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Buying a house at auction
Comments
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You're presuming it will sell after though - some properties are sitting on the market for years. What's the market like where you're looking to buy? Are things generally moving? Are there many price reductions? Everyone wants a deal these days. To only have £11k-ish profit from a house is cutting it a bit fine, I'd say. You might well end up having to reduce it £10k if it's not selling - still with no guarantee it'll sell. Your parents would be liable for that mortgage (even if you have a private arrangement that you'll pay them each month. What if you can't pay? On a salary of around £11k take-home pay, it might well be a struggle. I presume they wouldn't be taking it out over a long period of time - and I don't know if they'd be able to pay it back within such a short space of time without some sort of penalty.
Jx
Houses on our estate are generally selling within 10-12 weeks at the moment. Those that are on the market for longer are generally overpriced. There is a scruffy house down the road that is up for £145k and has been on the market at that price for 2 years now. An identical house opposite the one i am looking to buy was refurbished last year to a very good standard and sold in August for £158,500. That was only on the market for a couple of weeks.
Parents will pay the new finance if the property doesnt sell, but they are confident that it will.
My income has stopped as of last week - i am self employed and the guy i was working for has no more work. Work is quiet in the building trade around here at the moment but usually improves early February. I have no relevant qualifications to go and do anything else. I will not end up in a position where i need to claim JSA.0 -
poppysarah wrote: »so you're paying yourself?
are you running it as a business and what tax will you pay?
My parents will be giving me enough money to pay my bills whilst i am doing the work so they asked me to include that in my budget for renovation costs.
I am currently self employed (sole trader) so it will be done through the business. I am actually in the process of registering a Ltd company so also need to investigate whether there are any benefits of doing the project as a Ltd company.0 -
As the bank of mum and dad is so involved here, might it not be simpler for the parents to buy the house and then employ you to do the work?0
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LEAVE your parents out of this...your a grown man ,,do not risk your parents lifestyle for your happiness..It is nice to see the value of your house going up'' Why ?
Unless you are planning to sell up and not live anywhere, I can;t see the advantage.
If you are planning to upsize the new house will cost more.
If you are planning to downsize your new house will cost more than it should
If you are trying to buy your first house its almost impossible.0 -
Tiffabebbs wrote: »Also, the £20k renovation costs include my labour for actually doing the work so the £11k on top of that would be nice!
That does help quite a bit then, as you won't need to find the whole £20k up-front. You obviously have a very good idea what is involved, which reduces the risk. I'd say go for it.No reliance should be placed on the above! Absolutely none, do you hear?0 -
LEAVE your parents out of this...your a grown man ,,do not risk your parents lifestyle for your happiness..
That's overly-dramatic. The parents can raise the finance without risking too much, as they can pay the mortgage interest from their savings if push really comes to shove. The finance will be tied up in a property, so they can't lose it all. And a lot of parents would want to give their kids a helping hand in these difficult times.
What they need to do is see a mortgage broker ASAP to see if they can borrow the money (roughly 25%-30% of their property value) without current evidence of earnings. If they cannot, you should think again, as bridging finance can be murderously expensive.No reliance should be placed on the above! Absolutely none, do you hear?0 -
As the bank of mum and dad is so involved here, might it not be simpler for the parents to buy the house and then employ you to do the work?
Thats how i wanted to do it to be honest, but they dont want to own the house as they are concerned about tax implications when it is sold. They are in a good enough financial postion at the moment where they dont want/need any more income. They are just looking to act as security for the finance for me.0 -
LEAVE your parents out of this...your a grown man ,,do not risk your parents lifestyle for your happiness..
A grown man with no work and unable to raise the finance that can get back on track with a little help from my parents. Dont think thats completely unreasonable.
They have offered to give me a lump sum of cash so i dont have to work till mid next year, but that feels cheeky. Id rather be doing 12-14 hours work a day and making my own money.0 -
That does help quite a bit then, as you won't need to find the whole £20k up-front. You obviously have a very good idea what is involved, which reduces the risk. I'd say go for it.
I've got my own accounts with 2 local builders merchants this week - they have both given me very good credit limits and one is a 60 day account, the other is a 90 day. Might even be able to complete the project before paying out for the materials which would be nice for cashflow.0 -
Tiffabebbs wrote: »A grown man with no work and unable to raise the finance that can get back on track with a little help from my parents. Dont think thats completely unreasonable.
They have offered to give me a lump sum of cash so i dont have to work till mid next year, but that feels cheeky. Id rather be doing 12-14 hours work a day and making my own money.
can they afford to lose money?
What if
- your DIY skills arne't up to the job
- building regs rules means it costs more than you think
- it takes longer than you plan
- you have an accident and can't work
- you die (Worst case senario of course but consider how they'd cope with a half done house and a dead child)
- you get offered the job of your dreams
- you fall in love and want to move away
- you discover the house is built on a mineshaft and needs £30k to stop it falling in (Ditto about a million other senarios)
- you just get bored of doing it
- you discover that renovating a house in winter is the most miserable thing to do on the planet
etc.0
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