Helping a property developer buy a property for conversion
Client Background
Our client is a builder by trade who specialises in identifying individual properties that he can purchase, extend within a short timescale and sell on quickly, rolling profits into his next scheme. Over the last few years, he has completed several such projects with works finished to a high standard. He is a returning client, unfortunately with only a small cash stake and some adverse credit, who we first helped out with bridging finance in 2024.
Challenges Faced
In 2024, he urgently needed additional finance to repay an existing bridging loan and to complete a development scheme that was already well underway. We were able to quickly source the finance that he needed with the lender taking a 1st charge over the property being developed and a 2nd charge over the client’s own home. The development was completed after only a few weeks, and our client soon found a buyer however, after several months the buyer unfortunately dropped out and the property had to be readvertised. A new buyer was lined up and whilst it was initially believed that a sale would be completed before the bridging loan was due to be repaid, it took a further month.
How we Helped
By keeping the lender fully informed they very generously agreed to extend their original loan without any additional fees or interest being charged. Our client had already identified a suitable property for his next project – buying and extending a 2 bedroom bungalow into a 3 bedroom property. The same lender was happy to provide acceptable terms for new bridging finance and whilst the first sale was heading towards completion, they were able to take the next transaction forward.
Using a 2nd charge over the client’s own home enabled the lender to provide 100% towards the purchase price of the property plus 100% to be drawn in phases towards the build costs.
The Outcome
The day after the latest loan was drawn down, our client was already on-site starting initial works on the property. He expects the works to take only a few months during which time he will begin marketing the house, lining up his next project and we will no doubt be sourcing his next bridging loan. We wish him well and will be keeping in regular contact.
Property projects often have unexpected challenges along the way and some of those challenges can be very significant, leading to financial implications and stress for all concerned. By getting to know our clients well and working closely with lenders we will always do our best to help all our clients with their schemes and aim to achieve satisfactory outcomes for all concerned.