Site: Residential Unit with Land with Planning permission for 4 units
Exit: Sale and refinance
We have recently completed on a loan that required a flexible solution to maximise the leverage against the site
One of our clients approached us looking to fund the purchase and development of a site which included an existing house to be refurbished as well as planning consent for additional detached houses to be built on the adjoining land.
The borrower, a seasoned local developer in the Home Counties, had funds tied up in a couple of other sites which meant he required the maximum possible funding against this new site.
Having understood the requirements of the borrower and the project proposal in full, it was determined that traditional development finance alone would have met the leverage required to purchase and build out the site.
Instead we have been able to position a deal by raising a 70% LTV bridge against the value of the existing dwelling on the site (£1.1m), while splitting off the land as an unencumbered asset being land with planning permission.
In addition to the bridge, were able to raise 100% of the £1.1m required for the development of the additional new build units as well as releasing £236k of equity against the land value which replenished the borrowers cash reserves. All in all, the borrower was able to inject as little as £314k into a development which has total costs of £2.35m.
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