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#1: Residential Property Dvlpmt - What kind of mortgage ?

Posted on 2006-07-19 15:29:32 by Marie

I plan to buy, renovate and sell residential properties - not so much
for the money but because I want to be my own boss and I like the
thought of renovating property.

For the first property I will take out a residential mortgage. If I
enjoy the process and decide to sell, I'll buy more properties and
repeat the process. At this stage, it will be a business, so are there
alternatives to a Buy-to-Let mortgage which would eat up much of my
capital? How should I structure the loan ?

In terms of a deposit, I could just afford to put down 15 per cent on a
=A3200-250 property (The remainder of my savings could then cover the
other costs such as stamp duty, renovation costs, fees etc). I would
ideally prefer to put down less than 15 pc as a deposit. I will quit
my job and my husband will support me. He only has one year's worth of
accounts at this stage and he's an IT contractor.

Finally, would it be possible to a) use a residential mortgage for each
property, and simply transfer the mortgage from property to property
and b) if I do keep each property under a residential mortgage, I want
to make sure the tax department gets the correct amount of money - is
this possible.

Any suggestions?

>From a green but enthusiastic wannabe developer.

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#2: Re: Residential Property Dvlpmt - What kind of mortgage ?

Posted on 2006-07-19 19:52:54 by tim_not_at_home2006

&quot;Marie&quot; &lt;<a href="mailto:kiwiwelsh&#64;yahoo.co.nz" target="_blank">kiwiwelsh&#64;yahoo.co.nz</a>&gt; wrote in message
news:<a href="mailto:1153315772.647650.307170&#64;s13g2000cwa.googlegroups.com..." target="_blank">1153315772.647650.307170&#64;s13g2000cwa.googlegroups.com...</a>

&gt;Finally, would it be possible to a) use a residential mortgage for each
&gt;property, and simply transfer the mortgage from property to property
&gt;and b) if I do keep each property under a residential mortgage, I want
&gt;to make sure the tax department gets the correct amount of money - is
&gt;this possible.

I can't help you with the rules that the lenders will
apply here, but as far as the tax ofice is concerned
they won't care. If they genuinely accept that these
house purchases are a 'business' they will allow
you to offset the loan interest against the profit
regardless of the type of the loan.

HTH

tim

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#3: Re: Residential Property Dvlpmt - What kind of mortgage ?

Posted on 2006-07-21 17:31:00 by Christian Konrad

On 19 Jul 2006 06:29:32 -0700, &quot;Marie&quot; &lt;<a href="mailto:kiwiwelsh&#64;yahoo.co.nz" target="_blank">kiwiwelsh&#64;yahoo.co.nz</a>&gt; wrote:

&gt;For the first property I will take out a residential mortgage. If I
&gt;enjoy the process and decide to sell, I'll buy more properties and
&gt;repeat the process.

You may find that you need a developers mortgage which release funds
in tranches once agreed work has been completed if you take on a
property needing significant work.

Developer mortgage providers -
&lt;<a href="URL:http://www.homebuilding.co.uk/directory/Company.asp?Category=5F0A39121F98448E8B39C081A60F4854" target="_blank"> URL:http://www.homebuilding.co.uk/directory/Company.asp?Cate gory=5F0A39121F98448E8B39C081A60F4854</a>&gt;

There's developer magazines in all large newsagents.
&lt;<a href="URL:http://www.homebuilding.co.uk/" target="_blank">URL:http://www.homebuilding.co.uk/</a>&gt;
&lt;<a href="URL:http://www.house-builder.co.uk/" target="_blank">URL:http://www.house-builder.co.uk/</a>&gt;

Property Investor - Malcolm Walton is a good book on the subject. No
longer in print, but available for £3 secondhand
&lt;<a href="URL:http://www.amazon.co.uk/exec/obidos/ASIN/0953105709/026-0174889-7231604" target="_blank"> URL:http://www.amazon.co.uk/exec/obidos/ASIN/0953105709/026- 0174889-7231604</a>&gt;

The Housebuilder's Bible: An Insider's Guide to the Construction
Jungle, 6th Edition - Mark Brinkley - is the best book on the subject
although some of the prices may be 18 months out of date as it's due
to be updated in November this year -
&lt;<a href="URL:http://www.amazon.co.uk/gp/product/0954867408/202-6948744-4283007" target="_blank"> URL:http://www.amazon.co.uk/gp/product/0954867408/202-694874 4-4283007</a>&gt;

Basically as with any investment the buying price is critical. Know
the street ceiling price for the type of property. Look for
opportunities to extend.

Good forum here although it's mostly devoted to BTL - The Motley Fool
- Property Investing - Practical -
&lt;<a href="URL:http://boards.fool.co.uk/Messages.asp?bid=50096" target="_blank">URL:http://boards.fool.co.uk/Messages.asp?bid=50096</a>&gt;

hth

Daytona

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