Discussion
It's a been a thing I've been keen on for a long time and an opportunity has presented itself and so need to ask some questions regarding numbers in case i want to turn the idea into reality.
I would want to refinance after the renovation work to get my money back otherwise I wouldn't do it anyway so my first initial question is this.
If I put a 25% deposit down, renovated it then refinanced it, Do I keep the initial 25% in or is it 25% of the refinanced value?
TIA
I would want to refinance after the renovation work to get my money back otherwise I wouldn't do it anyway so my first initial question is this.
If I put a 25% deposit down, renovated it then refinanced it, Do I keep the initial 25% in or is it 25% of the refinanced value?
TIA
Ryyy said:
It's a been a thing I've been keen on for a long time and an opportunity has presented itself and so need to ask some questions regarding numbers in case i want to turn the idea into reality.
I would want to refinance after the renovation work to get my money back otherwise I wouldn't do it anyway so my first initial question is this.
If I put a 25% deposit down, renovated it then refinanced it, Do I keep the initial 25% in or is it 25% of the refinanced value?
TIA
If you want any meaningful advice I suspect you'll need to provide more information :I would want to refinance after the renovation work to get my money back otherwise I wouldn't do it anyway so my first initial question is this.
If I put a 25% deposit down, renovated it then refinanced it, Do I keep the initial 25% in or is it 25% of the refinanced value?
TIA
What's the purchase price?
How much deposit are you providing?
What are the refurb costs?
How are you financing the refurb?
How long will the refurb take?
What's the rental value now?
What's the rental value once refurbished?
What are the ongoing management and maintenance costs?
What are your total purchase costs?
What do you think the value will be once refurbished and let?
JQ said:
If you want any meaningful advice I suspect you'll need to provide more information :
What's the purchase price?
How much deposit are you providing?
What are the refurb costs?
How are you financing the refurb?
How long will the refurb take?
What's the rental value now?
What's the rental value once refurbished?
What are the ongoing management and maintenance costs?
What are your total purchase costs?
What do you think the value will be once refurbished and let?
The single most important question is: does the OP have the capacity to bear the costs associated with a bad tenant. In an extreme case, these could hit 6-9 months of rent and a full refurb. If a bad one would inflict serious economic pain then it isn’t an asset class for him. What's the purchase price?
How much deposit are you providing?
What are the refurb costs?
How are you financing the refurb?
How long will the refurb take?
What's the rental value now?
What's the rental value once refurbished?
What are the ongoing management and maintenance costs?
What are your total purchase costs?
What do you think the value will be once refurbished and let?
So if refinanced at 200k I would need to leave 25% of that for deposit as appose to 25% I put down for the initial mortgage before refurb?
Moulder I don't quite get your post, sorry.
the property is 30% bmv. The deposit + refurb cost should be the same as the difference between the BMV and ARV and so if I didn't have to leave 25% in of the ARV then I'd essentially get my money back due the new house value after renovations.
Without getting personal,It's a bit of an odd situation where I should never need to worry about tenants for a very long time and so missed rents *shouldn't* be a problem.
And that ties in to doesn't really matter how long it takes to a degree,and I'd be doing most of it due to my trade.
I think its a no, but it's always good to hear advice
Moulder I don't quite get your post, sorry.
the property is 30% bmv. The deposit + refurb cost should be the same as the difference between the BMV and ARV and so if I didn't have to leave 25% in of the ARV then I'd essentially get my money back due the new house value after renovations.
Without getting personal,It's a bit of an odd situation where I should never need to worry about tenants for a very long time and so missed rents *shouldn't* be a problem.
And that ties in to doesn't really matter how long it takes to a degree,and I'd be doing most of it due to my trade.
I think its a no, but it's always good to hear advice
JQ said:
If you want any meaningful advice I suspect you'll need to provide more information :
What's the purchase price? 140k
How much deposit are you providing? 25%
What are the refurb costs? I'd like to think max 15k
How are you financing the refurb? A house sale.
How long will the refurb take? Shouldn't be an issue.
What's the rental value now? Idk actually good question.
What's the rental value once refurbished? Similar properties are 850 pcm
What are the ongoing management and maintenance costs? Good question, shouldn't need management.maintenance... Pass on that one, could just need yearly checks for certs or a pipe could burst and drop a ceiling.
What are your total purchase costs? How do you mean? Fees and surveys etc?
What do you think the value will be once refurbished and let? 200k
What's the purchase price? 140k
How much deposit are you providing? 25%
What are the refurb costs? I'd like to think max 15k
How are you financing the refurb? A house sale.
How long will the refurb take? Shouldn't be an issue.
What's the rental value now? Idk actually good question.
What's the rental value once refurbished? Similar properties are 850 pcm
What are the ongoing management and maintenance costs? Good question, shouldn't need management.maintenance... Pass on that one, could just need yearly checks for certs or a pipe could burst and drop a ceiling.
What are your total purchase costs? How do you mean? Fees and surveys etc?
What do you think the value will be once refurbished and let? 200k
How are you getting it 30% below market value as a first time purchaser needing finance?
Normally the only way to get in cheap is some combination of the property being privately sold, the agent pushing your offer, being able to offer a hassle free transaction (no surveys, money/solicitors ready to go, track record of doing what you’ve said you will).
There is a lot of property on/hitting the market that looks tempting but unless you are somehow able to get an inside track and not need to compete for it then it’s worth always being slightly suspicious of properties that seem cheap.
Don’t forget to consider tax too or, depending on what the “odd situation” is, whether the terms of your mortgage will allow you to do whatever you’re considering.
Normally the only way to get in cheap is some combination of the property being privately sold, the agent pushing your offer, being able to offer a hassle free transaction (no surveys, money/solicitors ready to go, track record of doing what you’ve said you will).
There is a lot of property on/hitting the market that looks tempting but unless you are somehow able to get an inside track and not need to compete for it then it’s worth always being slightly suspicious of properties that seem cheap.
Don’t forget to consider tax too or, depending on what the “odd situation” is, whether the terms of your mortgage will allow you to do whatever you’re considering.
LooneyTunes said:
How are you getting it 30% below market value as a first time purchaser needing finance?
Normally the only way to get in cheap is some combination of the property being privately sold, the agent pushing your offer, being able to offer a hassle free transaction (no surveys, money/solicitors ready to go, track record of doing what you’ve said you will).
There is a lot of property on/hitting the market that looks tempting but unless you are somehow able to get an inside track and not need to compete for it then it’s worth always being slightly suspicious of properties that seem cheap.
Don’t forget to consider tax too or, depending on what the “odd situation” is, whether the terms of your mortgage will allow you to do whatever you’re considering.
Sorry for delay.Normally the only way to get in cheap is some combination of the property being privately sold, the agent pushing your offer, being able to offer a hassle free transaction (no surveys, money/solicitors ready to go, track record of doing what you’ve said you will).
There is a lot of property on/hitting the market that looks tempting but unless you are somehow able to get an inside track and not need to compete for it then it’s worth always being slightly suspicious of properties that seem cheap.
Don’t forget to consider tax too or, depending on what the “odd situation” is, whether the terms of your mortgage will allow you to do whatever you’re considering.
It's been listed for a bit, it's all above board, nothing odd in what I'm considering or would hinder a mortgage. I don't want to elaborate on the odd situation to not get too personal.
Mortgage advisor is booked in for a call.
I'll be honest, this sounds like one of those companies offering ready made property investments at "30% below MV, guaranteed returns, no lose situation". When in reality you're not getting it cheap (because they're taking a huge chunk of profit in the sale), the returns never materialise (because the company offering the rental guarantee goes pop and it lets for £600pcm) and you can't get your money out because the mortgage revaluation after refurbishment comes in at £145,000.
Apologies, we're not answering the question you've asked, but it all sounds quite unrealistic - 30% below Market Value, £55,000 (35%) profit from a £155,000 investment, no ongoing management/maintenance costs, etc
In answer to your question - the revaluation will be based on the completed value, however, whether that's anyway near £200,000 is a completely different matter.
Apologies, we're not answering the question you've asked, but it all sounds quite unrealistic - 30% below Market Value, £55,000 (35%) profit from a £155,000 investment, no ongoing management/maintenance costs, etc
In answer to your question - the revaluation will be based on the completed value, however, whether that's anyway near £200,000 is a completely different matter.
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