How Peter Licourinos Found Fulfilment in Property – An Interview by YPN
Before becoming a highly successful property investor, Peter Licourinos spent time working in the IT industry. After years of work and a brief travelling period, he met James May. Little did he know that this encounter would change his life.
They met in a pub. James had overheard Peter conversing, and believed that Peter would make a good estate agent. James invited him to an interview, where he received an offer join Prospect Estate Agency.
There, Peter sold 46 houses within the first three months, and progressed into management. In 2007, he opened their new Reading office. The launch of the new premises allowed them to expand into the investment market for the first time. At the time, Reading was one of the best places to invest in the UK.
There was a huge number of investors registering with the business, and Peter and James came up with the idea of an investor’s club. Subsequently, they became the first estate agent to introduce an investor’s club as part of the business.
When the market crashed in 2008, James and Peter saw an opportunity rather than a problem. The fall of house prices meant that investors could come into the market and buy properties at a reasonable price. But people were cautious about investing in the uncertain times.
This is where the investor’s club found its strength. It allowed someone who was interested in investing in property to sit with either James or Peter and speak for an hour. They would listen and aimed to understand what the investor wanted to achieve and why. Together, they would build a business plan, help the investor buy the right properties in the right areas, and hold their hand to become financially free through property.
A shock diagnosis
This was going well until three years ago, when Peter had an accident. He slipped a disc in his neck. That was traumatic enough … but during the MRI, they found a brain tumour the size of a tennis ball. It had been growing for up to ten years.
“I remember my mum coming down to see me in the evening. It was probably the worst moment of my life. I opened the door, and my mum appeared and she just looked at me and said: ‘What’s happened to my baby?’”
Within one year, Peter had gone from being a positive and confident person to an all-time low. Two operation appointments were postponed at the last minute, but third time lucky. After an eight-and-a-half-hour operation, surgeons removed 90% of the tumour. The remaining 10% was resting on a major nerve, which they cauterised.
He stayed in hospital for three weeks before coming home. Although he should have taken six months off work, he was back hosting the Reading pin within three weeks of being discharged. He wanted to prove to everyone that he could recover from the operation quickly.
But he overstretched too soon and became exhausted. For the first time in his life, he was getting tired before midday. Over the next six months, he did some soul searching to think about what he wanted to do and where the future would take him.
Although by this point he had been with Prospect for almost 20 years and had seen the company grow from 20 to 125 people, his passion was for property investing.
“I think what came out of this was I just wanted to wake up every day and do what I love every single day. And that’s how I moved forward.”
Although Peter was desperate to get back to work again, it was at least a year later that he could say he felt truly better. “I remember waking up one morning thinking ‘I’m not tired anymore’. It was just the most wonderful feeling.”
He worked hard on getting himself fit and spent time not only doing the things that made him happy, but also with other people who had a positive effect on him.
“Everyone’s going to have something at some point in their lives that will get them down. But if you work hard and you’re positive, eventually you will overcome it. I did. I just worked my ass off, remained positive and I just got through it.”
A new life – investing and helping others
He sold his shares in Prospect and instead opted to work full time with property investors looking for developments. Last year, he started working with Mark Lloyd and Jackie Reeves, and together, they mentor others.
His business, Heritage Investment Group, also evolved further. This company is predominantly used for developing properties, either working their own projects or working with other investors and developers.
HMO on Steroids
During this period, his HMO on Steroids venture was born. HMO on Steroids is designed to help others acquire and run HMOs. Within the current BTL market, it can be difficult to make a good profit, however Peter believes that licensed HMOs, done well and in the right areas, could be profitable for investors while providing outstanding and affordable accommodation for tenants.
As more and more legislation creeps in, it can be easy to lose track of what’s right and what’s wrong. Peter explained an example to us:
This time last year there were 3,500 HMOs in Reading. Only 900 of these were licensed. The remaining unlicensed landlords could get around the licensing laws and provide potentially sub-par accommodation.
But from October 2018, all five-bedroom+ houses need to have a licence. In theory, this should set a level playing field for landlords and will eventually improve the quality for accommodation and living for tenants. It may lead to less of a need for Article 4, which came in to protect communities and areas.
Stronger legislation forces an industry to improve. Those who cut corners will either leave the market or learn quickly and change.
Peter’s portfolio and business is based in Berkshire and Surrey, and has been for the past 20 years. He’s comfortable with the area and believes that he’s well equipped to advise on where the best properties can be found. If within budget, there are good deals to be found in the south of the country.
For his investors, he focuses on opportunities for capital growth, established blue chip companies, transport links and good communities, as well as keeping in mind the basic amenities such as supermarkets.
It’s not possible to pigeon-hole what kind of house works as an HMO; rather, he considers, it’s important to look at an abundance of factors. However, Peter tends to prefer older houses. The square footage of a 1930s four-bed property is the same as a six-bed house in 2010. Bigger houses allow for more room to play with. Many have front gardens that can be converted into car parking spaces.
Based on the type of house, the purchase price and making sure the desired profit is being made, five- to six-bedroom HMOs work well, in Peter’s opinion. “It’s a nice amount of people to have in a property and it could be very profitable for the investor.”
In most of the home counties, HMOs with seven rooms and above need to have planning permission. Immediately, the investment is greater in terms of both time and money, as well as a high risk.
The property in Bracknell houses professional tenants, as there are many blue-chip companies based in the area. It is a six-bed HMO, bought for £320,000.
It was built in either the 30s or 40s as a four-bed house. It had a big footprint, so Peter knew adding additional rooms would work well.
Peter worked with an investor, albeit through HMO on Steroids. As this business focuses on offering a turnkey investment, the investor could get involved as little or as much as he liked.
The property was sourced at 5%-10% BMV. On the day of completion, Peter’s refurbishment team went into the property and began work. Four weeks later, the HMO was ready to be marketed and rented to tenants.
Where possible, Peter tries to have one bathroom/shower room to two bedrooms, which works well. He has found that professional tenants are not necessarily looking for an en-suite room, preferring bigger rooms instead.
The rooms are all fitted with good quality, durable furniture with lots of storage, especially under the beds. They provide bedside tables, desk, chair, and if the room is big enough, a sofa.
“Two words I would use to explain why we’re so successful is quality and convenience. I think convenience is what customers want as well as the high quality we put into our houses.”
On this property, Peter’s investor is looking at £1,200-£1,500 net profit. The investor owns the property, HMO on Steroids aims to help others build their portfolios, so Peter doesn’t take a share of it.
HMOs can be revalued in one of two ways: commercial or bricks and mortar. Which one is used depends on the investor and what they want to do. Many look to add value and take money out quickly. But Peter’s advice is to stabilise investments. Be patient, look to add significant value, and go with an improving market over two to five years. It is within this period that it’s best to take money out and reinvest it.
Those who want to get rich quick or take as much money out as possible within six months are not the type of clients Peter wishes to work with. Property investing needs to be done carefully and it needs to be done with a long-term focus in mind. Only then can it be profitable.
After his turbulent few years, Peter can finally start to look ahead. Over the next few years, he wishes to take the property mentoring with Mark and Jackie to a higher level, as well as do a at least two or three small developments with Heritage per year. Maybe even some bigger deals at some stage.
He intends to continue working with HMO on Steroids and help others become financially free, or enable them to have a pot of money to enjoy at a later date. The flexible nature of the business allows Peter to touch on other property strategies as well, so when the market changes, he may start flipping properties again, or doing C2R conversions, or utilising the R2R strategy, or lease options … “There’s no end to what this side of the business can do.”
Professionally, e’s looking to take all three of his business and maximise them to their full potential. And on a personal note … “I guess I’d like to give my fiancé a little bit more of my time because she doesn’t get much of it. I’ve always been a workaholic and she puts up with it. So I’d like to have a few more holidays with my fiancé.”