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rockwood

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  1. It is the lenders that would have the issue, not the broker as such. And this is only true of high street lenders; there are specialist lenders that cater to LTD companies so you shouldn't have an issue if using a broker that has access to this part of the market.
  2. Hi Claudia, Understand your dilemma fully as I have this niggling thought in the back of my mind about our house. Not giving financial advice, but if the numbers work with regards to doing your current place up and selling it, I'd do that first and not be scared into just trying to sell ASAP because of looming Brexit. As you rightly point out, nobody actually knows what's going to happen with it all and you could be letting fear cause you to leave money on the table unnecessarily . Then, if we are still in this Brexit deadlock when you come to sell, you could possibly sell for top whack, which is great. If not, you will have hopefully built in enough equity by doing your place up to cover any possible decline in the market, which nobody can actually quantify the extent to which that will happen anyway, so you could still make money! So to me, this all seems like a calculated risk worth taking. Regarding whether its the right time to start at all, again, not giving financial advice, but I would again go for it personally. Imagine you were having these thoughts back in 2016 when it first happened......you'd have been waiting 3 years to see that there has still been no outcome and therefore would have done nothing. According to your plan, that would have been 6 projects of missed opportunity which is potentially more expensive than not getting involved. I think there will always be "reasons not to act", but if you let these affect you then you'll end up never doing anything. You could even end up picking up a property or two at the bottom of the market if there is a decline, which would be a bonus! Remember what Warren Buffett said......"be greedy when people are fearful, and fearful when people are greedy"!! I have a tendency to be over-cautious with things in a similar way and am really trying to change my thinking to one that encourages calculated risk! Read/listen to Rich Dad Poor Dad if you haven't already. I just finished it on Audible and am listening again! Robert Kiyosaki talks about this concept of fear. He also talks about the idea of letting your "financial genius" inspire you to take challenging situations and turn them around. So for me, the key is to take calculated risk with plans for how you might be able to turn the situation around if the worst happens. As I understand, your aim is to use this model to simply trade your way out of your mortgage as opposed to it being a business interest as such. So you are at an advantage in that the worst case is that if you REALLY wanted, you could just stay in any house you are in and flip it when you feel it is good to; after all, you'll be living in it, so no real holding costs! Also, as your looking to be in and out of the market quickly each time (6 months-ish), you will be less exposed than someone who wishes to hold only for the medium term; the market is unlikley to crash overnight and so the effect of a decline may not be as pronounced, assuming that each project has a good margin in it. Be creative......perhaps don't just look to buy houses that need a kitchen/bathroom. Maybe you could mitigate risk by looking to buy houses that have a large garden that could be turned into à building plot. Or potential to add a loft conversion or extension for increased profit (assuming the numbers worked out). More margin = more risk protection! Please note that I'm a newbie......someone of more experience will hopefully chime in with some more/better advice! Also, beware of the CGT implications of your chosen model, in case you haven't considered them already and build this into your numbers.
  3. Where I live the houses are in the region of £230-300k (mix of flats, 2 beds and 3 beds). Walk 100 metres onto the main road and the prices almost double! This is primarily because our house is part of a 1980s ex council estate built onto the back of, and around all of the 1930s houses that were there before. In some cases, the house prices change that much by literally hoping from one garden fence to another! I also know of a place where the first few houses on a street are nearly £1million and the street literally morphs into an ex-council estate. I think in this area there was/is a concept of trying to mix some of the demographics so as not to segregate or cause one area to become overly deprived. So I think you have to be really careful with the whole "comps in the same street" thing.
  4. Inspired once again Richard......thanks! I do always try to think like a 1%er, the problem I have is that most of the time, I can't determine whether an idea I have is a "1%er idea" or just me being a bit crazy! Sometimes I feel like there is a fine line between the two that I'm not experienced enough to determine yet!! What would be the best method to get in contact with you? I have tried to message you on here but it wouldn't let me for some reason! I also have some questions about some of the services advertised on your website that have interested me. Thanks!
  5. Thanks Julia, I do see your point here and think I have put the idea of completely selling up to bed, for the reasons you mention, as well as issues relating to rental affordability, as Richard mentioned. I'm not too worried about the risks of rental accommodation as we would still have our house as a back-up, and furthermore, we would have some protection due to the abolishment of Article 21. Renting would only a temp solution.
  6. Thanks Richard! Ok more food for thought, as you always provide! I guess my burning platform is just that I want to start the property journey and feel like whilst owning a home with lots of equity is great, that equity is not working for us. I have been giving a lot of thought to my initial Idea 2 (convert to BTL), because by doing so, we can release money and have the property still for capital growth, which feels like the best solution. Renting is more of a temp solution, but at least we will be more or less breaking even with our living costs. Wasn't aware of such a tight rental affordability though! Thanks for highlighting that! That's another reason for Idea 2 as our rent from the house would surely be classed as income, which would ensure that we would be ok under the 40% net pay criteria.......if the house is in my wife's name, is there anything stopping her from us saying that the rental income is mine, for the sake of using my tax allowance? Or does it have to belong to the person whose name the house is in?! Another point that you highlighted that I have looked at previous using the home as security. I was quickly put off this idea because it felt like a risk that we wouldn't be fully in control of and worst case, we could be made to sell the house anyway which could get messy. Plus higher fees etc. Been thinking more about my Idea 4 (JVing so as not to need any money). I know I mentioned the downsides of this approach, but have been thinking more and more about a profit split approach..........we do all the work, someone else simply fronts the money and there is no interest to pay as we would split everything 50/50. What are the best ways of finding these kinds of investors, and how do you go about establishing trust enough (as well as setting up the legals for full protection for both parties) to have someone work with you on this basis, despite lack of experience? I say lack of experience, however I have fully refurbed my own property (the house this thread is about!) and also have worked in the trade as a plumber, so I am literate with regards to building works etc. If we could at least start running projects on that basis, then that would be a great place to start I think! Thanks again!
  7. Hi! Nice to see a fellow Bristolian here! Actually, I'm not Bristolian as I'm from London orignially, but been here 16 years and absolutely love Bristol, and my kids are Bristolian born so that makes me honourary I guess! Prices near the school are pretty much comparible, so our sticking point is that we are currently maxed out wrt income multiples (my self-employed wage not yet valid!), so can't increase LTV. So the only way to release the money would be to sell and rent elsewhere, or rent out this house and then rent elsewhere. Either way, it involves renting.
  8. Ok, great, 0% it is for you then! I thought I would just mention the CGT thing just in case.
  9. Hi all, Looking to get some opinions from people actively involved in property sourcing discounted properties for the basic BTL/BTS/BRR type strategies (i.e. not R2R or Lease option etc)........is there still money to be made in packaging deals for investors? I know this depends largely on how good you are (as with anything in the world of business), but clearly if there isn't much demand in the market for something, then it doesn't really matter how good you are!!! I ask because I wish to add an element of deal packaging to our business because........well, why not eh?! I will need to learn how to source deals for my personal investing, so why not pass on the ones on that I cannot take action on (due to time, money, distance etc) to other investors for a fee, right?! The thing is, I have no problem with putting the work in, but clearly I don't want to invest time and money into a deal sourcing business if there is no money in it (costs of setting up and becoming compliant are quite high!!!). I've searched around and some relevant forums on PropertyTribes have cropped up, but they are all very doom and gloom about sourcing. Perhaps the reputation of this has become tarnished by an over-saturation of people doing this now, many of whom are not very good at it/trying to rip people off?! Wondering if sourcing has had its day?! Also, there seems to be SO many educational offerings with regards to learning how to source deals, it's VERY overwhelming! Does anyone have any recommendations of a reputable source of info? Ones that stand out to me so far are: Goliath Sourcing Academy (https://goliathsourcingacademy.com) The Good Property Company (https://www.thegoodpropertycompany.co.uk) Property Investment Blueprint (https://propertyinvestmentblueprint.co.uk) Please chime in if you are active in sourcing deals and can offer some advice!!! Thanks again!
  10. Thanks Matt! The plan with the money is to primarily operate a BRR 2yr hold strategy, although some of these may turn into flips. Not got the finer detail yet, and some of it may have to happen organically as we operate, depending on how quick a property can be sold, and whether we can get enough of my cash out of a project etc. Also looking at adding a property sourcing stream to it, although I have some concerns about this and will put up a separate post!!! To be honest, we're not attached to the idea of staying here, especially as at the moment, we have to commute 6 miles each way to take the kids to school!!! Thanks for the option 5 suggestion. That could also work but the sticking point is that we wouldn't be able to get a mortgage for a capital and interest repayment on anything higher than what we already have due to not meeting the income requirements.
  11. Hi henry, I don't think SDLT is conditional on your living intentions.......you will have to pay it regardless because it is levied when you purchase the property (currently at least!). The only difference is what band you fall in, as mentioned above. This band will depend on if you are a FTB, buying a second/thrid etc. home, or whether purchasing through a company. Be careful about CGT if you decide to sell in such a short space of time though........if you are seen to have purchased in order to renovate and sell for a profit then you would be exempt from PRR and thus need to pay CGT. I know your intentions were to maybe let it out as opposed to sell it, but just putting it out there in case you were contemplating selling too. I'm NOT an accountant, just offering up info based on my personal research!
  12. Hey guys, Really struggling to work out my plan of attack with regards to raising funds to get started in this; I keep floating back and forth from one to another. Here's the story: We have £210k-£220k equity in our house with a current LTV of 35% and thus a very low mortgage of £340. Idea 1: Sell house to release ALL the equity (of course minus fees), rent somewhere else and channel all the money into developing our property business. Upside is that we would have more of our own cash to fund things, meaning that the cost of financing projects would be less so we can maximise profit, or perhaps we would be able to get involved with more projects. Downside, we would lose any further capital appreciation in this house (area is Bristol, which has good appreciation, and the property fundamentals are very good), and would be increasing our living costs by renting (rent is approx £1000k/mth where we are, £660 more than our monthly mortgage). A further downside would be the hassle/cost of trying to sell which would eat into our pot. Idea 2: Convert house to BTL at 75% LTV, although this is dependent on stress testing criteria etc, rent it out for a net cashflow of around £500-£600/mth, whilst being able to release SOME of the equity (maybe £100k-£120k, depending on lending criteria). We would again need to rent somewhere. Upside is that we of course get to keep the capital appreciation, we convert our home into an income-producing asset, and it is less hassle to sort out than selling. We would still need to rent elsewhere, but given the cashflow, we would roughly break even on living costs. The only downside I see to this is that we would have to leave around £100k of our money in the house, giving us less to play with for developing the business and would therefore make us more reliant on raising finance; this may make financing more expensive (thus diluting profits) and restrict the amount of projects we can do. Furthermore, it would be a BTL in a personal name, so then there are the tax implications (although based on how things look for us, I don't think this will make a huge difference really). Idea 3: Same as idea 2 but with first selling the house to our LTD company. Upside is the tax relief, although as I said, this is unlikely to make too much of a difference for us on the one property. Downside is SDLT which would cost £14k, not to mention the fees etc. If Boris switches SDLT to the seller as he proposes, then this may work but would still cost £5k plus fees, so currently not in love with this idea at the moment (but would be worth considering for inheritance tax protection in the future!). Idea 4: Forget trying to use my own money completely and try to raise finance through JVing and private finance etc. Upsides are of course infinite ROI with respect to money, we get to keep the house and can then chose to rent it out or not, downsides are that it is riskier, much more expensive (much higher profit dilution) and I'm not sure we will find people to JV with when we have no "skin in the game" ourselves, and no experience!!! Lengthy post....sorry! Not asking for financial advice, just wondering what opinions you guys have on the subject!! Thanks RW
  13. Thanks! Only just realised the difference between a "like" icon and a "thanks" icon! Wow! Reading that makes me realise how little I know about this game, but also gives me something to target! Certainly think I will need a few more miles on the clock before attempting it. I have young kids so I would be looking to do the simpler method that you mentioned (long stays in places).
  14. Thanks for all the advice, and will be sure to pick the brain of Simon Allen if I can!!
  15. Yes, I thought as much. I think I'm at peace with the whole valuation thing now! This is all the more reason to really be focusing on adding clear value rather than simply a lick of paint and a hoover, but that was always my intention anyway. The "convincing" job must become a lot simpler when you can say "Actually mate, I've added a whole new room with en-suite" although I'm still expecting to be leaving some equity in the properties for the short term.
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