I have 3 properties nearly paid off but need to raise finance.

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    I have 3 properties nearly paid off but need to raise finance.

    hi , i live in a house that is valued at around £220,000 with £42,000 remaining in mortage.

    I have a second property a commecial that is valued at £220,000 with no mortage, this produces £1000 per month in rent.

    I have another residential property valued at around £120,000 producing £420 per month

    I have had to close my company down due to recession and relying on rental income now. My commercial tennant is not paying rent on time and i need to generate some more income therefore have decided to invest in more properties that is why i need to raise finance from my equity.

    I made lump sum payments because i had the money then and wanted to deflect the interest and wasnt really looking to develop a portfolio. However now i do.

    What is the best and most cost effective way of releasing that capital so that i can buy more properties by putting a 25% deposit down on a buy to let.

    #2
    I doubt that you will be able to increase net income by refinancing. If you refinance then you are unlikely to pay interest at a lower rate than the net yield of your rental income.

    Perhaps you could sell the commercial property or find a tenant who pays the rent?

    Comment


      #3
      Originally posted by rgk View Post
      I doubt that you will be able to increase net income by refinancing. If you refinance then you are unlikely to pay interest at a lower rate than the net yield of your rental income.

      Perhaps you could sell the commercial property or find a tenant who pays the rent?

      Is there any other way to make money from this situation.

      Comment


        #4
        hi

        I think your best bet is to sell the commercial property. If its worth £220,000 and has no mortgage then pocketing this amount gives you quite a good position to buy other properties.

        I think I would use this amount to pay off the mortgage on your own house which will leave you about £170,000. This reduces your outgoings by a few hundred pounds. Now you have alot of money to put a deposit down on two properties if you so wish or buy a family 3 bed house for £150k approximately and rent. You could buy this in the south of England rent for £750- £800 pcm.

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          #5
          NatWest are advertising a 2y tracker mortgage at 2.19 % interest rate , maybe you could re-mortgage your house to 50% .

          Comment


            #6
            Originally posted by midnightman View Post
            hi

            I think your best bet is to sell the commercial property. If its worth £220,000 and has no mortgage then pocketing this amount gives you quite a good position to buy other properties.

            I think I would use this amount to pay off the mortgage on your own house which will leave you about £170,000. This reduces your outgoings by a few hundred pounds. Now you have alot of money to put a deposit down on two properties if you so wish or buy a family 3 bed house for £150k approximately and rent. You could buy this in the south of England rent for £750- £800 pcm.

            hi thanks for the advice. I would like to hold on to the commercial as this presents a good opportunity, it has the potential to bring in £1000 per month rent, but also if my tenant doesnt make any payments soon, then ive got a view to evict and convert to 5 flats within the same building, its an old solid stone house, rent would then be around £1800-£2000.

            Assuming i paid £80,000 for the 3 bed residential which remortgages at £134,000 , would it be wise to use this remortgate difference.

            Comment


              #7
              I think I would pay off my existing mortgage on my own home first before purchasing other properties. Also you could put £80k down but it will take years to pay £134k mortgage. Unless you wanted to very long term investment I wouldn't bother.

              How much mortgage is on both commercial and residential property? You say you have £1000 a month from one and £420 on another. Does this rent pay for any mortgage?

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