Funding Your Deals: Navigating Property Finance with Adele Turton

Welcome back to another episode of Girls in Property! In this installment, Athena sits down with brand partner Adele Turton from Blanc Property Finance. We often receive questions about funding deals and the complexities of financing in property. In today’s episode, Athena and Adele dive into key topics such as common mistakes made by new investors, the importance of understanding loan-to-value ratios, and the ins and outs of bridging finance. Adele highlights the significance of proper education and finding the right broker to navigate the challenges of property investment. They also discuss the current state of HMO rates and the shift from employment to property investing, encouraging listeners to take informed steps in their property journeys.

Tune in for an engaging and informative conversation that you won’t want to miss, helping you build confidence in funding your deals!

Disclaimer: We experienced technical difficulties and unfortunately lost the last 10 minutes of this podcast, but we’ll be bringing Adele back on soon.

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Transcript

0:01

Good morning everyone and welcome to today's episode of the Girls in Property podcast. Today I have somebody very special I would like to reintroduce you to. She's already been on the podcast before. She is absolutely all things knowing when it comes to finance. She is the brand partner of Girls in Property and what we thought would be an amazing episode today to really get you thinking about financing your deals. So without further ado, I'd love to reintroduce you to Adele Turton. Hey Adele. Hi, hi everyone. Hi, pink. Yes. For those who are on YouTube and can see Adele is literally rocking the pink today and a really amazing new hairstyle as well. I love it. You look great. So on today's podcast, what we thought would be really good is what we've been doing for the girls in property community is we have been doing Q and A finance sessions and we've been learning lots about what the struggles have been for the women in the group. and what they're really needing to find out more about when it comes to financing and funding their deals. And what I thought would be great therefore is to share this knowledge with everybody who is either looking to finance their next deal, looking to get into property, and the common question and answers that typically get asked when looking and speaking to a broker. So how today's episode is gonna work is that we're gonna do it its usual fashion. But I've got three questions from the audience to ask Adele. And then I've asked Adele to answer common questions that she might get asked when people come asking to fund their deals. So that's what we're going to do for today. But Adele, before we go into today's episode, for those who have just tuned in and let's say that this is their first experience of girls and property and their first episode, could you please reintroduce yourself, tell everyone a bit about you and how you help people with their dreams and fund their deals? Sure. So my name is Adele. I am the MD and founder of Blonk Property Finance. We have, I've been in this industry for 20 years. Prior to that, I was in the legal sector under commercial litigation. So contracts and those sorts of things. I found that a lot of the stuff that I do that really comes into play, especially in legals. We are a boutique brokerage. We specialize in property investor funding. So whether it's ground up, whether it's refurb, portfolio, simple buy to let, HMO. A lot of the stuff that we do with the HMO will start all the way from refurb and then map out all the way through to the exit so that we can show people a full financial landscape of what it's going to cost at which point and what that will hopefully look like on the back end. And we'll give a couple of different options to that. That's a really strong service for us. We do a lot of business with that. yeah, so that's, that's me. I love it. And I will just repeat again, I love the fact that Blanc Property Finance is a boutique mortgage broker firm because then they get, you know, it's not like there's like loads and loads of all of you. It's like, no, we really care about the people that we work with. And that's why I chose you. And actually it was a unison decision between both of us for us to work together, for you to be the brand partner, because our values really align in regards to really caring about the actual customer. And I think that's so important to say as well. it is. Brokers do have a bad reputation. I can't speak for all brokers, they do have a bad reputation. I've been part of many groups and we don't like to brokers. We don't want to work with brokers. like, you're maybe using the wrong broker. We sort of touched on this before about you can possibly know what I know. So you would use my services to make sure that you get the best advice. I think within the property industry, there's so much money involved in property, so much money, big numbers. It does attract the wrong kind of people with the wrong ethos, let's say. You know, I've always said putting somebody into a bridge is not difficult. Getting them out of it with success and actually mapped it all out is where the skill comes in. So yeah. I agree. And what I would say is this for anyone listening who is looking to get into property and deciding about the best broker to use and deciding, you know, do I pay, do I not pay? This would be my advice to you from a mindset perspective, which is when I first started my journey, I remember trying to find a broker who wouldn't charge me a broker fee. And I'll put my hands up and say, that was me three years ago, right? You know, that was me. However, what I would say is I learnt my lesson the hard way. So the broker that I used who I didn't pay a fee cost me just shy of £4,000 because they didn't do what they said they were going to do and they did it the wrong way. And actually what I should have done was pay the broker fee, which actually would have been a lot less than £4,000. I'd have got the correct information and I would have built a reputable relationship with that same broker who I would then use all the time. So what I would say, if you're sitting there thinking whether you should be paying for a broker or not, what I would say, and it's quite direct what I'm going to say is, If you think you shouldn't pay a broker, you're actually thinking with a very small, very small minded, and it's actually a small mindset that you have. You know, are you looking to just take on one property? Are you looking to take on two? Are you actually looking to become a property investor? If you're looking to become a property investor, you should be thinking bigger. You should be thinking about that relationship and getting the right power team on track. So please don't ever sit there questioning whether you should be paying for a broker. The simple answer is you pay for the value and the that the broker will give you any information. So I will just say that. and then that goes back to why we are a boutique style size, whatever. It's because it is about consultation and it's about service. You know, I often hear, will you get paid off the lender? Yes, I do for the work I do on behalf of the lender. If you want me to, the industry will generally brokers who don't charge a fee usually have to do more work, more work. So you're getting less time. I often spend up to a gosh. six hours probably as an average with a client before we even start taking them through everything making sure that they understand the numbers do you know the difference between rolled up and deducted? Do you understand what rolled up will do to your end balance? Most people don't they just see that they're getting more on day one. The common mistake I see is that people just want the deal they just want the deal they just want the final spot no hang on a minute I just want to make sure that you understand what that's going to look like on the back end. Sometimes people don't listen anyway because when you're trying to complete you just want a complete. lenders that can be difficult or lenders that can be easy to deal with at the front end. They're often not as easy to deal with on the back end. And that's really what you're paying for. You're paying for all those years' experience and that service that you're going to get me as your right arm, that's essentially what war is. Yeah, I absolutely love that. And speaking positively then of you and the success of Bob Blank Property Finance, what would you say at this moment in time that you're celebrating at the moment, Adele? Do you know what I'm celebrating? Autumn. Because I can wear jumpers and socks. I love all the seasons. I do like summer, but I am obviously with the skiing. I do like the winter months and I like the, I've got my pumpkins around the house and I do like autumn. do. Yeah, look, there's one here, And I got a little, I think this is a squash, but it looks cool. It's a squash. It looks like a little white one though. I was gonna say it's like an anemic pumpkin. That is so funny. So, okay. So scary movie time, all of that. I love that. Autumn is great. I love it when the leaves fall. It's really beautiful. I don't like the cold. I'm half Mediterranean. Well, I'm half Mediterranean. I like the sun. What am I celebrating? So I'm celebrating the fact that this month for me is busy, really busy in terms of getting myself out there in a lot of speaking events. earlier this month I spoke at Ella Hardy's Land Profit event, which was amazing. I literally just got back from Manchester yesterday speaking at Paul and Danielle's Manchester Property Social. And I was asked to be on the panel and then I'm speaking at Sophia. Yeah. And then I'm speaking at Sophia Botch Ray's on Wednesday and What's amazing is I feel like with the podcast happening and me being, you know, me, I'm putting myself out there with all of the, the investment that I'm doing at the moment for property. People are beginning to really see me wonderfully as an expert. Well, and the other thing is, is the reality is I worked Monday to Friday, four days, Monday to Friday. And then I drove five hours to Manchester, went on the panel. and then drove five hours back yesterday. So I've just worked a seven day week and now I'm back to working this week as well. is the pleasures of being a small business owner though, isn't it? Actually, I forgot to say actually, we had some development funding in an area that's going into Article 4 beginning of May next year and the lender suddenly woke up and realized and said that had to complete the pipeline within five days. So we completed 11 cases in five days last week, which is phenomenal. 11 development deals, not just normal stuff, because you're liaising between probably about three different law firms. And it's often the vendor's lawyer. who isn't ready or they've not got something. We've got two that have tripped over into today, but that is a phenomenal effort. thought you were going to mention that, like you were speaking about autumn and I'm like, what about the 11 completions? Well, I thought you did. Yeah, but do you know that does happen, doesn't it? You're like, right, that was last week. This is this week, but I'm what's next. Yeah. And I'm just, I'm just really celebrating the fact that I'm, yeah, I feel so fortunate that I get to, to speak and then on a separate celebration, I'll speak about the fact in more detail that I've also in October been invited to speak for school as well. for 16 to 18 year old leavers. So I'm gonna be giving back as well. this week is all, well not this week, excuse me, this month is all about exposure, meeting people, getting out there. So it's great. Right, let's get to it. Let's get to the juicy bit of the podcast, which is let's talk about the Q and A of finance and funding your deals. So why don't I start and go first with the three questions that I've got from audience members who listened to the podcast and have sent you their questions. and then you can then speak about the common questions that you might get asked and we'll take it from there. Okay, question number one, here we go. What would you say would be the most common mistakes you see people make when they come to you to discuss their investment finances? I would say, probably speaking to too many people, I've mentioned this before. I deal with a lot of people that have used a mentor or they've used a coach, which is great. I think that they've got a real place if you're with the right one. And one of the things that they encourage people to do is shop around. But if you don't know what you're looking for, what you're shopping for, you if you want a pink jumper, you're looking for a pink jumper. For me, it must be very difficult when you're looking at you're at the foot of this mountain, you're looking at this mountain block and you're looking at this landscape and thinking, I have got no idea how to get up there. So I do appreciate that people sort of want to speak to a couple of different people. But it's, it's, it's time consuming. You're going to get differences of opinion. You may speak to one brokerage and like, yeah, yeah, we'll do that. And we'll put you with a lender that's not going to fund the works, but you're not aware that a lender. you know, somebody else will fund the works. There's difference in, it's really hard when you're at the start of your journey. I spoke with a lady, was it last week or the week before? Maybe the week before. And a lovely lady, real opportunity in front of her, but she doesn't know where she wants to invest, in what, how, when. There were so many questions. So yeah, I mean, not having any direction, I'd say. It really set out what it is you want to do, probably why you want to do it as well. and then work backwards and then start to sort of do your due diligence there. Okay, can I ask you a question off of the back of what you just said? Because I'm really interested in this. So when you've got some people who are just starting out in property, for example, would you recommend that they try and find a deal and then come to you to discuss it? Or would you rather them discuss it with you and then find a deal? You know what? It does depend on the person because I think everybody processes information differently. Sometimes people need to know the ingredients before they, or sometimes people find the cake and then work out ingredients. it really does depend. So if you came to me and said, look, I want to do HMOs in Liverpool. Okay, what area is he looking at? Okay. You aware of article fours in part of Liverpool? What, you know, you're to be close to the hospital, the universities. I'll sort of help them with the things that they need to, the ingredients that they're going to need to make a successful HMO. And then I can then look at the finance, but as part of that process, I'll be looking at rents, we'll be looking at comparables, we'll be looking at yields, we'll be looking at average bill cost. This area is going to work or it's not going to work. You know, there's no one way that fixes all. think if you have a goal in mind, of this is what I want to do and this is what I want to create, then that really does help. Understanding the finance is obviously my job, my job is to then make sure that you fully understand what it is that you're doing and why. It's very difficult to try and know what you don't know when you're also then trying to learn all this other stuff as well. It is difficult. What you do is you come to me and say, this is what I want to do, and I'll say, this is how we're going to do it. This is how I'd recommend that you do it. And that's really where the consultation comes in. makes perfect sense. That makes absolute perfect sense. So what you're basically saying is, is you're saying, look, I can help people who are starting out in, in property, but you've got to know where you want to go. You've got to have a plan as opposed to coming to me to try and give you the answer to your plan. You're like, I'll help you finance it and fund it and show you how, but you've got to know what it is you want to do. Yeah. due diligence, you the comparables that you've got. We can turn all that inside out, but there is so many different things that you can do and so many different ways to do it. It's an open-ended question. We'll be here for days. Do you know what I just thought could be a really good easy example of this for people to understand? It's like when you go to a hairdresser for the first time. You've never been with that hairdresser before. The hairdresser doesn't know you, doesn't know your personality. You sit down, you've got this hair and you go, they go, right, what we doing today? And you go, I don't know. Do what you want. And they're like, but we could do anything with your hair. exactly. And so it's so funny is that because your perception is everything. You know, I'll say to my hairdresser that, you know, I want it more of a wedge at the back and she'll do it as in a proper, no, I didn't mean that, I meant graduated. it's the words that you use, perception and terminology is everything, isn't it? So really, you really need to get very clear to coin a phrase from a coach. You need to get very clear on your goals. and what it is that you want to do. know, people normally invest in areas closer to them. Some of them may feel that, so a lady that was speaking to last year, last week, she's in the Southeast property prices are so expensive. The model is not going to work there. So she now needs to look further afield. You then need plumbers, electricians. You need, you need a team there. You need a reliable letting agent. There's so many things that could change your mind in that journey. So you've sort of got a lot, do a lot of due diligence up front. You know, people say they want to be in property. How, in what capacity? Do you want single by two legs? Because they're sleepy and there shouldn't be much trouble. Or do you want full on HMOs? Do you want to get into commercials? Do you want to do shared office space? There's so many things you can do. Yeah, I love that. That's beautifully worded. So I love that. And hopefully that answers the listeners question as well, which would be great. And then the second question we have here is once I have funds in my limited company, what loan to value do do regular business mortgage lenders offer and what common restrictions and conditions might there be to borrowing as a business? Okay, the use of the word business is a little bit, it's throwing me off there. Do they mean a trading business mortgage? So you are an MOT garage, for example, and I'm gonna say that because we've got a couple going through at the minute. So you are a trading business and the lending will be based on the strengths of your accounts. I think I've touched on this before with somebody in the forum, know, in the girls in property forum, or are you just meaning limited company by using the word business? Because limited company would be a single purpose vehicle for what the lenders call them. I think they're talking about a single purpose vehicle on this particular occasion. buying buy-to-lets in a limited company. The average loan to value is 75%. 75 % of the purchase price. There's a few little bits, again, because they wouldn't know, there's a few little bits missing so that I can give you the answer, which again is why we do consultation. So also, what do you really mean by that? Where are you going with that question? 75 % is pretty standard, to be honest. There are some lenders that will do... up to 80, I know they do 85 % anymore, but you're not gonna, if you're telling me you need to be using a commercial valuation at 70, a commercial valuation on a six or a seven bed HMO, the best results will be with a lender that won't go higher than 75%. And again, that's only through experience that I would know that there are so many lenders out there that market, we do this product, you as a client won't know that that won't work. for so many of the different reasons behind the scenes. And that's really why you need a broker to sort of see through it for you. And with that with that other bit of the question, then it says here, you know, what common restrictions or conditions might there be to borrowing as let's say, a single vehicle, you know, like in limited company? Yeah. I don't know what the common, what she means by that, to be honest. You're to have to sign a PG. You can, believe it or not, start the company today and borrow in it tomorrow. A lot of people don't know that. A lot of people think you've got to have three years accounts, but that would be a trading business. So you could start the company today and I could arrange funding in it tomorrow. You just need to open a bank account, which can be slow by the way. Other restrictions. there are some lenders that allow you to live in the house. So you buy it in your limited company and then rent it back to yourself. But it's quite tricky. It's not something we do lots of, be honest. It's mainly landlords that are investing in their, their portfolio. PGs, ILA obviously, there's probably going to be a debenture. So a debenture is. It's a charge over the shares in the company. So it's called a fixed and floating charge. If Anastasia's listening, she'll be picking up now. So if you imagine you've got your company and it sort of hangs above, and as soon as it, so it'll have to crystallize to the shares to attach to them, but it doesn't, it hangs above. And that's when you'll get into letters of non-crystallization. There's a lot of legal terms coming out. So debenture first charge, personal guarantees. The debenture means that, you need permission from that lender when you're bringing in another lender to lend it. You're not restricted to that lender with a debenture, but you've just got to get permission to sort of bring somebody else into it as well. Perfect. And I just want to touch more on the personal guarantee side of things. So just to explain to the listeners. when, for example, I remember when I took on my first property, this actually happened to me as it would most people, where you set up your business. And of course, how we see ourselves from our perspective is we are our business. You know, I'm down as, you know, Athena delimited, but I own 100 % of that business. I am Athena delimited. but a lender won't see me as Athena Delimited, they see it as a separate entity. So they therefore effectively were saying to me, and this was the first time I ever heard it, they were like, you need to go and get independent legal advice to say, do you understand the risks that you are taking on by being a personal guarantor for Athena Delimited? And I was like, well, I am Athena Delimited, but they don't see it in that way. And that's important to say. say, well, you know, they've borrowed money from the company. I'm like, that's not your money. Yes, it is. It's my company. I know it's the company's funds. You can, you can take money out of it, but you have to do it in a legal way. And that's the same thing. I think we spoke about this in the group as well regarding PGs. So you are personally guaranteeing it. So before, before the crash, before the recession, it was very common to get limited company funding without personal guarantee, believe it or not. And then what happened in the crash was. people just close the company and the lenders could not reclaim the debt. So the personal guarantee has you on the hook for that debt because limited company means limited liability. So it's ring fenced inside the limited company. So the PG then attaches it to you. You then need to take out ILA. So I have independent legal advice to say that you have been made aware, like you said, of the implications of this guarantee and what it means if it goes wrong. we can get into really, they've really started to bring in some different things now to do with data subordination. So when you've borrowed money from an investor for you to do your project, the lender will want a data subordination from the investor to say, you are aware we've got first charge. I mean, that would be obvious, you would assume, and you will only be repaid once we've been repaid. That started to come about because I believe there was probably a lender that lost. Because actually the deposit from the investor will go in first and a very clever litigation lawyer will argue that they should be repaid first because their money went in first. all these stuff sadly come out of things when they've gone wrong. It comes out of litigation. So the lenders now start to bring in more. These subs are fine. But if you've got a client that's maybe borrowed from six or seven different people, it's a lot of legal work and costly as well because they then need to take out independent legal advice against it as well. There you go, absolutely. And then the last question from the listeners is, what is it about your work that you love? I love that question. yeah, I get this quite a lot. like, I like connecting with people. like solving problems. I like, like when you said, you, you come to me with, this is what I want to do. And I've got this property and then I can sort of create something in the middle of it. I have dealt with, sadly, I've dealt with a few ladies recently, ladies and gentlemen, where they have, yeah, they've been left in quite a sticky situation as a result of third parties, lenders, mentors, PMs. a real mess really. I actually really like that sort of stuff which is a little bit weird. I don't like to see people in distress but I love getting called to arms and getting stuck in and getting something solved and like yay. It's stressful for them but I like helping. I think it's a big thing for me. I always said that I would volunteer to go and work with the Citizens Advice Bureau when I'm in a position where my kids are grown and everything, just do a day a month and just go and offer what I know to help other people really. So I do like help. I love that. And that's why we're so aligned with also the girls in property, because it is all about helping, helping to give the correct information. I'm actually going to ask you a question. I wasn't going to do this, but I'm really interested in the answer as well. And I think it would help quite a lot of the listeners is I've never done bridging before in my life. And now I'm thinking about potentially doing bridging going forward. And what I'm learning about is there seems to be lots of costs when it comes to bridging. So if somebody was gonna venture into the world of bridging for the very first time, what would you say is the top three things to understand and know if you are going to work with you going forward to get a bridge? Okay, bridging is not cheap, but it does allow you with the right advice and the right lender to accelerate your progress. The one thing that I always look at for people, they'll have, let's just say you've got 200,000 in cash, or if you use bridging, you're only gonna use 100, so therefore you can do two deals versus doing one deal. So what you need to look at is you need to look at the return on the capital you're investing. I know people like ROI and all that kind of stuff. Look at, so you've been able to do two deals as opposed to doing one and actually look at the cost of the funding. The cost of the funding is just a cost of the business unfortunately. It's just, you you're able to double up what you're doing. Don't take on too many projects at the same time. That is definitely good advice. Do not, don't fall foul. So people get very, they sort of go from one end of the spectrum, being totally scared to it like, yeah. do loads and they bring four at once I'm going my gosh it's just going to be hard work. So definitely sort of look at the return on the capital that you're actually investing and is it worth you paying them 1.25 percent a month. Another one is a lot of people don't understand the differences between rolled up, deducted and serviced interest. Now serviced interest I'd probably never advise anybody to do on a bridge which is Servicing means you pay for the interest every month, which could be thousands. Deducted means you get a gross loan. They deduct the interest for the term that you've agreed and you get a net advance. That's probably the best way to do it. The other one is rolled up. Now the issue I have with rolled up particularly on a development is there are some lenders that they will, when they issue the loan documents to you, they've only got the net loan on there. You don't know how much you're going to owe them on the back end. And the issue with rolling up is, as it rolls up every month, they don't just take off 10,000 pounds worth of interest and stick it on the balance. And that's what the, you know, the interest will be charged. It's charged monthly. So it's rolling up every month, which is compounding the interest. Those lenders often have more expensive drawdown fees. So I don't know, a QS will be inspection on a HMO maybe 500 pounds. But in addition to that, because they have the way that they have structured the loan, there's another thousand pounds in the background that you're not aware of. They're also then debiting and crediting the QS payment, which is then a crew in interest. I've looked at some lenders where they roll up versus deduct and the difference on the balance on the back end was frightening. It was at least 10 % extra that the client was not aware of. So if they've lent at 70%, you're going to owe them 80. and you can only mortgage at 75. Now, obviously you would have added more value from then, but what happens is all that added value that you're building is being eroded away. And when you actually look at the true cost of funds, because what happens is the lenders who do that are offering a lower rate. The only way that they can offer a lower rate is to make the money elsewhere. But it's an unknown. You don't know, I'd much rather you're going to charge 1.25, whatever it is. And these are very clearly what you will owe at the end because the gross loan is only 300 and it cannot exceed that versus you're getting 280 now, but you might owe us 330 when we're finished. What? And trust me, when you're trying to get off a bridge, you will do anything to get off that bridge. You don't want to stay on it. but this is what I'm talking about. It's really understanding the facts and the figures and the spreadsheet at the beginning so that you can look at the return on capital employed and make a justified decision with that. so Adele, I need more on day one now. This deal needs to work this way. I'm happy with the unknown on the back end. I'm like, as long as I've made you aware, and that's what you want to do, because that 1 % a month actually is costing you more than the 1.25 % a month with an exit fee. It's just you can't see it at the minute. The additional charges, they often charge a legal fee every time you draw down. I don't see the relevant, why you need to do that. Other lenders don't need to do it. So there's... They often all charge the same, the way they structure it looks very different, but the cheaper lender will end up costing you more in the long run. Yeah, yeah, I totally agree. And you know what, I feel that there's quite a taboo at the moment around bridging. Like I think when some people hear bridging and they've never done it before, the first thing they think is, I've heard bridging's really expensive. I've heard bad things about bridging. I had a conversation with somebody and I used to think this about bridging years ago. So if you borrow it for 12 months and you repay after six, you get six months interest back. They don't keep it. A lot of people go, they don't keep it. They'll obviously only charge you for how long you've been on the bridge. Interest on tranches is often half the amount of you expect it to be because you're drawing down in areas on a pro-router basis in tranches. for less months that are left. You know, as you're going across a bill schedule, you know, you've got maybe 25,000 in month two, 30,000 in month three. It's pro rata is the amount of interest. And then when you repay at month six, it's then all sort of credited, recalculated back to actually the true cost of funds was probably about 7 % per annum or something. I don't know, I'm just picking it out of the air. It's not 1.25, it's not one and a half when you really look at it. But until you get to the back end, I can roughly estimate what it's going to be. And this is why I don't like these lenders that don't show you the gross loan. It does unnerve me a little bit, and especially because a client's not going to know any better. They're just going to think that they're not aware of, well, there's interest on the end of that. They think that's what the loan is. Yeah. And this is why you pay to have a really good broker. The moral of the story. Perfect. Thank you for answering that. And of course we will be having conversations ourselves anyway. But yeah, it's a really interesting one where you then start to look into bridging and you start to look forward. But like I said, I think you've got the right power team and the right broker and the numbers work, then go for it. Don't let fear hold you back. I'm doing something I've never done before. I'm going into the unknown, but as long as I've got... you know, the right person such as yourself by my side, you know. Honestly, Athena, there has been deals that people have brought to me. I've said I'm not doing the deal for you because it has been so bad that they're going to get caught. And people find that really, I know a lot of people would assume that a broker would just put them into it. Me getting you out of the bridge, it's two bites at the same cherry. I know you as a client, my business is built on referral of word of mouth. We do very little advertising because this industry is so vast. I could spend six figures a year on advertising and get nothing. It's pointless. So it's relationships. So letting somebody down by not pointing something out that I can very clearly see is I'm failing them. I'm failing in my job and my responsibilities, my duty of care. Again, if you say, don't care, I wanna do it because of X, Y and Z, sometimes I'll still say, I can't do it for you. Because I can see what's coming. And that's really what a broker should do. And you know, I love that. And I also just want to say, like, just probably go on to your questions is I tell you what really fills my heart Adele, because obviously I have a duty of, I feel I have a duty of care to the girls and property community. And when they send me messages such as I've just had a conversation with Adele, it's all crystal clear now, you know, Adele's a queen, Adele's amazing, Adele's just helped me get out of this massive mess. Like that brings me joy to know that what I'm doing. and connecting people with the right people like I'm doing good as well and that's so important to me. When I'm looking for brand partners to work with it, it has to align. I won't just work with anyone. And so, yeah, I just want to make that point that it's important to also know that we're doing good in this industry when there is so much noise around, let's be the change we want to see. I always say that and it's important. Right, your questions. So what would you say was your typical question that you get asked that you think would help the listeners listening today? gosh, have HMO rates come down yet? No. The answer is no. I see a lot of people with the right particular lending. So you can probably get a HMO rate for about 5%, but you're not going to get the result. It's like a recipe, your ingredients that you need to get to that end result. And that is to be able to use a commercial valuation. Certain brokers need, well not all certain brokers. But brokers who specialize in this need to have a certain status with certain lenders to be able to that result. 6.84 is probably what you're saying, which is Shorebrook. There are lenders with lower rates and higher fees, but then you're going to be using the wrong surveyor, for example. When I say the wrong surveyor, I mean a surveyor. So a lot of lenders will come out and say, we do commercial valuations. They actually don't. You may have paid for one, but you're not going to get that assessment. There are so many things inside. Commercial valuation is like 50 pages long. It's so in depth. If that surveyor does not like this model. So in the Northeast, take this seems to happen a lot in the Northeast. Northeast is a very big area. And there's probably four firms that can do a commercial valuation in the whole of the Northeast. Possibly maybe a little bit more. And they do not like the commercial HMO model. They don't want it. They do not like it. So you will struggle. You will get a commercial valuation, but you won't get a commercial valuation like you would do in the Midlands, for example, because they do not like the model up there. They don't believe that it works. They think that the yield is much higher than what we do. So higher yield means lower value. So there's all these other little nuances inside it rather than just coming out and say, we can do a HMO at 5 % but the fee's 15%, whatever crazy fee they've got on it, it's not 15. But you're not going to get the result. I've seen people People still do this. They use term lending instead of using bridging. And all I can say to is you just need to be so careful because if a lender realizes that you are using long-term funds for short-term, they will put a mark on your Hunter file. And a Hunter file is like, I think CIRA is a different one. So you've got CIRA and you've got Hunter and they're like Equifax and Experian, but they're almost like for financial crime. And it sits in the background. And there'll just be a flag. And I have seen one from a client who, he worked for his mom and then they had paid. There was something that just wasn't right and the lender suspected something. So they put a flag and all it will say on the file is refer. So there'll be a refer. The lender that you're trying to go to will ring that other lender. The lender will tell them what happened and you won't get lending. And that's what tends to happen. lot of the bigger lenders. your big, your big lenders that do a lot of buy to let, if you're using buy to let's on that basis. they're not gonna like it. know, at the end of the day, the rate is cheaper because you're supposed to have it for longer. A lot of people do it, a lot of people do it with residential mortgages as well, and it's naughty. It's really naughty. If you wanna be in this industry seriously for any length of time, you've gotta play by the rules. Yeah. And what would you say was, so in terms of the question there, the question was about the rates, the HMO rates. yeah, went off, we went off piste a bit then didn't we? No idea. Rates 6.84 is going to be, if you're looking for a HMO on a commercial valuation, there are some a little bit lower, a little bit more fee, but that's roughly where you're going to be. When base rate comes down, if it ever comes back down, it will never go back to where it was. I would expect those rates to be sitting around six. between six and six and a half percent. I think that's where it will end up. I see a lot of people say, my God, these rates are so expensive. I know when they were like 4 % two years ago, you're never gonna see that again. I'd be very surprised if you see that sort of complex lending at such a low rate. Yeah, but if you think about it, the burst rate was at, what was it, quarter of a percent, half a percent? Mmm, tiny. Yep. they were making was still three and a half percent. The base rates at five now and the lending at 6.84, they're only making 1.84 because the base rate determines what they have to pay their savers, which is what then drives the mortgage rates. So I'd be very, very surprised. You might see an exclusive that comes out because they're short on business, but it will be for a very limited period. Again, a lot of people don't understand that. Well, they do understand, they don't take it into account with lenders. Lenders look at business volumes. So the lenders at the leader table on the sourcing, so your Paragons, your Lambays, all those sorts of lenders, West Worm, CHL, they've started to come in as well. They're volume-based lenders. So when business levels drop, they drop the rates. And then when they get too busy, they put them up again. The lender that does this tends not to operate like that because they've got a steady, consistent flow of business. Don't get me wrong, sometimes they do. And then when they get too busy, they put the rates up to, what was it last year? Was it eight and a half? It was a crazy rate. And sadly, some people had to take it because they were on a bridge. So they had to come off. Yeah. to come off, yeah. And what would you say would be another question then that you get sort of asked most frequently that would help listeners? Just trying to think of ones that we've had recently. I'm trying to think of cases we've had in the last couple of weeks where it was a common... lack of experience. I've got an email from somebody recently saying, you know, can I do this? Can I do a six bed HMO when I've got no experience? Yes, you can. But do you feel confident enough to do it? Most brokers can make lending fit most things, but it's always about you. You're the one that's going to be signing the PG. You're the one that's going to be left with this mortgage. Are you comfortable enough to do that? I think people Like I said, they sort of come from one end of the spectrum where they don't start and they don't know where to start or what they're doing to bring in four deals at once when it's their first ever deal and they brought four. Wow, this is going to be very, very difficult. Let me ask you a question that I get asked most frequently to see what your answer would be to this. So one of questions I get asked most frequently is people are looking to leave their full-time jobs sometimes. Some do, some don't, but some people like to leave their full-time job. And so they say to me, right, Athena, if I leave my full-time job, what will happen to me in regards to trying to get my first investment property for a buy-to-let? Because they're going to want to see the pay slips. So what would you say? So to answer the question before I go off piece again, cause someone else is just triggering my brain. A lot of the lenders, as long as you are living within your means, you've not got a hundred thousand on credit cards and you've not got a Porsche on the drive and you've, you're declaring, I don't know, five K a year. Most lenders that those sorts of lenders take a common, it's common sense approach. If you come to me and say, you need the cheapest buy to rate in the, in the market, that's a different. So. We had a case last week, was an Oldham or Bytelec, straightforward. They earned over 30,000 between them, but Oldham or one 30K each. So that did not fit them. And I've always said, Bytelec is about criteria, it's not about rates. So that's a question that people are, what's the cheapest rate? It's about what is the most, yeah, it's about what can I get with my circumstances? Where does that fit in the market? And I think a lot of... compliance and regulations miss this with investment. It's not, it's rarely to do with right. Obviously you get, you want the most competitive for your circumstances, not the most competitive in the market. Cause it often doesn't apply to most people. But going back to the other thought that I had then was to do with people give up work too quickly. So the common mistake that I have seen is that they'll have been on a course, they're all fired up, they're ready to go. They've got, you know, they've got one or two back, HMOs that have gone through. They're on the back end and they're to give up work. And the reality, you cannot, for me, I would say you need a good five years at it. And it's a lot of work. People forget that property is long-term. The word is investment. You have to invest time and money into this. It doesn't happen overnight. And I think that's one of the common mistakes people assume after 12 months of, and they've got two HMOs that they can give up work. But when you then start to look at... the net profit, is something that we work out for people as well on different options. Is that enough to replace your income? And often it isn't. But it's about getting the balance right. You cannot lose that foundation. When people are desperate for money, you make mistakes, you're making decisions from the wrong mindset. You're not doing this right, okay. All the bills are paid personally, it's taken care of. Now I'm going to build this. people jump too quickly. So I think definitely give you more time than you'd expect before you give up the day job. Property is not passive. It drives me up the wall does this passive income. It's bloody hard work. There's a lot of sleepless nights. There's big risks. It's great payoff when you've done it right, but it is not passive. It's far from passive. Yeah, you always got to work with your end goal in mind, you got to work out what it is that you need each month and require to sustain yourself and then work backwards, I completely agree. Yeah. Yeah, contingency. need to cover your income. You've got to cover it maybe two or three times Then you've got to look at the tax on my income. There's so many of the things that go into it real planning Yeah just on this particular one, if it's okay, I'm just gonna give my experience of what happened to me just to explain it, because I think that may help the listeners as well. So for example, when I took on my first buy-to-let property, what happened to me was I, no, that's actually, let me start again. When I took on my second buy-to-let property, I was coming out of my full-time job because I was forced to through COVID, the travel industry, et cetera. So what happened to me was they wanted to see these three months worth of pay slips. And of course I didn't have those to hand because I was coming out of the job. I was like, well, there's nothing to see. And so when you're talking about criteria of a pool, this is how I explain it to people. And on YouTube, you'll be able to see my hands, but if you're listening, I'll try and describe it. So when you have a full-time job, And that's like one of the criteria's of the three months pay slips. You get this many lenders that will lend to you. And they'll ask you the question, can you offer the three months pay slips? And you're like, no. And so, right, you're like, right, but down to this many people. And you you go from like 300 to 30. And then they'll say to you, and this is what they said to me, they're like, do you own your own property? That was the second question. And I said, yes, I own my own property. So I get to keep these 30, those who don't own their own property and they rent their property would probably go down to 10 lenders, let's say. And then what the final question is, is they said to me, do you have at least one year landlord experience? And I said, yes, I do. So I got to keep my pool of 30, let's say. Whereas if you rent your property and you say, no, I rent my property, you only have 10. And then if you go down again and you say, no, I don't even have a year's landlord experience, you might then only have five lenders. Now those five lenders will lend to you to get you going on your journey, but they will charge you a high arrangement fee, a high interest rate, because you are a high risk. And so when I started my journey, I paid those high arrangement fees, I paid those high risks, but it enabled me to start my journey. So I agree with what you're saying in regards to criteria, but it's just explaining it in its most simple terms for listeners. Yeah. Exactly. the other thing just to say is, is what I didn't realise when I first started investing in buy-to-let's myself, and I learnt obviously very quickly, is they don't, they care about affordability of you to a certain extent, but what they actually look at is what does the mortgage cost and what is the rental on the property? Does the rental cover the actual mortgage? And if it does, that's what they actually want to look at. So it's more about the property and less about the person. Yeah, exactly. Totally agree. Yeah, exactly. And Adele, to finish off, like I know that me and you both have like a similar mission, which is to educate people and encourage people to actually gain knowledge and then go ahead and fund their deals. And we see so many times that, you know, giving the education and then, and then it's, you know, it's like they feel that they just can't take that next step. And it's like, I know that our mission now is to give as much education as we possibly can and to say, look, if you're ready to go. let's do it. And so I think that's the message that I want to really leave on this podcast with you, which is gain the education, get the right person as a broker to talk you through the finance. But once the numbers are there, go for it. And I remember the first time I ever did an investment by Tlaat, I remember one person saying to me, you've stared at these numbers a thousand times now, you can see the numbers clearly were... okay. Well, this podcast is raw and real, so, you know. Right, well. Well, Adele, I'm telling you now, this remains on the podcast because I keep these podcasts raw and real. So this is staying on. So I hope the listeners just enjoyed that bit. What was I saying? I've lost my trail of thought now. So this is what I was saying. So what's really important is when I first started out, I remember I used to stare at these deals again and again and again. And somebody once said to me, look, Athena, you've stared at these numbers a hundred times, go for it. The numbers clearly work. And so that's the message I want to leave with everybody. Get educated, get the right information. But once you've got it, go for it. What's holding you back? Ask yourself that question. Like, get the right mind. It does. And of course I will be doing further episodes on that as well to really help everybody. But Adele, I'm sure that lots of people are going to want to get in contact with you from this podcast. What I would ask before you give your details is I would ask this. When people are getting in contact with you or you want them to get in contact with you, what is it that you would like them to come with when they set up the call? What is it you want them to have ready available with you? Yeah. I always think the advice I would give to anyone listening to this is when you're speaking to anybody, not just Adele, anyone, have a clear understanding of what it is you want to get out of the call. So you say, right, after this 30 minute call, this is what I want to have got out of it. If you don't have that, don't make the call. Be really clear because everyone's time, you know, everyone's time is, you know, Yeah. Absolutely. Yeah, you must always do your own due diligence because it's your name against against the deeds and everything. It's your responsibility a hundred percent Adele. I've loved today's podcast. I can't wait to hear it and hear the bit where your mum comes in But know what, that's what I'm here to represent, that's what we're here to represent, raw, authentic honesty. That is what we're doing. And I'm not, and you know what, it's just a bit of fun. I love it. Your name's not down. That's so funny. So Adele, if people wanted to get in contact with you, where is the best place for them to find you? perfect. Amazing. Yeah, I'm also going to add your calendar link to the show notes as well. So anyone who wants to book in a call, just go directly to the show notes of this episode and you'll be able to see Adele's calendar link. And then if you want to get in contact with me for anything regarding property mindset, girls and property, then I am Athena Dobson underscore official and on girls and property, we are of course girls in property. And then what I would say is a couple of things. So the first one is, is of course I've got the Girls and Property community where Adele of course comes in and speaks with the community along with other experts. We're now 73 members. I want to get it to 80. So please do come along and join. There is a membership that you can do so you gain access to the Circle platform, which is great. And it's so active. It's a really active community, which I absolutely adore. And then on top of that, I've got the Christmas gala on Saturday, the 7th of December for Girls and Property. I'm aiming for a hundred women in property, finance and construction to be there. Adele, of course you're going to be there as well. I will just say I've just hired some amazing entertainment for it. And I'm going to go OTT. I'm like, right, let's go. Let's do this. So there's going to be loads of, I appreciate being very quiet about the whole thing, but there's going to be loads of promo stuff coming up for it now that we're in October, we're going to go in go mode. And then anyone who is starting out in their journey or wants to really enhance their mindset. I do also have a free resource available for you, which is called the Property Lifestyle Mindset Accelerator Course, which is completely free. I created it myself and I want to encourage everybody to get the right mindset when going forward in property. So please go check that out in the show notes as well. But Adele, loved having you on. We'll of course do some more of these. It's important. Of course, it's important to educate people. Yeah. And I love the fact you're rocking the pink and we are going to do good things. good things in this industry. But go see your mum, enjoy your Monday. And listeners, I hope you enjoyed, I hope you got some useful tips from it and enjoy whatever it is that you're doing today. Have a great week. Bye.