Investment Question!

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Investment Question!

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deepwalia

Posts: 4
Joined: 27/2/2008

Investment Question!

Hi Everyone..

This is first time on a forum..never realised the wealth of knowledge on here!!

So can I thank all though's people in advance for replying!

My question is in regards to an investment deal that I have possibily going through, it goes as follows:

I was wondering you you could help me please.

I am just waiting for the council to give me the go ahead. The property is a 4 bedroom house - my vision is to covert it into 2 flats. The demand in the are is good. Strategy would be to sell one and rent one.

Property is slightly distressed.

The current market value is £310k

Agreed price is £275k

Deposit required is £41.25k

Stampy Duty + Other Costs: £10k.

Refurb cost is £30k. (max)

Resale price per unit will be £215k.

Once the dwelling turns from 1 property to 2 properties how does the mortgage work on this exactly?

Could you give me some advice and pointers please?

Thank you

< Message edited by deepwalia -- 20/3/2008 11:13:42 AM >

Report Abuse | Date 20/3/2008 11:07:42 AM

danjohnson

Posts: 245
Joined: 12/5/2000

RE: Investment Question! (in reply to deepwalia)

Hello

I've not done this before, but I believe it would go something like this...

My guess is that you will be creating a new set of title deeds, so the asset against which the first mortgage will be secured will no longer exist once your property has been converted into two flats.

Therefore, you would have to redeem the first mortgage at that point, simultaneously reborrowing a new mortgage against each of the other two properties.

If I'm right, then make sure your initial acquisition mortgage doesn't have any early redemption penalties - you should ideally be looking for a specialist lender that deals with this kind of activity regularly.

Report Abuse | Date 30/3/2008 1:54:50 PM

deepwalia

Posts: 4
Joined: 27/2/2008

RE: Investment Question! (in reply to deepwalia)

Thanks for the reply on this and my other question.

Most Appreciated Dan.

I take it thats your name, right?

< Message edited by deepwalia -- 30/3/2008 3:54:05 PM >

Report Abuse | Date 30/3/2008 3:53:37 PM