Case studies

Bridging Case Study

TIGHT TIMESCALES

Background: The borrowers sourced a commercial building that they needed to acquire in tight timescales. Lendhub Directors, aware of the time-pressure, met the borrowers on site in order to structure a deal.

Location: North West London
Product: Commercial Bridge
Term: 12 Months
Exit Strategy: Development finance
Valuation: £5,850,000
Total Facility: £3,802,500

LTV: 65%
Interest Rate: 0.90% per month

Quirks: The security property, a vacant commercial building suited for a permitted development conversion was being acquired without the benefit of planning permission.

Challenges that arose prior to completion: A competitive tender process meant that the borrowers needed to work with a lender who could show flexibility as the deal progressed and guarantee delivery with their reputation at stake.

Why we funded it: Lendhub established a strong relationship with the seasoned property professionals, impressed by the scheme and the borrower's vision for subsequent planning enhancements.

Time to completion: 16 Days

Development Case Study

MAKE IT
HAPPEN

Background: Lendhub were approached regarding the demolition and development of a commercial office building and were immediately keen to assist the developer. The borrower required funds to refinance their existing bank, refund sunk costs already incurred and 100% of the construction costs.

Location: South West London
Product: Stretched Senior
Term: 14 Months
Exit Strategy: Sale of property
Valuation: £2,500,000
Total Facility: £4,556,000

LTV: 72% Net Initial Day One, 100% of Development Costs
LTGDV: 70% LTGDV
LTC: 85%
Interest Rate: 0.85% per month
Gross Development: £6,508,000

Quirks: The project was larger than all the previous the developer had completed to date and it was a relatively complex development with a ground-up element and numerous party wall awards to consider. High LTC and equity release of sunk costs.

Challenges that arose prior to completion: The residual valuation was lower than expected moving from £3,100,000 to £2,500,00 which resulted in an increase in the day one LTV from 60% to 72%.

Why we funded it: Despite the high leverage and borrower's inexperience undertaking similar schemes, lendhub were able to gain comfort from the borrower's professional team and their ability to secure a pre-let agreement to lease the site upon completion.

Time to completion: 76 days

Bridging Case Study

STEPPING IN

Background:  An experienced developer approached us after they had found themselves in a difficult situation. Cost overruns on another project combined with a breakdown of the relationship with their development lender meant they required immediate finance to meet a funding deficit, to keep their development on track.

Location: London
Product: Residential Bridge
Term: 12 Months
Exit Strategy: Sale
Total Facility: £2,325,000
Valuation: £3,100,000

LTV: 75%
Interest Rate: 0.75% per month

Quirks: The borrower had been let down by another lender after the valuation came in lower than expected and they were unable to advance enough funds. Lendhub were able to re-address the existing valuation report.

Challenges that arose prior to completion: The borrower was repaying the loan through the sale of the part-built development. A last minute change meant that the other development lender decided they would not release the monthly monitoring reports to Lendhub thus removing visibility of our primary exit strategy. The directors of Lendhub were able to inspect the site themselves as an alternative arrangement.

Why we funded it:  Lendhub were able to obtain comfort that the experienced borrower had the ability to complete the development and repay the loan.


Time to completion: 17 Working Days

Bridging Case Study

EXCHANGE AND COMPLETE

Background: A direct borrower contacted us after they had exchanged on a 3 bed-semi detached house they had secured in an auction. They required funds to help them complete on the transaction and needed to work with a lender who would allow them to turn the property into a HMO, without being involved and monitoring the works.

Location: Reading
Product: Auction
Term: 6 Months
Exit Strategy: Refinance
Total Facility: £311,250
Valuation: £415,000

LTV: 75%
Interest Rate: 0.85% per month

Quirks:The borrower was undertaking a programme of refurbishment works to the property.  The security property was being altered however the borrower wanted to fund these works themselves without monitoring from Lendhub.

Problems that arose prior to completion: Upon receipt of the independent valuation report, it was indicated that the property was potentially at risk from structural damage. We instructed a structural engineer the same day to assess the property and verify the severity of the cracked walls.

Why we funded it: After speaking with the developer and understanding the nature of the proposed works and the professional team instructed to implement the works, we were able to gain comfort that the works would be done to a satisfactory standard allowing a smooth transition onto a long term HMO mortgage.

Time to completion: 14 working Days

Bridging Case Study

MAXIMUM LEVERAGE

Background: One of our introducers approached us, looking to assist his client in obtaining finance for the acquisition and development of a property they had exchanged on, with a delayed completion date. The borrowers were using the delayed completion to secure non-contentious planning amendments that would increase the square footage of the property by 25%. The borrowers were looking to leverage the equity as much as possible.

Location:  West London
Product:  Heavy Refurbishment
Term:  12 Months
Exit Strategy: Sale of the Property
Initial Facility: £715,000
Total Facility: £1,102,000
Initial Valuation:  £892,000
GDV: £1,700,000

LTV:  72% + Interest Rolled
LTGDV:  65%
Interest Rate: 0.85 % per month

Quirks: The bulk of the equity provided by the borrowers was through 3rd party preferred equity, meaning that the borrowers had a small amount of “skin in the game”


Why we funded it:  Despite significant hurt money in the scheme, we were comfortable with the borrowers experience and ability to deliver the proposed scheme in the intended timeframes.

Time to completion:  18 working Days

Bridging Case Study

Undervalue Transaction

Background: Our experienced developer required a bridging loan to assist with an opportunistic purchase of a freehold building containing 10 flats. The purchase price was considerably below the market value of the property due to the urgency the vendor needed to dispose of the property. Lendhub were asked to lend against the Market Value of the property, to minimise the equity input from the borrower.

Location:  South East London
Product:  Residential Bridge
Term:  6 Months
Exit Strategy: Refinance with BTL mortgage
Total Facility: £2,762,000
Valuation:  £3,750,000
Purchase Price: £3,075,000

LTV:  73.6%
LTP: 90%
Interest Rate: 1.15 % per month

Quirks:  Most lenders would only lend against the purchase price, however the borrower needed to borrow against the market value before they could refinance into a BTL mortgage.

We agreed to lend against the aggregate value of the individual flats, as opposed to the block value.

Problems that arose prior to completion: We instructed an independent valuation of the property, and this was returned at a price which we did not think was right. We instructed a second, reputable firm to carry out the valuation and this resulted in a higher figure.

Why we funded it:  We were confident that the borrower had found a unique opportunity to purchase the property at a genuine discount.

Time to completion:  21 working days

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