Before

6-Bedroom Historic HMO Property

We discovered this property in Erdington, Birmingham (an Article 4 area) through an online auction. The property, a six-bedroom HMO, had failed to sell in three consecutive auctions, which piqued our curiosity. Why wasn’t a six-bedroom HMO in a sought-after Article 4 area attracting interest? Reviewing the auction pack, we uncovered the challenges: extensive paperwork and a significant time commitment would be required to transform this property into a sound investment.

As we’re adept at navigating the legal and administrative complexities of property, we delved into its history. We found a non-paying tenant still occupying a ground-floor room, complicating the situation further. Viewing the property revealed serious issues, including no double glazing, a faulty boiler, a rat infestation, and hoarded rubbish both inside and outside. Additionally, the HMO license had expired three years prior.

Working with the vendor through the estate agents, we negotiated to purchase the property for £197,645, though our initial offer was £200,000. Our offer exceeded the £180,000 auction bids, as we saw the potential for a strong investment. The specific price adjustment was made because we took early management control of the property, handling the clearance and tenant eviction while the transaction was still in progress.

With the squatting tenant removed, the property cleared of waste, and minor redecorations done, we were well-prepared for the mortgage valuation. Upon completing the purchase, we began a focused refurbishment plan, prioritizing obtaining an LDC certificate for Existing Use to validate the HMO’s compliance status and safeguard its future use.