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Limited Company & Outside Private Investment

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Hi all,


Firstly thank you for taking the time to read this, and was wondering if anyone had any help, advice or has been in a similar situation.


I'm currently looking into opening a Limited Company for obvious reasons to both buy/renovate/sell property and also as a means to holding and acquiring buy to lets.


If it helps, all people including myself in the following questions are higher tax payers.


Questions is as follows:


1) I have a friend who has 20K to invest, they are interested in buying a buy to let with myself, whereby we get a company buy to let mortgage (through the limited company I am opening), whilst splitting the initial deposit amount of 40k between us. They do not want to run or operate a company, however I do as I plan to do more than just this one.

How will this work with regards to the mortgage?


Could this be as simple as a 20k loan into the company? Or the purchase of shares in the company? How do they protect themselves and how do I protect myself with regards to the mortgage payments?


2) In addition to the above, I am looking to go into property development with my father, where we will be buying properties for cash at auction with the sole intention to flip once ready (maybe 1/2 a year). This will be the main aim of the company, but buy to lets may creep up as and when dependent  upon the situation.


The main issues I'm having are, how will it work with regards to my limited company, receiving a 20k investment for a buy to let property with another - not associated with the company? How will ownership of this be structured and work? I obviously want this to be as fair and as transparent as possible, however as this is a one off for them, but likely to be a full-time career choice for me, I want to get this right.


In addition to this, I really need to the investment from the initial 20k for the first buy-to-let to get the ball rolling with the renovations to come in the future. Just wanted to do it the most tax-efficient and sensible way.


(To add, I know I need to speak to a specialist, and in due course I will, I just want to ensure I have a basic understanding of what should be so I know the right track to follow).


Many thanks for all help received.

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  • 2 months later...

HI Matt,


I am in a very similar situation to yourself and looking into starting a PLC very soon with the intention of buying, renovating then letting if the property is right, i have want to go into partnership with another of which we are having a 50/50 split, but also with potential for outside investment.

To my understanding you should start the business with your father and then your friend can invest as a business loan to the company of which you return the agreed revenue, however if you are going to the re-mortgage that same property to release equity then you are potentially going to cause a problem as your friend may claim your further houses are split with him too as he was part of the initial funding. i personally would treat it as a business loan over the course of 9-12months and then re-evaluate the situation later, this leaves you free to carry out your plans but also not tied into your friends investment.


i will be keeping an eye on this post and i wish you all the luck :)



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