It's unclear what exactly you are proposing.
Are you looking to buy an investment property to hold long term, or to renovate and 'flip' the property quickly?
They are 2 completely different things from a lenders perspective.
Thanks - what would the private finance options be or where would I find information on this? Its €350k house price I am looking for .Then you're looking for business lending, not an investment mortgage.
Unless you've got a history of doing it successfully, and about 50% deposit, the banks won't be interested. There are private finance options, but it's expensive, and really only for high value stuff.
Wealthy individuals, or pooling together with friends. It's too small for non bank lenders to be interested.
Wealthy individuals, or pooling together with friends. It's too small for non bank lenders to be interested.
How much would the house be worth fully renovated?
It's a lot more difficult than people think to make money flipping houses. Where people make profit, most of the money made is from a general uplift in prices rather than value you've added.
And you are carrying out a trade, so any profit is subject to income tax.
Have you sat down and worked out the costs of bringing the house from 350k to 450k valuation?conservative estimate would €450k
Alternative lenders wouldn’t look at a deal that small.
For something like this on a bigger scale, you’d be paying double digits in terms of an interest rate plus a chunky enough arrangement fee.
But let’s imagine they would. Say 12% of the loan amount plus a 2% arrangement fee. That’s €50k of the €100k ‘profit’ gone straight away. And that’s if you get it all done and sold within a year. Add the €25k cost which sounds light to me and you’ve €25k less tax which could be €8k or €13k, so let’s call it €10k.
So all going to plan, you might make €15k with all of that downside risk. And we haven’t even looked at legal costs, estate agent costs, or stamp duty. So, in all likelihood, even with a fair wind, you’d lose money. As the Dragons would say, “I’m out”.
What is the downside risk? Left with an asset worth €450k that cost €350k that would rent out at €2,500 a month.... Very short term view above and €15k/20k after tax isn't something to be sniffed at for a years work parttime.
What is the downside risk? Left with an asset worth €450k that cost €350k that would rent out at €2,500 a month.... Very short term view above and €15k/20k after tax isn't something to be sniffed at for a years work parttime.
Have you thought of getting a partner involved? He puts up the cash, or most of it. You contribute the expertise, labour and project management. You agree a mutually satisfactory split of the profits.
Short-term view?
If you’re going to have a go at someone’s view, at least get your numbers right.
Excluding legals (say €5k), stamp duty (€3.5k), and estate agent’s fees (€6k), the OP might make €15k based on his projections.
That’s a net €500.
And if prices fall, the OP could end up losing money!
Such is life "Gordan Gekko" Such is life
I was taught many moons ago that investments that at best deliver nothing and worst case scenario lose money are best avoided. Call me old fashioned, but €15,000 (or €500) isn’t much of a return on €450,000 and doesn’t leave much room for error.
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