Buy & fix investment and startup capital

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Buy & fix investment and startup capital

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beetee

Posts: 1
Joined: 7/4/2008

Buy & fix investment and startup ca...

Hi everyone! I am interested in investing in poperty. I have been advised to start from a fix and sell property. Can anyone pls tell me what sort of capital could be needed for a starter starting from property like £100k. I have a property of my own but am not sure how much i will be able raise as the property is in a high rise block and find it difficult to remortgage.The block is due to be demolished as part of regeneration in the area and the council will pay all leaseholders market value + 10% compensation. But that will be in about 4 years time. But i want to start this business if i can find a way to raise some finance as soon as possilbe. Any ideas pls?

Your help will be appreciated.

Beetee

< Message edited by beetee -- 14/4/2008 3:15:57 PM >

Report Abuse | Date 8/4/2008 6:42:26 PM

property law

Posts: 15
Joined: 27/3/2008

RE: Buy & fix investment and startu... (in reply to beetee)

Hi
if you find a property BMV potentially you do not need a penny to put down and you might even walk away with the house NAD some cash. there is a way to raise more money than purchase price. you need to buy it (with a close bridging facility) and remortgage it on the same day. so instead of getting 85% of purchase price you can get 85% of the property value.
Simply by way of a reminder, I am putting in writing what most of my clients already do by way of minimising cash input for below market value properties:

1) Find a property worth e.g. £100k for £80k (i.e. Purchase properties Below Market Value)

2) you do NOT tell the mortgage lender they are buying a property at £80k otherwise client (you) gets 85% of the £80k which is £68k and thus find the balance of £12k (Plus legal fees) from their own pockets.

3) Instead you advise mortgage lender that it is a REMORTGAGE and thus get 85% of the valuation (Valuation is £100k) = £85k.

4) In order to do this in a LEGAL way (Mortgage fraud is NOT not an option) client will need to buy it cash or get the funds from a bridging company for 1 day, i.e. Buying with the cash or bridging funds and remortgage same day with the mortgage lender's funds

5) As you/most of you know, most mortgage lenders won't lend you money on this basis if you owned the property for less than 3 or 6 months BUT there is at least 1 mortgage lender that will let you remortgage the property even if you owned it for less than 3 months

6) Client generally pay 0.5% of bridging facility for 1 day (= £400) + Legal fees £450 = they buy the property, pay the vendor and all disbursements and they did not have to lay out even a penny ... actually they generally walk away with the property AND some cash in hand!

7) Instead of the 0.5% of bridging facility for 1 day, we have a client that can now offer an unlimited bridging facility for £995 = one whole year of unlimited use of the bridging facility!

Please let me know if this is of any interest to you or your associates,

Shimon Rudich
0161-2782733
shimonrudich@ms-law.co.uk

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Report Abuse | Date 16/4/2008 7:59:32 PM