Bridging Loan for Property Development?

satguru

Hi - We are a retired couple who want to convert the 2nd and 3rd floors of a large HMO which we own outright (worth 300K) and currently let to students, into two s/c flats for immediate re-sale. We will keep the ground floor flat and the freehold for our disabled son. Our income from rents and state pensions is not enough to get a mortgage, so we need to get up a short term loan to finance the conversions. We can get the work done and re-sell in 12 months then pay off the loan. What sort of finance should I be looking for? Any suggestions? Thanks in advance for any help.

jonesMUFCforever

If you cannot afford a mortgage (even interest only?) then you cannot afford the project.

Have you thought of selling the property to a developer whilst buying back the ground floor that you wish to keep.

It might be easier though to have a clean sale allowing you to choose another property.

satguru

jonesMUFCforever wrote: »

If you cannot afford a mortgage (even interest only?) then you cannot afford the project..

Hi thanks for your reply - we can easily afford the project and to repay a mortgage or other finance, but because all our capital is tied up in property, and we are retired on state pensions, plus all extra income is from rentals - for tax reasons the net profit figure on the books is low - mortgage companies won´t consider us... We have to now look at banks and I wondered if anyone had any advice on the type of loan we should look for...

Emmzi

are you saying your net income has been made artifically low?

I'm afraid you can't have it both ways - one set of figures for the taxman and the bank.

sell one of your other properties to fund it?

jonesMUFCforever

That seems a good idea to me.