Background
An experienced property investor successfully secured a vacant mixed-use property at auction for £520,000, with plans to transform the upper floors into residential apartments while retaining the commercial unit on the ground floor.
With only 28 days to complete, speed was critical. The investor needed a finance solution that would allow them to complete on time, begin refurbishment works immediately, and refinance onto a longer-term commercial mortgage once the project was complete.
The Challenges
Like many auction purchases, the tight completion deadline ruled out a traditional high street mortgage.
The property required refurbishment before it would meet the criteria for many mainstream lenders, while the mixed-use nature of the building further reduced the number of available lending options.
In addition, there wasn't enough time for a standard mortgage valuation and underwriting process before the auction completion deadline.
Failure to complete would have meant:
Losing the £52,000 auction deposit
Paying additional legal costs
Missing out on a valuable investment opportunity
The client needed a lender that could move quickly and understand the exit strategy from day one.
The Solution
Propp sourced a specialist auction bridging loan of £390,000 (75% LTV) through one of our trusted lending partners.
The finance was structured specifically to:
Complete comfortably within the 28-day auction deadline.
Fund the purchase while refurbishment works progressed.
Allow the client to add value through the conversion.
Provide a clear refinance route onto a commercial investment mortgage once the works had been completed.
By comparing lenders across the market, we secured a funding solution that met both the auction timescales and the client's long-term investment strategy.
The Outcome
The purchase completed successfully within the auction deadline, protecting the client's £52,000 deposit and allowing refurbishment works to begin immediately.
Once complete, the investor will refinance onto a longer-term commercial mortgage, retaining the property as an income-producing mixed-use investment with increased capital value.
Need Finance for an Auction Purchase?
Buying at auction doesn't leave much room for delays. Whether you're purchasing residential, commercial or mixed-use property, Propp compares specialist lenders to find the right finance for your project.
Compare bridging finance quotes today and complete with confidence.
