First Steps to Solvency

getmore4less

Warby68 has covered the point I was going to make.

You need to prove yourself before you can impliment those next level plans. 
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You need to have the debt gone and your main business generating more free cash flow into your personal finances.

Prove you can do that, then you can look at restructuring. 


Until you have done that stop talking it up with the wife she is clearly not impressed. 

lostmyusername

Alt80, what happens if you suddenly pass away? I know it’s not nice to think about but something that does need thinking about. Is there possibility of dispute over your estate? I’m a solicitor and see a lot of messy probate. What if it drags out for a year, two years? What if the BTL properties don’t sell or the tenants decide to be pricks and refuse to move out, and the bank start wanting the res mortgage paid again and your wife doesn’t have the money? Where will the money come from for her and your son to survive?

I think expanding your portfolio is a fantastic idea but do you really not see why your wife wants the security of at least having her home paid off? 

lostmyusername

@lostmyusername yes. Why did you want to know?

That’s good. Just curious. If she wasn’t named, that would shed a lot of light on her POV about the debt and remo etc. 

ladyholly

Just one thought when we moved in 1985 the interest rate on our mortgage was 15% for a semi commercial property. I know interest rates are very low now but what happens if/ when they rise?

alt80

Not been unaffected by Covid on the tenant front but been entirely manageable some UC now who weren’t before, some furloughed and we have made arrangements between us. As I’ve said before my model has been low value / high yield stuff provide them with decent accommodation, have a good relationship with my tenants and very careful at the vetting stage. It works for me. Managed comm and res property for years professionally. Covid actually been a big prompt for me to get the debts under control. My business all but shut in Lockdown 1.0 enough retained profits not to affect my income but as each week passed no clue when we were opening again it was really stressful. All staff furloughed and maxed the corona loans just in case. Longest time I’ve ever had off work tbh knew it wasn’t forever and government would have to open business up so actually enjoyed the time out.

I do get where people are coming from re growth and not taking so much in the way of risk, just for me if I don’t take the risks it’s a very slow journey - never had massive capital injections just had to get by and yes not always with the mainstream lenders PGs etc. Don’t love that tbf but it is what it is has allowed me to level up and will do again. Have times I lose my nerve over it a bit and think I should pay it down, get the PGs off etc. Do that and it’s just a longer payback without much in the way of gains. Lot of commercial bridging / development / refurb products at stupid rates to get refurbs done nothing unusual and nothing dodgy/ illegal - that’s not for me.

100 I don’t get a good hit from family time. I enjoy it in a chill type way every now and again but I don’t get off on it. That’s not to say I don’t care about them. Had some thoughts about can I live the way I am without debts, go for the whole family/ security type lifestyle - would have good disposable, current res home etc etc but I’m not getting excited by it one bit. What’s the point in staying static in life? I want the 7 figure res home and the AM more than I want to stay static but have financial security. Static will be where I am if I go in for the payback big time. I won’t get my 7 figure res home, no chance of owning a portfolio in the hundreds - probably stretching it now but the dream is still alive for me. Cards can do one though and I’ve come round to the one car on finance at a time just don’t need that in my life anymore. It was 100 holding me back. 

All the talk about what if you get run over by a bus tomorrow/ have a stroke etc I see that and I know what you mean but I take bigger risks than that all the time. Odds are that at my age I’ll live another day for quite some years. We all play the risk game to a degree or you’d never walk out of your house in the morning. 100 I fear something going wrong and losing it all. The post from @NorthernSoulSouthernLife made me feel sick not gonna lie I didn’t sleep well and I could see myself taking a similar route if I had no access to money and wound up a tenant. Owning property is very important to me as much of it as I can get so don’t think I could live with myself if I lost my house unless some easy route to get it back (know there wouldn’t be in that scenario). Not a nice feeling to think that’s the route you’d take in life but if you think ‘what if’ in my position all the time when it’s all on you - you wouldn’t ever make it no chance, forget the dream, forget working towards the f**k you level, just coast along where you are gradually build portfolio, get a toy you’ve saved up for once every couple of years. Nice yeah but not going to get much of a buzz off it.

Honestly I wish I could be like many on here play the slow game, less risk, more time for family. I’ve been having a play at that but as soon as I got that buzz putting an offer in on another project and getting it accepted I was ready to get back into the world. Scrape the deposit together, get the finance and get the job done it gives me a hit and better than the JL binges and cars. I 100 wish I was a better man, not constantly chasing highs but I’m not. This journey for me is making me think about not buying cars and putting my lifestyle on cards definitely do want to be more sustainable in that way.

alt80

ladyholly said:

Just one thought when we moved in 1985 the interest rate on our mortgage was 15% for a semi commercial property. I know interest rates are very low now but what happens if/ when they rise?

@ladyholly yep don’t like the idea of rates rising one bit lol. Probably would be in a bad position if rates anywhere near when I started out never mind the 15% rates of the 80s. Really don’t think it’s going to happen for a long, long time if ever though these days. Again risk you take etc..

alt80

@warby68 I take objection to your I don’t have respect for women comment. Can only assume it comes from the fit comment. Show me a heterosexual male who doesn’t like a fit woman in her prime, sure you feel the same way about men.

I’ve got big respect for anyone smashing their goals in life male or female 100 doesn’t matter to me I’m no chauvinist. Couldn’t care less and said before I find driven women hot and never wanted the wife at home it just happened in fact she 100 drove that.

lostmyusername

But if you did die tomorrow, you wouldn’t be the one living with the consequences. I think there’s no problem taking risk when it comes to business, but there’s got to be something sacred in your personal life that you keep aside - the roof over your family’s head. The point is that your wife would be the one left with no way to pay the mortgage. Makes no difference to you if you’re dead but you’d be leaving your wife and kid high and dry. Is that really worth it? 

Different story if you were saying you wanted to sell the place and downsize to 2-3 bedrooms mortgage free, use the leftover equity to expand your portfolio. That way your wife still has her security if anything ever did happen to you. But you won’t want to do that (and I don’t blame you)! 

theoretica

alt80 said:

@TheAble There’s literally no risk, say I had res home paid for and refinanced 75LTV, I’d get the BTLs in SPV Ltd. at 60/65LTV no PGs. Net would easily outweigh res mortgage and extra properties in portfolio to leverage further when refurbished and as and when capital value increases. Property can decrease in value agreed but over long term has always increased historically. 100% win/win. Genuinely cannot see what’s stupid about adding to portfolio?? 

Now that worries me.  Going into anything when you can't see the risks is plain stupidity.  Of course there are risks - you talk elsewhere about 7% yields and someone else mentioned historical 15% interest rates.  Not to mention whatever shenanigans the government decides to pull next.  What decision you make is one thing, but letting your addiction blind you to the fact there are risks is not how good decisions are made and shows the scale of problem you are facing.

Also the risk of really upsetting your wife - parting from half of everything in a divorce settlement would be catastrophic for your portfolio. 

alt80

@lostmyusername I have a life assurance policy that would cover the res mortgage. She would also have the btls and my business which presumably she’d sell because there’s no way she would or could step up. There are lenders out there who will lend to people with no income on btls probably not best rates but still give an income. Up to her what she did though ultimately. 

No guilt on my part as far as this goes she’d be in a better position than most women who decide not to work and take a gamble on a man. Sure it works the other way too plenty of women earning more than their husbands. Even if she wasn’t better off; I’ve took risks and so has she - she took the risk of assuming I’ll be there and in a fit state to earn money to provide her with a lifestyle. Her choice - no reason why she couldn’t have contributed to the family income and we’d both be in a better position with more money. 

As it is we’re both trapped in a marriage which we wouldn’t be if she had earned her own money. We’d have some choice in whether we stayed together or not. 

She’s got no love for me I’m not dumb to this was never about her falling in love with me for me it was all about me being able and willing to let her have what she wanted from life. I had a conversation with her middle of the night; would she still be with me if I had £1 to my name, no house, no business, no anything. She asked me if I wanted a 100% honest answer and said that she ‘loves me’ haha but right now if that were the case no she wouldn’t stick by me. The lies apparently rather than the money. Yeah whatever but you can probably guess what prompted that conversation and why I was awake at 2.45am. 

Only guilt I would have is for my son being dragged through it but she’s just as guilty. Her choice to drop out of uni, take a dead end job and wait for a mug coming along to provide her with a lifestyle. This is not about having no respect for women. As I said I’ve got respect for anyone who puts the work in to achieve their goals. In a twisted way I suppose I do respect the fact she saw an idiot coming and made her move. Right now she’s got the run of the house and I’m locked up in my home office doing a bit of work but mainly just keeping out of her way. Yeah irony not lost on me at all lol.

@theoretica 15% rates will not happen again in my lifetime. I’d 100 bet everything on it and I’m not a gambling man.