Great opportunity

suemoo

This is very complicated - so complicated I can't actually get my head round it! We have a semi that has increased in price considerably since we bought it - our outstanding mortgage currently stands at about £74,000 and we could sell it for around £400,000. So lots of equity in there. We also have a terraced house that we rent out - this has about £25,000 outstanding and generates £500 per month rent. We have an ISA worth about £7000. So that's basically what we've got to play with.

I've spotted a house being sold off by the council - it's basically an "invitation to tender" - used to be an old people's home, I think. A similar house was sold a year ago for about £550,000. Anyway, I would love to put a tender in but the deadline is only two days away and you then have to come up with the cash 28 days later. Is there any way I could do this? I know I couldn't sell our house in 28 days. But could I have a bridging loan? Would anyone be prepared to lend to us on the "maybe" that we'd sell our house as soon as possible? What sort of figures would we be looking at - by that I mean how much would we have to shell out each month until our house was sold? Help! I'd love to do this but don't know if it is feasible. Thanks for any advice...

lynzpower

SueMoo,

Where do you intend to live, in the old peoples home once the work is done?

Is it an invitation to tender in so far as the counci are looking for compnies to run it as a resource though? Or are they selling it off to the general public etc? Sorry, confused by the invitation to tender, as when the council I work for uses the term its cos they want to fund/part fund businesses/ charities to run thier arms of service IYSWIM

lynzpower

Additionally if you are wanting to sell off the terraced house, surely you will have to evict your tenants that can take up to about a year, although possibly shorter, all depends on the process of eviction and where they are in their AST?

lynzpower

Id also think about getting estate agents round to give you a proper valuation ( best of 3 usually) in order to work out whether in fact your place is worth 400 and how the market is for properties of this price bracket in your area

PHEW - sorry for multiple posts

missile

You will almost certainly be able to raise the cash. There are many companies who will throw money at you, provided you have means to repay, a good record and sufficient equity to cover the debt. You have not given much info, but it seems you would be in this position?

You are usually required to provide a 10 % deposit immediately and the balance within 28 days, but terms vary. If for whatever reason you default there will be a penalty, possibly limited to 10%, however all of this ought to be explained in the "invitation to tender". You need to check T&C carefully and seek advice from a solicitor. You could also ask the vendor and possibly you may glean some other useful info, like how many other prospective buyers.

poopscoop

lynzpower wrote:

Additionally if you are wanting to sell off the terraced house, surely you will have to evict your tenants that can take up to about a year, although possibly shorter, all depends on the process of eviction and where they are in their AST?

You can give them 2 months notice if AST or AT. Also, properties can be sold with tenants as an investment property

Doozergirl

You might have to let it go. I know very little about bridging except that we do it via an agreed overdraft with our bank - the money is secured against a property with no mortgage. It took a lot longer to set up than two days though and it costs an absolute fortune in fees and interest. We only do it to secure a property with cash and then remortgage it immediately.

Even if you could arrange it all in two days, I'd be exceptionally concerned at getting my facts and figures wrong. There's no way I'd try and arrange finance and do all my homework on the property in two days. How would you go about getting a survey done and what would happen if problems came up on it? I'm sure the council will consider this.

It's often the most organised tender that secures a property, not just the price they offer. I just can't see how you can pull it together in two days. Sorry.

lynzpower

poopscoop wrote:

You can give them 2 months notice if AST or AT. Also, properties can be sold with tenants as an investment property

I never knew that about the 2 months notice. thanks.

Of course you can sell the property tenanted I did forget that. :beer:

klaatu

Since you have pleny of equity in your house, it seems to me the cheapest and simplest way to raise the money would be to increase your £74k mortgage, assuming your lender would give you enough based on income etc.

clutton_2

"""You can give them 2 months notice if AST or AT"" -

This is slightly more complex than you make it sound. An AST is an agreement for the landlord to let, and the tenant to pay for, a property for the full PERIOD as laid down in the agreement.

So, you can only give 2 months notice to coincide with the end date of the AST - so if tenants sign on January 1st for 6 months - you can only give them notice on May 1st for 2 months taking you up to June 31st. Tenants need only give one months notice on first of June.

This "tenancy end" date can be renegotiated by mutual agreement, but, this does not negate the legally binding nature of the Agreement both signed.

Even at the end of the 6 months, (if notice has been served on May 1st) a tenant may choose to not move out. It can then take several months to get them out.

Re OAP home - you have not said what you would want to do with it - knock it down and build flats ? Re-develope it into flats ?

i agree, that 2 days is WAY too short a time to research this. There will be others. Do all the research you can on this, and it will be a great learning curve for you for the next one. Such a project (if you are planning to knock down and redevelope) as this involves a VAST amount of knowledge, research, time and money - but - all this newly acquired info will be extremely valuable when the next one comes along - as it will. Best wishes

lynzpower

Thanks for that Clutton, that was my understanding of it too

What baffles me about this is if its an old folks home 9 or used tol be) surely it will be hoping to be bought out by companies aiming to run it as such ( your bupas, westminster healthcare etc) as we are in a massively ageing population and theres hardly any vacancies as there are. So you may well get gazumped