Jackie Tomes of Tomes Homes says ‘I bang on so much about the difference between a Strategy & a Business Model… so I thought it was time I brought ours to life!’
We buy blocks of flats. Exclusively.
Why do we do that?
For us it is the right Balance of Risk vs. Reward.
We buy existing blocks of flats, we don’t do the conversion.
Some blocks we buy in good condition and they are let from day one that we purchase them, others are in poor condition and we complete a full refurbishment before they are let.
– If it’s the former, we are able to be on buy-to-let style finance from day-1, which greatly reduces the risk when compared with a conversion or development opportunity
– if it’s the latter, the refurbishment works are purely cosmetic so they are quick – so you can get onto a low interest rate, long term finance product within 3-6 months of purchase.
After refurbishment we refinance and retain the units which provides a quicker and more certain exit than a lengthy sales process
Understanding how to buy blocks of flats is a very specific niche, and there are a number of complexities to doing this which means that we really need to focus in this area we have learnt how to navigate these. By building good relationships (with vendors & agents) and maintaining a healthy deal pipeline we are able to acquire these properties for prices that mean we still have scope to add significant value, which again helps to balance the risk.
For us having this focus onto just one Business Model, and replicating over and over again means less surprises each time we do it! Which means there are less unknown variables, less details that can go wrong and so ultimately this really helps to manage the risk.
Which starts to bring us nicely into our strategy… Consistency! Creating a business that is Consistent across all areas is one of the key aims of our Long Term Strategy.
Business Model vs. Strategy. It’s crucial you have both!