Private loan friend to friend to pay for a lease extension 8 January 2020 at 11:38AM edited 8 January 2020 at 11:41AM in Loans 82 replies 4.2K views

fwor

chucknorris wrote: »

I have already loaned them £5k over 2 years ago, which was to try and sort this out so that they could sell, but they decided not to sell, so they still owe me that.

If anything were to sound alarm bells to me about the situation, it would be this. With that history, I personally would not give a second chance.

chucknorris

Gaz83 wrote: »

What if the property doesn't sell for its expected value, and after the first charge is paid there isn't enough to pay you?

That isn't an issue, I have investment property myself, I know the property's approximate value is about £330k, if it sold for 50% of that (and it would be far more than that) I would still be covered.

Sea_Shell

What if they let the property go to rack and ruin, so it's not worth anywhere near what you think, and there's no equity left in it?

What then?

chucknorris

fwor wrote: »

If anything were to sound alarm bells to me about the situation, it would be this. With that history, I personally would not give a second chance.

That was down to stress related mental health issues, I would be in the position where, if it came down to it, I could (and would) force the sale of the property, and the money would be paid to me directly (not via the vendor).

chucknorris

Sea_Shell wrote: »

What if they let the property go to rack and ruin, so it's not worth anywhere near what you think, and there's no equity left in it?

What then?

It isn't going to drop in value by 50% in a year or 2.

chucknorris

Thanks for your replies so far everyone, so far I have not seen a reason not to do this, but I do appreciate your input, it is important for me to check that I have not overlooked anything. A special thanks to zx81 for bringing up the costs associated with legal costs if I had to enforce the sale of the property (that is something that I had overlooked), although to be fair I have only been thinking about this for a couple of hours.

I am doing this reluctantly for the benefit of my friend, I wish that there was another way, but I just can't see an alternative option that would work out well for my friend.

Gaz83

chucknorris wrote: »

Thanks for your replies so far everyone, so far I have not seen a reason not to do this, but I do appreciate your input, it is important for me to check that I have not overlooked anything. A special thanks to I am doing this reluctantly for the benefit of my friend zx81 for bringing up the costs associated with legal costs if I had to enforce the sale of the property (that is something that I had overlooked), although to be fair I have only been thinking about this for a couple of hours.

It sounds like you've pretty much made up your mind, but I would urge you to take ten minutes to search this forum and find the countless threads from people who have (despite attempting to take every precaution, similar to yourself) loaned friends and family thousands and thousands of pounds only to end up out of pocket and down one friendship.

If you're still going to go ahead with it after reading a few of those, then best of luck.

chucknorris

Gaz83 wrote: »

It sounds like you've pretty much made up your mind, but I would urge you to take ten minutes to search this forum and find the countless threads from people who have (despite attempting to take every precaution, similar to yourself) loaned friends and family thousands and thousands of pounds only to end up out of pocket and down one friendship.

If you're still going to go ahead with it after reading a few of those, then best of luck.

Thanks I will do as you advise, and search this forum. Do you have any forum threads in mind?

Sea_Shell

Just bear in mind that old phrase...

No good deed goes unpunished!!

Good luck!!

PasturesNew

Chances are they'll see their "increased value" from the longer lease and decide to not sell it for awhile longer as they think it'll be worth more in 2-3 years' time.... you could be left dangling until your estate picks up the paperwork to deal with....