‘I love Monopoly’: A large landlord talks buy-to-let
“I love Monopoly,” says large landlord Richard Blanco. “When I play Monopoly I realise I use the same strategy that I’ve used in my property business. I either win or I come second and I buy the cheap ones – the Whitechapels and Euston Roads. It’s actually what I have done in real life. I come from a poor immigrant family – I’ve never had big chunks of cash to buy in Belgravia.”
“Once I organised a game with three other landlords. It was hilarious. One of them kept forgetting to collect his rent.”
Board games aside, Blanco first encountered the world of property in the mid-1990s, when he bought a flat in the east end of London. “I was lucky because I bought in Hackney in 1995 and it was a real hot spot. My property just went ‘whoosh’ up in price. So I refinanced £100,000 out of it and I used that to start building up my business.”
He bought a second flat in the same area – and then another until he reached his current total of five flats, four houses and two shops: “The pattern I’ve got into is generally buying at auction, refurbishing and then renting out and refinancing, so I’ve got more working capital to buy another one, and so on. That’s my business model.”
In a typical case, the former arts entrepreneur will buy a Victorian terrace house, strip the floors down to their original wooden boards, restore the iron fireplace to its former glory and add modern kitchen and bathroom facilities.
“What I’m quite strict on is buying in areas where there will be infrastructure improvement,” he says. “Property values have risen quite strongly and that enables me to take further advances when I’m refinancing. Most of my mortgages will be two years and I’ll either take a further advance or move to another lender and take out more capital.”
Blanco’s finance comes from a medley of lenders, including the Bank of Cyprus and Leek United as well as high street banks. “I do like mutuals,” he says. “They are a wonderful British invention. There are building societies I really admire because I think they have sensible lending criteria, good personable one-to-one human relationships and they don’t do credit scoring, which for landlords is a key thing.”
Such credit searches can penalise large landlords, who may have to go through several a year: “The lender will have some random number they are expecting me to meet. They won’t tell me what it is, I have no way of knowing and I will only know when they’ve done that credit search and by then it’s too late – I’ve lost a footprint. And that makes me really angry as a landlord.”
Other gripes include lenders’ caps on the number of loans, a six month ban on remortgaging and “ridiculous” arrangement fees. “A lot of buy-to-let lenders treat us as people who are landlords on the side when actually we’re running businesses. I think it’s time we all grew up and accepted that.”
By contrast, he has few bad words to say about Close Brothers, the bridging lender he used to finance a house bought at auction. “I spoke direct to the underwriter and there was no arrangement fee, which was fabulous,” he explains.
At home with mortgages – “I enjoy a good spread sheet” – Blanco does not instinctively turn to a broker for help. When he does, his expectations are high. “I expect brokers to have an encyclopaedic knowledge,” he says. “When I called the woman at National Landlords Association Mortgages and said to her, ‘I’ve seen this freehold property with two flats in it. Which lenders will lend on that?’ she could list most of the information off. That is what I want from a broker, because it would take me three hours or more.”
Other, experienced landlords may still go straight to an intermediary, he acknowledges. “They see mortgages as a mysterious world they’ll never get to the bottom of. But finance is such a fundamental part of what I do.”
Blanco has clearly found a vocation. As well as maintaining his spread sheets, he is a hands-on landlord, dispensing with estate agents in favour of visiting the tenants himself and on some occasions being invited back for dinner. He uses his position as National Landlords Association London representative to improve landlord-tenant relations.
And while the memory of the landlords’ board game night makes him laugh, he stresses the difference between a game and reality. “I certainly don’t see my business as Monopoly, because I never forget there are real people living in real homes and real communities,” he says. “That’s very important to me.”
For a glimpse inside Richard’s property portfolio, click on.
Blanco’s property in Walthamstow, east London before refurbishment
The same property after refurbishment
Inside the house, before refurbishment
The same room after refurbishment with Blanco’s signature floorboards and fireplace
Bathroom, before refurbishment
The same bathroom after refurbishment