From commercial to residential refurbishment

Gross Loan Amount:

£200,000

Property Value:

£330,000

LTV:

60%

Initial Circumstance

A client recently contacted us regarding a conversion loan. They were looking to develop a commercial property into residential assets, a rising trend in today’s market, and they needed a fast and reliable lender, who would have no issues lending to a limited company.

The company were developers themselves and had a strong background in converting and refurbishing unoccupied properties and selling them for higher market prices. Their latest business acquisition was a gymnasium – now vacant – and was conveniently located in a highly sought-after residential area. They were looking to transform the place into 12 luxury apartments but had not yet applied for any planning permission.

MFS Solution

The company had consulted an architect about their conversion plans, who had advised that to ensure they received planning permission they would need to purchase one of the residential properties connecting to the commercial plot. Fortunately, one these had recently become available, as the homeowner was looking to relocate abroad.

Whilst many lenders would be unlikely to accept such a proposition – a development project yet to receive planning permission – We took a step back and looked at the bigger picture.

  • In a residential area, the flats would be in high demand.
  • The company had a strong development background with a good track record.
  • There was a residential property in the mix already

With the purchase agreement for the residential property completed, time became a key driving force behind the loan.

Like any purchase, the lender had to take the property through the correct legal stages before completion. Despite a few unexpected bends in the road, the dedicated underwriter for the case was able to ensure the loan completed within the deadline.

The Benefits

We take the time to step back and view the whole investment, enables us to provide a loan that many lenders would have turned away. Our commitment to clients, flexibility and dedicated underwriters is why we create many long-standing relationships. From this case, we were able to establish a new client with another two potential deals in the pipeline.

Alternative finance has never been more crucial. Whilst bridging lenders need to take ownership and always lend responsibly, flexibility and fast finance is crucial to ensure the property market keeps moving.

 

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