Property developer finance

[Deleted member 290019]

Hi all,

I'm in the very early stages of a business plan and there's a few things I'd like to be clearer in before I meet an accountant.

I'd like to become a property developer full time but if I leave my job surely a mortgage lender would not loan me money as there is no way to pay it back untill the property is sold?...

I have 120k cash and lots of experience in this field.

My wife would still keep her job however the mortgage on our home will be all in her name so again doubtful she could have a second mortgage?

Also... if the mortgage was in my wife's name on the property to be developed, how could I run the property profits through my company so I was able to obtain finance in the future?

Thank you in advance for any advice or comments here, constructive criticism also welcome.

Thanks
George

 

[tony84]

Are you aware that you will struggle to sell the property within 6 months of buying it? - That is not to say it can not be done, just that your buyers would be very limited to who they could apply to for a Mortgage.

In terms of finance it would normally be a Bridging loan, rates vary but are generally around 0.65% per month upwards. With arrangement and exit fees of around 3% of the loan amount. You do not normally need to go through affordability checks as you do not normally need to make monthly repayments. The balance will just increase and you clear it when you sell the property.

 

[billmccallum1957]

You need to look at development funding rather than mortgage, look for a principal lender rather than a broker.

such as http://www.goldcrestfinance.com/property-finance/

 

[TYCOONUK]

Hi all,

I'm in the very early stages of a business plan and there's a few things I'd like to be clearer in before I meet an accountant.

I'd like to become a property developer full time but if I leave my job surely a mortgage lender would not loan me money as there is no way to pay it back untill the property is sold?...

I have 120k cash and lots of experience in this field.

My wife would still keep her job however the mortgage on our home will be all in her name so again doubtful she could have a second mortgage?

Also... if the mortgage was in my wife's name on the property to be developed, how could I run the property profits through my company so I was able to obtain finance in the future?

Thank you in advance for any advice or comments here, constructive criticism also welcome.

Thanks
George

Hi,

I was speaking to a friend about a similar situation they faced, but they weren't as experienced as you and didn't have as much cash as you and they managed to secure a mortgage. You've said that 'surely a mortgage lender would not loan me money.' You wouldn't know if you haven't tried..I think you just have to meet a mortgage lender, and speak with confidence stating how much experience you have. I don't see why no one would lend you anything - plus if one mortgage lender says no you will find at least one that will say yes.

.And I do not have the answer to your other question, haven't experienced anything in that area.

Goodluck, let me know how it goes!

 

[Gordon - Commercial Finance]

Sounds like you would be a dream candidate for a lot of lenders who provide development finance and commercial bridging loans. It has already been mentioned above that monthly repayments aren't an issue so you wouldn't need to worry about your income like you would with a mortgage, and there are a range of rates in the market if you have access to numerous principal lenders. PM me if you want to discuss getting something arranged.