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What would you do?


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Hi everyone

I am currently living in the UAE but have 2 properties in the UK, both without any mortgage. Value of each is approx 250k GBP and both are rented out to long term tenants

I want to start increasing my BTL portfolio size via the Buy, Refurb, Refinance method, work will be done and managed by experienced family based in the UK.

Would you:

a) Take out a remortgage on one of those properties to release equity to fund the next property.

2) Take out a separate BTL mortgage (not linked to those properties) to fund the growth and continue with this method

Look forward to hearing your thoughts and thanks in advance for the help.

 

 

 

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Hard to comment entirely without seeing the numbers however most refurbs mean you would not get a BTL lender to initially fund the property if you plan to go and start pulling it apart.  This usually means you could turn to a short term/Bridging facility for the initial purchase, do the refurb then get a BTL lender to finance at the increased value post completion of the works.

Bridging financing is more expensive than BTL lending and you would have interest, arrangement fees, valuation and legals to cover in your project costs. If you have cash or the ability to release capital to fund the next purchase/works outright this will certainly save monies associated with arranging the bridging finance and thus your overall costs of Buy/Refurb/Refinance. 

Not entirely clear what your option 2 is suggesting? 

Hope this helps

  

Property investor ¦ Commercial Finance Broker ¦ Ex banker with 20 years lending experience. 

Commercial Lending Manager at Real Finance Ltd - www.realfinance.co.uk
Happy to discuss any queries regarding property finance for  Company/Complex BTL, HMO, MUB, Holiday Let, Commercial, Bridging & Development.  

kirsty@realfinance.co.uk
07494949852

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I would remortgage one of my properties, maybe even both, and use the cash to buy and refurb target properties. Once the refurbs were done refinance and go again. Will slow you down a little as your cash won't go as far but you won't have to pay the costs or take the risk associated with bridging finance (risk being running over predicted time frames and pay more interest).

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On 2/7/2021 at 4:52 AM, martlant7 said:

Would you:

a) Take out a remortgage on one of those properties to release equity to fund the next property.

2) Take out a separate BTL mortgage (not linked to those properties) to fund the growth and continue with this method

 

You're in a pretty good position tbh! You have different options for how to fund your portfolio

I would exhaust any savings I already have, and use that as a deposit for my new investments. Then I would refinance my existing properties

_______________________________________________________________________________________________________________________________
Vin Gupta
Property Investor and Developer
UK Property Blog: https://evolutionblogger.com/article/uk-property-articles
Travel Blog: https://soulfultravelguy.com/

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