Project Overview
The borrower was looking to purchase a property which was an 8-bedroom residential property that was in need of refurbishment and reconfiguration to an 8-bedroom HMO.
We provided finance to assist with the purchase and monies for the development, to convert this by a full renovation into an 8-bed HMO. This borrower wanted to put as little money down as possible, and we used 2 additional properties to help raise as much as we could.
In summary, we provided a bridge for the security based on the purchase, along with a 1st charge on a background BTL already owned and a 2nd charge raised in the background against their residential home, all on one deal. The Client received 100% of the purchase price upfront and 100% of the refurbishment costs upfront.
This case was completed in 8 weeks despite the delays (see point 2).
Challenges and Resolutions
Solicitors experienced delays in the vendor providing contract packs which was overcome by continuous daily chasing and prompting of the vendors solicitors to ensure they were engaging.
Down Valuations occurred on the main security and one of the additional properties but we were still able to provide 100% funding using the additional properties and increasing the loan to value on those.
Financial Breakdown
Purchase Price £290,000. Refurbishment costs of £100,000. End value projected at £850,000.
We gave 100% purchase and 100% refurbishment funding upfront taking away the need for future drawdowns and re-inspections.
Outcome
The client successfully secured the property and embarked on a comprehensive renovation project.
A high-value HMO projected to generate significant rental income and capital appreciation.
