Keep it in the family

Christopher Browne reports on how a Birmingham mother used her family's pensions to buy a shop for her book-keeping business
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The Independent Online

After the birth of her first child, Louise McCabe decided to give up working full-time and start a book-keeping and accounts business in her back bedroom, somewhat relishing her newfound role as homemaker/homeworker.

Business was brisk, so McCabe asked her mother to help out on a daily basis.The pair worked hard and, needing to take on more staff, rented a suite of offices near her Solihull home for two years, "keeping our options open as we found we were paying out a lot of cash with nothing to show for it", says the mother-of-two.

Enter fate. One day, McCabe saw an agent putting up a For Sale sign on a slightly rundown shop in a busy Birmingham street, went home and "after burning the midnight oil for several days" with husband Stuart, offered £165,000 for the premises, which the owner later accepted.

"The day I heard my offer had been accepted was the scariest of my life. I was now committed, and for someone who is used to calm and purposeful planning it was a major detour," says McCabe, a former business manager with Lloyds TSB Bank. Putting her banking experience to good effect, she approached a commercial investment company who helped her put a business plan together.

She then used pension money - you can use 25 per cent-plus of your pension to buy commercial property - for her deposit. "I had my pension from the bank, my husband had a private one and we asked for pension pay-outs from my sister, mother and father - so a real family business then," she says.

Together, they raised a 50 per cent deposit for the three-floor shop, applying for a business loan to finance the rest. The loan was going through smoothly enough until she came across an unexpected stumbling-block - not entirely unfamiliar in commercial property investment. The shop had a flying roof. At one time, the property had been split into two and the next-door shopkeeper still owned the roof. "Though it's almost unheard of in Birmingham, my hus- band came across this when he worked in Scotland," says McCabe. After a few solicitor's and broker's meetings, she signed up for the shop's freehold - and the flying roof.

For three months, husband Stuart and his building firm carried out £35,000 of renovations, turning the shop into a smart suite of offices. Soon the family were back in business again as a fully-fledged support and outsourcing company called Admin Angels - the other being Louise's sister Sarah.

"Eventually we'd like our son and daughter to be involved if they want to be, so we can turn it into a real family business," says McCabe, who employs six people. Among her clients are a window-cleaner, who comes in with his accounts in a plastic bag, and a £5m property management firm.

Backed by Stuart's building expertise, the McCabes are now keen on future property development - buying up houses and flats, restoring and selling them. Mid-2005, when the Government's Reits proposals for investing pensions in residential property could take hold, might be a good time.

Meanwhile, the couple has managed to build up a portfolio of six buy-to-lets. "We won't make a lot on them until the mortgages are paid off, after which we'll use them as our personal pension scheme," says Louise. But back to the present. "I've had a few teething problems with the extra responsibilities of looking after a commercial property and running a business, and for the first few weeks I kept asking myself, 'What have I done, what have I done?' Now I realise it's the best thing I have ever done in my life."