Case study: Car showroom to café and apartments
Loan type: Short term loan and second charge loan
Loan purpose: Purchase and commercial to mixed use property conversion
In September 2015, Malkit Purewal was looking to purchase a former car showroom, which he planned to convert into four residential apartments, with commercial space underneath. Malkit initially needed finance to buy the property and worked with CPC Finance to secure a short term loan.
CPC Finance arranged, via Shawbrook Bank, a loan advance for 100% of the purchase together with an additional £100,000 to complete the works. This was done by using the client’s residential house as additional security and a comfort charge was registered behind his first mortgage.
Malkit explains, “We specialise in the more complex side of property investment, particularly in houses of multiple occupancy. We have been working with the CPC Finance team for two years and they are now our preferred commercial broker. The finance we need is often time-sensitive and CPC Finance really understands the best products out there for us. The team always deliver when they say they will and this has meant that recently we have been able to do about one deal per month with them.”
Now that the conversion is complete, Malkit is working with CPC Finance to move from the short term loan to a buy-to-let mortgage. The uplift in the property’s value will mean the refinance will repay the short term loan and remove the charge on his residential house.
Case study: Refurbishment of a derelict building
Loan type: Short term loan
Loan value: £507,500
Loan purpose: Refurbishment of a derelict building
In Autumn 2015, Mark Forrest of Leaf Forrest Ltd found a run-down property in Broadstairs Kent, ideal for renovation. Speed was of the essence in arranging the finance as the property was being purchased via a sealed bid process and Mark was aware that, if successful, completion would need to take place quickly.
The CPC Finance team was approached by Mark and was able to arrange the short term finance within the timescales required. Completion took place in November 2015.
Mark explains, “We have worked with CPC Finance for a few years now and regularly use the team to source finance for purchasing property through auctions in various locations. You have to be quick off the mark with auction purchases and we knew that CPC Finance would deliver the goods allowing completion to take place within the timescales imposed.”
Mark was able to start refurbishment work on the property and has increased the value of the house significantly – he will now be speaking with CPC Finance in order to arrange a term facility to repay the short term loan.
Investors looking to take out a HMO mortgage under the name of a limited company should refer to our Limited Companies / Special Purpose Vehicles section.
Putting a lock on every room is not the same as an HMO. If you do not ensure that your property is HMO-specific, valuers and lenders may only see it as having the value of the family home it once was.
It is particularly important with HMOs to make sure it is a high quality property in order to get the desired long term return on investment.
Be aware of local council legislation, for example where there is an Article 4 Direction in the area. This will impact on the planning permissions needed for conversion into an HMO.