Buy, Refurbish, Rent, Refinance (B.R.R.R.) is a popular process for investors to go through to grow their portfolios. Here is a case study of how CPC Finance makes this work in practice.
BUY: An investor purchased a three bedroom house of non-confirming construction with adjoining land. The property was purchased for £340,000 with the land and the intention to convert to a five bedroom HMO. CPC Finance arranged a heavy refurbish short term loan of £255,000 and split title on completion.
A commercial investment valuation was carried out, which provided a GDV figure of £460,000, which could be relied upon for a 6 month period and excluded the adjoining land.
REFURBISH: The investor spent £80,000 to convert the property which included a rear extension and en-suite bathrooms for each of the five new bedrooms.
RENT: On completion of the works, the security generated a rental income of £35,000 per annum.
REFINANCE: The original valuer re-inspected the property to confirm the works were complete and the original GDV valuation could be relied upon. CPC Finance arranged a product switch to a term facility at 75%, which excluded the parcel of the land – now mortgage free, the investor has the option to build on the land at a later date.
Find out more about other B.R.R.R projects CPC Finance has supported by following our B.R.R.R. property journey series, where you can watch videos and get tips.