Optimise4

Optimise4 in the Residential Property Sector - Executive Coaching and Mentoring

Objective: The newly formed Company had 2 equity partners and a plan to invest in property. They wanted to convert residential properties into student lettings. The brief was to develop the idea and produce a business plan that would win bankers confidence to provide finance.

Activity: A program of Executive Coaching and Mentoring support was provided to the 2 partners, neither of whom had prior industry experience.

Services: An Optimise4 Associate worked one to one with the partners to develop the Business Plan. In so doing demographics, student incomes and property yields were examined. Excel modelling of 'to buy or not buy' was undertaken.

Outcome: The bank made available 1M GBP to finance 75% of the purchase price. The Company targeted a particular University city known to be favoured by parents on South East England incomes. The yield on purchase prices was such that within 18 months the mortgages were 115% covered by rental income. The Company made its first property purchases in 2008 and now has 9 converted into student lettings.

Value: Debt financing meant no equity dilution. The Optimise4 Associate then introduced the Partners to a property maintenance manager and accountants. The Business Plan will see the 2 shareholders hold the properties as a part of their pension. Inflation will drive rental incomes up. Capital yields will be attractive once price deflation is replaced by economic reflation.