If you’re finding it difficult to find HMO deals, you’re not alone. It’s something we’re all struggling with. This year is the hottest I’ve ever seen in the property market and particularly the property investment and HMO market.
In this blog post, we’re going to talk about how to find HMO deals in a tough market and what we can do as HMO investors to combat this. So, join me and let’s go through how to create a plan to find the right deal for you in a hot market. Find out about this 13-step action plan below or listen to the full episode on The HMO Podcast.
1. Reassess What a Deal Really Means to You
We all have our own goals and targets as investors, so it’s important to evaluate what a deal really means for you personally. Go back to your original plan, and look at what it is that you need to actually extract from your deals and reassess this.
This can help you figure out if your expectations have become unrealistic in the current state of the market. The market is always changing, and sometimes we need to change and manage our expectations with that in mind.
2. Re-Evaluate the Location You’re Investing in
Undertake a thorough area evaluation of the location you’re wanting to invest in. That’ll help you really understand exactly what is happening in the local market. Look at the last six months’ worth of sales data, what’s coming on the market and whether any legislative changes have come into play for that area.
All of this will help you reassess the area that you’re intending to invest in. And then you can compare that to what it is you’re trying to get out of your HMO deals. Is this location going to allow you to do this? If it won’t, then it’s time to adjust your strategy and look at a different area or different types of property.
3. Strengthen Your Buying Position
It’s also important to work on strengthening your buying position. Naturally, the more cash you have on hand, the better the buying position you’re going to be in.. If you’re buying fully with cash, this can give you a huge advantage over other buyers.
You can also further strengthen your buying position by raising private finance. You may need that extra cash on hand to help get yourself in a position to buy a property in the first place.
4. Acknowledge This Is a Huge Priority
Finding HMO deals isn’t something that you can just do on the side. You need to be searching for deals every day, especially in a hot market. Otherwise, there’s a very good chance that you will miss out on opportunities.
Because of this, you need to recognise that this is one of the highest priorities in your HMO business. Put time aside in your diary every single day to work on this, and make sure you’re prioritising these tasks.
5. Start Formulating a Battle Plan
Now you need to start formulating a battle plan for finding and securing HMO deals. Write this plan down on paper to help keep yourself accountable. Then, you’ll need to set aside time to actually tackle this process and execute the plan.
6. Make a List of Agents
In a spreadsheet, make a list of every agent that you could potentially secure a deal from. Include a phone number and website link for each. And then begin a routine of contacting them every week.
For starters, let the agents know that you’re in a position to buy and explain the specifics on what you’re looking for. Then, keep weekly calls up to remind them of this. This can put you at the front of their mind when a deal falls on their desk.
7. Set Alerts on Portals
At this point, you should know exactly what location you’re interested in. Setup alerts on every property portal that lists the kinds of deals you’re looking for. Get these alerts sent directly to your inbox as soon as potential deals come to the market.
In a buoyant and hot market, you can’t afford to wait two or three days to call an agent about a potential deal. You need to be giving the agent a call and arranging a viewing immediately after receiving that initial notification.
8. Ramp up Your Networking
Start networking more in online and in-person groups. Talk to people about what it is that you’re looking for. You never know when someone might have (or know someone with) a property for sale that fits your requirements.
Find solutions to increase your network, and add them to the battle plan. Make a plan of where and how regularly you’re going to network, and stick to it.
9. Consider Employing a Sourcing Company
Think about recruiting a sourcing agency. They can help you find the sorts of HMO deals you’re looking for. This could really capitalise the process of actually securing a deal, particularly if you’re not investing locally.
Remember a few thousand pounds to source a good deal will be worthwhile. So if you aren’t already, consider working with someone who can help you find and secure the right sorts of deals.
10. Set KPIs
KPIs are the mini targets you need to set to help you achieve your overarching goal of finding and securing HMO deals. Set some KPIs and write these down to hold yourself to account. You could set goals for making a certain number of calls to agents every week or doing a certain number of viewings.
It’s not just about holding yourself accountable to the idea of finding more deals. Hold yourself accountable to the small steps you need to do at every single stage that will actually help you find those deals.
11. Continue Putting in Offers
An asking price doesn’t mean that that’s the value of the property. It also doesn’t mean that’s ultimately what someone is going to pay for it, so don’t be embarrassed about putting a lower offer in – even if you don’t think it’s going to get accepted.
And if someone else does put in a higher offer than you that ends up getting accepted, there’s still a chance that the deal could fall through later on, particularly in a tough market like this. If you already put an offer in, you’ll likely be at the top of the agent’s list, and they may give you a call to let you know the property is back on the market.
12. Be Consistent
This isn’t all going to come together quickly. Good deals don’t just fall into your lap, and only doing one or two of these things every now and then isn’t going to cut it.
Being consistent will significantly increase the chances of finding deals that actually stack up. If you turn away just for a moment in a hot market, there’s a very good chance that you will miss out on a good deal, so be consistent in everything that you’re doing.
13. Review and Refine Your Action Plan
Lastly, continually review and refine what you’re doing. If you want to find and secure the best deals, you need to be strategic about this entire process. Start reviewing and refining everything that you do to see how your action plan is performing and make changes accordingly.
It’s difficult in a hot market to secure HMO deals that are really attractive. Despite this, there are still good deals out there. You just need to find them. And it can be disheartening at times, but stick with this plan and be patient. I guarantee that if you put all of these steps into action, you’ll start seeing the opportunities that are out there.
If you’d like to get additional support and insights from experienced HMO investors on finding and securing deals, come and join us over on The HMO Community Facebook Group. And for more useful step-by-step advice and resources on how to start, scale and systemise your HMO property investment business, become a member of The HMO Roadmap today!
About the Author:
Andy Graham is the founder and the lead trainer at The HMO Roadmap! He is also the co-founder of The HMO Mastermind and Smart Property, a specialist HMO property investment and management company. He writes as a regular columnist in different magazines about a variety of HMO topics and is the host of The HMO Podcast! Follow Andy on Instagram!