THE QUESTION

I’m looking for finance to buy a small B&B, what do you recommend?

THE ANSWER

Small B&Bs tend to be problematic to finance.  This is usually because the owners have a narrow view (encouraged by their accountant) of the property’s value based on keeping the taxable profits of the business down to a minimal level.

Of course they benefit by pocketing almost...

THE QUESTION

I have seen a property that has 60 years remaining on the lease with great potential to develop and sell, but the price is at market value and the length of the lease makes it a risky proposition.  If we could get a lease extension prior to purchase that would work, but agent claims it will cost £107,000.00 on a property valued at 600,000.00.  I need expert advice...

THE QUESTION

Serviced Accommodation (SA) seems to be the new HMO in terms of the property strategy everyone is talking about doing.

I can see the attraction for an investor. Like HMOs, SAs offer a superior monthly cash flow, but do I need any special mortgage for a property I am going to let out by the night or can I use a normal BTL mortgage?

THE ANSWER

You cannot run a Serviced Accommodation...

THE QUESTION

Can you buy a property for cash, using other people’s funds loaned to your Limited Company, carry out a refurbishment and then remortgage on to a BTL, hopefully releasing some equity to pay back the investors their initial stake in addition to their margin of interest?

Following the remortgage the property will be solely owned by your own Limited Company and the initial...

THE QUESTION

Here’s a scenario:

• Purchase at 150K
• Exchange and then carry out works expected to bring valuation to 185K
• Keeping a strong and detailed record of all the building works, when the valuer comes and tells you (hopefully) it’s worth the full 185K

How does the lender feel when they know you only paid 150K?

Also how does the vendor get their 150K, is that just a paper...

THE QUESTION

I’ve been advised to go out and find deals and the finance will follow. I have found a few suitable projects, done the sums and offered to purchase.  We lost a deal earlier in the year as we failed to finance it and we currently have two deals on the table that are good few weeks down the line and the vendors are starting to get itchy feet (quite understandably).

This...

THE QUESTION

When looking to buy a BTL property at what point does the length of the lease term start becoming a factor and should be taken in to account? 

THE ANSWER

80 years is a pivotal number, because you cannot get the freeholder to extend the lease until it reaches 80 year point. However, from a mortgage lenders point of view 80 years is not that pivotal, it is quite easy to get a...

THE QUESTION

What’s the best way to fund an auction purchase?  Do I need bridging or will any lenders give an undertaking to release funds WITHOUT knowing the final purchase price?  And who can beat the 30 day completion date deadline?

THE ANSWER

You have a small number of finance options when buying property at auction:

1. Mortgage
2. Your own cash
3. Someone else’s cash
4. Bridging...

THE QUESTION

I am considering buying a flat that was converted in 2008 – without planning permission.  The landlord tried to get retrospective planning permission two years after conversion (2010), but the Council rejected the application.

Now the property is up for sale and I think a bridging loan wouldn't be a problem, but a mortgage company would ultimately require an indemnity...

THE QUESTION

I want to release some equity from properties I currently have to purchase some more.  Who would be the best person to give me advice?

I'm also trying to find out how easy a property is to remortgage once it's been renovated.  Is there a specific period of time you have to wait before you can remortgage?

THE ANSWER

My first tip is to pick an adviser who is an investor...