Selling house, to rent, to raise capital for property development!!!

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My dh has a new scheme! He wants to get into property in the future but we don't have the spare cash at the moment. He wants to sell house and rent for a while releasing some capital to buy a small project to start with and then build capital from that etc etc.

He is very motivated and intelligent so I'm not worried about him failing at this but am feeling nervous about selling our home to follow this venture/dream.

Anyone done it or got any experience advice?

Why doesn't he get a business loan instead?

If I ever owned a home in the UK, I can't say I would sell it for this reason.

what expat said ...

The days of making money from property like that are coming to an end.Small developers are bailing out all over the place and banks are not lending as freely as they were.He is about 10 yrs too late.I sold my last property last summer and that was on the advice of someone with a lot of property investments.Expat is right don't risk your home

Although we do own a small property portfolio one of the things we agreed right from the outset was not to risk the family home.
As noddy says this really is the wrong time to be looking to make money from the property market, unless it is money you can afford to lose or be prepared to wait years to see a return.
If he really wants to do it can he not take out a loan instead?

Unless he were very experienced in the area, had a lot of primary skills (eg. could plumb/rewire/build) then I would think he has chosen the wrong time to make this particular career move.

Well we have a couple of buy-to-lets. Our golden rule was not to risk our house, just our savings.

Because property development is speculative you know. You can lose money as well as make it.

The property market is in the doldrums now. House prices in the UK (and the US for that matter) are not going to rise for a while. Quite a long while.

So if you are prepared to lose the money, and rent for a long time, then that's okay as a decision. But it's not a route that I personally would take.

Exactly, QS! These TV programmes are very misleading.

My dad buys at auction - never BTL but buy to do up and sell on, and on the whole he's gained, but he's definitely lost money on some places over the years.

It's legalised gambling, as he says.

Exactly, QS! These TV programmes are very misleading.

My dad buys at auction - never BTL but buy to do up and sell on, and on the whole he's gained, but he's definitely lost money on some places over the years.

It's legalised gambling, as he says.

I agree expat - the line "I'm not worried about him failing at this" sort of has me very worried. It means the OP isn't going into this with her eyes open, and it's her house.

People don't fail at property development because they are lazy and/or stupid. They fail because of a whole host of issues, a lot of them completely outside their control.

Like the effect of interest rate rises and falls, the effect of poor financial services controls in the US leading to overexposure in the sub-prime market.

Or unforseen problems with the property, builders or hired help who scarper with your money when the job's half done and you find out the work that is done isn't to code, your architect or project manager has an accident or falls ill and doesn't come back to work so you have to spend time hiring someone else, poor weather prevents some work from continuing, etc.

ALL these sorts of scenarios are outwith your control for the most part, so as my father always said, 'Count on it taking twice the time and costing twice as much as you think'.

But bank your family home on it? NO WAY.

Not in this market.

It's a hobby for most and some make a living at it - but most of the time the ones who do are in the building industry, skilled tradespeople or have lots of money.

And even then, it's far from easy and sometimes, despite your best efforts, you lose money. Sometimes a lot, too.