Want to buy to sell my first property but have no money....Help

jaype

I am saving like mad and renting like mad, trying to work out exactly where would be a good place to live, taking things like schools into account. And I am keeping a very beady eye on the market.

ZCC72

tysfoot, it is all a moot point. You will not be able to get a mortgage for £110k on a £100k property. The property may currently be valued at £100k, but the IMF have recently stated that the British Property Market is overvalued by 30%. Therefore, if the price of this property fell by 30%, it would be worth £70k, meaning that you would still owe the bank £40k if you are unable to pay the mortgage and they have to sell it - which, realistically, they are not going to get back, as you already have debts that equate to one years salary. It is worth bearing in mind as well that US market was only thought to be 10% overvalued by IMF... what does that mean for the UK market?

I understand that it seems like a good idea, with all these people doing it on the telly - Property Ladder, etc - note that it is back for another series - wonder how long that's going to run! - but it is not the right time. You won't be able to get the lending. A lot of people who bought a couple of years ago, on fixed rate mortgages, who are now looking to remortgage cannot even get mortgages. I would (a) work really hard to pay off the debts; (b) save like mad for a 20% deposit; and (c) wait until the market settles.

I hope this helps.

tysfoot

Well ive been totally biffed by everyone

PasturesNew

tysfoot wrote: »

why, isnt it worth taking a risk if i have good skills at building and designing property but not good skills in fnancial and and understanding of management.
if buy a property for 100k spend 10k doing it up and sell for 130k.

The reason why say that is because my freind has a house he wants to sell and i have told him iam interested in buying it for 100k. needs work to it. only cosmetic. want to extent the kitchen and garage. my estimation are 10k for the work and about 4 months work.

Easy peasy

or is it. thats what i want to find out

£100k - cost to buy would be another £2k
Mortgage interest for the 4 months is another £2.5k
Mortgage interest while it's on the market selling could be another £2.5k easily
Fees to sell could be another £2k
Fees for the £10k renovation budget on cards, say another £1k

So even without contingency, your £10k is very rapidly £20k

And as prices are going down, say by just 0.5% per month, it would be worth £500/month less each month, so knock another £3k off what you think it could be worth.

So £30k-£20k-£3k = £7k.

IF ... everything worked. IF you didn't have any problems. IF your estimate of now/then prices are correct. IF you could borrow the money (which you can't). IF you could raise the renovation budget. IF it sold in a timely manner. IF ... IF ...... IF..

PasturesNew

tysfoot wrote: »

So what are all you lot doing then.

Saving like mad or buying and selling like mad

I sold a house 9 months ago. Banked the cash. Sitting on it.
My savings will increase by 20-25% over the next 5 years.
Houses I'd fancy now will drop by about £50k over the next 5 years.

In 5 years I will buy again, and live in it.

PasturesNew

tysfoot wrote: »

Well ive been totally biffed by everyone

Or, to look at it another way: You've just been shown the Insider Secrets to Making REAL Money out of Property for Doing Nothing!

Chollita

OK, let's assume you're serious.

Please read carefully the advice people have given you here. In addition to their comments:

- Your joint income is only £27K (net or gross?). Don't forget that you have to pay your own living costs out of this (and debt repayments), before you even get to mortgage repayments for the renovation.

- You already owe £10K on credit cards, and have no savings. Even if you propose to do the work yourself, how are you going to purchase the materials? By adding to your CC debt?

- You have no contingency fund if costs escalate.

- Are your building skills of a high enough standard? If you botch a job, how are you going to pay for a professional to correct your mistake?

- Are you prepared to spend ALL your spare time working on this?

- Have you worked out a budget, factoring in such details as mortgage repayments while you do the work and wait for the house to sell (assuming it does sell?), and estate agents' fees, solicitor's fees etc?

- Does your girlfriend agree with this 'project?'

I still think this comes across as a joke, but if you ARE serious, think very carefully and do your research. You could be saddling yourself with an enormous amount of debt.

nobblyned

tysfoot wrote: »

The only thing is i currently dont have a mortgage and have 10k on credit cards and have no Savings. I have a partner who earns £17000 per year and i earn about £10000

Sounds like you are already making a good enough hash of your finances without adding to your debt in a business you know nothing about.

If you are good at DIY type stuff and only work part time, how about putting your skills to use starting a handyman/decorating business. Risks lower, capital required lower. Though I get the feeling the money through hard work concept may put you off...

LandyAndy

tysfoot wrote: »

Well ive been totally biffed by everyone

You asked for advice.

Quite a few people have offered advice.

They have all offered the same advice.

You don't like their advice.

That doesn't mean they are wrong.

Spend a happy half hour reading the DFW board and see where your 'plan' is likely to take you.

I agree with everyone else, you've probably had a lucky escape.

jaype

LandyAndy's right. You have had a lucky escape. One day you may be able to step in and use your skills to make money from this - just not now. At least you have had the sense to ask for some advice, which many people now finding themselves in a financial pickle haven't, so don't feel too disheartened. One of the smartest moves in business is having the brains to sound something out before risking your shirt on it.