Trading Ltd Co purchases 2 student multi-lets simultaneously
The Clients: Two business partners looking to grow their property portfolio with the purchase of two multi-lets in Birmingham (multi-lets are also occasionally referred to as non-licensable HMOs).
The partners were looking to make both purchases via their successful consultancy business which they had established in 2003.
Property 1: A 1930’s end terraced house situated in close proximity to the local university. The property comprises four lettable rooms, one bathroom, one downstairs toilet and a shared living kitchen area.
Property 2: A traditional Victorian mid-terraced house also situated in close proximity to the local university. The property comprises five lettable rooms, two bathrooms and a shared living kitchen area.
The business partners plan to let both properties to students.
The Finance: The partners were looking to borrow at 50% LTV on both properties. The deposit required would come from the business’s retained profits. The partners had requested that both purchases run simultaneously.
The Application Process: Due to the complexity of the case we needed to approach a specialist lender. We took the case to Keystone Property Finance for the following reasons:
- Trading limited companies accepted. Buy to let funding options for trading limited companies is limited. Keystone offers the same pricing to individuals, SPVs and trading limited companies.
- HMOs/multi-lets up to 8-beds. Keystone has a product range designed specifically for HMO and multi-let property.
- Student lets accepted. Only a handful of lenders will offer rates on HMO property let to students.
- First-time HMO landlords. Although the partners already own two rental properties, this is their first HMO/multi-let purchase. Most lenders like landlords to have experience in letting this type of property.
As both partners have a hectic work schedule, all business was conducted over the phone or via email. To support the application, we asked for the partners to provide us with proof of income in the form of the last 2 years’ company accounts and an SA302 or full HMRC tax return.
An offer was made within two weeks of submitting the application. Here are the details of the deal: