Property partnership,,,,

Generali

If you're buying a house to slap up a bit of magnolia paint, bung in a new bathroom and sell again, I reckon that you're really betting on continued HPI. A pretty risky strategy.

Kev_Y

Hi everyone, thanks for your input good and bad, it is needed,


I had an accident at work 2 years ago and was off for a long time hence the problems with paying creditors etc, I am now sorting everything out but will have around 28k to play with, you are right I may not be spot on with the financial side of things , but this is why I ask, I can take critiscism and even may even look at a different way to work this but in our area it is currently undergoing a multi million pound revamp and the sope is there in specific areas , I have known the potential partner that is interested for 12 years and he is keen to get on the property ladder too, and no I don't mean a bit of magnolia and a tart up and make easy money, I know it is a hand and risky business, but keep the advice coming it is appreciated.

zag2me

Also have to think about the housing markets direction with interest rates going up it is alot harder to make money from property than it used to be.

If you do have the building and renovating skills it certainly is possible though with the right property.

Doozergirl

My advice to any budding property developer is to play with as little money as you can to start off with. That means selling up your own house and either renting or living in the house you plan to refurbish. The more houses you own, the more interest you pay.

I also recommend going it alone as the financial split with someone else and the timeframes involved, especially when you start small, almost renders the profit useless, especially when you have to meet two mortgage repayments every month.

You make mistakes when you start. You need to make them cheap. We were lucky that houses were cheap and prices were rising like a rocket when we made our mistakes And that those places were also our home.

Generali

I guess that the way to approach it is to think about exactly what value you are adding to the property. If you are relying on this revamp of the area to lift the value of your property, perhaps BTL would be a better idea as you'd get some cashflow in the meantime - it's less of a risk.

If I were going into any sort of property business right now I'd do some pretty strenuous stress testing of my assumptions, costs and income. This stuff that is going on in the bond market where yields are rising quickly may seem arcane and dull but this sort of behaviour by markets is a good predictor of tougher economic conditions brought on by 'credit tightening'.

Borrowing costs are likely to rise in the near future, regardless of what the MPC does to interest rates. Make up your own mind about what that is likely to do to house prices and the wider economy.

Kev_Y

The things that I have noticed in this perticular area is there was a lot of ex council houses that were bought by the tenants under the right to buy scheme but due to the interest rates going up a lot of owners have pulled out and several being reposessions, and making it an ideal opportunity for developers or potential buy to let,

financial_solution

I dont think anyone could claim to have found Kev any form of mortgage.

I accept that the OP needs to operate with caution and responsibility (as does any lender/broker). However, any potential investor needs to furnish themselves with as much information as possible prior to making a decision, and Kev seemed to assume that he is an "untouchable". If his circumstances have been as bleak as he implies then any mortgage available may make "him run a mile" but at least he has considered the option and disregarded it.

It may be that in his current circumstances the OP feels waiting may be a better option or saving funds may be better for now.

As is pointed out enough info is not available for anybody to pass an informed opinion. I assume that having struggled previously the last thing Kev wants to do is be reckless.

It is just possible that done correctly Kev may actually make some money on the venture. The fact that he has had a period of difficulty in the past should not exclude him from trying to make money in the future.

However, whichever way Kev goes I feel the important factor if he decides to proceed one way or another is to furnish himself with as much info as possible before making a considered decision.

Dont let the fact that there is big investment going on in the area get you too-excited and jump in too quickly. The outside investments do not guarantee that you will make money, albeit it may help.

Good Luck,


Mark.