Loan Amount:
£1,015,000
Property Value:
£1,530,000
LTV:
67%
As the pandemic raged on, many offices and other commercial spaces ended up vacant. Sadly, businesses were forced to shut down or scale back. An unfortunate reality of Covid, but it has led to new opportunities for property investors.
An investor approached MFS with plans to convert office space into residential flats. Based near a market town along the south Coast, the property held plenty of potential, but work needed to be started asap as a deadline loomed.
With this in mind our underwriter moved quickly to get the ball rolling and overcome the buyers’ specific complications.
Keeping everyone happy through a complicated process
Conversion plans can be complicated enough on their own, with plenty of moving parts and shifting priorities. However, we also had to incorporate the fact that this investment was being made via a company. There were multiple directors, shareholders and other stakeholders at play. As such, we had to work extra hard to ensure all the ducks were in a row throughout the process.
We got the valuation sorted quickly and worked with the buyers to ensure the costs would be covered. Our underwriter went out of his way to plough through the paperwork and ensure the exit strategy was solid.
Given that efforts were already well underway for covering the development plans, with documentation to prove it, we felt comfortable in approving the bridging loan.
There’s a lot of empty commercial property out there
Conversion strategies have proven particularly lucrative in recent months. Investors took advantage of an emerging market, as thousands of properties were flipped during the pandemic, generating average profits of nearly £50,000.
However, these projects can prove costly as taxes, raw materials and unexpected problems all potentially chip away at a project’s potential. Fortunately, these costs can be minimised where investors take just a bit of time to prepare.
To help with this, we’ve broken down everything you need to know about the flip investment world, including how big the market could be, along with the key mistakes that may catch investors off-guard.
Further reading:
- Featured Product: Permitted & Light Development Bridging Loans
- Tool: Bridging Loan Calculator
- Guide: A Guide to conversion, refurbishment and renovation
- Blog: How to convert commercial property to residential assets & why should you bother?
- Blog: What is flip investment? Is there still a market for property flipping?
