Is this possible?

DCFC79

darrendonald2 wrote: »

So, the only way to get around this, as far as I know, is to borrow from friends. Banks won't see this. I have asked my friends (who don't plan on buying a property) to take out a loan for £15,000 and give it to me. I would then pay their loan off via direct debit plus an extra £1000 as a thank you. No one wants to do it though

Why the sad/unhappy face ?

Can you not see why your friends said no ? Maybe they dont want the hassle of they're credit file trashed or you ditching them with the loan and doing a disappearing act.

Remortgage/sell 1 of your other prperties or just stop buying properties.

DCFC79

darrendonald2 wrote: »

What's OP?

The OP (original poster) is you, its not going to be anyone else.

jonesMUFCforever

darrendonald2 wrote: »

Not if I pay with cash and get the loan after the mortgage application?

HA ha ha what if they ask to see proof of funds before deciding on your application?
They won't take milk tokens as far as I know.:D

John1993_2

darrendonald2 wrote: »

Why am I not sensible?

I've never been in debt in my life, borrowed multiple times from people ...

Can you just read your above sentence back to yourself, and perhaps realize how stupid it makes you sound?

Which half of it is true, have you borrowed money, or have you never been in debt?

Do you perhaps not understand what debt means, or are you using your own, new definition of words?

It's interesting how many of the people on here who moan about being unable to take in more debt also seem to have muddled thinking about what debt is.

To be clear, if you have EVER borrowed money, then you've had debt.

JuicyJesus

jonesMUFCforever wrote: »

HA ha ha what if they ask to see proof of funds before deciding on your application?
They won't take milk tokens as far as I know.:D

He also doesn't seem to realise that "fraud" involves "lying". Paying the mortgage deposit in cash is immaterial if the cash is borrowed, because you'd be committing "fraud" by "lying" about where it came from.

somethingcorporate

I do not believe you will get £1,000 per month income from a £110k property. That yield is simply astonishing!

If that was the case people with real money would buy them for cash way quicker than you could organise a mortgage (and would obviously outbid you for such a crazy income).

I smell some bs...

MEM62

darrendonald2 wrote: »

Question:

It does work:

I recently bought a £110,000 property and borrowed £88,000 from the bank. I needed to put in 20% (£22,000) which I did so with my own money. Suppose I got a personal loan from HSBC for £22,000, the (actual figures) would look like this;


INCOME

• £1000/month - Rental income I am currently receiving

OUTGOING

• £340/month - Repayments on the mortgage (fixed for 4 years)
• £529.41/month - personal loan repayments spread over 4 years

PROFIT

• £130.59/month (without using my own money)

I'm not so sure that your figures stand up. The income would be taxable, with only the mortgage interest being eligible for tax relief. Based on the above figures the figures should be;

Costs: Mortgage 340.00
Loan 529.41
Total 869.41

Revenue: Rent 1000.00
Less Interest 293.33
Taxable Income 706.67
Tax at 20% 141.33

Net Income 858.67

So you are pretty much only at break-even point even using a 4% interest rate and assuming that you are a basic rate taxpayer for my calculations. (And I am sure that a BTL mortgage will have a higher rate than that) If you are already renting properties you will be only too well aware of the additional costs of maintenance, insurance and letting fees etc so there is no way this is a viable business plan. And if it does all go wrong you don't even have any equity in the property to fall back on. 100% Risk and all with other peoples money. Personally, there's no way I would buy into it.

Firefox1975

...and neither will the banks.

Op - if you want ring fenced security you need to build an office block with borrowed funds with the promise of a good rate of return on monies invested in construction.

get a 5 year rental tenant in the building once completed. (Or better still - prior to completion off plan)

And then approach the bank for a mortgage on the property with tenant in situ.

use the mortgage funds to pay off the borrowings for contructing the building.

And then use the quarterley rental payments to pay off the mortgage payments and leave a small residual profit.

Eventually your building is paid off, as is the mortgage and you can sell it and retire on the building proceeds.

Put very simply for you - but that is a brief business model you are aiming at. There are inherent problems in there i.e how do you guarantee a tenancy after 5 years? but being an astute businessman like you and your cousin you will be fine.:)