For those who understand bridging finance I am getting external bridging finance. I usually use my own funds to bridge but me being me I have got myself in to a sticky situation.
I am getting 70% LTV finance at 1.5% per month. Ouch! And the fees they charge such as legals, arrangement fee and exit fees hurt as well. To top it off the loan is only for £20,000.
Anyway it has to be done. I thought it would be good to get a loan with these guys just to get a working relationship with them. Once I have done a few and have an understanding with them I can say:
“Erm, you know your fees, well can you tone them down a bit!”
It is worth asking. The deals I am seeing personally has really got me excited. So much so I am looking to sell some of my old stock which has doubled and trebled in value, realise some cash, pay my tax and re-invest.
If I can buy at auction then it just gets better. Get rock bottom prices from dealers selling off their stock at auction by putting only 30% in and bridging the rest and then going commercial finance at 110%+ of what you paid.
Forget no money down we could be entering the era of cashback for the professional investors. If you can pick up a £100k property for £50k at auction and refinance at £70k then bridging fees don’t look so bad.
In my situation I will be looking for properties that will value at £25,000 to buy at £12,500 and get £17,500 as a loan resulting in a gross cashback of £5,000. Once fees are deducted you will have around say £2,000. But the great thing is the property will be a 20%+ yield. These were the good old days and I think they are back……