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BRRR bridging loan + refinancing requirement advice


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Dear All,

I'm new here! largely because I need some solid advice in one place as after a number of calls to brokers and accountants I feel like I'm going in circles with different ideas and somewhat contradictory advice (needless to say any help or advice here is greatly appreciated). 

I've been renovating property's for clients since I left school and now have 10 years general building + 2 years kitchens and bathrooms (self employed) experience under my belt. After saving I now have a pot of money (35K) to start my own property investment venture. My plan is to buy in Liverpool where the yields are good and where my savings can be accountable for 25% of the property value.

I'm choosing the BRRR approach firstly because I can recover some if not all of my capital for the next, secondly because of my renovating/improvements background and finally because my goal is to build as big a portfolio as possible over the next 10/15 years. 

I understand how the general concept of the BRRR works, but lack an understanding of how the other parties involved (mainly money lenders) operate and what they need from me . . .

Gist: I have 35k saved, but because of covid my years accounts have been pretty atrocious and like many have been off work for periods of up to 4 weeks at a time. Ive been led to believe bridging loans are much easier to be approved when up against a property but have received different information on what they will want to see from me (financial / accounts / proof of incomes).

Q) What will they need to see?

Gist: (for arguments sake I've kept the story very vague) Supposing I've found a property and been granted a bridging loan, the refurb has gone well and the property has gone up in value to the value we were aiming for, on top of this the property is tenanted with a 12 month contract in place. I'm now in a position where I need to pay my bridging loan back with a BTL mortgage and hopefully return most of my personal cash. 

Q) a) Do I need to wait 6 months to refinance? 

     b) What do I need to show the mortgage company in terms of accounts / books? am I at risk of being in a position where I have a bridging loan out but am unable to be granted a BTL mortgage to repay it? or do I get an easier ride since the property has now gone up in value and is tenanted for 12 months with proof of rentals in high demand in the area?

Q) In general what do I need to be granted a bridging loan and also a BTL mortgage once the BRR has been completed? I'm slightly concerned that my hard work saving the initial capital in order to buy in 2021 has been sabotaged by my time off and lack of incomes etc during the pandemic period.

Additional info:
- I have guarantors if necessary
- I'm aiming for 2/3 bed houses with buy values around £80,000 - £95,000
- No debt
- excellent credit score

Im a complete novice and have zero experience with accounting / mortgages / buying / selling, but am excited to get things rolling with 100% effort! If you think my approach is wrong, don't hold back.

Thanks in advance!

Will 

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  • 2 weeks later...

Good afternoon @devine999

I hope you are well.

I noticed nobody has responded to your post yet, and if you are still looking for some advice then I would be happy to arrange a conversation with you to go through your points. 

The company I work for has access to all of the lenders in the marketplace and we specialise in complex property finance (Bridging, Development, Commercial, High Net Worth etc.)

Thanks and I look forward to speaking in the near future.

Best regards

Nathan Cole

 

Nathan Cole CII (MP)

Mortgage Consultant at Private Finance

Office: +44 (0)1743 211 855

Email: nathan.cole@privatefinance.co.uk

Website: www.privatefinance.co.uk

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