Our client, an experienced builder, was looking to undertake his own projects for the first time.
He had a couple of schemes available to him and needed to maximise borrowing on the first project. This would reserve cash funds for the next project.
Initially, our client applied directly for a buy to let mortgage to fund this scheme. However, as the property was in need of refurbishment, it was deemed uninhabitable and the application was halted following the valuation. Most mortgage providers will not lend where a property requires significant refurbishment to become habitable.
The client approached Pilot Fish to explore what alternative options were available to him.
At the same time, the client had an offer accepted on a second project. He was now seeking a way to minimise the deposit on this scheme so that cash reserves could be used to purchase the second property.
We sourced our client a 100% bridging loan with a commercially minded lender. The facility provided 75% of the property purchase price, as well as the additional 25% required.
This was achieved by placing a second charge against the client’s main residence. This meant the client’s only cash input was £10,000 to cover the cost of the refurbishment works.
The client will achieve a 250% return on capital upon sale of this project.