The Property
This 3 bed ex local authority semi-detached property located in Ely near Cardiff Bay, appealed to a local estate agent and his dad, after a sale fell through with another agency.
Built with a steel frame and pitched sheet metal covered roof, it had an unconventional construction. High street mortgage lenders were unlikely to look favourably on this property type due to its non-conventional build and would be unable to offer our investors a traditional mortgage.
That’s why this father and son property team, who have repeatedly borrowed from Apex over the last 5 years, decided to take out another bridging loan to purchase the property to flip, leaving funds available for refurbishment works and other projects.
Works were planned to replace the deteriorating metal roof up to the required standard, install a new kitchen and bathroom, put in central heating and redecorate throughout. Our clients would use experienced builders they had employed previously, predicting the project would take 2-3 months to complete, and cost a total of £15k. The refurbished property would be marketed through their own estate agency and they had already received interest from a potential buyer looking to downsize.
The Assessment
As the pair were repeat borrowers, we knew the history of their property portfolio built up over several years. The son who owns a local sales and lettings estate agency currently manages over 200 rental properties. As a result, he has a great understanding of the local area and had a reputation for being reliable and experienced.
Both developers own their main residences and have 7 buy-to-let properties in their current portfolio. We had no lending concerns as we’ve worked with the couple multiple times and love their realistic approach to property investment, based on local knowledge and experience. Apex had every confidence the works would be completed and the property would be sold in a timely manner.
The Result
With the purchase price at £120k and refurb costs coming in at £15k, if the property duo net the expected sale price of between £200-£220k, they will be looking at a profit of between £65-£85k. If they struggle to sell, Plan B is to refinance on a buy-to-let mortgage and rent out the 3 bed adding it to their current portfolio. Rental valuations fall between £800-£900 pcm if unfurnished and fully renovated.
Need a loan for an unconventional property? An Apex Bridging loan could be the solution. Speak to our friendly team on 01509 345 007 or email enquiries@apexbridging.co.uk if you have any questions.