INVESTOR INTERVIEW: What I've learned - Ryan Windsor

In property, you learn three ways - through research, through others who have been there and by doing. We can help you with the former but the doing is down to you. Now, when it comes to learning from others that is where our new column - What I’ve learned - comes in. We sit down and mentally ring the mind sponge of a long-term investor to find out what works and what doesn’t

In the first of these OTH Magazine met up with Ryan Windsor, a Cambridge-based property business owner with an impressive portfolio and story. You may recognise Ryan as the Director of HMO Architect (www.hmo-architect.com), an architectural firm focusing on, surprise, surprise, HMOs.

In the first of these OTH Magazine met up with Ryan Windsor, a Cambridge-based property business owner with an impressive portfolio and story. You may recognise Ryan as the Director of HMO Architect (www.hmo-architect.com), an architectural firm focusing on, surprise, surprise, HMOs.

OTH: Ryan, thanks for sitting down with us, let’s start right at the beginning, how did it all kick off for you?

I don’t come from an affluent family with lots of money. When I was in college I got an interest in property from watching homes under the hammer and shows like that. It got me thinking about how I could support myself and about property in general.

An opportunity appeared with my next-door neighbour who was going through a divorce, I was about 17 and I went to the owner

and asked if they’d sell their house if I could find someone to buy the property quickly. Being 17, obviously, I didn’t have too much money so I thought I’d pitch it to my sister, I convinced her to buy it but she didn’t quite have enough money. So I “angled” her the rest of the money before I knew what angel investing was, for a fixed return. It was a really good deal, a three-bed terrace in Norfolk, worth about £110,000 at the time, and the guy sold it to her for £85,000 as a quick deal. So, already she’d made a bit of money. It didn’t need much work and so she rented it out. And I thought, damn, what if I could have bought that myself?

(NB: Angel investing is when someone funds part/all of the deal. In this case, for a fixed return.)

Lesson 1: Property is problem-solving. You can’t take no for an answer, find a way to fund your next deal.

OTH: And where did you go from there?

Fast forward nine months, a house on the next street across came up for sale and we made a bid for it, being 18 I couldn’t get access to mortgage products, so I proposed a joint venture with my sister. With her being older than me I let her take the lead on things. This was probably one of my first lessons. She wanted to do a really good job with the renovation, but we probably ended up doing too good of a job. We renovated the full house from top to bottom… Instead of putting down normal tiles, we were getting people in to do custom mosaic designs and that absolutely ballooned the costs. It just didn’t match the type of tenant we were putting into the property.

I’d recommend anyone doing work, to assess their market, don’t over spec and don’t overspend. That could be online, mystery shopping, speaking with agents and other landlords - getting direction from them.

Lesson 2: Don’t overspec your renovation. Know your market and the level it demands.

I continued to buy, my next deal was an off-market deal, this was through the start of the ‘07 recession. A lot of people were telling me I was a bit crazy to invest because prices have gone down. But it’s the contrarian investor isn’t it, you buy when prices are low and sell when prices are high. These were the days when you could

put down a 10% deposit, so I put all of my savings and income into it.

Purchase price: £62,500

Reno roughly £15,000

Most of my renovations in the early stages were £10-20k for basic single lets.

Over the years I’d just buy when I could. Not many people were buying at the time so there were lots of opportunities. I ran the calculations and was happy with what I saw. People weren’t buying as much but rents were going up. With tighter lending and fewer people buying, people still need to live somewhere, so it fuels the demand in the rental market.

Lesson 3: Good investors are always looking for deals in any market. Don’t wait for better conditions, find better deals.

Over a few years, I carved a niche in the town I was investing in. I was renting to a lot of migrant workers. It even got to the point where they were bringing me properties to look at to buy and asking if I’d rent to their friends. Many of the tenants are still there, my average tenancy length across my portfolio is around nine years. (For single lets).

In fact, there was a bit of a lifecycle when I moved into HMOs, my HMO tenants would meet people in the town, want to

move in with them and they’d end up in one of my single lets. I’m now toying with the idea of offloading one property a year to the tenants, making use of capital gains allowances, I carry some cash and re-adjust the portfolio.

OTH: That all sounds like very quick growth, what allowed you to grow so quickly?

It was all down to timing, I was investing outside of London at a time when prices were right down, and I was buying £110k houses for £60k, so you’re not talking about huge sums of money. I was looking to go broke every few months. Now, I’ve worked on getting a lower loan to value across my portfolio due to S24.

Lesson 4: Be adaptable. Markets, regulations and demand are constantly in flux. You may find you have to adapt your strategy or approach to continue to succeed.

OTH: OK interesting, I guess that brings us nicely to what the future outlook is?

I’m currently looking at incorporating the portfolio. I’ve set up a company and am buying through it, but I still have a big chunk in my own name. I’m looking at land currently, that’s quite interesting. Especially with an architectural practice. Some flips. And HMOs, if done right, they’re still incredibly profitable. If it’s a really good single let, we can’t say no.

We’ve been exploring doing some deals, me and Giovanni (his business partner), it just makes sense, we’re together with work so much, we might as well combine our resources. I have quite an ambitious goal with our joint developments. We want my partner and I, and Giovanni and his wife, to have 31 properties each within the portfolio, so effectively we’d get paid in the longest months, every single day from the properties.

Lesson 5: Set goals and then break them down.

One thing every investor faces is running out of cash, so I’d rather pick up a property that we know we can convert to an HMO in the future. Secure it, run it as a single let to get some cash, pick up a few more, and as we’re doing that, start to go through the design and planning process to convert to HMOs.

OTH: You mentioned before overspending on your renovations, what other big learning have you made?

- I should have been more aggressive in buying. I realise now how lucky I was when I was buying.

Although it isn’t the same now, if you can assess the risk correctly, do your due diligence, and work with the experts to make sure it all stacks… Always do things right, get the right advice on compliance, work with the council, and build a relationship there.

Lesson 6: Do your due diligence and get someone experienced to look over your homework.

I would have talked to more people about it earlier, speaking with family etc to get more investment and support them.

Lesson 7: Don’t keep it to yourself. Networking is an important part of property businesses so you can’t be shy.

Anticipate regulations changing, and overspec in those areas.

Lesson 8: Keep on top of impending red tape to avoid being tangled up in it!

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