Roma Finance complete £485,000 auction purchase by re-assessing stalled renovation project
With property auction statistics showing their best results for 7 years, Roma Finance were able to help a broker’s borrower who won a fantastic investment property at a recent auction.
The borrower was let down by another lender who wouldn’t or couldn’t see the real commercial potential of the project after renovation and was inflexible in their approach. The broker approached Roma Finance because of their expertise in resolving sticking points by taking a closer look at cases and working with borrowers to resolve any issues, and so Roma Finance stepped in to re-assess the case.
As they do with all their borrowers, Roma Finance met with the applicant, an experienced property developer and builder, to review their situation and the project’s potential. It was quickly apparent the borrower had a grasp of what was needed for the property to be highly profitable and as he was contributing £150,000 of his own money in to the property, the case was progressed without delay.
The property was a mid-terrace in London purchased for £485,000 and Roma Finance provided funding of £360,000 within 7 days to meet the required deadline. The property contained two flats, one vacant and one with a tenant on and AST. After completion the tenant was served notice, and both flats were refurbished at a cost of £30,000. As work progressed, the borrower requested another £50,000 to aid business cash flow and get the flats ready for sale.
This was a hugely successful project for all involved as the flats were later sold for £745,000, making the borrower a significant return and the sale was also the exit from the bridging loan. The broker was paid commission on both fundings by Roma Finance.
Scott Marshall, Director at Roma Finance commented: “This is a case that wouldn’t have happened had we not taken the time to get to know the applicant and the property inside out. Due to a simple technicality, many banks wouldn’t lend but by meeting the borrower and reviewing the potential value after a refurbishment, we were absolutely convinced this was a genuine case worth financing.
“With the property and auction markets performing so well, this case highlights that there are real opportunities in the auction rooms, but it often takes a lender with specialist knowledge and underwriting expertise to be able to provide the finance. The borrower is now planning further projects and we look forward to doing business with him and the broker again.”