property developing

Jeff1965

Hello Everyone

I have just joined the forum and would like some advice please. My mortgage is almost paid off and estimate the value to be about £175k. I only pay £235 a month with 5 years left.
I would like to invest in a property development purchasing at auction to renovate and sell at a profit, I have seen and end terrrace locally with a guide of £15k, realistacially I expect it to go at auction between £20-25K, They are selling renovated up to 90k. I would like to renovate it over 6 months then sell.
My question is this I want to fund it useing the equity in my house, what is the cheapeast way to do this please?

Thanks in advance.

Jeff

Pixie5740

Jeff1965 wrote: »

Hello Everyone

I have just joined the forum and would like some advice please. My mortgage is almost paid off and estimate the value to be about £175k. I only pay £235 a month with 5 years left.
I would like to invest in a property development purchasing at auction to renovate and sell at a profit, I have seen and end terrrace locally with a guide of £15k, realistacially I expect it to go at auction between £20-25K, They are selling renovated up to 90k. I would like to renovate it over 6 months then sell.
My question is this I want to fund it useing the equity in my house, what is the cheapeast way to do this please?

Thanks in advance.

Jeff

Remortgage your home to release some equity or some lenders are offering personal loans of that size at decent rates. However, you'd need to check that the personal loan T&C allow the loan to be used for purchasing properties as many don't.

dimbo61

£20/25K for a run down property is very cheap.
I am surprised that there is not a queue of builders at every auction buying if you can sell for £90,000 when refurbished.
What is the rental market like in the area so you have a plan B.
Sorry but No lender ( surveyor ) is going to value a property at £90,000 if you paid £25,000 six month earlier.

ProDave

This is "homes under the hammer" teritory.

Some make big gains, some make a loss. Don't get carried away at the auction and make SURE you have the cash to pay for it, with buyers premiums, fees etc.

G_M

£25K?

Stick it on your 0% credit card .

Cakeguts

Jeff1965 wrote: »

Hello Everyone

I have just joined the forum and would like some advice please. My mortgage is almost paid off and estimate the value to be about £175k. I only pay £235 a month with 5 years left.
I would like to invest in a property development purchasing at auction to renovate and sell at a profit, I have seen and end terrrace locally with a guide of £15k, realistacially I expect it to go at auction between £20-25K, They are selling renovated up to 90k. I would like to renovate it over 6 months then sell.
My question is this I want to fund it useing the equity in my house, what is the cheapeast way to do this please?

Thanks in advance.

Jeff

1 A guide price like this doesn't mean they will sell for £20 to £25k it could be £50 to £60k. If it really is £20 to £25k then it needs a lot of work to bring it up to £90k. Is there a bulge in the gable wall by any chance?

ManofLeisure_2

Please, whatever you do - make sure you read the 'legal pack' and ensure that you have a realistic understanding of what you are actually buying

GreenSnake

OP, the question here is, do you actually know what you're doing?
Anyone who needs to post questions on a forum like this, should probably not be thinking about property development.
Just my opinion.

hazyjo

Many auction properties are unmortgageable.


I would also doubt something selling at around £20k and being sold for around £90k six months later. Have you witnessed this or is it word of mouth? Are you sure they're the same as what you're looking at buying and weren't sold as a plot/rebuild?

downhillfast

You may also find that after only owning it for 6 months any potential buyers will be unable to get a mortgage... many lenders wont lend on properties that have less than a year of ownership for the previous owner.

AdrianC

If you're needing to ask how to fund the £25k purchase price, how are you planning on funding the renovation? Will you be doing the work yourself, or paying trades to do it? If yourself, do you have the time and skills? Have you actually estimated the work required, and added on a contingency? How will you fund any overage from that contingency? Do you know what you're doing with that estimation, and did you actually understand what you were looking at during the viewing(s)?

What price are you willing to walk away from the auction? Can you stick to that, or will you be tempted by "just one more bid"...?