This week I want to talk to you about what we do and give you some examples of the types of deals we are able to help with. We have been talking a lot recently about commercial and HMOs but that’s not all that we do! Here’s a couple of examples of what else Baya have completed for our clients.
A seemly ‘vanilla’ case
We were asked to help raise some money on a client’s portfolio a couple of months ago. She has about 20 properties, all in her personal name, which she has build up over the last 15 years. She had some issues with a bank during the crash of 2008 which took a long time to resolve, causing some credit problems. On the face of it this was a straightforward case but when we delved a bit deeper there were some issues:
- The overall portfolio yield wasn’t enough to pass the majority of lender’s stress tests, meaning most lenders would not be able to help at all. This can be the case with older portfolios with properties bought before the new rules came in.
- One of the properties has been used as a holiday let as the client was looking to increase her income. Again this is something most lenders cannot help with.
- One property was a flat above a restaurant in a parade of shops, so many lenders would not look at this either
By using more specialist lenders, we have been able to raise funds against 5 of her properties and pay off some property related debt. This has put her in a position where she can start to grow her portfolio again. In this instance, we used two lenders. We chose lenders who not only do not look at the outside portfolio, but also who have the most generous income multiples for rental properties, particularly for property in a personal name as this is often much higher than for limited companies. We found a specific lender for the property above commercial in order to maximise the amount we could lend, as many restrict the loan to value of these properties.
Refurbishment and conversion to residential from semi-commercial
A client approached us to buy a small semi-commercial property in Manchester. It has been used as retail on the ground floor but was now vacant, with a vacant flat above. His plan was to convert the whole property to two flats to rent out under permitted development. The end value and rental was good, and he has experience so this seemed like a straightforward refurbishment bridge.
We then found out that the planning usage for the upstairs property was actually a tattoo parlour, and so it fell outside of permitted development rights. With the right lender on board, however, this was not an issue and we were able to complete prior to planning being approved.
Why are Baya and our lenders different?
We are a broker who builds relationships, as I’m sure you know. This is not just for clients though; we are so careful with the lenders that we work with. We need to know that we can trust them to deliver on what our clients need.
We have started working with more ‘vanilla’ lenders, and but that I mean lenders who require more from their clients in terms of income, credit, property type, source of deposit and so on. The rates are lower, but they are strict with their criteria so its not for everyone. What is so important is knowing where you fit within the market and how rate conscious you can afford to be – and that’s where we can help! We will find you a solution that works for you, with your experience and goals in mind.