The clients: Business partners looking to expand their property portfolio.
On the advice of their accountant, the pair had recently set up an SPV limited company through which they would make this and all future purchases.
After this purchase, the business partners plan to start the process of selling their personally owned properties to their SPV Ltd Co.
The property: The pair were looking to purchase a two-bed terraced house in Lancashire, valued at £55k. Their modus operandi is to purchase low-value, high-yielding property.
The finance: The majority of buy to let lenders don’t accept property valued below £75k, because of this, finance options were restricted.
We approached an intermediary only lender, which we know accepts properties valued from £50k. This lender is also currently offering some extremely competitive five-year fixed rates – the rate type requested by the business partners.
We sent the business partners a list of required documentation – including a property portfolio spreadsheet, proof of income and proof of ID. Receiving this information back almost immediately, a valuation was instructed and within 10 days a formal mortgage offer was made.
Property value: £55,000
Loan amount: £41,250
Rate: 3.49% 5 year fixed
Term: 25 years interest only
Lender arrangement fee: 2% of loan amount (£825)
Mortgage payment: £122 pcm
Rental income: £450pcm
Gross yield: 9.8% pa
Consultant: Andy McOwat, 01625 416396
30th January 2018