Opportunities can be found at property auctions. Properties can be bought quickly, sometimes at relatively low prices, and then flipped for a profit. This is a common tactic, but one not without potential drawbacks.
Properties that turn up in auction houses can be rundown or derelict, needing a lot of work to bring them up to scratch. This can raise costs and potentially delay returns.
Fortunately, specialist finance can help with this and keep the ball rolling. Our underwriter recently supported an auction bid. He acted quickly to help the borrower secure the commercial property involved, and gave them the breathing space to organise long-term financial solutions.
Auctions require speed, and we can provide it
The borrower purchased a commercial asset at an auction and as such, faced a tight completion deadline. There would simply not be enough time to attain a commercial mortgage for the investment when the auction house was stipulating 28 days for completion.
Bridging finance was required to secure the asset but on top of this, capital would need to be set aside for covering remedial work. During the initial assessment stages, a few issues were noted and as such, our underwriter worked with valuers to generate a full schedule of works that would be needed. This broke down just how much work was on the horizon.
Our funding would not only allow the borrower to make the initial investment, but also provide breathing space for organising an exit strategy, and addressing the works needed. To this end, the borrower provided evidence supporting their ability to exit.
Meanwhile, the refurbishment work was also likely to uplift the property’s value, boosting its long-term potential. With these elements in mind, our underwriter was able to issue the loan.
We can provide you with a competitive edge
Property auctions have risen in popularity in recent years but where demand jumps, so too will competition. Bidders who can move quickly will likely have the upper hand.
Fortunately, bridging finance can help provide a swift edge. At MFS, we can have funding issued in as little as three days where needed.
Demand in the property market is still so high that opportunities are unlikely to stick around for long. We can help investors lock in an asset before their competitors even catch wind.
- Featured Product: Auction Bridging Loan
- Explainer Video: Auction Bridging Loans
- Tool: Auction Finance Calculator
- Guide: A Guide to Property Auctions
- Blog: Commercial property investment tips: What to know and how to prepare for auctions
- Blog: Top 11 house flipping mistakes & how to avoid them