Commercial to resi conversion, RH10
Client required funds to complete the purchase of a commercial property, which they planned to convert into a house of multiple occupation (HMO). The vendor had set a specific timescale for completion, therefore the client needed to act quickly in order to capitalise on this valuable opportunity. The client required monies to help with the purchase and fund the conversion works.
MT Finance solution
We provided an initial loan by way of a first charge of £980,000 at 59% LTV, before the client’s deadline. Interest was retained at 0.85% per month, over a 12-month term. The client was able to utilise their own funds to start the works. Once these funds were exhausted, we were able to re-inspect the property and approved further funds on the increased value to continue with the works.
Our short-term loan meant the client was able to purchase the property before the set deadline and instruct their builders and contractors to start works on their project. During the period of works we were able to raise the funds against the increasing value in stages to provide 100% of the conversion costs. Once completed the client was able to refinance the newly created flats on to buy-to-let mortgages, adding the properties to their portfolio.