Careful costing of a property development is key to ensuring your project stays on time and on budget, but even the most experienced builders, property developers and landlords know that it takes just a few bumps in the road to throw these straight out the window.
According to UK Construction Online less than one in three projects completes within 10% of its original budget.
A recent client found herself in this boat when her funds ran dry before completing the works and needed £200k quickly to pay the builders and get her site back up and running.
She’d purchased a property at Auction in cash for £252,000 that had potential to be split into multiple units and sold for profit.
She ended up in a dispute with her subcontractors after paying twice for the work which had eaten into her budget. She’d since managed to find a trustworthy and reliable builder who managed to complete a lot of the works quite quickly but by this point, the client had run out of funds having not been refunded by the previous contractors.
Not being able to secure new funds quickly enough meant she would have lost a great builder which are worth their weight in gold.
The money was in the clients account just over two weeks after the enquiry which is critical when each day of stoppage is costing you money.
This case demonstrates really well how investors can lean on bridging finance as a reliable and versatile form of short-term finance.
With a gross development value of £1.2mil – even with the increased budget and additional finance costs, the client is set to make a significant profit.
Of course, ideally you won’t need to secure additional funds – but if you do, we’re able to step in with a bridging loan.
Use our bridging comparison tool to compare rates and costs from across the whole market, or just give us a call on 01489 346 788