🏗️ BRRR & HMO Strategy — Dudley & Surrounds

Using PropAI Deals API for targeted deal finding • Article 4 analysis • R2R/HMO playbook

📡 Using PropAI Deals API for BRRR

PropAI Deals API has 18,764 credits remaining (of 20,000). Each search costs 1 credit. It's our primary deal-finding tool.

🔍 BRRR Search Filters

# Search lower-end DY area for BRRR potential houses python3 ~/.hermes/scripts/propaideals_tools.py search "DY2,DY4,DY5" 80000 150000 2 4 "house"

🎯 Target Parameters

Price: £80k-£150k (BRRR sweet spot)
Type: House only (exclude flats)
Beds: 2-4 beds
Areas: DY2 (Netherton), DY4 (Tipton), DY5 (Brierley Hill)
Status: Active (not STC/auction)

📊 Key Indicators in API Response

bmv_discount_percentage → Positive = below market value (BRRR)
estimated_rental_yield → 6%+ target for BRRR
chain_free → Faster completion, motivated seller
needs_modernisation → Value-add potential (refurb)
days_on_market → 90+ = motivated seller
price_qualifier = "reduced" → Price dropped

⚡ BRRR Strategy — Sub-£150k

Buy at £100k-£130k (distressed/dated terrace)
Refurb budget: £15k-£25k (cosmetic + essential)
ARV target: £150k-£190k (post-refurb value)
Refinance at 75% LTV: £112k-£142k
Equity left in: £8k-£20k (or ideally £0)
Target rent: £675-775/pcm = 6-7% yield

🏘️ Article 4 — Dudley Has Borough-Wide Coverage

⚠️ UPDATE: Earlier version of this document incorrectly stated Dudley had no Article 4. Confirmed from Dudley Council's planning policy (DLP17): Dudley has a borough-wide Article 4 since 15 September 2023 removing PD rights for C3→C4 HMO conversions.

Council	Article 4 Status	Impact on HMO	R2R Opportunity
Dudley	Borough-wide	Planning permission needed for ALL C3→C4 HMO conversions	⚠️ R2R only (you rent, no change of use)
Birmingham	Article 4 in place	Planning permission needed for HMO	❌ Limited — most wards covered
Sandwell	Partial	Some wards affected	⚠️ Check specific wards
Walsall	No known Article 4	C3→C4 still PD (verify before buying)	✅ Best HMO option nearby
Wolverhampton	Partial	Some wards affected	⚠️ Outer areas may be free

What This Actually Means

🏠 HMO Purchase + Conversion

If you BUY a house in DY and want to convert C3→C4 HMO:
Planning permission required. Article 4 removes PD rights. You need full planning application through Dudley Council.

Time: 8-12 weeks. Cost: £462+. Refusal risk: moderate-high depending on street concentration.

📋 R2R (Rent-to-Rent) — Still Works

R2R is NOT affected by Article 4. Here's why:
→ You rent the property from the landlord (no change of use)
→ You sublet rooms to tenants as a licensee/tenant
→ The use class (C3) stays the same — no planning trigger
→ Article 4 only removes PD rights for change of use

⚠️ But check: some landlords' mortgages or insurance may prohibit subletting.

🔍 Best Councils for HMO Buying

If you want to BUY for HMO without needing planning:

Walsall — No known Article 4. WS1-WS10 postcodes.
Wolverhampton outer — Some wards free. Check individually.
Telford & Wrekin — No Article 4 (further out)

🏘️ R2R / HMO — Best Strategy Given Article 4

🥇 R2R in DY2/DY4/DY5 (No Planning Needed)

Rent a 3-4 bed terrace from landlord: £600-750/mo
Furnish: £2k-5k
Let by room: £325-400/room × 3-4 rooms
Gross rent: £975-£1,600/mo
Profit: £275-£600/mo
No planning needed — Article 4 doesn't apply to R2R
DY2 best: low crime (112/1k), good tenant retention

🥇 Buy HMO in Walsall (No Article 4)

WS1-WS10 close to Dudley border
3-4 bed terrace: £100k-£150k
Room rent: £300-350/pcm
HMO yield: 7-10%
No Article 4 = standard planning not needed
Still need HMO licence (Mandatory/Additional)
Near M6, commuter demand

🥈 Apply for Planning in Dudley

Planning applications for HMO in Dudley ARE possible
Cost: £462 per application
Policies: DLP17 — must not lose family housing
Best areas: DY1/DY4 town centres (less family housing)
Worst areas: DY6/DY8 suburbs (family housing protection)
Check local HMO concentration threshold first

💡 R2R (Rent-to-Rent) Strategy

How R2R Works in Dudley

Find a 3-4 bed terrace: rent from landlord at £600-750/mo
Refurb if needed (furnish, redecorate): £2k-£5k
Let by room to 3-4 tenants: £325-400/room
Gross rent: £975-£1,600/mo
Your profit after rent: £275-£600/mo
No deposit needed (unlike buying)

Cash Flow Per Strategy

Property	Strategy	Setup Cost	Monthly Profit	ROI
3-bed £120k terrace	BRRR	£35k (£15k dep + £20k ref)	£150-250	5-8%
3-bed terrace	BTL room let	£30k deposit	£200-350	8-12%
3-bed terrace	R2R	£3k (furnish)	£300-500	120-200%
3-bed terrace	HMO buy+licence	£35k	£400-600	14-20%

⚠️ R2R has highest ROI but no capital appreciation & more management

🎯 Daily Deal-Finding Workflow

# Step 1: Search DY area for BRRR targets python3 ~/.hermes/scripts/propaideals_tools.py search "DY2,DY4,DY5" 80000 150000 2 4 "house" # Step 2: Filter results manually for: # - bmv_discount_percentage > 0 (below market value) # - needs_modernisation = true # - chain_free = true # - days_on_market > 60 # - estimated_rental_yield > 6% # Step 3: Run deal calculator for top picks python3 ~/.hermes/scripts/propaideals_tools.py calc brrr 120000 25 5.0 700 # Step 4: For HMO/R2R search, look for 3-4 bed terraces # Filter for: within_article_4 = false (check API returns) # Filter for: property_type = house, 3+ beds # Range: £110k-£160k (bigger houses for HMO)

🎯 Priority Action Plan

Immediate: Run PropAI search for DY2/DY4/DY5 £80k-£150k houses with BRRR indicators
Immediate: Run PropAI search for 3-4 bed houses in DY area for HMO/R2R potential
Short-term: Verify Dudley Council's exact Article 4 boundaries (check specific wards)
Short-term: Explore WS postcodes (Walsall) as secondary HMO market
Medium-term: Build automated daily cron that searches PropAI and scores deals
Medium-term: Integrate Article 4 filtering directly into the deal-sourcer script