Case Study: £842,000 development loan completed in three weeks
Bridging lender Mint Bridging has recently secured an £842,000 finance deal in under three weeks.
The client’s objective was to complete the purchase of a chalet style bungalow and once purchased, obtain development finance to redevelop the property. When they realised this set up wouldn’t be commercially or financially viable, the broker contacted Mint Bridging for honest advice which subsequently turned into a loan. Instead of an ill-conceived 2 stage approach, the broker, client and Mint opted to venture into a full scale development deal from the outset which allowed him to hit his deadlines while accommodating the client’s development goal.
The client had negotiated a good purchase price based solely on the current condition of the property. Due to the very short time-frame within which the purchase had to be completed Mint opted for a multi-track approach by instructing their solicitors, asset manager and quantity surveyor immediately. This meant that the various visits could all be arranged to take place upon a single day, rather than spread over a greater period of time.
The client was an experienced property investor with a number of other buildings within his portfolio, but this was his first foray into property development. The broker identified Mint as a suitable lending partner based on the bridging lender’s extensive development credentials in this area.
All parties agreed that the bungalow required side and rear extensions plus a mezzanine, increasing floor area. Additionally, the layout of the property was flipped on its head. Bedrooms were relocated to the ground floor so that the living space was afforded spectacular sea views overlooking Sandbanks Harbour. By virtue of the redesign including the addition of the new floor, the value of the finished property was significantly enhanced whilst not distracting from the property’s aesthetics or neighbourhood feel.
Last minute changes to the build costs meant Mint had to swiftly revise their security documentation and restructure the planned retention release. With the team working around the clock to avoid missing the purchase deadline, the changes increased the LTGDV from 57% to 62%, yet all original terms were honoured.
Andrew Lazare, pictured, Mint Bridging’s Managing Director explained:
“This was a deal that required meticulous attention, based on so many changes within such a short time frame. The client trusted our advice and the Mint team were constantly thinking outside the box. It was one of those rare and tricky situations that had a tremendous amount of moving parts, but the type that Mint truly excels at. We’re really pleased with the results and more importantly, that the client received exactly what they were aiming for.”