Ex-pat in his 60s refinances large mixed use property to raise capital

A longstanding client, a 60 year old ex-pat living in the US, contacted us looking to raise finance against one of his UK investment properties to fund a development project in the US.

The client was looking to raise finance against a semi-commercial building built in 2004 in a prime high street location in Suffolk. We had helped the client raise finance to fund the original development and also helped him secure, subsequently, a short term facility against the premises although this has since been repaid.

The property consists of:

  • 5 retail units, all let to leading high street retail names
  • 18 flats on the upper floors, all sold on long term leases

Now mortgage-free, the client wished to refinance the property to raise in excess of £1m for his latest project, a house-build in California.

There were two main challenges with this deal:

  1. The client's ex-pat status and age meant most mainstream lenders would not consider case

  2. Very few lenders will entertain transactions where the funds raised are being used to finance an offshore project

To overcome these challenges we agreed to approach the client’s existing lender with which the client already had an excellent relationship and track record. We put together a detailed proposal and supporting documentation, and after some negotiation, the lender offered the following terms:

Property value: £3m

Loan amount: £1.2m

LTV: 40%

Rate: 3.25% (Bank Rate + 3%)

Term: 3 years interest only

Borrower: SPV Limited Company

Lender arrangement fee: 1% (£12,000)

Mortgage payment: £3,500pcm

Rental income: £16,916 pcm

Gross yield: 6.77% pa

Consultant: Steve Bedford, 01732 471609

This is a highly unusual scenario but does highlight where our skills and expert knowledge of the lending market can often produce a favourable result.