Buying properties with LTD

[simes]

Have you looked at the full lifecycle of this property i.e. the tax/cash handling at the end? It's always been the advice of this board to do it personally. Entry in to the BTL looks very attractive using company money but it doesn't look quite as good once you look at disposing of the property and distributing the funds.

Could one not just sell the company as a going concern? I have two properties in my LtdCo and I am thinking, if as and when the time comes, I look into that. That'll be decades away so what may or may not possible now is not necessarily relevant.

[northernladuk]

Could one not just sell the company as a going concern? I have two properties in my LtdCo and I am thinking, if as and when the time comes, I look into that. That'll be decades away so what may or may not possible now is not necessarily relevant.

You could try that but there is going to be a lot of complexity and someone is going to want it at a lot less than it's really worth.

[simes]

You could try that but there is going to be a lot of complexity and someone is going to want it at a lot less than it's really worth.

Is there a reason for the value to be less than the LtdCo is worth. Is not a company valued at assets plus x years' profit. Which in this case would be value of two flats plus profit on rent? Never having ventured into selling a company but having watched Dragon's Den religiously...

[northernladuk]

Is there a reason for the value to be less than the LtdCo is worth. Is not a company valued at assets plus x years' profit. Which in this case would be value of two flats plus profit on rent? Never having ventured into selling a company but having watched Dragon's Den religiously...

I'm just thinking about buying and selling anything generally. There has to be a benefit to the person buying and that is usually the price. Why pay full price for something they could easily set up themselves, fully understand the risks and buy the properties they need/want. Why is what you have for sale attractive? What's in it for the person buying? You've a very small pool of people that would be interested in buying a business like this and then there is the question of is what you've got exactly what they want further reducing the pool. What is left is highly likely to be someone that's knows their beans and if it is they are more than capable of doing this themselves and get exactly what they want i.e. the right houses, right location, right condition, known risks etc. What does your sale bring to the table that is worth the market rate? IMO next to nothing so they are going to expect a discount to make it worthwhile. At the very least they want it cheaper to cover their costs and time let alone a good reason to actually buy.

Could be totally wrong but looking at the complexities, risk and costs of the sale for something at full market price doesn't make it an attractive prospect.

[courtg9000]

You could try that but there is going to be a lot of complexity and someone is going to want it at a lot less than it's really worth.

I used to broker some of these deals. It's not that complex but there is a limited market in terms of buyers and sellers. It really is for professionals only especially the larger portfolios. The discount generally is not as big as you might think but it does reflect the difference in selling a number of properties as singles and the ballache that could come especially with a larger portfolio split. If you think of the ballache in selling your own home and buying and moving to another and multiply that by x number of properties, you get the picture.