Hi, Personal loan for un-mortgageable auction property?

Jack_Johnson_the_acorn

GDB2222 wrote: »

So, if they lend you £20k and you have £10-15k in savings, aren't you going to be rather short, unless the property sells for the bottom end of the guide price (which is very unusual)? What if it goes for £40k or £45k? I appreciate that it's not worth bidding it up and up, but it would be a shame to spend all the fees up front if you haven't even got enough to get to the top end of teh guide price range.

That's what parents are for... I don't understand what costs I will incur, I'm not going to get the loan for property until after the auction, I'm going to get a written agreement from the bank to confirm that the funds are available if I buy the property.

kiki*_2

Whats so good about this property? Wouldn't you be better getting one that you could get a mortgage on?

GDB2222

Jack_Johnson_the_acorn wrote: »

That's what parents are for... I don't understand what costs I will incur, I'm not going to get the loan for property until after the auction, I'm going to get a written agreement from the bank to confirm that the funds are available if I buy the property.

Parents - can they raise the extra money you'll need within the required 28 days?

Fees- you'll need to get a solicitor to look through the legal docs before the auction. Or are you able to do this yourself?

Won't you want a surveyor to at least look at the block, even if he can't see inside the flat, to reassure you that the whole place is not falling down/ whether there are major works urgently needed?

GDB2222

kiki* wrote: »

Whats so good about this property? Wouldn't you be better getting one that you could get a mortgage on?

It's cheaper as it's unmortgageable.

kiki*_2

It's cheap but he/she still doesn't really have the money to pay for it!

GDB2222

kiki* wrote: »

It's cheap but he/she still doesn't really have the money to pay for it!

The alternative is to borrow much more, but on a mortgage. If the OP can make this work, it should save shedloads of cash, although what is borrowed will be at a much higher APR.

chappers

GDB2222 wrote: »

Well, the lack of management is easy for the leaseholders to get together and sort out, and that would make the flats mortgageable again, so the value will go up. Likewise, if the tenants are on an AST, you can get them out eventually. I would definitely wander round and have a chat with the tenant/the neighbours.

All fair points but I would want to see them satisfied, before the hammer fell and I was commited to purchase.
A tenant who is unwilling to allow viewings, could turn out to be hard to shift, not to mention you will have no idea of the state of the property until they are gone, however if you made it clear to them that you would consider renting to them again that may open the door for viewings.
Just be careful they may turn out to be a problem tenant.

Jack_Johnson_the_acorn

kiki* wrote: »

It's cheap but he/she still doesn't really have the money to pay for it!

How do we not have the money to pay for it?? We have a combined monthly net income of £3000 minimum per month.... The loan I have just been offered was for £20'000 with repayments of £450 over 5 yrs...... That leaves us with £2550 each month to survive, I think that means we can afford it.

The tenant has signed a new contract for 6 months paying just over £400 per month. I think this is a great purchase if it can be bought at the right price. The gross yield would be over 10% :T

kiki*_2

Sorry my post sounded harsher than I meant! what I was trying to say was you couldn't afford it outright so why not go for one that you can get a mortgage on instead of loan + parents.

However you seem to think it's a bit of a bargain so that answers my original question of what's so good about this property?

Jeffrey_Shaw

As to lack of Mgt. Co., ask your solicitor to investigate a possible Indemnity Insurance policy.