WIBU to ask you to help me figure things out? Career related (Self employment or property developing)

[PeppermintLatte]

Hi,

I feel at such a loss, sick of feeling this way and don't really know who to discuss it with in real life? I see a lot of posts on here from women who come across as extremely intelligent, they seem to know where they are going in life and have things sussed. If you are one of them women, can you help/advise me?!

Long story short I live with my Mother (since I separated with my ex) I have a child who is approaching 5 and is now in Reception at school. I was 30 last month and feel like i'm having a mid life crisis! Shouldn't I have things sorted by now? I run a small business that isn't doing well, people simply don't have the money to pay for my services as it's not an essential, more of a pamper. I rely on working tax credit and with all the changes coming in such as Universal credit etc, I am not comfortable with how my working life is. It could all be taken away from me if I struggle to hit minimum wage for the hours I work and obviously with having a child to support I can't live like that. I could go and get a job and I have looked, but all the jobs in my area are shop work/care work/call centre work at minimum wage. If I go down this road i'll still be reliant on tax credits. I really want to give a new business ago, something I can make work so that hopefully, eventually, I can be a productive member of society who pays taxes.

I can't afford to move out from my Mothers (This is a living nightmare, but she's very kind to let us live with her) And I feel like such a failure. Lately I struggle to get out of bed and feel permanently down, always on the verge of tears. My mind works over time constantly trying to figure out what to do next. I do a fair bit of voluntary work in the hopes it will lead to a career in the industry i'm volunteering in, but of course there are no guarantees.

What i'm asking for really is some advice on two things, the first is this -

My wonderful Dad (Don't see much of him as he lives abroad) is retired now, he has a decent pension and is comfortable. He owns a small flat in a nice area in my City and the plan has always been that he'll leave this to me. He paid £100,000 for it about 10 years ago. He has a £15,000 mortgage left on it. These flats are now selling for about £65,000 so he doesn't want to sell it (or me to sell it when it becomes mine) Someone rents it off him right now but when they leave it will be mine for me and my child to move into, it'll be our own home if i'm hopefully sorted enough then to deal with the mortgage and bills. I've been thinking though, once it's signed over to me, would it make sense to re-mortgage, buy a couple of run down houses and do them up and sell them on? Could this be the start of a career for me or am I being ridiculous? Obviously i'd have to do plenty of research beforehand but i'm not sure where i'd start with that? If I went ahead and did this, would I have to come off all tax credits straight away? Just wondering how that would work and would it mean living on nothing until sales were complete etc?

The second thing i'm looking for is to start up a new, small business, with the hopes of eventually earning a decent enough living for myself and my child. I just have no inspiration at all and am shamelessly hoping that you may be able to help me with ideas? I have no talents besides being a good talker, I have great communication skills and I am a confident public speaker. I was thinking of perhaps going down the route of sourcing something to sell on ebay to start me off, but then would it be worth it with sellers fees etc? Unless I set up a Facebook/Instagram page and worked that way. I'm interested in women's fashion/designer items such as sunglasses, shoes, bags etc, although I cannot afford to treat myself to these things, but I do enjoy daydreaming about one day being able to, was vaguely thinking of trying to source these kind of items, but maybe this too is a ridiculous idea. My Dad would loan me some money to start me off. I also spend a bit of time at my local auction, they do a lot of ex display stuff from Costco such as coffee machines/household applicances for decent prices, they always seem to have Ugg boots in and sunglasses etc, was thinking this may also be a start?

If you've read this far, thank you. I probably sound like I haven't got a clue, because I haven't! I'm just clutching at straws and trying to get my life sorted in some way as it appears to be such a mess right now. Any ideas of advice you could offer would be greatly appreciated.

[MrsTawdry]

First of all you need to calm down a little bit because you do sound depressed and you're running away with thoughts.

It's not a bad thing to be living with your Mother but you're right to look ahead.

Starting a small business is only a good idea if you have an idea to begin with. For now I would look at re-training in a profession which will be secure.

Re the flat...you're definitely running away with that one...when it could be many years until you can sell it. I would forget about that completely...property prices change and who knows when the tenant will go? It seems odd that your Dad says it will be yours when the tenant leaves...is he planning to let you rent it from him until his death?

[sparechange]

Do you have a mortgage now, or have you had one before?
Remortgaging the flat won't be as simple as you think.

For starters, you'll need an income to get a mortgage. Of course the rental income is what will be used to pay the mortgage every month, but the bank won't lend it to you just on that basis. They'll want proof that if the tenant doesn't pay, or its empty for a few months, you'll have the means to pay the mortgage, on top of paying for any other outgoings you have (bills, childcare, housing costs etc).

And step two of your plan... You don't say where you are, but it is a place where the property market is not doing well, and prices are well below their peak (so I'm guessing it isn't the south east). Simply, the market has fallen because there are more sellers than buyers, so if you do something up, it is unlikely that you'll be able to sell it quickly or easily.
When prices are flat, people developing property make money by being able to do it quicker and cheaper than anyone else.

If you watch homes under the hammer and those sorts of programmes, the majority of people that do well are those who are from a building background and able to do the work themselves to save money.
If your plan is to buy somewhere, hire in a builder to potter away and improve it, and then sell it on, you don't stand a chance, I'm afraid.

Even in a frothy property market like London, it would be very difficult to make it work, because run down houses are sold at a price which is more or less the maximum 'done up' price, minus the cost of doing the work.

[PeppermintLatte]

Thank you for replying Mrs The tenant is a family friend and is set to leave in the next 18 months. My Dad is giving it to me to live in, it's my inheritance so to speak. He was going to leave it to me in his will anyway, and he said he'd rather see me with it sooner than later as he knows i'm stuck with my Mum. He's been successful in life and is being this generous because I guess he can afford to be. He's not rich, but he's comfortable, he's an older Father and is past retirement age now.

Regarding re-training, I have though about this, but no idea what career i'd want to do, scared to do a degree in something that either won't get me work, or I find that I don't enjoy the subject at all. Getting into debt with no guarantee at the end scares me.

[PeppermintLatte]

Sparechange Thank you. I'm in the North. I was actually hoping that my Dad would help with re-mortgaging. Rather than selling on I could buy to let. My Dad was a builder/joiner and ran a successful business, so again i'd be relying on a hand from him. I also have a couple of cousins who run a successful building business who i'd work with.

[sparechange]

It's great that you've got trade contacts. Have you approached them about your idea?
Would they work for mates rates/a cut of any profit you make?
Would they drop your project if a full-paying job came in?
Would you be able to tell them that their work wasn't up to scratch if you felt it wasn't, and would that cause any bigger problems?
Would they be able to teach you skills during the projects so you could do more of the building work on subsequent projects?

Re your Dad getting a mortgage, you say he is past retirement age now... Very, very few mortgage companies will lend to someone past retirement age, so that might not work either.
Sorry to be negative, but better that that making too many plans and finding they can't happen because of a stumbling block over the mortgage issue...

[PeppermintLatte]

spare Because it's such a recent idea i've not been able to discuss it much with anyone yet, briefly mentioned it to my Dad and he basically said he'll help me sort it. Regarding my cousin's, yes they'd be happy to work for a cheaper rate, but haven't discussed leaving it if a full time job came up - but of course i'd expect them to. I'm thinking it would be a part time thing for them, fitting it around other commitments.

In terms of my Dad being past retirement age, I thought it'd be tricky. I would hope Dad and I could try and figure a way around this, and if so, do you feel i'd be better re-mortgaging and doing a couple of buy to lets as opposed to selling them on?

[MrsTawdry]

What about learning a trade yourself? If you want to go into property development it would be very handy AND plumbers and electricians aren't short of work are they? Loads more women in the field now OP.

[sparechange]

It will all come down to your mortgage capacity...
A bank will lend you roughly 3 x your income, assuming you've got a good credit rating.
If you've been doing buy-to-let for a long time, they'll let you include some of the 'profit' (difference between mortgage payment and rent) in the income, but if you are currently self-employed, they'll want 3+ years of accounts to judge what your income is.
It used to be easier - you could self-certify and say you earned £xx per year and they'd believe you, which is partly whey we had a recession, because people lied about their earnings and then couldn't pay back what they'd borrowed when there was a glitch, like tenants not paying rent.

Do you have examples of the sorts of properties that you would want to do? Are they in an up and coming area, or student area or family area, for example?

[holeinmyheart]

I think if you are thinking of Property Development then you could do with leaning something about house building. Otherwise you will be a sitting duck. It is no way as easy as you think. Speaking from experience, you need money to support things when they go wrong, and they do.
I think selling something would be easier. Is there anything you could make? I had a friend who made hats. She had a market stall and had to sell so many hats a week at so many pounds, to support herself and her daughter.,
Good second hand nursery furniture can be bought very cheaply and sold on eBay. I think becoming a dedicated ebay seller would be a possible idea. Picking up things at auctions and taking photographs and selling them factoring in the price of post and packaging.
I have a friend who does it. She goes to car boots and finds designer goods, then sells them on EBay.

[Want2bSupermum]

I flipped houses at university to pay my way. I had a team behind me that while I paid for it, it was put together by my Dad.

I think there is more money in property development than selling stuff online but you need to think this through. I would learn a building trade (agree with poster of plumbing or electrician) and do a bricklaying course. Nacro used to run bricklaying courses for juvenile offenders but also allowed people such as yourself to join in. The cost to complete the course was zero and there was a shortage so plenty of work available back then. I doubt things have changed.

I would take ownership of your Dad's flat, rent it out and save 100% of the after-tax rental income. Do use an agent to find the tenant (fixed fee only with no further due after that) but not to manage the flat.

Living with your mum must be painful so I consider getting on housing authority lists now before your Dad transfers title of the flat into your name. With your low income you should qualify for housing assistance and once you have the flat in your name you should be earning enough to pay the rent. If you can stomach it I would live with your mum and move into your first flip so you can more easily manage the finishing stage for selling, get out of your mother's hair and it will be a primary residence so capital gains won't be due. This would be in 3-4 years and there are no rules saying you can't have two properties but this might change (i.e. you could live in the property you are selling and keep paying rent on the second home).

In 3-4 years you should have enough cash saved from the rent of your Dad's flat to buy one place and flip it. You will also have your own contacts plus your Dads and your own skills. Use this as your practice property. After that I would look at the cash left. I made about GBP20k after tax on each property that I flipped. This cash went into the next place. It might take you 3-4 flips before you can buy two properties at a time and keep one to rent out. Also, you need to plan for taxes coming out of the proceeds. If you live in the property before selling it and it's your primary residence the tax treatment of the gain is different than if you run this as a business. Inland Revenue are not stupid and you having 5-6 primary residences a year won't cut the mustard. I do suggest you live in the first place, just so you can more easily manage the last stages of getting the property ready to sell as this will help you learn. If you don't want to you will need to adjust your plan accordingly as you will be paying tax on the gain.

Keep the mortgage on your Dad's flat. Once you can show a good record (I would say 5 years) income on the property and your other property activity get the biggest mortgage possible based on the rent coming in (ideally interest only if possible). This will reduce your tax bill and reduce your borrowing costs on the other places you are flipping/renting out. Do not use this cash for non-business purposes. Your living costs should come from your day job only.

[Want2bSupermum]

Oh and people who look sorted are not always that sorted.

I have 2DC and work a 75% schedule. Barely breaking even. On the surface we look great but its a lot of very hard work and there are some days where I just want to stay in bed because I am exhausted.

Going into accounting was not a great move and I too am looking to do my own thing. Looking at buying a dunkin-donuts franchise. Capital outlay is nuts but everyone here in the US drinks the stuff.

[MrsTawdry]

Super She won't stand a chance of local authority housing if she's housed with her Mother. They're like gold dust.

[PeppermintLatte]

Massive thanks for all of the replies. Want & spare Thank you for sharing your knowledge of property development with me. I think the property development stuff would obviously need tons of research, plus it looks like I could be waiting around for a long time for a sale, so what would I live on in the mean time?

In terms of selling stuff online, i'm not creative at all, couldn't make anything myself. I need to find something that would be in demand & that I could get my hands on easy enough. I just don't know what else I could do business wise that I could earn a fairly decent living from, I need something that is long term.

[MrsTawdry]

What about a trade as I suggested earlier? Could you do something like plumbing? Personally I'd be taking advantage of the fact that I was with my Mum at the moment and training!

[PeppermintLatte]

Mrs Yes, you've definitely given me food for thought & it's something i'm looking into. Thank you.

I still feel like I need some money coming in now, as my business is going nowhere so i'm thinking of my likes/interests that may work (in terms of online selling) I love all the finishing touches in a home & I adore candles. I always see beautiful photo frames/mirrors usually vintage style, at the auction, plus a lot of coffee machines/pots & pans that are ex display from a well known wholesale place. I'm wondering if I could get trade account with a decent candle company, plus find a wholesalers that does nice wall canvases, decorative pieces for sideboards etc, as well as buying from the auction & setting up on Ebay/Facebook/Instagram? This is an area that would genuinely interest me. Just not sure if it's viable? Plus there's finding wholesalers & sorting trade accounts.

[Parsley1234]

Have done property developing and got left with last one I did which has been rented out or 5 years until market lifts a bit I think maybe next year will sell it. I did a private beauty therapy course and had my own salon a year later market is a bit saturated now but I do make a good living from regular clients and hotel guests. The trick is to specialise which I do re the candles true grace are a good company to sell great product and minimum investment x

[PeppermintLatte]

Parsley Thank you so much, will check them out. Beauty is heavily saturated in my neck of the woods, and I know about 300 make up artists, seriously! I think for me, selling from home would be a decent starting point, it's just ensuring i'm selling the right thing. Storage, luckily, isn't too much of an issue.

[morethanpotatoprints]

Hello OP

First of all, you are doing a great job and are supporting your child the best way you can, so have some
You need to stop stressing about the future however hard that sounds.
Is you Dad expecting you to take over the flat soon, when the present tenancy is up? Do you have a time scale for the move?
Would you need to get bogged down with a mortgage could you not just pay your dad instead. I was thinking of doing something similar for my ds1 this is why I ask. This would allow you to build up your business so you don't have to take work you don't like or that won't pay any more.
We have done several properties now and wouldn't do it again. It is difficult to guarantee an income which would be difficult for gaining credit. You also have to choose your market as stated above and decide if you are going to go for something almost done, i.e need a bit of decorating and go for small profit, or the bigger profit. This can involve anything from investing in an unmortgageable property at auction and completely renovating or a mid range type that has some structural work to do.
The latter two will need you to have some knowledge and either friends in the business or lots of trusted contractors.
It can be very rewarding but can also go wrong very quickly, one reason could be going over budget and not making a profit.
I wish you luck in whatever you choose.

[Want2bSupermum]

OP - The idea is you train and get a job as a tradesman so you have a steady income and use the property development as a way to supplement your income. I would do bricklaying and either plumbing or electrical. Brick laying course is relatively quick but there are a few levels. After the first level you can get a job as a trainee which is min wage at first. I would then train as either a plumber or electrician as you can always get side jobs as a brickie. Once you are qualified you can either be self employed or an employee. Brickies get in at the start which will help you build a business as either a plumber or electrician if you want to be self employed. Having bricklaying experience will also make you attractive to an employer. It is one less thing they have to subcontract out. Also, you can also moonlight.

I suggest you look at the long road. If you start selling on ebay you are looking at a saturated market and there are a lot more what-ifs with that. You say you are in the North West... I grew up in that area and hairdressers are a dime a dozen. If you look at developing a skill you are looking at having multiple income streams in that you can have a day job PLUS doing property development which will tide you over during lean years/provide you with your pension.

This does mean you need to look at staying with your mum for 3-5 years if HA won't help you. I know it can be hard but DH and I have spent the last 3 years in a house we hated in an area we didn't feel safe in. Finally made our move in September last year. Patience enabled us to make just over 25% on the sale of the house when prices are increasing at 1-2%. The gains are there and the more work you can do yourself the better.

Huge well done for getting this far and keep going. Think this through and look at the long term. Share your plans with your mum because she is probably also looking for you to move out!

[PeppermintLatte]

Huge thanks for all the advice, there's clearly lots to think about, including learning a trade, so i'm going to spend the week looking into this.

It's clear my current business isn't working out, so besides studying, I need something else in place so I can earn some money and still be eligible to a little bit of working tax credit so that I can put my child in breakfast/after school club. Preferably i'd want to sell online, self employed, as I could fit this around studying. I'm going to have a look at wholesalers that supply things for the home, and i'd like to sell candles too, so need to see if I can get a trade account with a decent company. The Government are putting something in place now where self employed people need to be earning NMW for every hour that they work, right now i'm not earning that, and there's no guarantee that I will be if I sell online, but i've got to try something. It's just making sure I find the right thing...

[MrsTawdry]

Is that true about the NMW for self employed people Peppermint? It's been mooted before but never happened.

[Hamiltoes]

Yeah thats what universal credit is going to do.

I would honestly stay well clear of selling on ebay. Especially home things like candles. These are more of an impulse purchase as in, you smell a nice one in Dobbies and think ooooh i'll have that, or i'll get that for Xs birthday. Not many people will sit down at the computer and trawl ebay for candles.

Ebay is also absolutely saturated with whatever the "in" thing is at the moment. I can remember back when winter started seeing a stall in the local centre with fur lined capes. Lovely but really overpriced. Had a look on ebay but decided on something else in the end. Had another look on ebay at the weekend and bought one for £13.99!! These trends only have a set amount of time before the shipments come in from china and everyone and their aunt starts flogging them.

I'd have a think about what you can do that will actually be different. Something gifty like candles would be better sold on a stall. What about making ring candles where every candle has a ring inside and you have to burn it to find out which one you get? There isnt too much craftyness needed to make candles.

I would definitely stick to trades though!! As a young female who works in the trades i'm so so thankful that this is what a decided as the world could come to its knees tomorrow and I bet there would still be someone wanting spotlights fitted also, you'd be surprised how many people like to have a female tradesman. You have to really enjoy that kind of thing though as its alot of hard work. Good luck whatever you decide.

[Want2bSupermum]

Good luck!

Word of caution. I know you need money now but you would be better off working in a junior role in the trade you pick rather than selling on ebay. You need to focus on getting as much experience as possible if you go down the trade route.

Xenia was the one who bleated on about 10k hours to become an expert in something. IME she was right so I would think it makes more sense to start clocking up your hours of experience ASAP. The more experience you get the better you will be at your trade.

Also, whatever you do, I would share your plans with your parents. They might have some valuable insight that could help you and you need your mum's support while you live at her home.

[MrsTawdry]

Painters and decorators can do ok OP...it's hard work but not quite as full on as some of the other trades and of course you can specialise in period effects and so on. I would consider that in your shoes.

[PeppermintLatte]

Thank you all, some great advice, lots to think about this week.

Having a nose on Ebay and there are some people who just sell yankees? Thousands of the things. Obviously i'm not going down this road but i'm trying to gauge what sells online so I can do something short term until I get myself back into some kind of training.