Bargain Dilemma

ricriley

Hi,

I'll cut straight to the chase. I know a friend who want's her house sold quickly, it has been on the market for one year at 170k but hasn't sold. She is going to take an offer from a firm at 110k, because she cannot afford the mortgage payments.

She said she'd sell me the property for the same amount, because she'd prefer me to be living there.

I currently own a property that I bought for 76k 2 years ago, in which we borrowed 115%.(81k) I don't think there's anyway we could sell our property in time to get the deposit cash for this one.

So I would like to buy this property at the bargain price of 110k and then sell it ASAP at a decent price of about 130k, which would hopefully bring a quick profit of 20k if all goes well.

Would this be possible and can you see any hurdles that I may come across? I'm currently unsure how I will find the money for the deposit on this house but it seems too good to let slip.

I would like to hear what you all think.


Thanks,
Ric

tek-monkey

How does your friend feel about you making a few k off her misfortune?

If I was her I'd drop it to 140k and see what happens, if its still at 170k?

Pee

She hasn't sold it in a year, but of course you could sell it in a matter of months - and the friend is selling it to you as she would prefer you to be living there...

I'm thinking morally this is dodgy and financially you don't seem to have it worked out at all.

I have a house worth about £200k and want to buy something for about £125k. My mortgage is less than 50% of the value of the existing property and no matter how I do the sums, a) noone would be prepared to lent to me b) I would be endangering what I have put together so far to buy another property at this stage.

ricriley

When I say 'friend' they are more of a friend of a friend.

I understand what your saying, why wouldn't she just lower the price herself?. My answer to that is to that is that I'm not sure to be honest. It was under my impression that the house would be repossessed soon if she didn't get rid.

I already told my girlfriend it wouldn't be viable. But it's just a shame to see a house going for much less than it's worth...

Soot2006

Well other that the rather strange morality toward your friend who trusts you more than a strange (bad decision, that!), no there's nothing wrong with your plan.

Just ask bank nicely for the mortgage, pay the deposit (only about £20,000 + £1,500ish for legally things), buy the house as a secondary residence (so you don't need BTL), re-market it quickly and sell it for £140,000. Simple'z. Can't believe your mate hasn't thought of selling it at £140,000 herself the silly woman -

Please let me know how it goes ...

the.ciscokid

ricriley wrote: »

Hi,

I'll cut straight to the chase. I know a friend who want's her house sold quickly, it has been on the market for one year at 170k but hasn't sold. She is going to take an offer from a firm at 110k, because she cannot afford the mortgage payments.

She said she'd sell me the property for the same amount, because she'd prefer me to be living there.

I currently own a property that I bought for 76k 2 years ago, in which we borrowed 115%.(81k) I don't think there's anyway we could sell our property in time to get the deposit cash for this one.

This is golden. You bought 2 years ago (at the peak), and borrowed 115%, now what equity do you think you would actually have in your house for a deposit even if you could sell (in a declining market)?

ricriley wrote: »

So I would like to buy this property at the bargain price of 110k and then sell it ASAP at a decent price of about 130k, which would hopefully bring a quick profit of 20k if all goes well.

Why is it a bargain price, and why doesn't your "friend" put it on the market at a price that it might stand a chance of selling (since you think it will sell quickly at 130k)?

ricriley wrote: »

Would this be possible and can you see any hurdles that I may come across? I'm currently unsure how I will find the money for the deposit on this house but it seems too good to let slip.

Ric

No chance.

ricriley

This is golden. You bought 2 years ago (at the peak), and borrowed 115%, now what equity do you think you would actually have in your house for a deposit even if you could sell (in a declining market)?

I bought a house in need of renovation for 76k. Everything has been done, new kitchen, new bathroom, re-plaster, the lot. I think it is now worth at least 90k, that why I thought it was possible that we now have enough equity to sell.

Thanks for everyone's views and opinions.
Ric

AlwaysWorking

ricriley wrote: »

I bought a house in need of renovation for 76k. Everything has been done, new kitchen, new bathroom, re-plaster, the lot. I think it is now worth at least 90k, that why I thought it was possible that we now have enough equity to sell.

It really depends on where you live. I bought mine 2.5 years ago and have put in a new heating system, kitchen, bathroom, replastered etc etc...I'd be lucky to get what I paid for it....:o

Bermuda_John

i'll buy it, where is it ?

Cannon_Fodder

ricriley wrote: »

...it's just a shame to see a house going for much less than it's worth...

Its worth £110,000, because that is the most that has been offered for it...

Your 'friend' is mad not to drop it to £130k for a week and see what happens before "giving" it away...

confused31_2

It makes me laugh people buy houses 2 years ago do a little bit of work on them and expect them to go up in price, some of the people have got their houses priced higher than what they was in 2006 by me, the funny thing when i look at the house prices in the region no house as even sold down the roads in question anywhere or anytime near the prices they are asking for them now.

These people need to take their heads out the sand and get in the real world, houses have fell at least 20%, not gone up 20%.