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  1. I would like to get the entire process mapped out on paper, and would be grateful in people could fill in the blanks for me. Case study (Simplified for math purposes) Auction purchase price £100,000 Bridging finance arranged at 80% LTV for 3 months at 1% Mortgage to be arranged after a 3 month period of renovation 1) Pay 10% on the day of the Auction (£10,000) 2) Within 28 days, arrange the bridging loan. The loan is only for 80% of the purchase price (£80,000), yet £90,000 is due. Does this mean that although the auction house require 10% down payment, the reality is that I will need 20% in cash? Assuming yes to the question... 3)The loan of £80,000 arrives in my account, and coupled with my further £10,000, I pay the outstanding £90,000 to the auction house 4) For the next 3 months, I pay a monthly direct debit interest payment of £800 5) After 3 months of work, a mortgage lender values the house at £130,000, and offers a 90% mortgage This is where I am most unclear: Do they require the remaining 10% as a deposit from me? Or do they simply pay £117,000 to me, which I use to pay off the £80,000, and the £37,000 remains as mine? (Less cost of renovation etc) If anyone could rework the process I have outlined, I can begin to put a basic structure in place, which I think would help a lot of people. Thanks
  2. Hi All, New to the forum and looking for some insight into what my chances may be of securing a btl mortgage in limited time, So to cut a long story short, I have purchased a flat in auction just on Friday 28/2/21, yes I know it's crazy but I haven't physically seen it. I was outbid on the actual auction, however it didn't meet the reserve so didn't sell. A week later I get a call, it's still available and being offered to me below the reserve before it's back in auction a week later, I make a lowball offer which was refused, I then offer to meet half way to the sellers asking price and I would make a deal today (Friday). A couple hours later I get a call and the seller has accepted! It's local, I know the area and market value, and it's got enough of a margin to cover potential issues, although I'm confident it's a straightforward renovation (new bathroom, kitchen decoration, possibly new boiler), so I FOMO'd and paid the deposit to secure it without viewing, and yes I studied the legal pack and all is good. To cut to the chase it will be a buy-to-let investment, and it is still sold under auction conditions with a 6 week completion date, and my intention is to renovate to a good standard before letting. I want to try to secure a buy-to-let mortgage in time to avoid extra costs of bridge loan. The property does look to be in 'habitable condition' , but my question is is it in 'lettable' condition? The only hurdle I can see that could delay the mortgage application is if the survey may regard it as not in 'lettable' condition before renovation. I know the property was being lived in by the owner/occupiers until recently, from the pictures it obviously needs renovating/modernising, but assuming it has a working kitchen, bathroom, electrics, heating and no holes in the roof, would lenders consider it unlettable just on the basis it needs updating? I want get some idea if this is doable from anyone with experience in getting a buy-to-let mortgage for auction property, and what hurdles you had with it. Pictures are attached. Appreciate your help members. Mohsin.
  3. Hi, Recently I came across great opportunity for BRR or flip. It would do well for both. However the best option was to take it by cash or similarly with bridging finance. I decided to sent an enquiry for bridging loan and after assessing the numbers it looks like it's pretty pricey! I'm not 100% sure if I understand all of the number rightly but I was expecting gross interest at around 12-15% max whist my quote exceeds 20%... I copied the quote below and I've got few points to confirm: Net loan £52,578 - so for £85,000 property I can only get financing of 52,578 - That is already a non-starter... Bridging costs £4,921 (as per quote below) Rolling interest 0.89% for 12months - gives us total of £6,450 - presumably if I pay back the loan within 9months this will be around £5,000 (not exactly but let's round the number) Above points mean that taking a loan of £52,578 costs me £11,371 for 12 months or almost £9,900 for 9months, so effectively 21.6% or 18.8% in relation to net loan. Is it normally that expensive? I had the impression that bridging finance is bit cheaper since many investors take this type of loan which makes their deal still worthwhile but seeing these figures there is no chance that I can get any money out of a deal. Please see my reference finance quotation for a property worth 85k.
  4. Hi, new to the exciting world of property. We have set a company up but need some adcice on accountants and brokers any suggestions are welcome! Thanks in advance!
  5. Hello, I am looking into doing flips to build capital faster. I already own a property though a limited company. The problems with using savings only to acquire property are that it takes time to save, months, and you can only do one property at a time. I do not own any personal property or have any other avenue to extract cash to used as deposit. I know a few friends who would be fine to lend me some money for a year. As a starting point, I am looking for suggestions on how to structure the financing with the people. They will only provide the money and not do anything in regards to the property. I will agree to give them a fixed return when I pay them pack. Any suggestion is much appreciated. For example on a property below and I belive the same principle will apply for a more expensive one. Purchase Price : £ 75k Deposit: £ 22.5k I put in £12.5k and the other person put in £10k. I return them an additioanl of £500 (5% much better than interest rate) Some thought I had I was thinking of taking a private loan from the person a few months prior to buying. This agreement would only be between me and the lender. Then, do a director's loan to my current Limited Company and use the money as deposit for a bridging finance. Is that something feasible ? Joint Venture though new SPV created only for this property but the downside would I would need to pay tax under my own name and it would not be worth to build capital. How to put the private loan directly to my current limited company so that bridging lenders accept it? They are not director's so it cannot be a directors loan. Is there any way? How does that work to put the friend as a second charge on the property ? Does the above make sense ? Any other ways please? Thank you
  6. Hey all! I'm looking to purchase our first property with bridging loan (note we have 3 BTL already but they have all been through BTL mortgages) Anyways I'm looking for recommendations for who you have used before and rough costs? I've seen from 0.5 to 1% per month but that's a massive difference. The property value is 100k and I'll buy it for 100k hopefully, spend 15k on it so I need 120k in total with fees and stamp duty. If ideally like to borrow 60 to 70k over 6 months. Many thanks!
  7. Hi there, I have a question on what deposit contribution is required at the point when you refinance onto a mortgage from a bridging loan upon its expiry.. For Example: - I purchase a property worth £100k using 100% bridging (secured against other properties I own) - I perform refurb works increasing value to £150k. - I refinance onto a 75% BTL mortgage once the bridge expires In this scenario, what deposit am I required to contribute at the point of refinance? Is it: £25k (25% of £100k) / £37.5k (25% of £150k) / other? Answer is probably really obvious but I'm snookered... Thanks in advance
  8. Is it possible for nonresidents to secure finance in LTD structures without having personal guarantees witnessed and signed? After 10 years of procrastinating on finally going to spend some of my rental income and travel Asia, however this presents a problem when trying to maintain growth as the funding partner of JV SPV for flips – as: anyone with 25%+ shareholding is required to have a personal guarantee witnessed and signed power of attorney not accepted by some lenders, preventing someone I authorise to fulfil this role even if I am a creditor of the company, I will be brought back into the picture when answering the 'source of funds' question on the finance application unless I want to travel back to the UK to have personal guarantees witnessed and signed, I need to find an authorised person abroad to do this and then send wet ink copies back which could hold things up by weeks or months when its inevitably lost in the post. I'll be gone for longer than 6 months hence non-resident.
  9. Hi, New to property investing and very interested in flipping a property to fund an HMO (and build from there). I recently left my job, and have enough savings to keep myself afloat for a fair few months before a new source of income is required. It's during this time I'd be keen to refurb something and sell. I don't own any property, nor have I ever, but was wondering if I would be eligible for "bridging" finance, including refurb costs? I always assumed bridging involved selling an existing property during the bridge-loan term, securing the loan with your current property as well. Anyone able to clarify please? If not bridging, would any general short-term lenders work given my circumstances/profile? If useful, I'm 28 years old with no real credit history (certainly not any bad history). Many thanks, Jord
  10. Hi folks, I am buying a house at £39K which needs a complete refurb (up to £10K). Am thinking of getting a bridging loan then refinancing after 6 months (or earlier if any lenders would). The value will be around £60K once the refurb is done so a BTL mortgage is an option by then. I have 4 other BTLs all bought with a 75% BTL mortgage where I financed the refurbs and deposits myself, so this is the first time I'm doing it this way. Rob D's Complete Guide book taught me to look at other options for financing cash purchases, but I have no intel on good bridging finance options, can anyone tell me which companies would be a good starting place please? Any other tips or pointers much appreciated! Thanks all, Kirsti
  11. Hi Everyone, I wanted to say hello to the online property community and introduce myself to the network. I am a recent graduate working in the west midlands area. I have a very keen interest in property and have been reading, listening and watching property related education over the last 12 months. I wish to begin my property portfolio by starting with a flip to increase my capital to help me expand my portfolio. I am looking for advice and to build contacts to help me acheive this project. I am particularly looking for any reputable and trusted sourcers in the west midlands area and any bridging finance contacts. Any advice would be most welcomed! TIA KP
  12. Hi All. I am from Nottingham. Managed to raise 60k with my friend. We both want to start our property journey buying 1st house doing it up and sell. Ideally want to repeat flips couple times to increase our capital and buy 2 - 3 BTL to start saving towards our future. Now question. Is there any short term loan company you recommend from Nottingham? By short term I mean 4-8 months till we refurb and sell...... Any help, ideas, thoughts from Nottingham people more than welcome.... Apart of the auctions, where else to find out prospective properties for our flips? Thanks Greg
  13. Hi guys, a question for you all regarding Bridging Finance... The way I've heard it described, seems to indicate it doesn't require a deposit. For example a case study described to me recently involved an individual who 'only' had to pay advisor (legal, broker, lender) fees and the loan interest- and then shortly flipped the property for a significant profit. Correct me if I'm wrong here but sure he would've had to have stumped up a deposit in addition to the costs??
  14. Hi All. Can anyone explain how a bridging loan to purchase a property works when finance is also required to do a refurb on that property? Is it just one loan, or is it split into two: one for the purchase and one for the refurb? Thanks.
  15. Hello, I have inherited a sum of money that I am looking to invest and I am looking at a recently refurbished house that has been converted in to three flats. I cannot get a traditional mortgage because the banks don't want the risk of having to evict 3 tenants. My current plan is to get a commercial mortgage to purchase the property, then split the title in to three separate properties and then get three separate traditional mortgages on the flats. I believe the shortest time frame for re-financing after a purchase is six months, so I would be paying the higher commercial rate for six months before hopefully switching to the lower rates on three traditional mortgages. It has dawned on me that maybe bridging finance would be more cost effective than a commercial loan for six months. I thought it would worthwhile to see if there were any experts out there prepared to help a newbie out of their depth as I do not know where to start with bridging finance. A little bit more about my situation- -I do not have much of a salary -My father is prepared to be a joint tenant on the mortgage and this allows me to get a commercial mortgage rate of 4% with a 70% LTV . -I am hoping to advertise all three flats as short term lets -I am located in Northern Ireland (few bridging options here) If you need anymore information I will try and get it to you as quickly as possible and any help or comments would be greatly appreciated. Many Thanks
  16. Hi All, We are looking to buy our first property using our Ltd Co. that we have set up. We have found a property in need of refurb and we are looking to buy using bridging finance (we do have the cash to buy out right but prefer to use bridging), refurb and refinance later. We have gone to our usual solicitor who has worked for us on a few land and property deals before that have always been straight forward mortgages buying in our own names. However for the first time as a limited company their quote seems to have increased quite a bit (£1,500 +VAT + disbursements for searches etc) and 'guideline timeframe' is just not good enough for quick turnaround purchases. The only thing that is really different is that I said 'buying as a limited company' and 'bridging finance'! The house is only worth £50k. Can anyone recommend a conveyancing solicitor that is experienced in Limited Companies buying using bridging finance that have reasonable fees? Cheers, David.
  17. Hello all, I'd love to pick your brains. I own a three bedroom house in Liverpool that I want to develop and turn into student accommodation. Purchased for £60k, the renovation will be £65k. The only problem I have is finding £65k for the renovation. Do you have any suggestions? I have six other properties so could bridge but want to make sure I've explored all options first. Have you ever used a development loan? The build will take 12 weeks then I will refinance to pay off the loan. Thanks in advance.
  18. Hi James Kelly of York here. I am currently looking for bridging finance brokers - preferably in the north but not essential - tradesmen & letting agents in these areas, if you are one or know any please get in touch. I have been religiously following all things Property Hub related for the last 18 months whilst planning my first steps. Began whilst looking to buy my first house with my wife. We have now bought and refurbed our own home and are looking to invest in BTL in Leeds, Sheffield, York, Hull area whilst also doing other flip projects to recycle our initial capital. I work in sales and have been able to use my negotiating and project management skills to complete our refurb on budget and time, I intend to maximise this in future projects. I am of course happy to help in anyway I can in return. Best James
  19. Morning, Need some help in understanding my financing options under my current circumstance. I purchased a property at auction on Wednesday and looking to complete the purchase via my limited company set up to purchase property. As with all auction properties, I have 28 days to complete the transaction. I'm now at 24 days and counting. Couple of notes: - This would be the first property purchased within my limited company. - For employment I am relatively new to contracting (6months working in a contract role) after taking a break from employment for a period a year. Contracting income goes into my other limited company. I haven't filed my first year accounts for my other limited company yet and draw minimal income from my other limited company set up to take my employment / contracting income. Ideally I would like to finance the transaction via lending - need your help in understanding my options and what is the best way to proceed: 1) Purchase cash I am able to purchase the property cash via a directors loan from my personal savings to my limited company. I would then like mortgage it as soon as I can to release the equity and use that to fund future purchases. I know about the 6 month rule. My question is 1a) Is this a valid option? 1b) Is it relatively straightforward to mortgage a property originally paid for cash after 6 months in order to release equity? 2) Purchase finance / mortgage I'm now at 24 days to complete. What are my options for financing the purchase? Bridging seems to be an expensive option as 6 months would be costly. Bridge to let seems to be a good alternative, but I don't know much about this option. I'd probably need only 1-2 months bridge to do minimal work on the property. 2a) Has anyone used Bridge to let? Is it a relatively straightforward option? 2b) Any recommendations on bridge to let lenders / mortgage brokers? 2c) Would it be likely under my currently financial circumstances / minimal evidence of income / short history of contracting i would then be able to arrange a mortgage after a month or two? 3) Any other advice / options I could pursue? Let me know if you require any other info. Thanks a million for your help, Dhiren
  20. We've come across a great opportunity on a repossession property in North London that having done the research looks like we can make money on it by refurbishing and then selling on. There is an extremely tight deadline though [ a few days ] and the vendors have said the purchase must be cash. We are selling a more expensive flat in West London with £400k equity and a mortgage agreed. We have the money to refurb the property if a purchase were to go ahead, my partner is an architect and able to do a high spec refurb in keeping with what people would expect in the area; this could be done within the budget and to make a healthy profit. In effect we need to borrow £450k for less than a week until the mortgage funds are released. What are our options, if there are any?
  21. Hello everyone A quick hello from me. I currently have 1 x BTL and 1 x HMO in the Leeds / Bradford area and I'd like to do more. Familiar story I know. My first rental property was as a result of becoming an accidental landlord some 7 years ago and Ive only started to think about property seriously in the last year to 18 months. Hence the HMO purchase. That has been great and Ive had it for almost a year now so I'm looking for my next property adventure. The property I've just had an offer accepted on is a standard mid terrace which I am looking to develop into an HMO. My mortgage broker has advised me that that means I will need bridging finance as I cant get any type of HMO mortgage until its developed and licensed - I assume thats correct - any advice? Would like to hear from other 'newbie investors' such as myself and always keen to learn more. I read around as much as I can and attend PIN's when possible, but I'm hugely aware there's a lot more to learn! Finally, before property I was in eCommerce for 14 years - digital marketing, development projects, optimisation, digital sales - that kind of thing, and I still do some consultancy. If I can help anyone here with any digital advice perhaps for a property site you have or are thinking about, I would be happy to discuss. All the best to everyone in their property adventures. Cheers, Steve
  22. Hello everyone, I'm a part-time property investor based in Lanarkshire, Scotland with 7 properties between me and my wife. Looking to get building my portfolio but currently not overly cash-rich (one day hopefully). My portfolio currently ranges from a 1 bed flat to a 4 bed villa. Recently I have had two extensive refurbishment project which have been thoroughly enjoyable (at times stressful) to do. Also have a full time job as an Optometrist, so property is a great change of scenery! Ive just started listening to the podcasts which are great. Going back through some of the older episodes to make sure I haven't missed anything! I would be keen to attend any meet-ups planned nearer my neck of the woods? Keen in general to build my network, especially anyone who can help build my portfolio despite my cash poor but asset rich (richer) position. Thanks Mark
  23. Hi Could anyone advise please on the best place to get a bridging loan? Is it best to use an advisor or doesn't it particularly matter? Thanks Ruth
  24. Hi I am in the process of organising bridging finance to top up private investment for an auction purchase and it's the first time I've applied for bridging. Most brokers seem to be keen to beat the competitor which is great, but one thing I am not sure about is how does dual representation work. I have my solicitor already onboard but not signed and paid for and currently total costs for them to do the conveyancing is £1244 for a £155k property. The dual representation is coming in at around £720 but what does that cover exactly as I can't get the quote unless I've agreed the loan. I have attached my solicitors quote for you to look at. Thanks Ruth Purchase Estimate.pdf
  25. Hi everyone! I'm new to property investment, so please bear with me if the answer to my question is extremely obvious. After viewing a repossessed house at the weekend, I noticed the electricity supply had been tampered with. The electrical connection between the supply into the house and the consumer unit had been removed (with the exception of some earthing cable), as shown in the attached photo. I don't think fixing the problem would be a major issue. An electrician quoted £300 for the installation of a new consumer unit, and the electricity supplier would be required to install a meter, and reconnect the power between the supply and the consumer unit. My question is; Would a mortgage company consider the house to have an electricity supply or not? If they would, I can calculate my offer based on obtaining a standard BTL mortgage. If the mortgage company would not consider the property to have an electricity supply, they would not offer a mortgage, so I would need to opt for bridging finance, which seems way over the top for a days days worth of work to reconnect the electricity supply. Any thoughts or comments would be most welcome. Best regards, Nick
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