A seasoned property investor sought funding to purchase and refurbish a three-bedroom terraced house into a six-bedroom, six-ensuite HMO. With a projected GDV of £360,000, the project offered strong potential, with plans to exit via a BTL refinance. However, several unexpected challenges emerged, putting the completion deadline at risk.
The Challenges
We faced significant obstacles that threatened to derail the deal:
1. Valuation Setback
The valuation report provided raised multiple concerns, as the type of report and its findings lacked the detail and reliability required for lending purposes. Ordering a new report and waiting for another inspection risked pushing the completion well beyond the borrower’s deadline.
2. Deed of Priority Dispute
At the last minute, the borrower’s existing lender demanded a Deed of Priority (DOP) to establish security ranking. The negotiations quickly became complex, with disagreements over terms and delays from prolonged legal back-and-forth. The borrower, unfamiliar with the legal intricacies, became frustrated and concerned that the transaction would collapse.
Both challenges created a time-sensitive situation that required immediate action to ensure the deal stayed on track.
The Solution
Lendhub acted quickly and decisively to resolve both issues:
- Internal Valuation Confidence
Using their local market expertise, our team conducted an internal desktop valuation and funded the loan immediately. We also covered the cost of a formal valuation post-purchase, eliminating delays and added costs for the borrower.
- Resolving DOP Negotiations
Anticipating lengthy legal disputes, Theo Goodman, Credit Manager, led negotiations, coordinating immediate all-party calls, clarifying our position, and securing an agreement on the security ranking. His leadership resolved the issue without further delay.
- Ongoing Client Support
Throughout, we kept the borrower informed, simplified complex issues, and ensured they felt confident in the process.
The Outcome
Lendhub provided a £245,000 refurbishment loan at 70% LTV and 75% LTGDV, enabling the borrower to successfully fund their HMO conversion project. By conducting an internal valuation, Lendhub avoided delays from waiting for a new site report, ensuring timely progress.
Direct engagement with the lender promptly resolved a Deed of Priority (DOP) dispute, clearing the path for completion. As a result, the borrower met their purchase deadline and immediately began the property’s conversion into an HMO.
Client Testimonial
"I just wanted to let you know that we have been very impressed with Theo's performance on our deals. This has been a difficult and challenging deal, given the size. However, Theo has conducted himself with professionalism and great patience given the twists and turns this deal has taken. We look forward to continuing to work with Theo on further transactions."
Robert Sadler, Excellion
