Hello

I'll try and keep this as brief as possible but to the point. My dad has just reached pension age and still works for himself but struggling physically as a handyman and he's just about surviving financially.

He was running a very successful construction company about 4 years ago but unfortunately, he had a business partner who embezzled 75% of the business funds over time leading to the company into liquidation and then lying about an illness to buy him time to do identity fraud on my dad to sell 3 properties they had. The guy disappeared out of the country and is somewhere in America. Nothing we can do about it as solicitors, forensic accountants are way out of range financially.

Anyway, in the height of the business, the house he purchased was done on an interest-only mortgage for 15 years and that term is ending in 2 years, he's already getting letters from the banks about plans to repay etc. With just about enough money to cover the mortgage per month, bills etc i'm personally having to help pay every few months or so.

Both parents credit files are ruined which does not help.

He's always dreamt about doing his own property developments, naturally starting wh small projects, working as a family to rebuild from the damage caused and get into new builds and larger refurbishments projects.

We're stuck in limbo and need a proper plan on what to do next, he is working slowly on tidying up the house and using my credit cards to fund some of the works with a plan to sell the property within the next year.

I am here today to seek advice.

The market value of the house means he's got between £300k to £400k, this is what we've discussed in an uninformed manner so bear with me:

1. Sell the house, buy another in bad condition, refurb and sell
2. Stay in the house and release equity to buy another
3. Gifting the house / sell it to my sister? (good credit file and good wage) then being on a new term and her being young, the banks may be more likely to lend money.
4. Downsize and relax (he refuses to down tools)

He is willing to take a calculated risk.

I would just love to bring him a solution and a plan, put my mind at rest and get him out of the borderline depression state of mind.

All advice and guidance would be greatly appreciated,

Thank you very much.

My sympathies, Jason. Sounds like your father has always worked hard and finds himself in a terrible situation through no fault of his own.

Another word of caution on Option 3... if the house is gifted to your sister then it may mean that the value of the house is still considered to be part of your parents' net worth should either of them ever need care. Regardless of the reason for gifting the house, just the appearance of having attempted to avoid paying for care can lead to reduced help from the state as I understand it.

Given that you say your father is struggling physically as well as mentally, is there a risk that he may not be able to complete a substantial refurbishment without paying for labour?

Ultimately you know your parents and your instincts should guide you to the right solution for them, but in your situation I would probably be thinking seriously about steering them towards Option 4. If they are living in a house that is larger than they really need, then they are effectively investing in property - at a time when prices look likely to drift lower. This does not mean your father has to down tools entirely - perhaps a smaller project - say a flat that could be sold to your sister?

FWIW, No 4 for me.

You indicated he is not as physically able.
My own father worked hard till 65, retired, and had four good years before a life changing illness disabled him for 3 years until death.

So, for me, the choice is downsize, relax and enjoy the Grandkids.