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  • FIRST POST
    • deltoro41
    • By deltoro41 15th Sep 18, 9:18 PM
    • 4Posts
    • 0Thanks
    deltoro41
    12 months to buy 2 to 3 houses, please advise on mortgage process
    • #1
    • 15th Sep 18, 9:18 PM
    12 months to buy 2 to 3 houses, please advise on mortgage process 15th Sep 18 at 9:18 PM
    Hello everyone,
    I would like to change my life for better by owning a house or three, and start saving for my old age (around 25 years from now).
    I tried my luck and tested an online business model and have now come to a conclusion it will work.
    Next week I'm opening a business bank account and register with the HMRC.
    Before I ask for help, an idea about my past:
    I'm in my early 40s, with a wife and a teenage daughter.
    My credit score is okay, 916 out of 999 but not so great because I don't have any loans, credit cards, any phone contracts as I use pay as go, to show that I can repay stuff on time...
    Last time I was overdrawn was 6 years ago or so, I don't even have an overdraft allowance now.
    I paid off my loans more than 5 years ago (after they messed up my life for 10 years or so) and have lived at my sister's house rent free until she got her place back few months ago which led to getting a council house up North.
    I have never been on benefit but because my small business (to be dropped) was not making enough money, I get tax credits.
    As I was saying, I tested the waters and found a great online business model which will allow me to generate at least 50,000 in 12 months, for a 2000 test which has become 5000 and will be my initial capital. The 2000 was a credit from my young sister, which she said I could repay any time I'm ready, which is soon.
    I'm hoping my new business will be turning a gross profit of at least 3000 a month and growing, which I want to use to get mortgages, one for the home office (where we will also be living), the other one as the same business investment toward a rental home, and if I get more than 50.000, have a third one to buy and sell.
    All the profited money will be tied up in the growth of the business, I want to by properties in years to come and be like a property developer, still a lot to learn though.

    Surely the level of ignorance in property investment is clear here that's why I ask for your help:

    - How long should I be making good money to apply for a mortgage?
    - How much should I, as a sole trader, be making to qualify for 2, or 3 mortgages?
    - What the alternative if I only hit 20.000 to 30.000

    When I go open the business account I will also talk to an advisor about this plan.
    I'm planning to have an accountant too, for my past business I fill the self-assessment form myself.

    This is my second chance to be the man I should have been 20 years ago,
    So help me good people...

    What steps should I take?
Page 1
    • jonnygee2
    • By jonnygee2 15th Sep 18, 9:34 PM
    • 308 Posts
    • 307 Thanks
    jonnygee2
    • #2
    • 15th Sep 18, 9:34 PM
    • #2
    • 15th Sep 18, 9:34 PM
    If you have a business model that turns 5000 into 50,000 in 12 months, you don't need to invest in property.
    • AnotherJoe
    • By AnotherJoe 15th Sep 18, 9:34 PM
    • 10,556 Posts
    • 12,070 Thanks
    AnotherJoe
    • #3
    • 15th Sep 18, 9:34 PM
    • #3
    • 15th Sep 18, 9:34 PM
    You sound like you are trying to walk before you can run.
    50k might sound like a lot but its a fairly ordinary salary and unless you are buying houses for almost literally peanuts then you wont be getting three mortgages on that.
    Get your online business running smoothly and predictably first.
    And then, secondly, whats the fascination with houses? If the online business is as good as you say, whats the rationale to buy properties that have a 5% or so yield when the business is apparently returning 30x that? That makes no sense.

    You say you have a business that for every 2k you put in you get 5k back.

    Why then with that 5k start a rental business that for every 2k you put in returns 100 ?
    • AFF8879
    • By AFF8879 15th Sep 18, 10:10 PM
    • 370 Posts
    • 950 Thanks
    AFF8879
    • #4
    • 15th Sep 18, 10:10 PM
    • #4
    • 15th Sep 18, 10:10 PM
    Like with anything in life; if it sounds too good to be true, it normally is. That said, 50k annual income is not going to sufficient to mortgage two properties (don’t forget BTLs require a much higher deposit than residential) unless these are in dirt cheap / run down areas.
    • deltoro41
    • By deltoro41 15th Sep 18, 10:11 PM
    • 4 Posts
    • 0 Thanks
    deltoro41
    • #5
    • 15th Sep 18, 10:11 PM
    • #5
    • 15th Sep 18, 10:11 PM
    Thanks for the replies,
    This is what I wanted to inquire about.
    The thing with online businesses like amazon, they can decide to suspend you from selling for very minor mistakes, it feels unsecured,

    I was thinking to reinvest the money into something solid like properties but within the company.
    Taking in consideration the 2 first replies, I will look into saving more,
    That's why my question was to know how much I would need and how long it would take to qualify for 2 or 3 mortgages.
    • jimbo747
    • By jimbo747 15th Sep 18, 10:16 PM
    • 561 Posts
    • 1,526 Thanks
    jimbo747
    • #6
    • 15th Sep 18, 10:16 PM
    • #6
    • 15th Sep 18, 10:16 PM
    Why not fill your ISAs and pensions first? Some of the 50k you take as salary can be whacked in to a pension with the govt adding 40%. That's a much better, cheaper, secure and less stressful way than getting in to property when a lot of the experienced landlords are looking to diversity elsewhere.
    Last edited by jimbo747; 15-09-2018 at 10:18 PM.
    • AnotherJoe
    • By AnotherJoe 15th Sep 18, 10:21 PM
    • 10,556 Posts
    • 12,070 Thanks
    AnotherJoe
    • #7
    • 15th Sep 18, 10:21 PM
    • #7
    • 15th Sep 18, 10:21 PM
    "How long is a piece of string?" is the answer to your question.
    I would though say you are about 20 years behind the ball when it comes to thinking that starting up a rental business is the ready made route to riches.

    The increasingly onerous rules, regulations and tax changes are only going to get harsher. I make no comment on whether thats a good thing or not but just state that as a fact.

    And what sort of deal do you think landlords would get under a Corbyn government given the hard time the Tories are giving them?
    The rental market as a decent business ship has sailed IMNSHO but in any case, you are years away from that being a concern, focus on your business first and cross the "hmmm shall i buy three or 4 houses this week?", question when you actually have money and a steady stream of income (from which i think you are further away than you think but I wish you all the best)


    p.s. and by then you'll likely have wised up that investing it for the long term within a pension as proposed by another poster is likely a much better plan.
    Last edited by AnotherJoe; 15-09-2018 at 10:51 PM.
    • getmore4less
    • By getmore4less 16th Sep 18, 12:37 AM
    • 33,044 Posts
    • 19,924 Thanks
    getmore4less
    • #8
    • 16th Sep 18, 12:37 AM
    • #8
    • 16th Sep 18, 12:37 AM
    Start by scaling your business to a predictable level.

    A lot of business don't scale as demand is not infinite.

    in many cases it dries up quickly or margins shrink or you get competition that undercuts.
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