UTB Guide to Property Finance
CASE STUDIES
study 1
£366k bridging loan to acquire two refurbishment opportunities at auction Borrower: Property investor/developer through their Limited Company Amount: £366k Loan type: Bridging Finance Term: 12 months Location: North West LTV: 59% Project type: Auction purchase of two houses to refurbish and sell Special features: » 100% funding of purchase costs and works » Properties in poor condition, with 1 unmortgageable UTB’s bridging finance team was approached by an experienced property investor/developer seeking to buy two houses at auction. Both properties were in poor condition with one being unmortgageable. The borrower intended to buy both through their limited company, remodel, refurbish and then sell them on for a profit once improvement works were complete. No planning permissions were required, and the borrower had successfully completed similar projects. UTB was able to use the borrower’s unencumbered home together with the two purchased properties as security for the £366,000 loan which provided 100% of the purchase funds and works costs. The schedule of works and costs provided, together with the post-works value of the refurbished properties, was supported by UTB’s valuer. With the works estimated to take four months, the 12-month bridging loan term gave the borrower ample time to complete the projects and achieve the sales required to repay the loan and earn a tidy profit.
12