The Property
This 1900s 3 bed detached, 2 storey house in Peterborough was discovered by property brothers after they were asked to do remedial work to cap a Victorian well in the garden. The well was in poor condition and had deteriorated due to its age, causing extensive water damage to the ground floor of the property and neighbouring properties.
As the siblings are co-directors of their own specialist geotechnical drilling company, they were able to fix the damage, using £70k of their own funds as the vendor could not afford this expense. They agreed to purchase the property for £90k directly with the vendor in an off-market transaction.
Although structurally sound, the property is dated and if they decide to keep the property as a buy-to let, it will need a basic cosmetic refurbishment, which the brothers estimate would cost only £5k and take 6 weeks to complete by local trades.
The Assessment
Although this is our first time working with the property duo, we had no real concerns. Both investors own their main residences and have 4 buy-to-lets between them. They are experienced landlords and astute businessmen with a specialist background who have already invested a significant amount of their own money into the property.
Having resolved a difficult and expensive situation for the vendor, the pair plan to use the bridging loan as a short-term solution to purchase the property and sell to recoup the costs. Once the works have completed, they will decide whether to keep as a rental or sell based on the best case scenario. Although this is an unusual case, it’s straightforward and low risk in Apex’s opinion.
The Result
With a low loan-to-value of 43%, there is substantial room for an uplift in value. If they sell at the surveyor’s valuation of £250k, the brothers are set to make a gross profit of £85k, recouping their costs with some to spare. Rental valuations come in at £800pcm based on similar properties in the area.
Looking for a short-term property loan? An Apex Bridging loan could be the solution. Speak to one of our friendly team on 01509 345 007 or email enquiries@apexbridging.co.uk for more information.