Hope Capital’s Flip+ funds Welsh HMO project from purchase to refurbishment

Hope Capital Property Finance used its Flip+ proposition to support a borrower from an initial purchase bridge through to a refurbishment facility with a longer term.

Lyndsay Kent of TBK Mortgage Studio introduced the case on behalf of a developer acquiring a three-bedroom mid-terraced residential property in Wales for £85,000, with plans to convert it into a four-bedroom HMO.

With HMO conversions in Wales falling outside permitted development rights, the borrower needed to secure the property while retaining a clear route into refurbishment funding as the planning process progressed.

Hope Capital Property Finance initially provided a purchase-only bridge, enabling the borrower to secure the property ahead of the planned conversion.

With no minimum interest period under Flip+, just three months later the borrower was able to refinance onto a 75% LTV refurbishment facility at 0.89% without having to secure an exit with another lender.

A further £52,000 was used to complete the refurbishment works, with tranches released on the same day that loan support specialist Sophie O’Neill received the monitoring agent’s report.

An 18-month term was available, but the borrower only required 12 months to complete the works.

A desktop valuation was completed to support the purchase facility, with a full valuation required once planning was in place for the refurbishment works to commence. Dual legal representation, used on both the purchase and refurbishment facilities, and full title insurance helped streamline the process further.

Rather than paying a full new facility fee, the borrower only paid an uplift fee on the additional refurbishment funding required, alongside a single admin fee covering legals.

National account manager Sam Lea (pictured above) and relationship manager Chris Grierson also worked closely with Lyndsay throughout, structuring the funding around the valuation of the property.

Lyndsay commented: “From the outset, I wanted to be sure I could make this deal work for my borrower, which meant sourcing a lender that could keep costs down throughout.

“Despite the complexity, Hope Capital Property Finance stayed relentless in finding a solution throughout and made what could have been a very difficult case easy for my borrower.”

Sam said: “This was a great example of a case where the funding needed to work around the different stages of the borrower’s project.

“They needed to secure the property first, while also having a clear route into refurbishment funding when they were ready to progress.

“Flip+ gave us the flexibility to support both stages, while keeping the borrower with Hope Capital Property Finance throughout.

“By working closely with Lyndsay and our underwriting team, we were able to structure a solution that reduced the cost and complexity of moving from the initial purchase bridge onto the refurbishment facility.”

Stacey Bradwell, underwriter at Hope Capital Property Finance, added: “Having underwritten the initial purchase facility, I already had a clear understanding of the case when the borrower was ready to refinance onto the refurbishment facility.

“That continuity helped make the transition between the two facilities more efficient and is a great example of how closely our sales and underwriting teams work together.”