Remortgaging home to buy house to renovate and sell

booklover

:hello:

I am urgently in need of some advice. We fortunately own our home which has just been valued at approx 550K (a similar house sold recently for 650K :eek:)

We have a joint income of approx 44K and have been offered the chance of making some money by joining in a venture to buy a property (with family):question: :rolleyes2 renovate it and then sell it on and we should make maybe 100k profit. It does however mean borrowing against our home. Does anyone know how this works in practice?

Firstly, as a very cautious person I am quite wary of this, however I believe it would be good investment as properties are increasing rapidly in this area and sometimes risks have to be taken to make money. I don't know what to do and have to reach a decision soon...........


Many thanks in advance for your advice

Fiona

Guy_Montag

Well, worst case scenario, you lose your home & you never speak to your family again!!

On the other hand you could end up 100k (between how many people?) better off

booklover

Hi Guy

Well, if all went well, judging by how similar properties have sold for once in good order we would hopefully make maybe 500k. It is between 3 people BTW so 166K.

Interest paid and other fees etc would obviously be deducted from that.

My husband is really keen to do this but I am quite apprehensive as I think its a bit risky.

The property is in a highly sought after location and should definitely sell; I think we would probably be guaranteed our money back.........

Fiona

hearts

You seem to be set on it and are here for reasurance. I would jump at it assuming you have taken all the necessary precautions.
How much do you have to put in?
How much do you expect to make? 166k seems a bit far fetched? at that level even if you go badly wrong you cant lose. But unless you are stealing it I find it hard to believe there is a profit of that amount.

booklover

Hearts

Its my husband who is set on the idea not me! I understand the figures are accurate, here in this part of Belfast the prices are just increasing at an incredible rate.

BTW what did you mean by ' I would jump at it assuming you have taken all the necessary precautions?' What precautions are you referring to?

The profit does seem very high but this house needs some work on it and a similar house sold for about 700k higher not long ago.

Fiona

PS. Many thanks for you thoughts on this matter.

booklover

Any more advice please as it would be very welcome

Many thanks

Fiona

hearts

Fiona. I wasn't criticising you. I cant see how you would need advice if it has all you say it has then what on earth is there to be concerned about. With that amount of potential profit its hardly a difficult decition.
By "precautions" I meant make sure your figures stack up. Check and recheck your sums. Make sure you can make all your payments until its sold.
You missed out some figures.
Buying price? estimated selling price? Your investment? Timescale?

booklover

Hi Hearts

Thanks for reading this and talking to me.

The house had an asking price of 610k and has quickly gone has high as 1.1million!!!!!! EEK! It is a large victorian semi in a very good highly sought after area.

It needs maybe 100k of work carried out on it on improvements.

A detached house in the same avenue sold for 2.4 million :shocked: :shocked:recently so we would hope the house in mind here would sell for at least 1.8 mill. once work is completed on it.

Our investment would be approx 500k and it seems from what I am learning by my research into houses in this area,:think: that it is highly unlikely we would loose our investment.

The timescale I believe would be approx 1 year from buying then renovation to selling.

I am a bit scared at this prospect :undecided but would not be happy to miss this opportunity either.

Fiona

PS. What would you do???:question:
I can hardly believe these mad prices here.

booklover

Anyone want to come live in Belfast as there are lots of cheap houses here !!??:D:eek: :rolleyes2

Fiona

booklover

I love these smilies

Fiona

Ian_W

Gathered that!

Don't forget that your profit will be taxable, quite probably income tax rather than CGT - so may be advisable to run the figures past an accountant.

If all the figures stack up - sounds too good to miss.