Using bridging finance to purchase a 3 bedroom semi-detached house in an Article 4 area in North Bristol, our client subsequently had his planning application to convert the property into a 6 bed HMO declined.
His plan B was to convert the property into a 4 bed and let it out to a family.
However, the client, who was both a first time landlord and property owner, had very little funds or loan facility for the refurbishment, so required a re-bridge to redeem the initial bridging loan, with a refurbishment loan facility for 100% of the £60,000 build costs.
He'd also spent just several thousands of pounds on architect and other professional fees, a sum he was hoping to drawdown as part of the refurb facility to help with cashflow.
The problem was finding a lender who could provide sufficient net loan on day one to redeem the existing bridging loan of £186904.
Most lenders were falling far short on the day one net loan. However we eventually sourced a deal with a boutique family office funded lender who could provide virtually all the funds required to re-bridge. The client just needed to find £294.89 out of their own pocket.
Not only that, the lender would fund 100% of the refurbishment costs and pre-pay staged drawdowns upon receipt of invoices.
They also allowed a day 2 drawdown to cover the client's previously paid professional and other fees related to the project.
After a two month refurbishment, the property is expected to be re-valued at £375,000., allowing the client to refinancing onto a £300,000 BTL mortgage, providing surplus funds for his next refurbishment project.
Case Study 3
Case Study 1