Roskov book 19, p.23
Roskov, Book 19, page 23
Hearing that, I led the twins to Phase Three, and the manager explained that David Hutton had agreed it, the nursing home that they had been in now shut down – and shut down a week early.
Sat with the old ladies, the twins got odd responses, most of the old ladies suffering from dementia. One old lady was talkative, and loudly sure of herself, just that she was sure that the German Army would be pushed back from Dover.
As we were about to leave, a second batch of residents arrived, all beyond the point where they cared where they were, rooms found for them. Thirty-six were coming up in the lifts.
Moving across to Phase Two, second floor, we found a line of old men and ladies in wheelchairs now being shown to their new apartments. They had come from the NHS for the most part, and all were glad to see me, so I stopped to chat to as many as I could.
At the main offices, the manager and his staff in on a Saturday, he explained, ‘The NHS pressured us to take some Phase Two people, and two nursing homes pissed us off by closing early and not as agreed, so we have to take the residents.’
‘Are we ready?’ I worried.
‘Yes, we can handle them, but by Monday morning we’ll have about three hundred residents. Social Services and the Council are waiting the go signal, which should be on Monday.
‘And we have more staff than we need, some being trained for Ronnie Masters House, some for the Phase Zero.’
‘We’ll staff the Phase Zero?’ I asked.
‘They call the staff on demand, but some residents will have issues, medicines and ointments, a few visits a week. One man is just forty, mentally sharp, but his skin is poor and his circulation is even poorer.’
‘And dialysis users?’
‘We’ll have sixteen of them in the big Phase One, others will travel here. At the moment they go to Nottingham.’
‘A waste of taxpayers’ money, so if we can persuade people to live in here … do so. We have heat sensors here?’
‘If someone farts we detect it,’ he said, making me smile. ‘And we’ll test the other sensors, heartbeat sensors.’
‘Daytrips?’
‘Got a programme; local castles, the Post Office for lunch, a weekend on the coast, all sorts.’
‘Make sure that the Phase Two residents are stimulated.’
‘There are two staff for that, to stop them just sitting around.’
Back in the Phase One, a gaunt and grey-haired man wheeled his own luggage in, as if arriving at a hotel.
‘Are you checking-in?’ I joked.
‘Yes, Phase One. I was a doctor, but I have cancer, so it was here or a hospice, and I figured I could do some good here, feedback and studies. Your chap Dick Klein agreed it, but I have to earn my keep.’
‘How long do you have?’
‘Two years at most.’
‘Try the spring water, it helps, and it will be available here, and discounted.’
‘I’ll try some, yes.’
‘If you want a good room, go for the third floor, south facing.’
‘I had one picked out, yes, no construction work seen.’
‘It must be odd for you, a prison warder but now in with the inmates…’
He smiled. ‘I had to quit work a year back, that was a shock to the system, and at least this gives me something practical to do.’
‘I need feedback, urgently, before I build more of these and make a mistake, door and walls in the wrong place, so get me that feedback.’
‘Trust me, this is the Ritz Carlton compared to what the residents will have been living in, so it’s fine tuning only.’
‘Any suggestions, and make sure I get them as well as the manager here. And look for cost savings, because I aim to house a few million residents at the taxpayer’s expense.’
He nodded, and we wished him well in his new apartment – south facing.
Back at the new offices, and having some lunch, a pack arrived for me, photos of the construction work in Manchester. It appeared to be a huge construction site, sixty cranes at work, several buildings already displaying two or three floors of bare grey concrete.
I called Bill. ‘I got the photos of Manchester.’
‘And I got a list of almost a hundred properties for sale or repossessed around it!’
‘When we open the place it will boost prices, and if we buy up spare stock there – that would greatly boost prices.’
‘Yes, definitely.’
‘So start buying if the price is right,’ I suggested. ‘Especially along that main road outside the nursing home.’
‘Price is dirt low for many of them, but a mile away the price doubles. This was a shit abandoned area, that’s why we got the land there cheap.’
‘Take a trip to Manchester with some staff, stay in a nice hotel, and have a look at that mile gap, and what we can be doing in that mile gap.’
‘I’ll book a train, not drive.’
‘New offices coming along?’
‘Got all the desks and chairs in, computers are in, network is being done tomorrow, tea bags at the ready.’
I smiled. ‘How many staff are you moving?’
‘We have seven property staff, plus two part-timers who will go full time, plus two extra people we just hired – they used to work in estate agents. Oh, and I found a chap, was an insurance assessor, and he’s expert at appraising domestic houses.’
‘Great, take him on, and have him lecture the staff. I also want the staff taught by Russel, and the new conveyancer, as well as this other guy. I want the staff all to become experts.’
‘At the moment they’re learning as they go,’ he quipped.
‘So alter that, they’ll soon be handling a huge number of properties.’
Rose Fallon House
Monday morning saw Rose Fallon House filling up, and filling up quickly, it would soon be at capacity. That left a hundred and eighty local council houses up for grabs, the asking price to us being four-point-five million if we undertook to renovate and provide social housing, with at least half the houses to be rentals.
We agreed, we signed, and the houses were now ours, all empty apart from the bad smell, a few carpets smelling of dog pee and to be thrown out and burnt.
Bonza’s uncle would be busy, but he had sub-contracted work to local teams, who started with assessing the furniture, some to be sold locally for whatever we could get for it – which in most cases would have been just ten quid.
Movers would do the lifting, the cleaners would clean, assessments would be made, the decorating to then start, Lucas handling the job lot of sofas and chairs and tables, kettles and toasters, knives and forks.
Locks would need changing, windows cleaned, lofts examined for skeletons. It was a lot of work, but it gainfully employed a great many local people.
Thankfully, most of the houses did not have gardens, or they possessed only basic gardens that were all grass.
Over at the new building, the new staff were now entering the new house details to the computer, and would then enter the costs associated with cleaning-up those properties.
But since they were council houses, fresh deeds and ground plans would need to be created, so David Hutton had a team of junior legal clerks on that project at a local solicitors. When we finally sold the properties, the new owner would get those house deeds.
Arriving at the new property building, I met the new solicitor conveyancer – a rotund man with a pleasant face, as well as our financial expert, and they had offices next to Russel, nice desks, computers and printers already set-up.
Sat with all three of my top men, the new conveyancer told me, ‘Best you keep those council houses rented out, some will be an issue if sold.’
‘How so?’ I queried.
‘They were built to be council houses, and the beams in the walls go from one house to the next, same in the attic. Technically, the houses don’t move location so that should not be a problem, but ten years down the road – when someone renews their roof, they’d cut the beams and affect the next house.’
‘How would we get around that?’ I asked.
‘Not very easily. Could try and cut them now, but what for? Just face that bridge when the time comes, but the deeds need to state the joint beams and joint risk of fire.’
My eyes widened. ‘The lofts are not fire proof?’
‘Hell no.’
‘Then we’ll fix that, I don’t want a fire to take a whole street.’
He responded, ‘You’ll need a fireproof covering, and to effectively block up the holes, a base on the beam floor and fire proofing above it, not so expensive.’
‘Look into that for us straight away, we could have a fire during renovation. Are all these council houses like that?’
‘No, just the ones in the Horse Lane area.’
‘We have just ten from there I think,’ I told him. ‘Rest seem to be in my old area, red brick terraced houses.’
‘Those old red brick houses are solid, more so than modern houses,’ he replied. ‘Lofts will be OK there, but worth checking.’
‘How did the council get away with such a fire hazard?’ I complained.
‘Not a fire hazard as such, till they catch fire, then the whole row goes. Same for brick houses, the fire jumps loft to loft.’
‘I’ll have that looked at, a job lot of fire prevention.’
‘That prevention will only go so far, a fire is very hot, it jumps, you could never spend enough to stop it. We just do what we can.’
I nodded at that. ‘We try, and we’ll be seen to be trying.’
The new financial guy asked, ‘What will be my responsibilities here exactly?’
‘Chief Financial Officer, with overall responsibility for money and for keeping the books accurate and up to date, financial summaries for me.
‘We’ll also need an annual assessment of the portfolios, which will include the UK’s forecast for house prices for the next few years, interest rates, other issues.
‘We need to look at what we paid for the properties, money spent on renovations, rent collected now and in ten years, and then take a guess as to what the houses may be worth in five years and ten years.
‘You’ll handle the office accounts and wages, talk to the bank and our external accountant, and do the running costs for this building. There it gets complicated, because when you have an idea what this place costs - per day or per month to run - we’ll bill it back to the various investment funds.
‘So if this building costs a million a year to run, that million would be billed back to six funds, pro rata on the money they have invested and the hassle of administering them – houses take more time than apartment blocks.
‘I don’t need that figure yet, we need this place to settle down, but we need a guess at it, then – three months down the road – we bill back a figure to each fund.’
He nodded. ‘We administer and manage the funds, and charge back. And profit for this place?’
‘A small one, because this place … is owned by my charity, which also puts fund money in. What I need from you, and the directors here, is to make sure that everything is legal and compliant and running smoothly.
‘We take client money and invest it and manage the properties for them, but we’re also owned by those people putting in the money.’
‘Estate management is not like financial management,’ he began. ‘If you were trading the stock markets or choosing risky investments overseas you’d need to be FSA licensed.
‘But you’re not offering financial advice - the fund owners are telling you what to do with the money, a different ball game. But I’ll register us with the Information Commissioner for the software, but that doesn’t have a person’s name just a property, so there’s no private data.
‘I’ll also register us as an estate agents and make us compliant, not sure if it’s strictly needed, but I will check.’
I told him, ‘When I buy a property using the new Barclays public funds … I’m suggesting the property to Barclays’ experts … and they make an assessment themselves, last word lies with them.’
‘No compliance issues, you’re just proposing the property after some research.’
‘How accurately can we predict future house prices?’ I asked,
‘Not very, is the answer. Basically, the last five years is assumed to be a forecast for the next five years. But you’re already sat on a huge profit, you got the properties at knock-down prices.
‘But when we detail that property in the computer its value is current market value. So as it stands you already look to have a thirty or forty percent profit over costs.’
I told him, ‘In some cases that will be more, we’d buy repossessed houses now being used as drug dens, and get them for six grand, worth thirty grand or more.’
‘You did Park Lane here in Leicester,’ he noted. ‘Now, today, they could sell for thirty-five grand.’
‘And we paid ten I think. And I’ll work a deal with Barclays and basically buy up its bad debt, all of it.’
His eyes widened. ‘How much are we talking about?’
‘They think it’s six hundred million. And the list shows around five thousand domestic houses, but some of the items listed are big apartment blocks in London.’
‘RBS are said to be sat on four thousand houses in arrears.’
‘I’d go for some of those as well. We’d renovate and rent, some to sell where the margin is large. But … is there such a thing as a mortgage to rental conversion?’
‘No.’
‘So we could invent one. We find someone in default on their mortgage, we buy the house from the bank, the previous owner becomes the renter, and they get back much of what they had paid to the bank – less bank interest and costs.’
‘I’ve … not heard of that being done before. They get evicted, house is sold at auction, new owner takes over.’
‘Hold on.’ I called the CEO at Barclays, who stepped out of a meeting for me. ‘I was thinking that we help you when you have a house about to repossessed, in that we buy it, pay you off what you need, the house owner becomes a rental tenant for me, and they get back much of what they paid in mortgage payments, less interest.’
‘That … has never been tried before, but … that would help us greatly. I’ll put a team on it, some figures to work out. Another brilliant Roskov move.’
‘I’ve had my coffee,’ I quipped before I cut the call. ‘Barclays love the idea.’
Our CFO responded, ‘Of course, they benefit greatly; no court action, no bailiffs, no bad publicity, fewer costs for them.’
‘How many houses in Britain are in arrears?’
‘About to fall over the edge, around twelve thousand I read, spread across all banks and building societies. But that all comes down to the months in arrears and where you draw the line.
‘If you took those mortgage payers that just lost their jobs, you could double that figure easily. Across a year, that figure could be twenty thousand or more – it’s a process that often takes six months.’
‘So which is best for us?’ I posed. ‘Wait till the house is repossessed, or move early?’
Russel responded, ‘Get the house and tenant before they leave and trash the place, mortgage turned into rent, no renovation costs, no full conveyancing package just a legal agreement – which should be cheap to draw up. Or you switch them to a fifty percent mortgage.’
My eyes widened. ‘What a great idea. But … if the guy has lost his job, and he defaulted with Barclays, he’d not pass the credit test. So if they rent for two years then we’d look at the fifty percent mortgages.’
Heads were nodded.
Our CFO noted, ‘You’d get a better price after repossession, then lose on fees and … suffer the trashed house. Taking over a warm house is quicker and cleaner, yes.’
I raised a finger. ‘A warm house mortgage rescue. We should copyright that.’ They smiled. ‘Talk to Lucas, to talk to Experian, because I want figures, house prices and wages by region, the more accurate the better, house prices by town and by type of house. Try and get that quickly, we need guidelines.’
Russel made a note.
Our CFO noted, ‘A huge variance, especially around London; one street is posh and the next street is council housing. My old boss had a million pound town house, two doors down was council housing. But in London you accept that.’
‘Not in Leicester,’ I pointed out. ‘They like their posh estates and posh villages around here. You from here originally?’
‘Born in a small village, went to school here and then university in London, started work in London almost straight away. My wife is from here, and her family.’
‘Miss London?’
‘No, not now, I’ve kind of slowed down, and I don’t miss the commute to work – at all.’
‘Tube and train?’
‘Tube to Ealing then a walk, others in the office took a train for an hour.’
I shook my head. ‘My idea of hell. But tell me, what was your opinion of my business operations before we approached you to work here?’
‘You have a magic touch, and working here should be better for me than London, more dynamic, more money, more going on, and making a difference as well.
‘And what you’re doing with the properties is great business sense, and if you have the money then you can sledge hammer through the deals. A smaller concern would struggle.
‘And apparently you just called up Barclays and worked a deal, and now the CEO there takes calls from a twenty-year-old, which has never been seen in London before.
‘So the answer is … that I think this work will be more interesting than what I was doing in London, and when I came back here I figured I would only find some poorly paid dull work.’
I faced our conveyancer. ‘Are you happy to be here?’
‘I wanted to stay local, had a good job offer in Birmingham – which I did not want to take. I could get a local position in a solicitors’ firm, but that would be a step down the ladder for someone at my level.
‘So this was a godsend really, local and well paid, and not a step backwards, and … you’re not some flash young idiot out to make money; I’m a Labour man.’
