Hi all.
I had Motiul Islam on the podcast this week. To be honest, we could have continued the conversation for another hour.
Motiul has been investing in property for over 20 years.
He started by buying a house and converting it into flats, but too soon, he ran out of money.
Spent the next 20 years getting creative about how to buy property without ever owing money to anyone.
Motiul doesn’t like debt, and he doesn’t like to work with investors.
He told me that he has never enjoyed the feeling of owing someone money, so almost everything he’s built has come from finding ways around it.
Lease options instead of purchases.
Option contracts instead of mortgages.
Structuring deals instead of borrowing.
We talked about a property he controlled through a lease option that pulled a woman’s home back from the auction block days before it was due to be repossessed.
We talked about a commercial block he is negotiating right now, worth over £2.5 million, that he’s set to control for an option fee of around £200,000.
And we talked about what actually happened inside his HMOs the week the Renters Rights Act made headlines, which was not what either of us expected.
In this episode:
0:00 — Motiul’s 20 years in property, and the deal that taught him to hate owing people money.
5:35 — A lease option that pulled a woman’s home back from the auction block.
10:22 — When two valuers give you two wildly different numbers, and what to actually do about it.
16:03 — Why some HMO deals are far riskier than the numbers make them look.
18:14 — Inside the land strategy, including option contracts, planning uplift, and controlling a project without owning it.
24:15 — What happened inside Motiul’s HMOs the week the Renters Rights Act hit the headlines.
31:38 — Buying short lease flats, and the 80-year cliff edge nobody explains properly.
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The Lease Option
Motiul got this one pretty much by accident. A woman had already been repossessed, and her property was heading for auction. Someone asked him to jump on a call and help her with a loan.
The problem was, Motiul doesn’t do loans.
He got on the call anyway, and the more he heard, the clearer it became that a loan was not what she needed. What she needed was for someone to stop it going under the hammer. So Motiul and his joint venture partners structured a lease option instead, and paid £60,000 to get her out of the position she was in and take the property off the auction list.
The numbers were solid from day one. A guaranteed rent scheme was already in place, bringing in £1,700 a month against a £900 mortgage. Motiul could have kept it and pocketed the difference for years. He’s selling it instead. Buying it outright would mean putting down another £30,000 to £40,000, and he would rather take a straightforward uplift on the sale.
“I’m not attached to property in the sense that I have to buy it and have to keep it.”
Wrong Valuations
Down valuations came up more than once, and Motiul’s take was blunter than most investors will say out loud:
“Sometimes the valuer is just wrong.”
He described getting two valuations on the same property, one at £100,000 and another at £180,000. Get the lower number first, and it is easy to assume you have misjudged the deal completely.
His answer is to do the legwork before the valuer ever turns up. Background checks, comparables, sold prices, all of it, so that when a number comes back that doesn’t match his own research, he has the evidence to push back on it rather than simply accepting it.
He said that the problem is when there are barely any comparables. Title splits, first-of-their-kind HMO conversions, anything a valuer has not seen much of locally. No comparables means the valuer is guessing too, and that is when deals get downvalued for reasons that have nothing to do with what the property is actually worth.
Control Land
Motiul now runs a joint venture with three partners, one of whom is a town and country planner, buying option contracts over land rather than the land itself.
An option contract gives them the right to buy a site at an agreed price within a set window, usually while planning permission is being sought.
They are not paying for the land upfront. They are paying an option fee, and using that window to get planning consent and increase its value before they ever have to complete.
The commercial block he is negotiating on right now is worth in excess of £2.5 million. He doesn’t have £2.5 million in cash. What he has is roughly £200,000 to secure a two-year option, during which time he will seek planning for around 90 units across the building and a car park. A lender has already indicated they would fund the full purchase once planning is granted. If it comes off, the project has a gross development value of around £8.5 million.
“We’re leveraging our skill sets to buy larger projects.”
Planning that should take nine months took nineteen on his last project, and he’s now budgeting two years as standard rather than being caught out again.
Renters Rights Act
Within a week of the Renters Rights Act dominating the headlines, ten rooms across his HMO portfolio went void. Tenants who were meant to give two months’ notice under their rolling contracts left overnight, some of them going back to live with family, without giving notice at all.
It is a reminder that legislation aimed at protecting tenants can spook the very people it is meant to help.
Short Lease Flats
Motiul buys short lease flats as part of his portfolio, and the mechanics are worth understanding even if you never plan to buy one.
Once a lease drops below 80 years, it triggers something called marriage value, and the cost of extending it jumps. Once it drops below roughly 55 years, most mainstream lenders will not touch it at all, though specialist lenders exist down to around 45 years. Below that, you are generally buying for cash.
This is an opportunity. If you understand the lease extension process and can move without a mortgage, you are competing with a much smaller pool of buyers for a property that a large part of the market has already ruled out.
I genuinely enjoyed my chat with Motiul.
I’m sure you learned a thing or two.
Drop your questions in the comments.
Heidi Mobbs
Property Investor
