AIBU To Give This Financial Idea a Go or am I being naive?

[Nofilter]

Hi,

So, I've been on and off with a lovely, kind and loving guy for almost two years - he's basically waited for me to get my head around becoming a mum unexpectedly in 2016... we dated early 2017 and I just wasn't ready.

A couple of months ago we reconnected and it's the best relationship so far I have ever been in we've really really clicked...

I've been in a bit of a flummox in the last 12 months as I want to invest XX amount in BTL properties and HMOs to complete my existing property portfolio and secure mine and my daughters future. I worked my ass of from the age of 20-33 and then sold my business which left me with a block of money but no career as it was a very specialised area.

My new partner is an artist - is fantastic at interior design and also building (he basically built a whole downstairs basement renovation 5 years ago bringing in the help of his friends and professionals for the items his expertise didn't cover. It was incredible and a massive financial success for the property in terms of adding value.

He's offered to give up a couple of days a week of his self employed business and help me go to auctions, research areas and different types of properties and available yields and then manage the renovations - which is massively valuable to me as just hiring a builder would mean I'd be paying inflated prices for such things.... in return I will cover the loss of income for those days instead.

Ive also been a bit stuck on where to start with it all plus managing my toddler etc and need his help or run the risk of being ripped off in so many ways and messing up this one shot of boxing off our future.

All that seems ok and a no brainer... he's not on an income where he could lose out on business to come and just "do" this as a favour. There's a big difference in our financial situations.

However he has said that if he were ever to move in with me (half way across the country) which he's willing to do and realistic in that it wouldn't be me and my daughter upping roots - he would only do that if he had a fall back plan IE a property of his own to fall back on should things not work out.

He isn't in a position to buy a property of his own... so I think he means us somehow making this happen through the investment ventures or taking a share of equity etc.. he had to start from scratch again ten years ago and it was a horrible time for him. I completely understand that.

This probably sounds confusing! He's willing to basically take this on full time (which is a risk for him as he'd be giving up his self employed client base he's built up over 5 years) and I'm not stupid I have lawyers and accountants and financial advisors to do all my paperwork etc) but it's messy and I've been in financially abusive relationships in the past so I'm trying to get my head around it.

I suppose the options are for him to just earn a wage for working on my projects but that still wouldn't change his situation enough to buy his own place as a fall back if you see what I mean. I know for a fact we could renovate at least 50% lower than what an average builder would charge as he's very resourceful and talented and a hard worker, he would fully immerse himself in a project and crack on all hours of the day....

This is a serious relationship with a future, we have two years of history and he's been the most patient and gentle and loving man I've ever met. I told him in that time I was not interested & I didn't see a future of me bringing a partner into mine and DDs life - and he did date but both of those women told him he was in love with me and they knew it... and we kept reconnecting. All my friends also said the same repeatedly and just think I'm the last to the party to realise so to speak. I wanted to prioritise my DD first which I have done and she's flourishing.

I just don't want to be blinded by love now that I've fallen for the idea of the relationship. I'm the one with the child, we're really happy in our life but I'd love more children and so would he and we are not young.... but I do have this fear over how to proceed with my property venture... I need his help or someone's help!

It's a really good fit in a way - we've a great shot at doing something really cool together here - but does this all sound fair from both sides do you think? Am I being "too" careful given what he's offering to give up or vice versa?

TIA

So what would you be paying him to do?

And how is he getting his own place?

It seems a fluffy arrangement, to me. I'd prefer to keep business and pleasure separate.

Hi,

Firstly viewings, calculating a spreadsheet I want made up of 5 key areas comparing yields, checking company accounts of various HMO companies, in addition to cosmetically overhauling my new holiday home plus helping decorate my newish home... (Lots to do).

His own place would either need to come from an agreed % profit share over the first few properties (as they will be valued on completion and remortgaged to take the investment back out to reinvest in the next one and so on). OR we make it a priority and say, buy a Victorian 3 floor property, renovate into two apartments and he keeps one - that kind of thing...

He also has an option of a discount on his e siting property due to being a housing association tenant for 10+ years (it's in a really hip area).

The research I've mentioned above is the tip of the iceberg there is a massive amount of research I have planned out prior to spending a penny. Meeting contacts, attending auctions, building relations with estate agents and so forth.

tea I'm usually of the same opinion myself however going out and getting a builder myself is definitely going to cost a considerable amount more - £30k+ just on the first property...

Do you need him to attend viewing etc with you? You seem to know your stuff so why pay someone else to do a job that doesn’t need doing?
Also, if he doesn’t own now, why does moving in with you mean he should be gifted one if it doesn’t work out? I genuinely don’t get that.

I'd hire a professional project supervisor.
You've already got professional accountants, professional lawyers, professional financial advisors...

Nope. No way. My money would be for my child not my partner. I would rather have a professional to do the work and keep our relationship personal.

Keep business and your personal life separate.
You've had your challenges and two years in is not a place to mix business interests with personal interests.
Hell, if it were a twenty year friendship it would be a bad idea in 90% of cases.

The potential for conflicting interests and awkwardness and outright falling out is so big as to not be worth it.

Also, if you need to mix personal relationships with business in such a risky way, reconsider if your business plan is actually viable.

Surely it makes sense for him to save up and buy his own HA property at the discounted rate no?
He’s already in it, gets the discount. Wage from working with you, save, buy it and that is his investment. He has a secure home as he has the HA property although he can’t move to you as he would have to give it up but that doesn’t mean he couldn’t work for you? I suppose the downside is he couldn’t sell it for 10 years
Only thinking about the potential for the investment he’s already in

Never mix business with pleasure.

I read back your OP and something about it would really put me off this plan. If he’s talented and no DC, works hard why is he still in a HA property no mortgage in his 30’s? Also he’s looking to you for a non romantic business arrangement to be able to buy a house when even you say he wouldn’t be able to buy a house by himself at all whatsoever.

Does he have any knowledge or expertise to contribute?

You paying him for doing some work for you is one thing. I don’t think it’s a great idea because of your relationship. It will be difficult for you to ‘manage’ him in the same way that you would normally do for someone you employ because of your relationship.

Giving him a separate property all of his own as compensation for moving in with you is a vastly different thing and the fact that he has asked for this should be ringing alarm bells.

Tread carefully and don’t do anything hasty.

You could give the employing him idea a trial if you really want to but there is absolutely no reason for you to give him a property of his own. In time you may get to the stage of living together and then it would be reasonable for your home to be jointly owned but I wouldn’t rush to this stage in view of his rather concerning attitude.

I'm not as pessimistic as some, I think it could work. It is perfectly possible that you could purchase a property to renovate (I assume this is what we are talking about) as a joint investment, with you providing the capital and he providing the labour/expertise/skills/project management etc., whilst keeping your other investments/properties/capital separate, and then splitting any profit in defined % shares based on the relative value of what you each put in (this would be assuming you aren't married of course). You would need to take legal advice on making sure any business agreement is all properly documented and signed up to by both parties - with clauses to cover contigencies like what happens if the property doesn't turn a profit, what if he doesn't complete work on time, what if there are unforeseen structural issues causing extra cost, what if one party wants out before the work is completed etc.

This wouldn't mean him immediately being able to buy a property but presumably you (and he) expect this to be a profitable venture so in the medium term and if all goes to plan he could expect a significant return on his investment in time/labour, more so than if he was working for a salary, right? Is that not enough for him and if not, why not? I certainly wouldn't be buying him a house in exchange for him working for you (ie him getting the profit before he's put in the work), if that's what he's asking for, but you could perhaps advance him a 'salary' out of your capital to meet his living expenses (to be deducted from his share of the profits in the project). Or he could move in with you as he's suggesting but really I think that's a decision that needs to be taken outside of these conversations about business/investments - are you ready for him to move in with you? Would you be suggesting it if it wasn't for this business venture?

Also, and apologies if I am teaching you to suck eggs here, you mention you have a portfolio of property and (it sounds like) multiple HMOs already. Is it really necessary for you to invest in this opportunity to 'complete your portfolio'? Have you explored other options for investing your capital? I know property can be very profitable but you may not want all your capital to be tied up in a single market (e.g. if there was to be a housing crash, although the market would almost certainly eventually recover, it could take a very long time to be able to liquidate your funds, compared to other investment options), and obviously BTL is less tax efficient than it used to be. And there is the high degree of input needed from you which as you are finding can be tricky to manage alongside other commitments. Would it be worth simply thinking about a more secure but less high return home for your money, even if temporarily while your DD is so young? Again apologies if this is out of turn but it might be worth getting some financial advice on...

Separate out the personal and business ideas.
With clear boundaries and your business head on look at what a business partnership would look like, the assets each party are bringing to the table and then what a fair division of profits would be fair and appropriate.
Get your lawyers and accountants on to this.
Even without capital it is feasible that his skills and work make up an investment into the partnership.
You are a successful business woman. This side of your relationship has to be approached totally professionally and with clear contracts.

Hopefully your romantic relationship will also be smooth sailing and bring you both much happiness.

Many couples have successful businesses. Clarity is key.

Also, as others have said, if he made such a massive financial success of the previous basement renovation, what happened to the profits from that and why doesn't he already have his own place and/or the funds to invest in this as an equal partner with you?

Don't use him in your business venture. It's blurring boundaries. Either pay a professional or do it yourself but your business arrangement with him is likely to end up with one or other of you feeling ripped off. And if anything goes wrong in your business arrangement it will badly affect your emotional relationship, and vice versa.

getting a builder myself is definitely going to cost a considerable amount more - £30k+ just on the first property...

Then put on your business head and decide whether this venture is really feasible. You wont get something for nothing.

I know for a fact we could renovate at least 50% lower than what an average builder would charge as he's very resourceful and talented and a hard worker, he would fully immerse himself in a project and crack on all hours of the day....

You can't know that for a fact. He's done one big downstairs renovation that took years, calling on favours from people he knows. That's not a business. Supervising your renovations is a new professional direction for him - are his friends and contacts on your side of the country or his? - and it's not clear how it will pan out. And how pissed off will you feel if it doesn't work out the way you hoped?

You are seeing this business venture with this man through rose-tinted spectacles because you want him to move in with you.

I've been in financially abusive relationships in the past

That is another huge reason for not mixing business and emotional life. Rose-tinted spectacles have let you down in the past. He might not be abusive but this could still go seriously belly-up in a lot of other ways.

If he wants to move across the country to be with you then he needs to find his own independent way of funding himself to do that. The relationship doesn't have a secure future if he can't.

And equally if you need a business partner then find one who isn't going to have to move halfway across the country and make huge sacrifices to work with you. Find someone who sees this as a natural business move.

The thing is op - my partner is fantastic at building and has added value to our house etc. But progress is also maddeningly slow. You will get frustrated, you will question the quality of his work or the speed at which he's working. It's natural. And when that happens are you his friend/partner or his boss?? It's like when you move in with someone and realise they stack the dishwasher wrong and leave their dirty clothes lying around but 100% worse. I can see why it's so tempting but I really can't see it working.

Please don’t put all of your assets into property, that would be incredibly foolish.

So, you’ve known him a couple of years. He wants to give up his job, move in with you but in exchange get a property from you? And then he can leave, move into his own place and go back to his career.... it’s mot worth the risk.

He can do what everyone else does; take a leap of faith, move in and if things don’t work out then he can go back to renting. If it’s longer term, then he’d have the same rights as everyone else to the family home.

You have 2 separate issue.

1. Hiring him
2. buying him a property.

Do not do the second one. The first one could work, but you need to b3 very clear on his role and ensure you pay the going rate so he can’t come after you later saying he did it cheaply because he thought he’d be entitled to half the profit.

You just pay him a fair wage; same as anyone else you’d hire. Don’t get mixed up with profit sharing etc.

Don’t do it . If you’re both serious about each other , keep dating but live separately . Invest in your own business by yourself and let him sort himself out . In a couple of years if you’re still together either get married or move in together . If you want more children , get married before you have them .

Also if you’ve built up a business and sold it with enough profit to invest in property , I doubt very much you need an artist to advise you of your next step . Visit the auctions yourself , manage the properties yourself . You’re making it more complicated than it has to be . Do not mix business and pleasure . Ever !

I wonder if you're