The world of short-term property finance can be a crowded marketplace. So how does our newest product, Refurbishment Finance, stack up?
Think of it as sitting between our current bridging and development finance products – in many ways combining the best of both.
You’re no doubt aware of the benefits of bridging: allowing your client a fast line of credit before securing funding through refinance or sale. Now you can offer them the flexibility of a development loan to the proposition, unlocking the benefits of GDV as well as the cash flow advantages of rolled interest.
A Refurbishment loan from LendInvest is at it’s most useful to your client in the way money is released: funding the property purchase as well as refurbishment works as the project progresses.
|Loan size||£75k – £7.5m||£100k – £7.5m||£100k – £8m||£250k – £10m|
|Term||Up to 12 months||Up to 12 months||Up to 18 months||Up to 24 months|
Mark is a professional landlord with a portfolio of 10 properties across Edinburgh. He regularly purchases properties in need of work before renovating and refinancing onto BTL finance.
Mark has the opportunity to purchase a run-down detached property in suburban Edinburgh. With most of his capital tied up in an ongoing project, Mark is looking to maximise his leverage so he can take the opportunity whilst it lasts.
Using Refurbishment Finance, the costs are as follows:
Gross development value: £360,000
Purchase price: £190,000
Day 1 loan: £133,000
Build cost: £40,000
Total loan amount: £213,000
Day 1 LTV: 70%
Loan to GDV: 60%
Interest rate: 0.92%
Profit on costs: 22.17%
For additional use cases, product information and key features, download the Refurbishment Finance guide here.