Purchase price: £560,000
Loan: £618,556 (gross)
Arrangement Fee: 3% (this is high and may put people off)
Rate: 0.87% (this isn’t high and won’t put people off!)
Term: 12 months
Adviser: Peter Davies
My clients had exchanged contracts on a building with a 10% deposit. The transaction had a delayed completion date to allow construction work to be completed which would turn the building into a 32 bedroom student HMO (House of Multiple Occupancy).
While a large amount of work had been carried out, the building wasn’t finished for the originally scheduled completion date. As a result, the limited company purchasing the building required funds to complete the purchase whilst also requiring additional funds based on the uplifted value of the conversion work carried out to date.
I approached one of Coreco’s bespoke short-term lenders where we have direct access to the principals and agreed on a 12-month loan facility in excess of 100% of the purchase price to enable the purchase to complete with additional funds for costs and interest.
The 12-month facility enabled the clients to complete the purchase and not lose their deposit – also giving time to complete the conversion works before we refinanced to a long-term 10-year interest-only facility.
Interested in an HMOs? Get in touch with Peter here.