The clients were referred to ourselves, by one of our key introducing partners.
The 2 directors formed a company for the sole purpose of purchasing a property, which is to be converted into 7 separate apartments. Both directors have experience in buying and selling property, but this is their first venture into a full conversion of this scale.
The property currently comprises of 2 residential dwellings, set within 3 acres of land, situated a couple of miles outside of Oxford City Centre.
The main building is a 3-storey detached property with 6 bedrooms on the first floor and 2 further bedrooms on the second floor. The second dwelling is a 2-bedroom cottage. The properties have had a varied past, having been used as both residential and commercial properties over the years.
The clients’ required maximum leverage towards the purchase, so that they could retain as much of their capital as possible, to meet the planning and initial development costs.
Post purchase, an application for planning permission to convert the large property into 4 x 2 bed apartments, plus 1 Penthouse will be lodged. In addition to the main property, planning to convert the cottage into 2 apartments will also be submitted, enabling the owners to realise the full potential of both properties.
With our wealth of knowledge and experience, we discussed the project with a potential lender who we felt would be able to provide maximum leverage. We were able to demonstrate to the lender having spoken at length to the local valuer that the project was a viable and profitable one. We were also able to obtain an Agreement in Principle from a term mortgage lender to exit the bridging loan facility post completion.
This gave the bridging lender the confidence to maximise the Loan to Purchase price/Value at 80%, and provided the clients confidence that they would have a suitable exit strategy.
The Next Stage
Once planning is granted in the next few months, work will commence on the conversion.
Options have already been considered and discussed with the bridging lender as to how the conversion works will be funded. As the clients could retain some of their original capital, these are to be utilised toward the costs. Additionally, we have secured commitment from the bridging lender that they are willing to support some of the development costs if required.