Our Strategy:

Building a cash flowing property portfolio.

We believe that everyone should be entitled to live in a warm, dry, safe home with good quality and well maintained facilities. We provide this for all our tenants.

So, what do we do? We purchase properties that are often in a tired or distressed state, refurbish them, and equip them with new, high quality facilities. What were previously unloved or empty houses are brought back into use as a comfortable, warm, and loving family home.

 Our process:

  1. Locate demand

We predominantly purchase two or three bedroom terraced and semi-detached properties in areas with access to good schools and decent transport links within our selected locations.

As the company builds its property portfolio, we will be able to recycle cash from property to property, enabling us to purchase more properties.

2. Finding properties

  • Estate agents

    We have contacts with a number of Estate Agents located in our investment areas who are able to notify us when new properties come onto the market that match our criteria.

    As such, we are often offered properties before they are even marketed & given first refusal.

  • Auctions

    We visit auctions and virtual auction sites on a regular basis which allows us to find interesting properties below market value.

  • Our own research

    Within our target locations, we search regularly via property sites for any new marketed properties.

    In addition, our landlord database and contact network allows us to hear about potential opportunities via word of mouth.

  • Sourcing

    We frequently employ individuals and companies to source new investment opportunities. They are able to conduct direct to vendor research on our behalf on a more regular basis, allowing us access to opportunities more regularly.

3. Due-diligence

It is of vital importance to carry out detailed research on every property to ensure that we know exactly what we are purchasing. We regularly turn down opportunities as a result of due-diligence work, however its better to reject an opportunity at this stage in the process rather than purchasing a property that will lead to problems further down the line and limit our exit strategies.

4. Redesign and refurbishment

  • Redesign

    Internal redesign

    To add value, Dormy Homes Ltd have often reconfigured layouts to add additional bedrooms, enlarge kitchens and bathrooms etc. In one property we removed the airing cupboard and relocated the staircases to allow a redesign of the upper floor and the creation of more bedrooms to allow access into the roof void without compromising on headroom.

    Extending the property by permitted development or planning consent

    This would include ground or first floor extensions and loft conversions. With permitted development especially this is an accelerated route with little risk of challenge as long as the correct notifications are provided. Dormy Homes Ltd would also at the outset check neighbouring homes to understand what is likely to be allowable by local planners.

  • Refurbishment

    In most of the properties purchased, Dormy Homes Ltd would carry out a range of refurbishments that are likely to include a full redecoration, a new kitchen, and a new bathroom.

    In many cases we would install a new combination boiler, especially if the current boiler was old, was a back boiler or a conventional boiler with a tank & cylinder. Additionally we would check, enhance or replace electrical circuits as well.

5. Re-mortgage

The principle of the Dormy Homes model is that we secure the property generally as a cash purchase, refurbish the property to a high standard and subsequently re-mortgage the property with one of a number of companies that offer buy to let mortgages to limited companies. This process is quite cumbersome and the criteria is very strict, however we work closely with whole market mortgage brokers who advise us on the best options for us at that particular time. We generally prefer to purchase five year fixed rate mortgages as this provides us with a known expense for that property for that period of time. The issue however with mortgages for portfolio landlords is that the maximum loan to value is 75%. As mortgage companies introduce their own restrictions, 65%-70% LTV mortgages are quite common for portfolio landlords if they wish to secure a commercially advantageous mortgage rate of around 3%. This is where medium term investment is required as generally 25-35% of the property value is not secured as a mortgage but is funded by investors and where Dormy Homes can offer generous returns.

New realms

There are a number of new strategies we have considered and some that we are currently implementing such as:

  • Purchasing a lease extension on a short leasehold property. We have evaluated schemes where there is a short lease and lease extensions are required. This significantly increases the property value once new 99 or 125 year leases are purchased. We are not actively considering one of these at present but its in our ‘tool bag’ if we see the right property where it would work.

  • One of the strategies we are actively progressing is ‘Title Splits’ - This is where we purchase a property and split the title into a number of leasehold properties that we can then hold or sell individually. It also increases the mortgage value of the property.

  • Another strategy we are currently employing is obtaining planning permission or permitted development approval. We have just obtained a certificate of Lawfulness on one property that we are currently developing by constructing a loft conversion along with a rear extension too.