Idea appraisal. Your feedback is eagerly awaited :)

[alexft]

Hey folks,

We are thinking to introduce a service to parts of UK market.

Who can benefit - people whose flats are not selling for long time due to the outdated exterior and interior.

How?

We are creating a mortgage in the owner name. Buying flat, house for a nominal sum of 1 pound with a mortgage. Then we rebuilt, renovate it, sell it and pay owner x amount from the archived sale price, the rest is our profit. Chartered surveyor appraised for which sum a renovated dwelling can be sold, then we ascertain the cost, market direction up, stable, down and make an offer. That offer then is the sum of first charge in the owner favor. We also create agreement which will penalize us if we don't sell withing agreed time period except force majeure like war. We can agree to prepare and fast track planning permissions for extensions, etc to further increase both sides profit.

If you were offered such service how would you react? What sort of percentage from the final sum would you wanted for yourself? And would the percentage size depends on the amount of work done by the firm? Such as rebuild, organizing planning permission, finding best use to unlock extra value, etc.


Alex.

 

[indiemandm]

Hi Alex, I would be interested but would rather have a cost up front. I would also want to know about the legality of the arrangement, would I be signing over my house to you? What work would be done and what would the arrangement be while the work was being done? I don't know about other people but I would want everything spelled out very clearly and would be concerned about the cost vs the benefit. Also, if I was not desperate to sell I would not be very keen as I could do the work myself over time.

Sorry if i've rambled there, hope it's of some use!

 

[scribe]

With all due respect .
It sounds dodgy,sorry but that's how it reads.

 

[Christine Hough]

I would not like this at all.

Either I own the property and decided what work is done, or I sell.
I would not like to have someone initiating work on my property. If it went pearshaped or did not sell who would be left holding the baby?

I could end up with a devalued property someone else had ruined, starting a renovation and not finishing it.

I have heard of developers offering a low price and then asking if they can start renovation prior to completion and this is dodgy for the same reasons.

 

[Liybpg]

as per other comments, don't see how this will work.

I think a better service would be you as an expert looking what can be done to bring the value of the property in the most cost-efficient manner (e.g. do the kitchen but leave the guest room) and charge a premium for consultancy. Don't know if that exists already or not.

 

[alexft]

It can work well with probates for example where people want to sell fast yet also maximise the value.

Doing work by yourself cost much more unless you don't work and have all the time to fix mistakes, etc. In the falling prices market the more it takes to fix the less is the profit.

Christine a company have to offer a penalties then. If renovation and sale its not completed on time it is due to be paid. Builders can also decide to leave it half finished, go into liquidation, drink for weeks, etc. There is also insurance available to companies with solid financial background that picks up cost of finishing shall for some unforeseen reason company wont do it.

Some people have poorly renovated houses, houses that have undeveloped attic, large garden, etc. They might wish to get a bit more money and hence is their primary interests.

Also some people wont sell for a current market price as they feel their house worth more and got locked potential, etc. When portion of profits from redevelopment is shared with them they might be more likely to sell.

What you think?

Its not a main stream service more like a specialized solution for some.

 

[scribe]

Sorry but it won't work ,there are to many things that are wrong with the idea.

 

[Rainbow Chasers']

I must admit, it does seem high risk and dubious. The legalities are shady, with 'another' mortgage in their name - that would need looking into. A development loans would be more like it - in which case they would rather source that from a bank, than a private company, or add it onto their mortgage if in equity. In which case they would probably go to a builder and cut you out (the middleman) I would be interested in how you will sell this to average joe taking into account that people on here are not sold who will have a better understanding.

It would take some more investigation into the finer details, but cannot see many people taking up the offer. You may be better off coffin chasing property from owners that have no heirs - give them the value/partial value and sit on it until they pass, do up the house and sell on. I am sure you would have more success giving mr bloggs some money to enjoy his last days worry free, as much as they would enjoy getting some money back rather than the government taking it when they do go.