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Hi

 

I am completely new to the Property Hub and this is my first post.

I need to provide the background to my story to illustrate my  fairly tricky dilemma.

I bought a property back 2006 for £75,00 on  a joint interest only BTL mortgage.   No problems, we rented it out and had good and bad tenants along the way.  I managed the lettings myself, despite knowing nothing at all about being a Landlord.

Anyway, sadly my husband became my ex-husband and I ended up moving into the property as a means of removing myself from a very bad situation in the family home.  I eventually moved out then he moved in with his new partner.  

He lived there for a number of years and has just moved out so now the property is finally empty.  

Unfortunately, he has not maintained the property and it does need some renovation  / possible building works.   It's a gable end terrace and I'm concerned about the condition of the property and possible damp.  It also needs some TLC inside.

The other problem is that as I bought it during the property boom, prices in that area have either fallen or remained the same over the past 11 years so there is no equity here.  So I'm also concerned it could be in negative equity.    There is still £70,000 outstanding on the mortgage.  I have not had a formal valuation but from my research, at best it's worth between £60k - 70k.

 

So my dilemmas are multiple - 

*  Possible Negative equity

* Requires renovations with no access to immediate funds to complete the work

* Do I sell up or try to remortgage in my own name.

* Can I remortgage with a BTL on one part-time income ? (I work part-time, receive tax credits , single mum etc)

*Could an Investor help ?  If so, where do I find someone reputable ?

*Should I try to get a bridging loan to fund the renovations ?

 

One one hand,  I just want to get it off my hands as it has been like a millstone round my neck for the past 10 years.

On the other hand,  I think, in the long-term should I try and keep hold of it and go it alone in the hope that house prices will eventually pick up in this area.

 

This is a very unique dilemma and   I would really appreciate an outsiders point of view, experienced or not.   Thanks.

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  • 3 months later...

As a(n almost complete) newbie I think there are a few things to consider. Is is something you can make cash flow positive? If so then it could be worth keeping. There’s no point getting a bridging loan to do it up without a very good plan A and B about how you’ll pay it back. If you’re relying on rental income to pay it back, you’ll likely not be able to do so very quickly, which would make things much worse! As Rob and Rob would say, “Always think of your exit strategy.”

If you can make it cash flow then one option would be to ride out the possible negative equity. (I lost £18k with negative equity and having to sell, having bought in 2005). Hopefully if you did decide you couldn’t make it cash flow you won’t be down that much!

I would talk to a good mortgage broker to see about getting a BTL mortgage. I believe there are products out there which don’t rely on your income. 

All the best!

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