If you’re going to have a go at someone’s view, at least get your numbers right. - Investment is €350,000 - at best an asset worth €450,000 at worst a newly renovated 3 bed semi in Dublin.
Point taken that may need to hold house until renovation costs paid back by rent.
Again, you need to be clear on whether you're flipping or investing.Point taken that may need to hold house until renovation costs paid back by
Again, you need to be clear on whether you're flipping or investing.
If you want to keep it, you need at least 30% deposit, and get a mortgage from the start. There's no way around it.
If not, the interest cost is higher than the rental income.
In terms of a business partner, if the numbers stacked up, and you'd a proven record of doing this successfully, I'd lend the money to purchase at 12%, with the house in my name. You finance all the costs after purchase, and I get paid first from the sale - you get what's left after I pay legal fees, estate agent, and get my 12%. Or, alternatively in terms of a split of profits, I'd want 80%+ if I was putting in all the capital.
But I'd want to see a properly costed plan.
Why don't you give him your money so?Red would 12% return within 12months not be too high ?
And you are carrying out a trade, so any profit is subject to income tax.
Exactly. The facts I was commenting on were very much carrying out a trade.facts of "carrying on a trade" and making it your PPR, are dependent very much on your exact circumstances.
This is very misleading in these circumstances. You might read up on tax legislation - the PPR relief does not apply where the acquisition was made for profit.If you moved into the house after you had done it up and lived in it, made it your PPR, there would be no CGT.
Exactly. The facts I was commenting on were very much carrying out a trade.
This is very misleading in these circumstances.
No, I'd disagree regardless of the order I quote you.In quoting me above did you deliberately reverse the order of my sentences so you could find a point of disagreement
Now you're making a definite statement which is wrong.Something done on a one off basis is not 'carrying out a trade'.
Yes, the number of transactions is just one of the factors in considering if something is a trade.THE NUMBER OF TRANSACTIONS
A single transaction can amount to a trading activity, it is more indicative if there are repeated and systematic transactions.
I cannot find an equivalent irish source
The piece underlined above makes your absolute statement earlier incorrect.
Doing this once would probably not qualify it as a "trade'.
The facts of "carrying on a trade" and making it your PPR, are dependent very much on your exact circumstances.
Again, you need to be clear on whether you're flipping or investing.
If you want to keep it, you need at least 30% deposit, and get a mortgage from the start. There's no way around it.
If not, the interest cost is higher than the rental income.
In terms of a business partner, if the numbers stacked up, and you'd a proven record of doing this successfully, I'd lend the money to purchase at 12%, with the house in my name. You finance all the costs after purchase, and I get paid first from the sale - you get what's left after I pay legal fees, estate agent, and get my 12%. Or, alternatively in terms of a split of profits, I'd want 80%+ if I was putting in all the capital.
But I'd want to see a properly costed plan.
What is the downside risk?
I would start with a generalised decline in house prices.......
I've either made a mistake in my calculations or explanation if it still makes sense.
Basically on a 350k purchase, closing sale after 18 months, the first 433k would go to the finance partner. Out of the balance you need to pay for all materials and labour, and what's left over is yours. If the house sells for less than 433k, you've lost a lot of money.
Not something I'd personally do at the moment, I'm trying to negotiate on a property myself but things are slow moving.
But I thought you wanted to flip? This is a short-term play!If you can keep borrowings below €400k in Dublin on a solid house in a liveable area 20 mins from city centre I don't realistically see a long term downside -
House purchase: 350,000Yeah I think you've made a mistake with you calculations
House purchase: 350,000
Stamp duty: 3,500
Legals: 2,000
Survey: 500
Insurance: 1,000
Total: 357,000
Interest: 64,260 (12%, 18 months)
Estate agents: 8,300 (1.5% + VAT)
Legal fees: 1,500
Total: 431,060
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