A start-up HMO firm’s unconventional strategy is paying dividends for both itself and investors.
Rockstar Property Partners focuses on converting properties in the Home Counties where it doesn’t rent out HMOs by the room, but to companies and NHS Trusts which pay the rental equivalent, a strategy that also avoids potential issues with tenants not getting on. “There’s no better tenant than the NHS,” asserts founder Kane Andrews, who adds: “Plus, it feels good to be helping the health service.”
Fast-growing portfolio
Andrews started out in performing arts, becoming a franchisee for the Stagecoach school, and bought his first rental property in Nottingham in 2011 aged 22. Going into property full-time, by 2015 his investment portfolio under Rockstar Property Management had grown to 11 properties. After selling the firm to a London-based competitor, Andrews set up Rockstar Property Partners, specifically for hands-off investors which, nine months after its launch last year, had bought and developed £6m worth of HMOs.
It buys existing properties and converts them, getting a significant uplift; 95% of its properties are six-beds, each with en-suite. “You can buy low and refurbish to a high standard – it’s all about adding value,” he tells LandlordZONE. The firm has continued to focus on the HMO sector in the Home Counties, but despite the area’s higher prices, it ensures its offer is available to investors with a more limited budget. “For people who have £60,000-£80,000 to invest, we have paired them up with another investor,” he says. “Investors put in equity which goes towards the deposit to buy the house, stamp duty and refurbishment.”
Joint ventures
The company and its investors go 50:50 on every joint venture, utilising a £9.2m bridging facility with Shawbrook Bank. Increasing the portfolio’s value and refinancing has produced £550,000 for both the firm and investors in the last 12 months, says Andrews who has also turned his attention to helping others follow in his footsteps by offering two coaching packages: a one-day intensive session and 12-month fully inclusive course. He’s now looking at using his previous experience to franchise the business. “There are possibilities in property, you just need to know how,” he adds.
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