Refurbishment loan at 80% Loan to Value (net) for a residential property near Chester.

Deal Structure

80% Loan to Value (net!) on Day 1 for the acquisition (based on the Open Market Value).

£749k value & purchase price

£599,200 net Loan amount

2% Arrangement Fee, added.

Interest at 0.8% per month, rolled up.

No Exit Fees.

12 months term (3 months minimum)

Deal Summary

Our experienced investor client had come across what he thought was a great opportunity to purchase a “tired” residential property just outside of Chester. The owners had lived in the property for close to 30 years and hadn’t done a great deal to the property other than to maintain it, during their time there. They were motivated sellers and they didn’t particularly want to “host” numerous potential buyers and so were happy to agree a price for a “quick” sale.

Our client anticipated that the refurbishment costs could come to around £100k which included a new kitchen, a new bathroom & en-suite, a re-wire, new plastering and decoration, plus some landscaping externally to fully modernise the property. Our client was able to fund the cost of works himself, and as such we just needed a loan for the acquisition.

The valuer said that the finished property could command “just over £1m” which was sufficient for viability purposes, but the client expects to achieve a higher figure.

The lender offered 80% LTV (net) for the purchase and utilised title insurance to speed up the legal process. The loan took circa 4 weeks to complete, and the client is now stripping the property in preparation for the contractors. Works are expected to take up to 3 months, with the appointed agent now promoting the property to buyers on a waiting list.

Contact  John Waddicker

07974 703375

[email protected]