they look like they even want to be there? What are the reasons for them being there? You can ask all the questions that you want to and then you'll know whether you want to give them why. I actually said no to somebody taking one of the properties because it just didn't feel right. And trust me, your gut will always be right. And one other top tip, just regarding viewings and also who you actually have in the properties, is we actually had it where we knew we didn't want an all male house or an all female house. We wanted a mixed house. From Sophie's experience before and with HMOs, typically you will usually get male demographic. It just tends to be that way. So I filled all these rooms with guys and were like, we need girls. We basically need girls. So we had girls. And then the last room, I was like, Sophie, I can't get girls. I'm really struggling. I've got guys messaging me, loads and loads of lows, can't get a girl. And Sophie's like, Hold out, hold out. And we actually took a hit on our, on our income and our profits as a result of that because we remember that a rental period of income for about two weeks. But then we did actually get a wonderful girl in the property. So sometimes it's not always about the money. It's about making sure that the flow of the house is actually correct and what it should be for a longer period of time. So don't always look at the shorter kind of tunnel vision. Try and open your eyes to what could best for the house in general.

Julia: 19:34

I think that's incredible tips that you've given there. And one of the other things I would like touch upon is what you said where you were planning on having a dinner with your boyfriend and your family and you had to leave that. And that's the truth about business. Like, it's not a nine till five and you will have days where you won't want to leave families and stuff, but you'll have to because you are your own boss and if you don't go, it's not going to get done unless you delegate it to someone else. And I think it's so important for anyone who's looking to start our business to acknowledge that and know that, okay, I'm looking to take the leap. That's great. There's a lot of good, amazing benefits because you're your own boss. But also there is a downside, because to every upside, there's a downside. It's that balance exactly.

Athena: 20:17

So I would say that if you personally and people are very different with this, but I'd say if you're looking to take on your first rent to rent, stay with your local area, you are the person who is going to know your local area the best. And therefore you're going to be able to go and do what you need to do. If you've got a property which is an hour away, you're never going to be able to do the viewings because viewings don't happen all at once. People are going to want to get there at different times and you're going to need to be there when you need to be there.

Julia: 20:44

Okay, you've done the viewings, you've had a few weirdos and you've had a lot of cool people, and you've holded out to get the whole flow. I love about the whole longer term vision because in business, it's always the end result rather than the instant gratification. So what was the moving process like? Was it smooth after the viewings? You've had a lot of hiccups throughout this deal. I'm assuming it would be all okay, right? It's on new property, everything's fairly renovated or how did it go?

Athena: 21:15

So when we actually did the move ins, I think that actually was quite smooth, I would say. So no hiccups there, everything was fine. The furnishings arrived on time, the rooms were ready for them because I knew when each one was going in, they didn't all go in at the same time. Our first tenant moved in about two weeks before the others. And I kept thinking to myself, oh, I hope he's okay on his own. And everyone kept saying, he will be fine. And he was absolutely fine. So everyone sort of moved in gradually, which was great because it kind of gave me a bit of time. Obviously, there were some steps when you moved them in terms of inventory, right to rent checks, et cetera. So always make sure that you have your list when you go to check them in, because all you're going to want to do is talk to them and they're going to want to talk to you. But you need to make sure that you get all the documentation that you need as well and make sure everything's right. So that's another top tip, I would say.

Julia: 22:03

And for people who are starting out, they might go, okay, inventories, do I hire someone? Do I do it myself and write to rent checks? Where do I find them? Where did you get your knowledge about this?

Athena: 22:16

Well, I'm quite lucky because obviously I'm part of a franchise, and obviously I've got Sophie as well. My advice came from Sophie, who's already done it before, and obviously the franchise prior to that. So I would say definitely get knowledge about rent to rent before you start, because if you do it wrong, it will come back to bite you. So make sure you get the knowledge from the correct people. That could be. Make sure it's credible, I would say. And people who are already doing it in the field and showing that they're doing it on a day. To day basis because they're the ones that are going to be most up to date in terms of compliance and up to date in terms of what's actually needed at that moment in time. But make sure you get knowledge about it.

Sophie: 22:54

And in terms of the inventory, you just need a record of what's in the room or the entire house. Depends on what you do. So we do a detailed record of what's in the room, take pictures of the condition so that when they move out, you can compare them. And Simon actually came up with a good one the other day, which was how the room smells when they come in. So you write down no strong odors. Is that what we're doing?

Athena: 23:18

Yeah, noticeable odors.

Sophie: 23:20

No noticeable odors because very few of our tenants have left a room. And you walk in, you're like, oh, whether it's well, let's not describe it. So no apparent odors is a good one, and then covers you for smoking as well.

Athena: 23:36

Yeah, it's very true. Always get them to sign it as well so that they've seen it, they've agreed to it. And then always make a copy as well and keep copies. So that at the end, because it always works in terms of deposits. And what deposits you do and deposits is a whole different conversation, isn't it? A whole different topic that we came across.

Sophie: 23:54

Yeah. And then the right to rent bit, that's legal compliance. So look it up if you don't know. And you have. To follow the government guidelines on it.

Julia: 24:02

Yeah, perfect. So now that the main contract was signed and then you've renovated it well, the landlord has. And then you've sort of put the furnishings in, you've done the viewings, you've done the due diligence of referencing the tenants, you've signed the tenancy agreements and now you get to benefit from this sexy deal. Right? So was it all good?

Athena: 24:25

Do you know what? You do get to benefit from the sexy deal, because obviously the rents start to come in, the rents are also going out to the landlord. So it's a little bit of a balancing act. However, what the reality is that when people actually start moving into the properties, teething issues are going to happen. And they're going to happen because you can check as much as you want to check, but until somebody's actually living there on a day to day basis, you are not going to know the things that they end up coming up with. And they will message you about them. And they will all come at once on a Saturday night. That is what is going to happen. So, yeah, there were teething issues. So this proves even on let's call it a fully refurbed property that we imagined were taking on, there were still underlying kind of teething sort of bits, as it were. We had people who were locked in their rooms. In fact, we had one tenant, bless them, who was locked in on their first night and they were locked in their room, so they couldn't get out of their room. And this was a Saturday night. And Blessed Sophie called so many locksmiths on a Saturday night. I think you called about 14, didn't you? Nobody picked up the phone and they.

Sophie: Were all like, yeah, 24 hours, 365 day year emergency call out. And then they're like, 07: 25:31

00 on a Saturday, I'm not coming out.

Athena: 25:38

Yeah, pretty much.

Sophie: 25:39

Apart from Steve.

Athena: 25:40

Apart from Steve. Shout out to Steve. He was amazing. So he came out and he basically got them out. However, what then transpired was there were certain things like, which we just would never know where the locks had been glued on the doors instead of screwed in, and were like, oh, my goodness, what is happening right now? And suddenly all these things started to unravel. So they actually got sorted today, so we've now got brand new locks and all the doors, et cetera. So, yeah, I think it's just what I'm trying to say is there will always be things that happen, but you just have to keep going and you just have to make yourself aware of them and do your best to get them rectified as quickly as possible for the tenant.

Julia: 26:15

Amazing. And what were the biggest takeaways from this deal that you're going to implement for your next one?

Sophie: 26:21

A big one for me was that Bournemouth Amenity standards are different from Southampton. So this house came with quite a small kitchen. And I was like, oh, they'll just put more cupboards in for the rest of the tenants, because each tenant needs a cupboard for their food. And as we got the deal and they were just kind of finishing the last bits and pieces of the refurb, I was like, So where are the extra cupboards? And they're like, no, we've got enough space. And I went through the guidelines again for Bournemouth, and it was like, you don't need as much space as you need in Southampton. So were trying to get the agent and landlord to provide this space, and they were like, no, we're not.

Athena: 26:59

Going to do it.

Sophie: 27:00

And actually, didn't we share the cost with them in the end?

Athena: 27:03

We paid for the cabinets, was the end agreement, and they paid for the labor. Yeah.

Sophie: 27:07

So we just chucked some extra cabinets in the communal area. So that was my takeaway, yes.

Julia: 27:12

And what about your one, Athena?

Athena: 27:14

Mine changes on a day to day basis. I think my takeaway from it, I think the main one, is actually of one that I had today, which was, I think, always stay really honest and true and transparent with the tenants would be mine, because I spoke to some of the tenants today and I was like, how are you getting on? And they were speaking about some of the things that happened at the beginning. They're all fine and happy now, but I was really just transparent with them. And I was like, okay, what do you need from us? Come talk to us. And he just said to me at the end, he goes, you know, I really appreciate you speaking to me about this. I said, of course. That's what we're here for. If you really seem to care and you really want to do your best and to put them first, it's their home. At the end of the day, they're living there. Okay? It's an investment. But you have to remember that. I think you will always do well in life to just be true and be like, Let me help you. So that's my takeaway point. And the next one will be so much easier and so much better, she says, because it's not the first one.

Julia: 28:07

Amazing. So should we get on to the property disasters? Because I think you've pretty much outlined everything in the deal, how you acquired it, and a lot of people, I'm sure, have taken a lot of good tips that you've given. Do you have any property disasters on this deal or any other deals that you've been doing?

Sophie: 28:27

We've got a house in Southampton at the moment, and bits keep falling off it.

Athena: 28:31

What, literally?

Sophie: 28:33

Yeah. So damp kind of appeared and our handyman went to fix that and just more came off and then the kitchen ceiling started kind of flaking and coming down, and it's like a growing, evolving problem right now as we speak. So, yeah, there you go.

Athena: 28:49

Well, hopefully you get that sort yeah, it's all good, it'll be fine. You're used to it. Property disaster. Okay, I wouldn't call it so much a disaster, but it's something that you could see it as a concerning point, but then you can move forward from it. So I had a text over the weekend to say that my tenant was moving out of my flat, my property, and so everything is going to be stopping after a month in terms of mortgage payments, et cetera. And I've just fitted a completely new boiler of two and a half grand in that property, literally, as he then told me he was moving out the next day. So that was a little bit scary and that was a bit I was on a bank holiday weekend and I was like, okay, could be seen as a property disaster because no money is now going to be coming in for that property cash flow. It's quite a scary and daunting thing. However, I had about five minutes of a meltdown and then from that you go, that's okay, let's readdress this. Do I do option A? Do I do option B? Do I do option C, Z, et cetera? And I think you've just got it's all about mindset, just turn it around and go, okay, this is what's happening, what do I do about it? So, yeah, I think just stay calm, everything will be fine.

Julia: 29:56

And I think my takeaway was with property disasters. We entered a new apartment in Wembley in London, that we've now transformed into a beautiful looking service accommodation. But when I first walked in, I nearly had a heart attack because I didn't see the property at all before taking it on. And we have loads of people who sort of inspected it, but I had to walk in and I saw shattered glass and I saw cracked windows and we had to deal with agents and we had to deal with double Glazing people and it was a whole nother story. But luckily we're going to get those fixed within this month and hopefully there's not going to be any window delays and it will be all smooth sailing, but I'll keep you posted.

Athena: 30:40

There you go. It's all happening in the world of girls and property, isn't it?

Sophie: 30:44

We fix it and we move on.

Julia: 30:45

So I've got a listener's question for you girls. Someone's saying that they want to try and take the leap to go into their first HMO deals, but they can't stand the fear of things of going constantly wrong. What would your best tip be for that? It's a bit daunting if you're constantly thinking about the negatives. Is there anything that maybe they should keep an eye out for on all deals that you take on? Is there anything that you definitely look out for in order to prevent any disasters from happening?

Sophie: 31:15

I would really quickly say to them, number one, do your market research and there's loads of ways you can do that. Message us for more details. Your mindset is holding you back. Clearly it is a confidence thing. So surround yourself with cheerleaders. Like, we support each other so much and we've all grown massively just helping each other along, haven't we? So I think it's really important to have that support network and then be confident in your numbers. So send them to us, send them to someone you know and see what they think.

Athena: 31:44

And I would say also that fear is a very natural feeling to have. So if you've not got the fear, it's almost odd that you haven't got that fear. Always think to yourself, well, what's the worst that could happen? And almost see it like full on and charge towards it. Because if you know that is what could be the worst thing that happens, at least you therefore know it and you can overcome it and definitely get yourself accountability partners. Accountability Partners is what is going to make the difference for you. And try and get somebody who's obviously walked the walk before, if you can, because you can then ask them questions. And if you want, of course you can always join Star Collective.

Julia: 32:19

The first deal sounds like it's been ups, downs, roller coaster. I think that's with every deal, and I think it's so important to portray that to everyone who's listening, that there will be no deal that is perfect. And if you tell me you found a deal that's perfect, you're lying.

Athena: 32:36

To be fair, it was actually a good deal because one thing we haven't also touched on is we thought that this was going to be a HMO for six rooms. However, when we actually got the license, it was licensed for nine people. Nine people, because three of the rooms were couples. So it meant that we could actually charge couples rates for three of the rooms. So our margins went from what we thought were going to make to a little bit more. So it actually ended up being a pretty good first deal.

Julia: 32:59

So that's amazing. If our audience wanted to get in touch with you and get them to analyze the numbers or ask for any tips with their new deals, who would they reach out to?

Sophie: 33:10

So I'm on Instagram as Sophie Rooms.

Athena: 33:13

And I'm on Instagram and Facebook under Athena Dobson. And we are also rooms. Bournemouth. And obviously I'm in Bournemouth. If you want to go for a coffee, reach out.

Julia: 33:22

Amazing. And if you have any questions or anything regarding property, feel free to reach out on Instagram. I'm julia gollabieska. That's G-O-L-E-B-I-E-W-S-K-A. Thanks.

Sophie: 33:34

Thank you. Bye.