I believe there is an economic downturn coming, which will lead to a lowering of house prices. I know many people in the construction industry (although I am in IT) and there are definate similarities between what happened in 89 and what is happening now.

I have sold my house and and am moving back into my parents house in 3 weeks time. This is because we could not find a house we liked enough to buy and also because I wasn't comfortable with having a large motgage to buy our next house.

When we were searching for a property to buy I saw two houses which I have now put offers in for (90% of asking price) and the offers have been accepted.

The mortgages will be about 1/2 million pounds in total and I will be putting 125K down on each property (money gained from selling my house)

I expect to make from both properties a total of 4K a month profit before tax. (room by room let) I have done alot of research and this is achievable.

No contracts have been exchanged so I can pull out of these whenever I want.

I could keep the money in the bank, but if I lose my job in the downturn I dont want to start using savings to survive, this way I will have money from the rent.

This is a serious question and genuine replies would be appreciated.... what would you do and why?

This seems like a strange question, you say you didnt want a big mortgage on your home but are perfectly happy to have two big mortgages on two others.

You also say that if there is a downturn you dont want to use yours savings to survive - if there is a downturn you might not be able to get the rent you require for these houses and any drops in value would be worse than having to live off your savings. What happens if you can't repay the mortgages - you will loose the whole lot?

Personally speaking I would save the hassle and put the money in something other than two direct house purchases. I am not sure what but it does seem like an entirely foolish venture. How about buying something smaller and living mortgage free?

Letting individual rooms is a pain in the whatsis (I know my previous abode was a room in a shared house and the landlord had to spend a lot of time looking for people to move in). Also is your £2000/house not a bit optimistic? there were four rooms in my last place two singles and a double (in Edinburgh) he was charging a total of £1400 a month rent in total but he also had to pay for all the bills and council tax on top of this, when I left he was also in the process of spending a fortune on a HMO licence - have you thought about that?

yawn

Err, wind up alert!

"I know, I'll ask a house price crash website if I should buy two houses and have .5 million in debt."

Honestly, it sounds like a great investment to me - I would stretch yourself and go for another

edited - that's a better avatar HoL

you couldnt make it up could you? this guy thinks there could be a downturn in the economy-yet he is planning on getting 2 mortgages- for something like 500k- if you've got 500k- you surely dont need our help!

Obviously I am happy with big mortgages if I am getting a return on my money. It is completely different if I have a big mortgage on a house I am living in and find myself with no job in a years time.

I could by something smaller and live mortgage free but this is all about securing a future income in the future down turn which I am sure is coming.

These properties are in greater london, and I promise you I have researched this over and over for many weeks and the figures do match up. I have researched HMO and spoke with the council, and it is going to cost a total of 3k to get the property fit for HMO.

This is honestly my situation at the moment, I am looking for reasons why this would be bad for me.

One proplem you have highlighted is if things turn real bad would I get tenants to fill the rooms.

You could always try sticking some of it in the Chinese stock market - double your money in weeks.

You really are an idiot. Nothing decent to say so you just try and reply with 'funny' comments. I came on here with a genuine scenario and you have came on with 2 stupid replies.

If I came on and said I have sold and am now renting I would have been praised and told what a wonderful thing I have done. I haven't bought these houses yet, I came on here looking for a reason not to buy them but so far only 1 person has given decent feedback.

Try and be creative, imagine your fairy god mother gave you 350k to invest what would you do with it.

Try and be sensible and mature I can't take much more of your useful advice.

Another stupid reply, where do I sat I have 500k to invest.

You have a go, if you had 300k + to invest, in your dreams, what would you do

But you have said yourself that you are expecting a downturn?

If there is one, the value of your properties will not be as much as what you paid for them - you will loose your deposits and be still living at your mums, you potentially might not find tennants and could loose the whole lot.

Seriously buy something smaller, live mortgage free and do something more exciting with your money - I can't tell you what, but seriously you are coming across as a bit of a divvy.

"I know there is going to be an economic downturn" "but I am going to risk my £250,000 equity on a couple of BTL's" "and move in with my folks"!!!