The Property
When IT Technician turned property developer spotted a 1930’s 3 bed end terrace in Felixstowe up for auction, he made a quick bid to secure the property for £200,500k. Unfortunately, when the house was valued for a new buy-to-let mortgage, *Japanese Knotweed was discovered.
With hindsight, the property flipper wished he had viewed the house with an expert in tow. However, the auction house and housing association selling the property are working together to put a 5 year treatment plan in place at completion.
Although the property is structurally sound, it’s tired and dated needing cosmetic redecoration throughout, new kitchen, bathroom and flooring, and a tidy up of the gardens. Our client has a good relationship with a local builder he has used for previous refurbs. As he will be doing some of the work himself, costs are estimated at £35k and expected to take 6 weeks to complete.
The Assessment
Bridging was required for a speedy transaction as the completion deadline was looming. The high loan-to-value of 85% meant our client will have funds available for refurbishment. Although this will be his first bridging loan with Apex, the developer is an experienced flipper having renovated his first main residence and sold for a profit, using those funds to purchase an investment property. Over time, he has successfully flipped several properties doing most of the work himself as he is very hands on.
We had some initial concerns that our client would struggle to sell the house due to the Japanese knotweed, but he is working closely with a broker to look at refinancing options as a backup plan. With a treatment plan underway and guidance from the broker, Apex are confident he has multiple options to exit the loan. The IT tech whiz has been a great borrower to work with. He is organised, cooperative and has done a lot of his own market research, providing all the information we’ve asked for.