Buying Commerical Property Help Needed

xenaneale

Good morning

In a bit if a dilema - We have a house which is currently valued at £185k with mortgage of £155k. Behind the house is a commercial car garage (repairs cars rather than selling them). The landlady wants to sell the garage for £75k however we are struggling to work out how we can buy it as it is currently commercial use.

We want to buy garage and change use to residential so that we can have the driveway to the side of our house and all the land the garage sits on as our rear garden. Plan for the garage building to be used as a "Man Cave" for husband as well as the first floor as playroom and storage for the kids.

Have been investigating options as follows:

Can't use own house as only £30k equity and mortgage companies won't fund the "potential value" of the whole plot once garage has been bought.

BTL mortgage not possible as commercial property and not living accommodation.

Commercial mortgage out as have to find 50% deposit.

Parents have a mortgage free house but not sure how that can help us.

Don't know wnayone with the ready cash to buy it now so we can raise the money to buy at a later date.

Any suggestions would be grdateful at this point. The land and house used to be as a whole but were split off about 35 years ago. The other issue is that the land at the rear of the garage is contaminated land which may have an issue if we wanted to convert to residential.

Many thanks in advance.

usefulmale

If you cannot afford to buy it outright, how did you plan on funding the conversion?

This situation is not a dilemma, it's a dream that you cannot afford. Let it go.

GDB2222

Suppose this project costs £125,000 including conversion costs, the really fundamental question is whether it will add more than that to the house value. If it adds less value than it costs, it doesn't matter where you get the money from, as you're going to lose the balance.

If the house is worth £185000 now, do you think that adding a man cave and playroom is going to almost double that? It seems highly unlikely to me, but you can always ask a surveyor for his opinion.

So, you only need to worry about finance if this project stacks up financially, and you haven't even mentioned that aspect.

MyOnlyPost

You are looking at buying a business and it's valuation is based on this. If it were just the land for sale what would it be worth? As this is the only reason you are thinking of buying it this should be your only consideration.

If the land is worth £100k it's a great buy, if the land is worth £30k why would you pay £75k for it?

However if you can't afford it then it doesn't really warrant any further investigation

xenaneale

MyOnlyPost wrote: »

You are looking at buying a business and it's valuation is based on this. If it were just the land for sale what would it be worth? As this is the only reason you are thinking of buying it this should be your only consideration.

If the land is worth £100k it's a great buy, if the land is worth £30k why would you pay £75k for it?

However if you can't afford it then it doesn't really warrant any further investigation

Thanks for this - I had not considered this angle.

I appreciate everyone elses comments so thank you for taking the time.

We are not planning on converting anything - just changing the use of the land from commercial to residential (which I understand is just a planning application). Converting may be something to be considered way down the line when we would be in a better position financially.

Caz3121

xenaneale wrote: »

The other issue is that the land at the rear of the garage is contaminated land which may have an issue if we wanted to convert to residential.

xenaneale wrote: »

just changing the use of the land from commercial to residential (which I understand is just a planning application).

have you actually spoken to the planning department? What is it worth to you if residential permission is not going to be possible?