What I Learned Doing My Title Split? Converting a House to Two Flats
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- Опубликовано: 6 сен 2024
- I had a great question asking whether one would need to create separate leaseholds to get finance, like a buy to let mortgage, if one, for example, split a house into two flats.
Now, I don't consider myself an expert on Title Splitting, but I have done one - strangely splitting a house into two flats.
And so I'm very happy to share my experience of that, including how I financed it after the work was done.
By the way, I didn't say in the video (my bad) but I originally bought with a bridge and then refinanced onto a buy to let mortgage after the conversion.
I hope you find the video interesting and useful.
Here's to Successful Property Investing.
Peter
Peter Jones
(ex) Chartered Surveyor, author and property investor
www.ThePropert...
PS. By the way, I've rewritten and updated my best-selling e-book, The Successful Property Investor's Strategy Workshop, which is an account of how I put together my multi-property portfolio, starting from scratch and with no money of my own, and how you can do the same.
For more details please go to:
www.ThePropert...
Good real life example of Title Splitting Peter.
I would perhaps add a few things to hopefully add value your viewer.
If he wishes create leases to refinance individually he needs to follow the following process (some of which you do mention in your video but i will cover in full to provide a complete view of the process).
(1) Set up a Group Company Structure so that one Company will hold of the Freeholds (FH) and another one will hold all the Leaseholds (LH) going forward. He will obviously start with one but then use the same company structure to rinse and repeat the process. He needs to ensure the correct SIC codes are used when setting up the Group Company Structure.
(2) He will also then be able to transfer the interest between these companies without triggering SDLT and CGT as they are considered as intra-group company transfer by HMRC (He needs to, of course, talk to his tax advisor as we all have different tax positions)
(3) Then he can refinance the individual leaseholds (LH) separately to different lenders and get 75% of their individual values.
(4) The FH will be transferred to the FH Holding company.
(5) All of these needs to happen simultaneously, thus need good legal team, brokers and HE will need to be the HEAD of the operations to direct that team on the process to ensure execution is done correctly.
Hope this helps him and others but if they need anymore information i have written a book about Title Splitting which provides even more details on this very lucrative Strategy and i share how i have been buying multi unit block of flats and title splitting them and leaving NO MORE in most deals and recycling 100% of my funds to buy the next one.
Hope it's ok to post the link here if not pls delete. Thanks
If you want to know how to engage in the very lucrative and wealth booster TITLE SPLITTING strategy then check out my book called
Grow your Property Wealth with Title Splitting: Learn about the process of disaggregating freehold properties into leaseholds, unlocking value and profits.
Facebook Title Split Property Group:
facebook.com/groups/2050169985113902/?ref=share
Hey azid this is exactly the situation I'm on now.. can this also be done with a Ltd company and my personal name? So transfer between the freehold to my personal name from the company and have the leaseholds in my company without triggering sdlt??
We have had an offer agreed on a freehold set of 2 flats that we are buying on a bridge
We want to separate the flats into 2 leaseholds and get them both valued individually for a higher end value.
The problem we are having is how to structure this, my solicitor says that if for example we bought in the company name and then granted the leaseholds in my personal name we would owe stamp duty 3 times!
Once for the original purchase then twice, one for each flat when transferring the leaseholds..
But this would completely defeat the object of why we were doing it in the first place as it would wipe out the extra value we'd be gaining.
Hope that makes sense and I understand if its a complex question you'd rather not answer lol.
Thanks
Lee🤯😁
I would like to know about the refinancing. What would the different costs be in mortgage term. From one dwelling to two dwelling with Separate mortgages.
Great video thanks, my question is where is the boundary between the two properties. As in where does the ground floor stop and the upper floor begin.
Do you mean physical boundary or legal boundary? As I said in the video I haven't created the leases yet and so technically this is still one property under the freehold title, so as yet there is no legal boundary. If I were to legally separate them by means of two long leases, no doubt the solicitor would decide the lower flat extends to the underneath of the floor joists of the upper flat etc, plus the entrance hall to the stairway leading to the upper flat would be marked separated from the ground floor flat (it is physically separated by a wall between the two front doors). If you mean physical boundary today, the red line on the video is probably close enough
When creating a new lease, can you directly put it into the name of an end buyer as opposed to putting it into the name of your Ltd company? As I know that the freehold title name cannot be the same as the new lease. Secondly, for buying Btl properties via an Ltd on a mortgage, are the personal guarantees usually unsecured? That is is it usually secured to a personal asset such as a personal home or what? Thanks.
I don’t think you’ve answered the fundamental question. I’m guessing what he wants to know it’s about the refinancing of the properties. What would the cost be to get a mortgage on both flats. As supposedly the splitting of the titles and getting two mortgages.
How did you finance the purchase of the house under one title, which you later title split into flats?
so you didn't do a title split!