The old HSBC building had been acquired back in 2018 but due to other ongoing developments sat largely untouched through 2019. The team at 978 Finance were asked to raise money against the asset in order to convert the property into a number of apartments keeping some commercial space on the ground floor. Although a great project, it is not seen by many lenders as such. Ultimately the end values are not brilliant in comparison to the cost of refurbishment as the site is located in a small town in Cumbria with lower than national average sale prices.
This made it difficult for a lot of lenders to get comfortable. The developer is more than happy as the strategy here is to hold long term for income generation and yields here are great.
They do need to see a big profit in terms of flipping as that is not the plan here and is not part of their overall strategy. Whilst the majority of lenders were offering rates of 1%pcm or more due to its location and GDV and not offering enough money to complete the project, we used our solid relationships to ensure we could get the necessary monies at 0.75%. We also managed to save on QS fees by getting our chosen lender to utilise their refurb product saving around £4000.00 on additional potential draw downs.
Paul said “Thank goodness we are finally moving on our bank job! This was far from straightforward but 978 Finance went above and beyond even managing to complete the deal after the industry had broken up for the Christmas break. We loved the levels of personal service and the unbiased advice throughout. Nothing was too much trouble and although the deal took a long time with changes along the way the team adapted and put in 100% energy right up until close. We’re back on site and looking forward to providing some more much needed high-quality housing for our local residents”.
Due to the low GDV we worked with our lender to get comfortable by taking security over a second asset which we will refinance onto a BTL in due course without any early repayment charges. This was a complicated deal but working with an experienced, professional client ensured it was a pleasure throughout. Looking forward to seeing it progress over the coming months!
