Together and Capital B Property Finance have completed a £3.8m unregulated bridging loan for an experienced real estate investor acquiring a 40-property rental portfolio at auction.
The portfolio was brought to market following the break-up of a larger REIT portfolio and comprises mainly tenanted three to five-bed terraced and semi-detached houses, alongside a smaller number of flats and HMOs across the West Midlands.
The borrower has more than 25 years’ experience and has built a £25m portfolio of 110 properties, generating more than £2m in annual rental income. A newly incorporated SPV was established specifically to acquire the portfolio.
Funding was required quickly because of the competitive auction process, with Together delivering the bridging loan within 12 working days of submission.
Andy Neo (pictured), key account manager at Together, says: “Our team has extensive experience in dealing with complex cases, auction deadlines and multi-million-pound transactions, so when Capital B approached us for support, we knew we had the flexibility, appetite and speed to deliver.
“This case also demonstrates that experienced portfolio landlords continue to invest significant sums in the private rental sector despite the introduction of the Renters’ Rights Act. They still see strong opportunity in rental property and are willing to commit capital to acquire new stock.”
Because of the number of individual lots and the nature of the auction purchase, the client had limited access to detailed condition reports and full letting information across the portfolio.
Together said it was comfortable supporting the transaction because of the investor’s track record in acquiring and managing similar large-scale residential portfolios. Only three properties in the portfolio lacked a valid EPC, with the client confident these could be addressed quickly after completion.
The loan was processed through Together’s Premier for Intermediaries service and structured at 75% gross LTV based on purchase price, over a nine-month term with retained interest.
The facility will enable the borrower to carry out light refurbishment works and let any vacant units before refinancing the portfolio onto long-term buy-to-let mortgages, allowing repayment of the bridging loan.
Neal Telford, director of bridging and development at Capital B, adds: “Given the number of properties involved, it was essential that the case progressed quickly and with certainty.
“Together worked diligently to ensure challenges were addressed, communication was clear throughout and funding was delivered on time to meet the client’s requirements.”
