Refurbishing a property can be a relatively straightforward endeavour for property investors. By doing-up a home, its value could be raised. It could also invite higher rents from potential tenants. But, these seemingly simple plans can be upended by unexpected issues.
A foreign national turned to us to help fund their refurbishment plans. They already owned the underlying asset, which was lying vacant as their long-term tenant had moved out. Before getting another tenant involved, the borrower wanted to make some cosmetic improvements to the home.
However, several issues needed to be overcome before this could happen. Our underwriter ensured no potential issues slowed the deal down.
Enhanced due diligence doesn’t need to slow down a deal
As our underwriter got to work, a number of issues came to light during background checks. To overcome these, and keep the ball rolling, she performed additional due diligence to ensure everything was secure.
She also worked closely with the valuers to determine that the property held potential. Not only was the property desirable, the borrower clearly had entrepreneurial ambition. They provided a clear schedule for the works, while also putting forward a plan to purchase a new BTL property with remaining funds – expanding their portfolio.
The borrower planned to refinance these plans with a long-term lender, and the broker involved provided details on the many lenders they could work with. Should these plans not work out, the borrower could also cover the funding by selling the property. With these potential exit strategies all available to be put in place, we were happy to issue the loan.
Refurbishment can come in many shapes and sizes
Tweaking a property is commonly done by those looking to increase its value, but the actual work can come in many shapes and sizes. Refurbishing a residential space is easy enough to understand, but investors can also convert a commercial space into flats, or completely renovate a decrepit building.
The costs of these plans can vary drastically and as such, it’s important to have a lender who understands the market, and embraces flexibility. See what property boosting options could be available to you.
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