Help! Don't want to miss out on this property.

[cerbfan]

Wonder if anyone here has any experience buying property in a similar situation to mine.

I have just found a dream renovation project that I am desperate to buy. It is an old stone bothy currently used as for salmon fishing (making nets etc), its located right on the sea in a lovely little fishing village. Right so I have made up my mind I want this place so I need to make an offer at the closing date (scottish system) so I need to make a bid. Now normally for this being a self build I'd bid subject to planning (therefore I can get a mortgage) however I fear that I'll miss out going this way as they are hoping for a clean offer to buy the place and not have to wait for planning permission to go through before the sale goes through and they get there money.

So I'm wondering if I could buy it through my limited company as commercial premises, (I'm a contractor), then once I have planning permission through (which I am 99% certian to get as I've spoken to the planners) I could then sell it to myself for the same price that I've paid for it. Then there will be no profit to pay tax on. Obviously this will incur extra legal fees but not much else I think. (Do companies have to pay stamp duty, therefore I would need to pay it twice, company and then personally?)

Any other options so I can make a straight forward bid?

I have a house with around 100k equity in it that I plan to sell to move into a mobile home while the renovation is ongoing. The plot in question will be around 300k. I also have another plot that I am waiting to get planning on that will be worth about 70K once I get the planning (this will be to late for the closing date).

Long winded I know but if anyone has any suggestions I'd really appreciate it.

[M400 NBL]

I'm surprised you've had no responce. As for tax implications, i'd ask the question on www.taxationweb.co.uk/forum There may be others that have been in the same situation, in which case you may get ALL the answers.

I hope it all works out.

[Dick Dastardly]

Would a Bridging loan be suitable?

[Davel]

Could you sell it back to yourself before the planning approval actually arrived, or do you even have to mention the planning approval in the sale back to yourself?

- and I'm not an expert or an accountant.

[Horse_Apple]

cerbfan said:

Wonder if anyone here has any experience buying property in a similar situation to mine.

I have just found a dream renovation project that I am desperate to buy. It is an old stone bothy currently used as for salmon fishing (making nets etc), its located right on the sea in a lovely little fishing village. Right so I have made up my mind I want this place so I need to make an offer at the closing date (scottish system) so I need to make a bid. Now normally for this being a self build I'd bid subject to planning (therefore I can get a mortgage) however I fear that I'll miss out going this way as they are hoping for a clean offer to buy the place and not have to wait for planning permission to go through before the sale goes through and they get there money.

So I'm wondering if I could buy it through my limited company as commercial premises, (I'm a contractor), then once I have planning permission through (which I am 99% certian to get as I've spoken to the planners) I could then sell it to myself for the same price that I've paid for it. Then there will be no profit to pay tax on. Obviously this will incur extra legal fees but not much else I think. (Do companies have to pay stamp duty, therefore I would need to pay it twice, company and then personally?)

Any other options so I can make a straight forward bid?

I have a house with around 100k equity in it that I plan to sell to move into a mobile home while the renovation is ongoing. The plot in question will be around 300k. I also have another plot that I am waiting to get planning on that will be worth about 70K once I get the planning (this will be to late for the closing date).

Long winded I know but if anyone has any suggestions I'd really appreciate it.

I suspect that if a company bought it with no planning, achieved PP and then sold it on, if you were to sell it on at the same price you would be breaking the law. The property would have a new value and the sale price would need to reflect that if you don't want to get knabbed by the Revenue for defrauding them.

[cerbfan]

I've sort of given up on the idea of making an offer without being subject to planning now as a. I don't think I'll be able to do it or have the time to organise it and b. the solicitor thinks its a daft idea and I could be left with a building that is worth massivley under what I pay for it in the unlikely event that planning is refused. Just need to hope that they will accept my offer then.

[JustinP1]

cerbfan said:

...the solicitor thinks its a daft idea and I could be left with a building that is worth massivley under what I pay for it in the unlikely event that planning is refused...

Thus is the difference between the motivation between the solicitor and businessman.

The solicitor's motivation must be to advise his client and advise against risk - so they don't get sued for not doing so later.

Yet, the 'value' of a businessman is their ability to judge risk and the acceptance that taking risk is a necessity in making money.

After all, if there was zero risk involved in an investment, everyone would be doing it (even the solicitor!), and thus it wouldnt make money.

[scotal]

Sorry I'm a bit late to this. There are a couple of lenders who now offer renovation mortgages. I'll have a look at them on Monday if you like, gauge their reaction to buildings with no PP.

[cerbfan]

I know you are right Justin, if I could find a way of doing it I would still likely go with it , but the problem is I'm going offshore on Tuesday so the time I have to try and organise a non standard mortgage to do this is non existant unfortunately.

Scotal, I'm guessing you must work with mortgages to be offering this so if it is not to much hassle then this would be much appreciated. I am going to get the property valued next week for both the value it has now minus planning permission and also the value it will have with planning. If the value without planning is enough with the equity in my house I may be able to make a decent offer and buy the property under a commercial mortgage. I've been told I cannot borrow on a residential mortgage as the building is not classed as habitable as it does not have a kitchen, bedrooms etc.

[scotal]

cerbfan said:

Scotal, I'm guessing you must work with mortgages to be offering this so if it is not to much hassle then this would be much appreciated. I am going to get the property valued next week for both the value it has now minus planning permission and also the value it will have with planning. If the value without planning is enough with the equity in my house I may be able to make a decent offer and buy the property under a commercial mortgage. I've been told I cannot borrow on a residential mortgage as the building is not classed as habitable as it does not have a kitchen, bedrooms etc.

Yep that's what I do, I'll have a chat with some people and let you know.

The non-existence of a kitchen is a bummer in standard mortgage terms, and will count against you, but I'll see what the specialists have to offer and drop you a pm.

[TimCrighton]

Scotal I wonder if you might be able to help me out as well as I'm on the hunt for a mortgage at the moment. I've seen a property that I wish to purchase (first time buyer) At the moment its a commercial premises (Office use - B1). The building itself is a former hay barn for a coaching house. I'm keen to offer subject to planning on the unit and I'm confident that I'd be able to acquire a change of use to resi (I work day to day in commercial prop. and have a good relationship with the local planners!). I know that not having a kitchen will stand against the property from a mortgage point of view? Is there anything that can be done to combat this? I'm looking for an interest only mortgage based on the fact the resi value is significantly higher than the commercial value and I have enough capital to pay for the conversion works...

Any help greatly appreciated as I'm a bit stuck and its holding back my ability to offer on the place!