Buying a home with business

[Sway]

So. The dream has appeared on Rightmove...

https://www.rightmove.co.uk/properties/152206727

This is literally all I've ever dreamed of. Location, home, business, everything. So, guess I should at least look at if it's possible.

Selling current house at 'fairly quick' price would leave me with about £400k as deposit. Business is fairly new, so looking like provable revenues aren't where they 'should' be. Would need to look into the planning consent and 'review in a couple of years' for the glamping tents - but absolutely confident in being able to make it a success.

How do I go about this? Is it even remotely feasible? (I'd really want to give up corporate life to focus on it fully, but guess I could continue for a few years). Mrs Sway has no income.

[jonsp]

Seems the current owners only added the holiday letting/glamping side in 2019. But they're selling out already - why? One possible answer is because it didn't work out as well as they hoped.

Maybe also consider that it would be hard to get finance for such a new business.

[Sway]

jonsp said:

Seems the current owners only added the holiday letting/glamping side in 2019. But they're selling out already - why? One possible answer is because it didn't work out as well as they hoped.

Maybe also consider that it would be hard to get finance for such a new business.

They only bought the property in '19, so have done the planning/build/etc. Since then - but yep, recognise as such a new business it'll be a challenge.

As for why they're getting out, I'd not want to assume - but absolutely it could be it's not gone well (in which case, run!), but also could be anything like health, etc. Or maybe they just loved the 'build' but not the 'life'?

[TownIdiot]

Roughly how much of a residential mortgage are you able to get?

[Doofus]

Their website was setup in 2014. Does that mean somebody else started the business, sold it five years later and now, five more years on, it's for sale again?

[Sway]

TownIdiot said:

Roughly how much of a residential mortgage are you able to get?

Currently at £250k. Based purely on resi, and current earnings/job, I'd not expect to get much more. Not entirely sure how you could break it out into resi/commercial considering the nature of the business/site?

[TownIdiot]

So the it's a 900k or so issue.

I think you'd struggle to get a sufficient commercial loan and even if you could you'd be full on trying to service it.

You mentioned extended family on the other thread - is there anything they can chuck into the pot?

[Eric Mc]

If you are buying the business as well as the property, at the very least ask to see the last three years worth of trading figures.

[Sway]

TownIdiot said:

So the it's a 900k or so issue.

I think you'd struggle to get a sufficient commercial loan and even if you could you'd be full on trying to service it.

You mentioned extended family on the other thread - is there anything they can chuck into the pot?

That seems a reasonable statement of my position.

In terms of 'chunk into the pot' - not really. SiL/BiL are renting, but I would be able to 'take to lender' a guaranteed long term rental agreement for the 'third barn' that they'd live in. SiL would continue to run her cottage industry as income, BiL would become my maintenance/building manager (he ran a building firm until covid).

My parents would sell their house, but I'm the eldest of five (and have actively worked with them to remove me from any inheritance - I don't need it, younger siblings do to help them get setup) - so any equity they released would frankly be set aside for parents to have as their security/inheritance for my siblings. For them, it'd be a case of 'live for free, help the business instead of rent' - reducing staffing costs, but perhaps tricky to explain to a lender.

[TownIdiot]

It looks like a bridge too far to me.

If you could find somewhere for 650k I think it would work.

The people who bought our last place did similar, although rather than run a business they moved their horses in as well as one set of parents.

Their mortgage is an absolute humdinger but they are probably still better off in cash terms through not paying livery.

I bet you could get somewhere on the Welsh borders with that budget.

[Muzzer79]

Sway said:

jonsp said:

Seems the current owners only added the holiday letting/glamping side in 2019. But they're selling out already - why? One possible answer is because it didn't work out as well as they hoped.

Maybe also consider that it would be hard to get finance for such a new business.

They only bought the property in '19, so have done the planning/build/etc. Since then - but yep, recognise as such a new business it'll be a challenge.

As for why they're getting out, I'd not want to assume - but absolutely it could be it's not gone well (in which case, run!), but also could be anything like health, etc. Or maybe they just loved the 'build' but not the 'life'?

Have you ever run a similar business before? What makes you so confident that you could make it work?

Why they (the current owners) are getting out is very important. You are, naturally, putting a positive assumption on it but you need to objectively look at your due diligence. If the reason it that "it's not gone well" that does not automatically tie in with it not being well run - there might just not be the market there.

And the finances seem very risky - you need nigh-on a million quid to get this place - that's a hell of a lot of money to source in order to service a glamping business.

Frankly, this seems like the sort of opportunity for someone who wants (and has funds for) a £1.5m house but also wants a side-hustle with the glamping aspect. If this isn't you, think very, very carefully.

[Sway]

TownIdiot said:

It looks like a bridge too far to me.

If you could find somewhere for 650k I think it would work.

The people who bought our last place did similar, although rather than run a business they moved their horses in as well as one set of parents.

Their mortgage is an absolute humdinger but they are probably still better off in cash terms through not paying livery.

I bet you could get somewhere on the Welsh borders with that budget.

£650k would be 'easy', agreed.

We're looking at two options really for the 'next step' - and yep, Wye Valley is the other option, but we'd look for something quite different in terms of property/business (and would look to do it without commercial lending).

This is another level financially, but also in terms of the lifestyle it'd enable.

[ozzuk]

I'd love to run this kind of business, been looking for years but nowhere near that budget, could probably scrape 300k deposit so was looking max 5/600k as lenders often need a strong LTV in their favour. Can't see how you'd finance that kind of purchase unless the business is extremely strong.

Market does seem good for this in UK, but it is getting to be a very crowded market, seems since covid everyone wants this type of property, or if they have land they try slinging a tent in and call it an eco-glamping site. I've seen a few in Wales falling foul of planning.

You get a lot more for your money in Scotland, but then you have to deal with the weather but it's somewhere we're focussing on.

Let us know how you get on with finance enquiries!