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Purchasing a portfolio of 7 HMOs worth £1.8m

Loan Amount

£1,300,000

Loan Term

3 years

LTV

90%

Background

Our client desired to acquire a property portfolio with a purchase price of £1.45 million. Typically, the client would obtain bridging finance for the purchase and later refinance onto a Buy-to-Let (BTL) mortgage to free up their capital. However, this approach would entail additional fees, legal costs, and valuations during the refinancing process, amounting to tens of thousands of pounds in extra charges.

Challenge

The challenge was to find an alternative solution that would minimise additional costs and streamline the financing process for the property portfolio purchase. The goal was to secure a significant amount of funding while avoiding the need for a costly future refinance.

Solution

After assessing the situation, we advised the client of an alternative option. Since the purchase price was within 20% of the market value, we were able to secure 90% of the purchase price using Shawbrook’s portfolio product. This eliminated the need for bridging finance and subsequent refinancing, which would have required additional fees and a larger deposit.

Outcome

Our advice resulted in several favourable outcomes for the client. Firstly, we secured more Day 1 funding, reducing the client’s deposit contribution by £168,000. Additionally, the client was able to avoid waiting for two years to refinance at market value. Most importantly, by avoiding a future refinance, the client saved significant costs by eliminating the need for duplicate fees, legal expenses, and valuations.