Want a mortgage for first time buyer

killakz

the support will be offered to them from myself voluntary, housing benifit will yes cover the rent and after conducting my research i am aware of what income we will get from them. the residents will then have to pay a service charge each week which will cover the cost of the bills like gas, electric, water, tv licence ect

the property would not be classed as homeless accomodation it will be classed as supported accomodation for vunerable people

gizmo111

killakz wrote: »

the support will be offered to them from myself voluntary, housing benifit will yes cover the rent and after conducting my research i am aware of what income we will get from them. the residents will then have to pay a service charge each week which will cover the cost of the bills like gas, electric, water, tv licence ect

the property would not be classed as homeless accomodation it will be classed as supported accomodation for vunerable people

Why would you do this on a voluntary basis? What insurance will you have? Will you be CRB checked? Where will the homeless referals come from? How will you risk assess your residents before they move in? Are you qualified/working in supporting housing or with vulnerable adults?

Soot2006

Sounds like a very dodgy "business" all round **confused** ...

maninthestreet

Killakz,

So you have a business plan ready to present to a lender in order to show the viability of this proposed enterprise?
How are you going to provide 'support' to these vunerable people if you work full time? Do you have any experience of providing 'support' to vunerable people?

killakz

hi all thank you for your responce

i am currently working on the business plan and going to show detail in there with regards to how and where the income for he business will come from

once i have this business started i will be quiting my current job to work with my own business, i am fully qualified in working in supported accomodation and supporting vunerable people so the qualification will not be a problem.

i also have contacts in which case i will be able to obtain all licences like the HMO licence ect

all members of staff will also have to be CRB checked and the referals will come from housing accociations and also places like the salvation army

i also have accessment templates ready to be checked by solicitors to make sure that they are adequit enough to be used for risk accessments

gizmo111

killakz wrote: »

hi all thank you for your responce

i am currently working on the business plan and going to show detail in there with regards to how and where the income for he business will come from

once i have this business started i will be quiting my current job to work with my own business, i am fully qualified in working in supported accomodation and supporting vunerable people so the qualification will not be a problem.

i also have contacts in which case i will be able to obtain all licences like the HMO licence ect

all members of staff will also have to be CRB checked and the referals will come from housing accociations and also places like the salvation army

i also have accessment templates ready to be checked by solicitors to make sure that they are adequit enough to be used for risk accessments

But it still won't be a 1sttime buyer residential mortgage, and you say you are going ot provide the support voluntarily, how do you hope to pay staff?
What sort of money are you putting into this? Why do you need a solicitor for a risk assessment, or IA to see if the people referred will meet your criteria?
When you say housing associations what do you mean? I don't know of any homeless that get referred on to homeless projects by HA's.

killakz

gizmo111 wrote: »

But it still won't be a 1sttime buyer residential mortgage, and you say you are going ot provide the support voluntarily, how do you hope to pay staff?
What sort of money are you putting into this? Why do you need a solicitor for a risk assessment, or IA to see if the people referred will meet your criteria?
When you say housing associations what do you mean? I don't know of any homeless that get referred on to homeless projects by HA's.

For a large building of 15 flats incoporated into one building housing benifit will pay approximatly 80 per week, if all flats are occupied then that will generate 1200 per week or 4800 per month or even 62.400 per year this will pay for part of the mortgage or the monthly agreement

each resident would then have to pay a service charge of 20.00 per week to cover the cost of gas electric tv licence water

so if i had a full house off 15 people for a whole year this would bring in around 78000

take out of that your mortgage which i am going to say would be around 400 per month which would be approximatly 4800 per year

that would then leave the company 73200 now because the company would not be allowed to fall into profit with the service charge i going to say that would cover the cost of all the bills 15600 as an example

that would then leave the company with 46300 per year.

then with the remaining balance i will have to deduct the loans that would be taken out for the company say 20000 per year

remaining balance would be 26300

take out a small percentage for wages for myself lets say 15000

leaves the company with a net profit of 11300 per year

now persuming with the net profit i would then have to pay for tax and vat but i am not sure at the moment what that would work out at

am i being realistic with this??

gizmo111

am i being realistic with this??

No. I don't know of any supported housing scheme that charges £20 per week service charge the average is around £11.
You have made no provision for arrears, voids, cancelled claims etc. No provision for furnishings etcs. Insurance, staff.
How much are you putting into this? How much will this building cost and where is the £400 mortgage payments figures from - you will not get a residential mortgage on this.

maninthestreet

killakz wrote: »

For a large building of 15 flats incoporated into one building housing benifit will pay approximatly 80 per week, if all flats are occupied then that will generate 1200 per week or 4800 per month or even 62.400 per year this will pay for part of the mortgage or the monthly agreement

each resident would then have to pay a service charge of 20.00 per week to cover the cost of gas electric tv licence water

so if i had a full house off 15 people for a whole year this would bring in around 78000

take out of that your mortgage which i am going to say would be around 400 per month which would be approximatly 4800 per year

that would then leave the company 73200 now because the company would not be allowed to fall into profit with the service charge i going to say that would cover the cost of all the bills 15600 as an example

that would then leave the company with 46300 per year.

then with the remaining balance i will have to deduct the loans that would be taken out for the company say 20000 per year

remaining balance would be 26300

take out a small percentage for wages for myself lets say 15000

leaves the company with a net profit of 11300 per year

now persuming with the net profit i would then have to pay for tax and vat but i am not sure at the moment what that would work out at

am i being realistic with this??

I would stay away from running a business if you don't understand the difference between gross and net profit. Putting that to one side, £400 per month mortgage payment would equate to a mortgage of about £80,000 at 4.5% p.a interest rate. Assuming you paid a 20% deposit, you are looking to buy a property for £100,000 - how many 'large' properties that can be converted into 16 flats are available in your area for £100,000? Even if the property is delapidated and rundown, making it cheaper to buy, how are you going to fund the renovation/conversion costs that are going to be ten of thousands of pounds?

benjo

Your business plan is flawed, you have based your figures on 100% occupancy which is physically unachievable in the first year and probably unachievable in subsequent years, (unless you are an NHS mental health facility who generally fun at 120% occupancy) it concerns me that if you havent realised this, then you really havent researched this thoroughly, from previous experience I would imagine you would be looking to acheive 70% occupancy for the first year.

Your solicitor might well be able to offer advice regarding work based health and safety risk assessments but is not best placed to advise you on specialised risk assessments necessary when working with this client group, with the greatest respect they do not specialise in mental health risk assessment, suicide/self harm risk assessment, drug and alcohol risk assessment etc - Im guessing that whoever is providing medical cover for this project will factor this service within their charges to you? What is the annual cost of this service?

I seriously doubt you will find a property for 100k that is big enough to take 16 bedrooms, 16 bathrooms, at least one commercial kitchen or 16 kitchenettes, living accomodation for 16 people, office space, storage space, commercial laundry facilities and cleaning/sluice facilities, staff rest room/changing facilities, interview rooms, space for your maintainance equipment, there is a minimum amount of space people need to live and if you did - mortgage finance would be the least of your worries.

Have you any idea what it will cost you to furnish this place? You cannot go down to the local charity shop and buy what you need, your furnishings will not be covered by the Furniture and Furnishings Fire Safety Regulations which cover furnishings used in domestic properties, but you would need to comply with your responsibilites under the Fire Services Act 1981 specifically section 18(2) and this is going to cost, since as Im sure you already know your project falls into the 'high hazard' catagory as a hostel and would require you buy furnishings/fittings appropriate to this job.

Im raking my memory here, the last time I set up a project for the NHS which was about 5 years ago (so prices may well be higher now) the cost of a dining room chair was around £200, 4 seater table £600, arm chair £350, two seater setee £700, bed £300, mattress £180, single locker/wardrobe £300, carpets/curtains I cant remember, but certainly many times higher than anything you would put into normal residential housing and of course it isnt just the initial outlay there is the service contracts to factor in and the annual electrical testing and fire equipment testing.

I would imagine you would need a setup budgest of 100K upwards to furnish the place for 15 residents, that doesnt include the cost of installing 16 toilets, showers, wash hand basins, ariel sockets, electrical sockets, fire alarms etc.

The last project I was involved in was a 14 bed unit and had a build cost of 3 million alone and we didnt have to purchase land, just build, I accept though that our costs would have been higher than yours due to consideration of medical/security needs.

It is a nice idea to help people and be able to earn a small wage working from home whilst your mortgage is paid off - but I dont get the sense that you have really thought this through - goodluck though.