Magnetic Properties Ltd
About Our Business
We have built trusted relationships with agents and builders over time. This means that we have reliable sources of due diligence and are therefore in a position to effectively respond to opportunities.
We are a small team of three currently. I am wholly responsible for delivering and maintaining our portfolio, whilst Sudhir leads our planning and sourcing processes alongside his corporate role. We also have a virtual assistant for support.
In recent months, we have been transforming our processes for scale. This is in part due to the learning and support we’ve received from the IPI mastermind group we’ve been a part of for the last 18 months.
Our Company Values
Our personal values drive our core company values. In particular:
1. CONNECTION drives us to build positive, meaningful relationships with investors, tenants, and partners.
2. INTEGRITY ensures we are always open, honest, and guided by our principles and ethics.
3. RECIPROCITY means we strive for mutual benefit in all our dealings.
4. PERSISTENCE reflects our commitment to seeing projects through and honouring our promises.
5. Lastly, CONTRIBUTION represents our desire to make a meaningful impact on the community and environment, always aiming to serve a greater good.
We enjoy working with those who have values that align with ours.
What Differentiates Us
What sets us apart is our focus on building personal relationships, which is both possible as a small business and vital as we grow, ensuring a more tailored and responsive approach.
We prioritise thoughtful, practical design, creating homes that stand out to tenants using colour, light and effective space planning. We're deeply committed to sustainability driven by a lifelong passion for protecting the environment. We continually work to improve the energy efficiency of our properties where practical and cost effective to do so. With project management expertise and creative refurbishments, we are delivering homes that create positive impact.
Additionally, we aim to inspire others by sharing our journey as divorcees rebuilding our financial future through property investment.
KEY Information
Registered company name: Magnetic Properties Ltd
Year started in property investment: 2012, but seriously in 2016
Operational areas:
Liverpool
Typical portfolio type: Student and professional HMOs, mixed use
Portfolio value: £2m
LTV across portfolio: 70%
Ave ROI on owned projects: 20-30%
Ave private funding amount: £100k - £400k
Ave term length: 12 months
Ave interest offered: 10-12%
Securities on borrowing: First charge to PG
Meet the Founder/S
Nicola Humphrey
I founded Magnetic Properties with my partner, Sudhir Joshi, to draw on our shared experiences, to build our future as a blended family of seven, and create homes that people love to live in. I've been investing in property since 2012 and became fully immersed in 2017 after completing my first student HMO conversion.
My prior career in project management in the defence industry gave me the planning and execution experience that I've been able to apply to our property projects. Sudhir supports the business alongside still leading corporate transformations.
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Our Existing Portfolio
Prior to starting Magnetic Properties, I delivered six HMO projects. Five of them are student mini-HMOs. I also completed a development to two four-bed all en-suite HMOs for professional tenants.
Between 2020 and 2022, my property journey was paused whilst negotiating my divorce settlement. Within Magnetic Properties, we have completed one mixed use development of two flats above a commercial unit and we have two projects in progress. One is a HMO conversion that will complete at the end of 2024. The other is a property split into two flats that we plan to convert to a HMO, subject to permissions.
The Ethos Behind The Portfolio Type We Work With
I chose to keep my initial student HMOs small, targeting groups of three or four students, filling a gap in the market. This also allows for future resale as family homes. They have maintained strong cash flow and continuous occupancy.
I then diversified into professional HMOs to focus on design for a different market. The demand for HMO rooms is growing as young people find home ownership increasingly costly. They also looking for shared experiences which they get living alongside others. We plan to develop more blocks of single-let flats to cater to this same demographic as they seek independence, further diversifying our offer and portfolio.
CASE STUDIES >>>
PROJECT 1
Botanic Road
The Property & Strategy
The property was previously a four storey terraced property that had been split into three flats (plus an unused basement). The flats had fallen into a state of significant disrepair due to water ingress.
We obtained planning to convert the space (incorporating the basement) into two four-bed, all en suite HMO flats. An uplifting design was a key part of the outcome we wanted to achieve in order to appeal to our target professional tenant demographic.
Numbers
Project started date: We bought the property at auction in March 2019
Project completed date: The refurbishment completed in July 2020 (Covid delayed us by 3-4 months).
Financing method:
Purchase was 25% own funds, 47% my own SSAS loan back and approx. 28% investor borrowing.
Cost of works was 100% investor borrowing.
Purchase Price: £157,500
Cost of Works (including finance costs): £170,000 plus approx. £19,000 finance
Legals, professional services and fees: Approx £13,000
Total spend: £359,500
GDV: In 2020, it was valued at £400,000; In 2022, it was valued at £440,000.
Profit from costs: Based on 2022 valuation: 18.3%
Annual cashflow after all costs: Initially, it was c£20,000 pa; Since refinancing in 2022 with the higher rate taken into account, it is c£16,000. Note: We do not self-manage our properties, so costs include agency fees.
Location
The property is ideally located within easy distance of the city centre (1.5 miles), the hospital (0.9 miles) and Liverpool Innovation Park (0.7 miles) so good access for employment opportunities. It’s also very close (0.5 miles) to the iconic Littlewoods building, which is being transformed into a film studios over the next few years.
The house faces onto a park on the other side of the road, and the closest station ‘Edge Hill’ is 0.4 miles away.
Planning
We submitted an application for two HMO flats. Planning was approved without objection.
Since we completed the project, an Article 4 restriction has been rolled out across the area, which means the value of the property will continue to rise.
Additional information
The property two doors along with the same footprint is a nine-bed HMO. We chose to split the property into two four-bed HMOs because we had observed how some people prefer to live in smaller groups. It also means we were able to provide much more communal space, which I believe leads to increased retention.
