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Advice: Property Development Startup Funding
mp-11
Posts: 1 Newbie
Hi all,
My father and I are looking to start a small family "company". We've developed a handful of properties over the last few years – mostly at a hobby / second job kind of pace. All done as individual sole traders, not a company.
We're considering forming a limited company, and signing over 3 properties to the company name as assets. These properties are owned outright by us and currently rented out. Their current market value is approx £300k in total.
My questions are:
– How would we best release equity from the owned properties to enable us to expand and buy more property?
– Are there benefits to putting properties into a limited company's name, or does it provide extra headaches, costs etc?
– Is the limited company route a wise move, or would it be better to leave as is and raise personal loans against the security?
We're looking to raise £150k, so thinking 50% refinance/remortgage on each property would be a good start. We're both self-employed in other jobs at the moment and I'd say our combined overall personal turnover/income would be less than £30k.
We have decent equity in assets but I realise individual low incomes may go against us when applying to refinance/remortgage the owned properties.
– Despite the equity, is it realistic to expect banks to lend £150k to a newly formed business with previous "low" earners as directors?
Your opinions/advice would be a great help in confirming some decisions.
Many thanks.
MP
My father and I are looking to start a small family "company". We've developed a handful of properties over the last few years – mostly at a hobby / second job kind of pace. All done as individual sole traders, not a company.
We're considering forming a limited company, and signing over 3 properties to the company name as assets. These properties are owned outright by us and currently rented out. Their current market value is approx £300k in total.
My questions are:
– How would we best release equity from the owned properties to enable us to expand and buy more property?
– Are there benefits to putting properties into a limited company's name, or does it provide extra headaches, costs etc?
– Is the limited company route a wise move, or would it be better to leave as is and raise personal loans against the security?
We're looking to raise £150k, so thinking 50% refinance/remortgage on each property would be a good start. We're both self-employed in other jobs at the moment and I'd say our combined overall personal turnover/income would be less than £30k.
We have decent equity in assets but I realise individual low incomes may go against us when applying to refinance/remortgage the owned properties.
– Despite the equity, is it realistic to expect banks to lend £150k to a newly formed business with previous "low" earners as directors?
Your opinions/advice would be a great help in confirming some decisions.
Many thanks.
MP
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