10:40 AM, 9th March 2011, About 11 years ago
Robin Pilley invests into HMO’s (Houses in Multiple Occupation) in the Haverhill area and regularly achieves up to 16% yields, he is also a Director of CXG Property Services, which is a Letting Agents and Property Sourcing Company. This is the second article in a series of four.
In my previous article I explained how CXG Property Services was born but our only clients were my brother and I. Our mortgage broker then persuaded one of his biggest clients to come and hear a presentation about what we were doing in Haverhill.
I made a presentation to Mr & Mrs X, who were very impressed with the returns we were achieving and the fact that I would personally manage the properties (very few Letting Agencies managed HMOs and that still tends to be the case today).
So despite the fact we had no office, no staff, no brochures, no website and little experience, they saw something in my brother and I that gave them the confidence to contract CXG to source them 10 investment properties. We negotiated a conditional fee agreement for sourcing the properties which included a furniture package and a letting fee. CXG would also manage each property for an ongoing charge of 12% of the rental income. So amazingly we had yet another income coming into the business from very early on. We were up and running and it taught us the value of having a genuine passion for what you do but making sure you deliver on your commitments.
We managed to tenant every property that Mr and Mrs X purchased within 2 weeks of the completion date and soon our tenant base was growing to the point where we had to have a waiting list.
CXG continued its close working relationship with their mortgage broker, which meant that as soon as I found a suitable investment property, we had already sourced an investor, thus we quickly built up our business to the point where we were managing 50 properties within our first 2 years.
As we are a Lettings company formed by investors for investors we have always obtained high yielding properties and have been very active in ensuring that we have very few void periods and very low arrears.
At this point I was not aware of the property networking circuit or the Celebrity Landlords (the self styled “experts”, “mentors”, “gurus”) but my colleague Elaine heard about them and we started to attend such events.
We then started to hear about no money down deals, lease options, Buy and Rent backs and started to wonder if we had got it all wrong and whether we should adjust our model of high cash flow and well managed properties? Was this an old fashioned model as it does take years to provide the financial freedom that we are all looking for? So we had a decision to make, do we adjust our model or not?
More to follow next week………………
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