Its as bit of a puzzle and a bit of a long story. Me and t’missus own 2 flats in the attic of a commercial building, one is rented out. We have a lot of equity in them. The owner of the third flat is going to sell and we would love to buy it but its worth too much – around £300 000 for a 3 / 4 bed flat.

These are the only flats in the building – the rest of it being offices and so I would really love to buy it to control the entire attic.

The flat that is up for sale would get a rental of about £1200 pcm, the flat we have rented is £450 pcm. ( its only small)

We have no savings and very little income ATM.

We don’t have quite enough equity to buy it using the equity from the two flats but plenty to cover a 30% deposit without going over 80% mortgage on any flat.

The third flat needs modernising, the two we own are fine
So – anyone any ideas on creative financing to allow us to get our grubby mitts on the flat? Ta for your thoughts

Become an MP?

what about getting some plans drawn up re-renovation and rocking up to the bank and showing them a ‘business plan’ for them.

i.e. what you need to do, what its going to cost, what they will get back from financing it.

i cant imagine you want to stay in it as you already have too much room (admittedly due to your shift patterns etc its necessary) so you need to view it as an investment and treat it as such,

have you considered changing it into offices and letting them that way?

oh and thanks for the heads up last night – we will take it for 200k but not 300k,
when can we move in?

I presume you need to have income to cover a buy-to-let mortgage?

Mark – the issue is I cant make the sums add up. 🙁

It would be for renting – in some combo – we would rent two of them and live in the third. The smallest one is too small for us to live in

Rental values are about 450, 900, 1200 for the 3 flats. We would need including the current loans etc £420 000 of loans, values of the flats are about £100 000, £250 000, £300 000 so plenty of equity – just not the income to cover the loans

Al – for buy to let renmtals are considered as the income – at a discounted amount so usually IIRC 9/12 of your rental is allowed as the max mortgage payment or something like that and 70% loans only

come one everyone, quids in for TJ. Paypal?

**** me – if begging on here gets me many thoooooosands than I shall beg away.

Hoping for advice from somone who is not a finacial idiot like me

so I would really love to buy it to control the entire attic

That sounds quite sinister.

So you would be renting the flat out to cover the mortgage payments with no other income to cover them is that right? If that’s the case then a bank won’t touch you.

get one of these!

TJ – If you want you can e-mail me @ sihills@moneydecisionsDOTcoDotuk with your contact details and I’ll see if i can help you being that I’m in the business and am an Independent advisor an all that.

:MOD’s: Tis a shameless plug i know but time are tough and any business i generate off here will see a donation to the STW beer & kebab fund 😉

Cheers

BigSi

:edit: GaryM that is not strictly true, just not very sensible lending.

Cheers Si – I will do.

you could just sell what you have and move to peru,

you know its a possibility.

Mark – that is a real possibility for sure. Somehow something needs to change this summer.

personally i would not buy it.
you would be better off working hard at paying off what you owe now and enjoy a more comfortable retirement when it comes.

you have plenty of space, a lovely view, enough floor space to hoover that more would add a burden to you and tie you down more.

Chance of capital gains tho over ten years? We wouldn’t make owt as income but any growth in values would be ours to add to the pension pot. I am sure the flat would grow in value over the medium / long term

what like the last growth period?

a lot of people are now sitting in property that they thought would grow over the med/long term they bought 10 yr ago.

not so smug now though i bet,

its only worth something when you sell it.

is it worth the risk…. and do you want to finance it for that long ‘just to see’?

there are a ton of paper rich property investors in the burgh these days…

enjoy a more comfortable retirement when it comes

I imagine tj hopes the flats would add to that retirement either as income or selling for the capital. That 40% capital gains tax is the killer though.

he already owns enough to make a comfortable retirement as it stands with not much stress or work.

um… I’m honestly not trolling here, but how about waiting until you CAN afford it, then buying it? Much of the reason the property market is in such a mess is because people were able to get mortgages that they shouldn’t’ve, rather than simply being told ‘you can buy it when you can afford it’.
You KNOW it’s the sensible thing to do, and that it will be on the market again in the future; there is NO point mortgaging yourself to the hilt and praying that you can make the sums add up afterwards. Worst case, you lose the lot; rental yields are falling (as people who own places try to rent them out rather than sell), and there’s still no sign of stability in the market, or indication that mortgages are going to get any cheaper any time soon.

Mark – over the last ten years the flats we own have doubled in value. Around here there has been no great growth for the last two years hence no crash in prices yet

We only have about 1/2 what we need to retire on with only 10 yrs ish to go until retiring

Nick – I very much doubt the chance will come again soon. The flat is a superb buy. I am also a bit worried about new neighbours and control of that would be great

Obviously I would only buy it if I can get the sums to add up

they may have doubled in value but you won’t see that until you cash that in… prices will go up and down.

we have been looking as you know and are amazed at how slow the market it just now, there is an abundance of nice flats for not much money and there is a load of fixed price places.

new growth might be a wee while off yet and i dont think it will be like last time if people learn their lessons.

TJ – I use Arlene Addison here: http://www.sjpp.co.uk/addisoncluley/

If anyone can make the sums add up, she will.

Best of luck