If you’ve been exploring property investing, you’ve likely heard of two powerful wealth-building strategies:
✔️ BRRR — Buy, Refurbish, Rent, Refinance
✔️ HMOs — Houses in Multiple Occupation
But what happens when you combine both? You create a high cash flow, scalable investment when done right.
In this blog, we break down a real-life example of how an investor used the BRRR method to transform a standard property into a cash-generating HMO, complete with the real numbers, challenges, and wins.
Quick Recap — What is BRRR & HMO?
BRRR (Buy, Refurbish, Rent, Refinance):
A strategy that lets you:
✔️ Buy a property below market value
✔️ Add value through refurbishment
✔️ Rent it out for income
✔️ Refinance to pull your original capital out
HMO (House in Multiple Occupation):
A rental property where three or more unrelated tenants live, sharing communal spaces. Done well, HMOs produce higher rental income than standard single lets.
Combining both gives you capital recycling and increased monthly cash flow.
The Numbers:
- Purchase Price: £130,000
- Refurbishment Costs: £48,000 (full HMO conversion: en-suites, fire doors, compliance upgrades)
- Additional Costs (legal, fees, etc.): £7,000
- Total Investment: £185,000
After completion and tenanting, the property was revalued at:
- Property revalued at valuation: £250,000
Refinance arranged at 75% loan-to-value (LTV):
- Refinance Amount: £187,500
Capital Position:
Total Investment: £175,000
Refinance Proceeds: £187,500
Remaining Capital in the Deal: £0 (capital fully recycled)
Rental Income from 5-bed HMO:
Gross Monthly Rent: £2,350
Mortgage Payment: £675
Management & Running Costs: £500
Monthly Net Cashflow: £1,175
Challenges Faced During the Deal
No deal is without its lessons. Here’s what this investor had to overcome:
✔️ Licensing Delays — Local council processing took longer than expected
✔️ Unexpected Structural Work — Extra £4,000 added to refurb budget for hidden issues
✔️ Tenant Turnover in Month 1 — One early exit meant finding a replacement quickly
Lesson learned: Factor in contingencies and work with trusted tradespeople and letting agents.
How Profit & Cashflow Were Achieved
Despite the obstacles, the investor successfully:
✔️ Recycled all capital within 6 months
✔️ Secured a strong monthly cash flow of £1,175
✔️ Created long-term income with increased property value
The key? Combining the right strategy, solid refurbishment, and expert guidance.
How Property Business Training Can Help You Do This
At PBT, we guide investors through the real process, not just theory. You’ll learn:
✔️ How to source suitable HMO opportunities
✔️ What real refurbishment costs, timelines, and regulations look like
✔️ How to avoid common mistakes that erode profit
✔️ How to structure deals for maximum cash flow and capital growth
We don’t just talk property, we show you how to do the deals.
Conclusion
HMO using BRRR is a powerful wealth-building strategy when done properly. With the right preparation, support, and proven methods, you can recycle your capital and build consistent monthly income.
Are you still unsure, and you need clarity? Contact us to discuss how we can assist in moving forward.