Case Study: Wavertree, Liverpool
Loan Redeemed: February 2020
An experienced developer who specialises in terraced house buy to lets and HMOs had spotted a potential investment property and required fast access to finance in order to secure and develop an investment property.
The property was located in a densely populated student area of Liverpool where the developer had previously converted similar properties. Previously the property had been a 4 bedroom HMO however the developer wanted to increase the capacity further. This property was to be a heavy development project as the developer was taking the construction back to the brickwork and then adding two additional bedrooms in the loft during this extensive renovation.
Considering there were numerous other HMO properties within the vicinity and that the property was not within an area affected by ‘Article 4 Direction’ there were to be no issues with the planned development works. The main issue for the developer was to get quick access to funds so that they could complete the property purchase quickly to get development completed in time for the rooms to be on the market prior to the October University intake.
Given the track record of the Developer, Mint Bridging was able to provide a net advance for the purchase and to provide an additional £75,000 to meet the development costs. The development tranche included a 10% contingency should the developer hit any problems during the refurbishment works. The term of the loan was 12 months with planned development drawdowns at key milestones, the facility also including sufficient time within the term for the developer to arrange their exit, which they intend to do in the form of refinancing.
The developer was able to complete the purchase quicker than anticipated thanks to Mint’s underwriting efficiency which allowed them to progress at pace. The end product was a remarkable 6 bedroom HMO that was completed to a high standard and placed on the market in time to meet the developer’s key timelines. The loan has now redeemed with the developer having refinanced and able to take advantage of the increased evaluation when it came time to exit.
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