Buying house to do up and sell

SBD90

Wandering what you think is a fair outcome here.

I’m buying a house for £80k which will be in my name. I’m putting £20k deposit down and looking to spend £20k on renovations. Me and my gf of a year and a half will be living in the property while we do it and she’ll contribute towards some of the bills and help out with some of the minor work going on, painting, labour etc. 

The plan is to flip within 6-9 months and sell for a £15-20k profit.

Bearing in mind the money being put into the house is all mine what would you say would be fair for her to have out of that profit when we sell.

My divorce from previous marriage is just about to be signed and sealed and I’ve been stung with that so looking at things from a more selfish POV now.

Thanks  

teachfast

I think your major worry is not how to divide the profits. 

moneysavinghero

Free rent for 9 months should cover what she puts into it.

billy2shots

Wage minus rent would be cleaner than % of profit.


Not what I would do if I felt the relationship was strong but sounds like the best option for you. 

AdrianC

You're grown adults. Sit down and have a conversation about it.

If you can't agree, then the whole project - indeed, relationship - is doomed anyway.

theoretica

How would it affect the project if she bowed out?  Does she want to live in a building site for months? Fair rent for a property in process of being done up would seem pretty low.

If it doesn't go to plan will she have any responsibility for losses?

You are putting in £40k - and hoping for £15k profit in under a year- what might you earn on this money without the project? 

AnotherJoe

SBD90 said:

Wandering what you think is a fair outcome here.

I’m buying a house for £80k which will be in my name. I’m putting £20k deposit down and looking to spend £20k on renovations. Me and my gf of a year and a half will be living in the property while we do it and she’ll contribute towards some of the bills and help out with some of the minor work going on, painting, labour etc. 

The plan is to flip within 6-9 months and sell for a £15-20k profit.

Bearing in mind the money being put into the house is all mine what would you say would be fair for her to have out of that profit when we sell.

My divorce from previous marriage is just about to be signed and sealed and I’ve been stung with that so looking at things from a more selfish POV now.

Thanks  

50%. Yes she hasn't put the money up but she has to live in a building site probably working evenings and weekends amd she is enabling you to make a profit because you won't have to pay someone to help,. If you paid someone to do the work she will do, especially counting overtime, I bet it would cost more than £10k. In fact she could probably earn more flipping burgers at MacD's. 

If you go into this looking to minimise her profit through some clever method, then this relationship will likely last less time than your last one.
make her a  "full partner" in your endeavour  or nothing,  

kazwookie

If I was the GF, I would live else where and leave you to get on with it, that way any money / work is all yours.  I might visit for an odd hours or so here and there, but wouldn't be doing any work.

getmore4less

Does this include her paying 50% of the mortgage?

Base cost £100k
You putting in £40k

Mortgage £60k

30% before you value the relative non cash inputs.

dimbo61

What makes you think you will sell for £10/15K more 6/9 months after you have bought the place ?
In order to buy a property it has to have a " working kitchen and bathroom " 
Now unless your a qualified electrician with mates in the trade you will struggle to add value unless you extend the property.
New kitchen and bathroom may make the property more attractive but when the surveyor looks at the value he/she will see what you bought the place for 6/9 months ago.
They can even see the old photos before you bought the property.

lesalanos

Mortgages should not be used for flips.  Be careful of committing mortgage fraud with that