Re: Would like advice please regarding flipping houses

boingy

Bostonerimus1 said:

Andrea is trolling us here, 

I said the same, dozens of posts ago but my comment got pulled. Weird moderating.

swingaloo

Do you know this friend personally? How long has your partner known them.

jimjames

Andrea2528 said:

He doesn't want to mortgage the property but he realises he will obviously have to if the venture doesn't work out

I'll repeat previous question. How do you know the property isn't mortgaged? (now or in the future) Why isn't your partner buying the house in his name if he's paying 100% of the cost?

Have a look at Blackmore Bonds, they were investing in property to renovate and sell. Investors all had a charge over the property but when it went belly up the properties were mortgaged to someone else so no money could be raised.

Also repeating previous question, if this friend is so well off and has assets why are they not using their own assets to buy this house? They would make more money and avoid involving others. Only reason I can see is that they don't want to risk their own money or don't actually have any money.

phlebas192

Andrea2528 said:

Unable to actually use online banking.  I said he could do it over the phone or even go to the bank but he wants to do it through online banking

Andrea, from reading this thread I don't know whether your partner is being scammed but I am very worried that he/she is scamming *you*. Whatever your partner decides to do, do not involve yourself in any transfer of money from any account of your own. If they really have a few hundred thousand availble for this "investment" then they can easily arrange the transfer themselves. At the very best you are likely getting involved in some form of money laundering (a serious criminal offence which you will be guilty of), at the worst they are looking to steal from you. 

There is no valid reason why anyone would not be able to transfer such a significant sum of money themselves. You know in your heart that there is something very wrong with all this or you would not have posted here.

Hoenir

jimjames said:

Andrea2528 said:

He doesn't want to mortgage the property but he realises he will obviously have to if the venture doesn't work out

Also repeating previous question, if this friend is so well off and has assets why are they not using their own assets to buy this house? They would make more money and avoid involving others. Only reason I can see is that they don't want to risk their own money or don't actually have any money.

What all the best business people do. Take no personal risk. Use other people's money to provide the funding. 

1spiral

My years of investing in P2P have taught me that there is no such thing as a personal guarantee. When the chips are down, all their assets mysteriously find a way of being owned by their spouse and there is nothing left for the loaner to claim their guarantee from.

Alexland

Andrea2528 said:

Partner wants to do this and I don't want to do it.  He can't do it himself and wants me to do the transaction of paying the deposit online using his money to pay this other person, so they are sure of securing the property.  He knows what property it is.  He is getting stressed about it because I won't help him but I'm trying to protect him. He doesn't see it that way and I'm thinking that perhaps I should if he is so sure that it's safe to do it

The whole situation with this flipping house sounds awful already 

Archerychick

This is ALOT of risk for just a 10% gain (which you’d then have tax to pay on). Wouldn’t you / your partner be better off putting that money into a pension, taking the tax relief and putting the investment into equities - I imagine you’d get a better return over 12/24 months. Obviously not guaranteed but you’re probably young enough to have time to ride out any market declines. 

Mr.Generous

i have renovated property for 10 years, I have worked with my brother as a business partner and alone. The quickest we have renovated a 2 bed house for a flip was 4 month with both of us working full time. Then allow about 4 months for the sale if a cash buyer with no complications. How quickly is your renovator estimating he can do the job on presumably a large property?

I have a good friend who is doing this work now, he did a property course and is a very handy guy. His estimates on how long it would take are ridiculously optomistic, even when I tell him and loint out the complications.

The only property worth flipping is a wreck. Half decent can only be made half better, and the fixed costs remain the same. It costs about the same to rip out an OK kitchen and replace it with a really nice one, as it does to rip out a musty rotting tip of a kitchen and replace with a really niced one. So its going to be a wreck.

My mate told me he would do the bathroom in a week. I told him it would take me three weeks. I was too optomistic.

I won't go into loads of detail but he planned to do 10 in 2 years (please don't laugh).

I think he managed 2. He wasn't selling them, he kept them to let out, so no time delay waiting for a buyer, but the workload is huge. I did it full time, he tried to do it weekends, evenings and an occasional week full time. It is much harder than you think. Watch "The great house giveaway" to see how many renovations lose money. Half done they sell for less than they were purchased for.

Property courses encourage people to use someone elses money, and stress how simple and profitable it is. they do this because that's how they make their money.

This is a very stupid idea that will not end well if you go ahead.

Andrea2528

swingaloo said:

Do you know this friend personally? How long has your partner known them.

Yes, my partner knows him, he purchased the farm off him