We were approached by two brothers and their father, all directors of a trading property company, who were looking to raise finance to expand their portfolio.
In addition to running the business, both brothers are employed, as a chartered engineer and a building surveyor respectively. The father is retired.
Eight years ago the business had purchased a pub in Wales and converted it into two terraced houses, two self-contained flats and built a detached house in what was formerly the car park.
The development is now rented out to a mix of professionals and families and generates £2,500 per month in rental income.
The directors were looking to release some of the capital in the development so that they could buy more property to develop and rent out.
As the properties are all under a single freehold title, we approached one of the specialist lending banks which agreed to remortgage the development based on the rental income.
Here are the details of the deal:
Property value: £600,000
Loan amount: £390,000
Product: 5.35% term tracker (lender’s LIBOR + 4.60%)
Term: 5 years interest only
Mortgage payments: £1,739 pcm
Rental income: £2,500 pcm
Lender arrangement fee: 1.7% (£6,630)
Gross yield: 5% pa
Consultant: Chris Longhurst
Consultant tel: 01732 471607
22nd July 2015