Property partnership,,,,

Kev_Y

I have a dilemma, I had a few years where I had some financial problems and was unable to pay a lot of my creditors including my current mortgage, but I am getting back on my feet and am in a position soon to have a bit of spare cash to play with, I myself cannot get another mortgage at present so after speaking to a friend who is completely debt and mortgage free but no credit history, we are looking at forming a partnership with him getting the finances and me putting the money up, buying properties and renevating them and selling them on but how can we do this,

I have a few questions,

Can we get mortgages as a business ?

how do we go around forming the partnership?

Will my previous credit problems hinder it as a partnership?

he has no previous credit history at all, will this stop him.

we are in a situation where all properties locally to us have gone up in value by 400%, as our area is being revamped with a multi million pounds government scheme, there is houses being pulled down everywhere that we look and new houses being built and existing houses being revamped,

any advice would be fantastic,

Debt_Free_Chick

Kev_Y wrote: »

I have a dilemma, I had a few years where I had some financial problems and was unable to pay a lot of my creditors including my current mortgage, but I am getting back on my feet and am in a position soon to have a bit of spare cash to play with, I myself cannot get another mortgage at present

Are you absolutely sure? Even discharged bankrupts can usually get a mortgage

Debt_Free_Chick

Kev_Y wrote: »

Can we get mortgages as a business ?

how do we go around forming the partnership?

Will my previous credit problems hinder it as a partnership?

he has no previous credit history at all, will this stop him.

If you form a partnership or business and the business/partnership tries to get finance (mortgage, loans etc) then YOUR credit history will be taken into account, as you will be financially associated with your business partner.

How many properties are you looking to buy, in the first place?

Kev_Y

I have outstanding credit cards and have had arrears on my mortgage in the past , I have also got CCJ's , my credit file is a real shambles ,

Kev_Y

We are looking at buying one property at a time and renovating it and selling it on, there is a lot of properties in our area that meet our criteria and we just missed out on one due to lack of knowledge regarding mortgages etc.

Debt_Free_Chick

Kev_Y wrote: »

I have outstanding credit cards and have had arrears on my mortgage in the past , I have also got CCJ's , my credit file is a real shambles ,

But you may still get a mortgage - albeit, probably not at the very best rates available.

It sounds as though your plan is a little overcomplicated. Could you not simply buy one property jointly, with a joint mortgage?

You say you will have spare cash soon - you really need to use this to address any current debt and/or mortgage arrears, rather than ploughing it into a speculative investment.

Kev_Y

yes, this did cross my mind but I am on track to sorting my problems but it will take time to sort out and I will have some cash that I would like to invest and make some money from, this has always been my passion so I will follow it if I can.

Debt_Free_Chick

Kev_Y wrote: »

yes, this did cross my mind but I am on track to sorting my problems but it will take time to sort out and I will have some cash that I would like to invest and make some money from, this has always been my passion so I will follow it if I can.

But if you sort out your debts & arrears, it can only improve your credit rating.

Investing is speculative - you are not guaranteed to make a profit and could actually lose money. So you might find you are still in debt and have "wasted" the spare cash you once had.

Investing is really only for those who can afford to lose

financial_solution

Kev,

As Debt Free Chick states you should not necessarily rule yourself out of getting a mortgage. There are many lenders (in the correct market) who will lend in even the most bleak of circumstances. The key is the level of security you can offer. The more security (equity) you can offer the more likely you are to be accepted.

It may be that you are looking for higher sums etc but although they are not cheap I would think that considering such an option is preferable to forming a partnership with somebody where you shall be the sole funds provider, you seem to be taking all the financial risk for half the rewards.

EG; A mortgage coulsd be arranged for somebody who is ex-bankrupt, missed the last 12 payments, is self-employed without income proof and has CCJs....they may only get say 75% Loan To Value and it may be very expensive but the chances are that your rate would be preferable to this.

With some lenders mortgage payments missed over 12 months ago will be ignored.

Please advise the following:

1) Current house value.
2) Current approx mortgage balance.
3) Current Mortgage lender.
4) Approx value of property to be purchased.
5) Approx funds required for improvements.
6) Level of spare cash available to put in.
7) No of mortgage payments missed in last 12 months.
8) No of CCJs in last 2 years.
9) Current income situation.

Regards,

mark
Just an thought,


Mark.

wecanhelpu

One of the reasons we are in the present situation of sky-high prices and massive debt levels is because of irresponsible lending practices by banks.

People like the OP (who obviously lacks financial awareness and discipline) should not be encouraged to take on more levels of debt just as he/she is starting to find his/her feet.

I would advise caution and an honest approach to what is realistically achievable, not promises of a never ending credit supply regardless of circumstances and ability to pay.

Doozergirl

wecanhelpu wrote: »

I would advise caution and an honest approach to what is realistically achievable, not promises of a never ending credit supply regardless of circumstances and ability to pay.

Thank God I'm not the onlyone who thinks this is potentially a recipe for disaster. We haven't even established how much the OP has to invest and how much debt there is exactly but we've already found him a sub-prime mortgage :wall: