Best way to start Property developing

adicosuk

Hi there,

We bought our current house last year, renovated extensively and now we have about £220k equity in the house.

We have seen a house in the same bad state as ours was and we want to buy it and do it for a profit.

I talked to our mortgage bank (Abbey) and they said they would let us take out equity only as much as we can afford to pay, based on salaries, which is around 55k on top of our current 180k mortgage (which tied in a 2-year tracker, with 11 months to go)

We literally want to buy the new house, renovate it and sell it in 3 months. And the 55k (offered at 7.33%) we would get as maximum from Abbey as equity does covers just 5% deposit + legal + renovation costs on the new house (the price for the new house is £280k).

We would need something like a short-term mortgage to buy the new house, but Abbey don't do short-term mortgages. And I am not sure any of the big banck/building societies do this.

I heard about small lenders offering this short term mortgages, with no penalties for new build and renovation, giving up to 95% of the buying cost for the new house and up to 95% of the cost for the renovation.

But I am not sure how trustworthy are they and how this work.

Anyone been in this situation and knew more about this things ? The advice would be greatly appreaciated !!

Thank you,
Adrian

Massive_2

Adicosuk,

There is finance available from various sources for precisely this purpose.

I've sent you a Private Message that I believe will be of assistance. (They're up at the top right where it says welcome.)

Regards

[Deleted User]

That sounds like a pretty bad idea to be honest i wouldnt bother.

adicosuk

Massive, what do you by PM ?

Thank you,

Iotrez

Could you pretend that you intend to rent the property out and get a buy to let mortgage?

Iheard that the the buy to let mortgage lenders are only concerned that the potential rent will cover the mortgage repayments.

adicosuk

Thank you for the suggestion, Iotrez, I already invetigated this path, but for buy-to-let mortgages the banks ask for higher deposits, like 15% Abbey and Barclays or 25% HSBC. I can't raise these money for deposit...

[Deleted User]

You can get 90% BTL mortgages, see A+L, they wont give it to you though im afraid. Maybe try a broker to see if theres anyone madder then a hatter to lend you the money.

Do you really think you can buy, renovate, sell a house in 3 months and turn a profit?

Lets say it takes one year you would pay 20k in interest during this time and probably another loading of exit fees and all the little things you didnt budget for.

adicosuk

Yant1,

We have done our current house in 4 months, that includes a 2 bed+1 bath loft conversion. And I was working about 3-4 hours a day on top of my normal job, plus the workers I employed

And it was done.

I can renovate a house in 3 months, otherwise I wouldn't ask, believe me.

Cheers,
Adrian

advent1122

adicosuk wrote: »

Yant1,

I can renovate a house in 3 months, otherwise I wouldn't ask, believe me.

Cheers,
Adrian

....and how long will it take to sell?
Another 3 months, 6 months, a year?

plane_boy2000

Massive wrote: »

Adicosuk,

There is finance available from various sources for precisely this purpose.

I've sent you a Private Message that I believe will be of assistance. (They're up at the top right where it says welcome.)

Regards

Massive - would you be able to Pm me to? I have been looking into this to without much luck, and it sounds like you are knowledgeable in the subject.

del855

adicosuk wrote: »

Hi there,

We bought our current house last year, renovated extensively and now we have about £220k equity in the house.

We have seen a house in the same bad state as ours was and we want to buy it and do it for a profit.

I talked to our mortgage bank (Abbey) and they said they would let us take out equity only as much as we can afford to pay, based on salaries, which is around 55k on top of our current 180k mortgage (which tied in a 2-year tracker, with 11 months to go)

We literally want to buy the new house, renovate it and sell it in 3 months. And the 55k (offered at 7.33%) we would get as maximum from Abbey as equity does covers just 5% deposit + legal + renovation costs on the new house (the price for the new house is £280k).

We would need something like a short-term mortgage to buy the new house, but Abbey don't do short-term mortgages. And I am not sure any of the big banck/building societies do this.

I heard about small lenders offering this short term mortgages, with no penalties for new build and renovation, giving up to 95% of the buying cost for the new house and up to 95% of the cost for the renovation.

But I am not sure how trustworthy are they and how this work.

Anyone been in this situation and knew more about this things ? The advice would be greatly appreaciated !!

Thank you,
Adrian

How did you get on. I am also considering such an idea, i cannot find employment due to health issues and consistancy. I am desperate to find a way of doing something so i can work when able, however like you i also know a lot of tradesmen so finding the right teams is no problem, finding funding methods and actually earning salary is the big stumbling issue, also i am aware finding property may also be an issue.