Our clients were friends and business partners who wanted to purchase their second investment property from a business contact who was selling off part of their property portfolio.
Our bridging loan enabled them to take up the opportunity and due to their relationship negotiate a purchase price that was below market value.
The property was in a poor state of repair and required total refurbishment and modernisation which the clients were going to manage partly themselves, and partly with experienced contractors. The property was purchased under market value for £50,000 and was valued at £70,000. It was stripped out and taken back to bare brick, a full re-wire, central heating system, new kitchen and bathrooms were installed.
The clients had personal funds of £50,000 and they borrowed £56,000 to complete the project and estimated the work to take a total of 3 months. The clients took an 8 month term to allow them to complete the works and market the property to achieve a sale for their desired price of £140,000.
We maintained contact with the borrowers throughout the term of the loan at regular intervals to keep the rapport and ensure the project was all on track. Our clients managed to achieve a sale at the end of month 6 for the full market value.