Can I get a bridge loan with no credit?

prodigalson

I am currently saving to buy some rental properties. I can come up with 25% deposit for the properties I'm interested in, but I have little to no credit. I am looking to buy properties in the range 50-60k with a 25% deposit. I want to get a bridge loan and want this property to produce rental income as soon as possible. The property can produce a yield of 10% after expenses and bills.

How can I get a bridge loan as an employed individual for my own company.

Can someone recommend any brokers or companies?
Also if anyone has any valuable input.

Doozergirl

You won't be making any yield at all with a bridging loan. A bridging loan is purely for the short term (a year at most, perhaps) and the rates are astronomical. It's not the right product for an investment purchase regardless of credit status.

Good luck making 10% yield on a cheap property even if you had it all in cash in the bank.

Just replacing the boiler wipes out half of the year's rent income - the house being cheap means that the repairs are proportionately much higher when compared to income. The house isn't going to be a palace to start with either.

There's plenty of competition for cheap lettings, it's easy to move around so you're in danger of void periods if the house isn't better than those around it.

Keep your fingers crossed too that your tenants, who live on the bread line, actually pay the rent. 6 months going through the courts to evict someone for non-payment and you've got zero income in that time, plus still incurring your normal expenses like the mortgage. You'll be lucky to ever see that money because these people have no assets or disposable income to pay you back or they'd have paid the rent in the first place.

Oh, and when they steal your appliances upon leaving, the deposit doesn't cover all of that, or they've brought in a massive dog (that you knew nothing about) to the tiny house and it's peed all over the floors, scratched the doors and broken the blinds so you have to spend money replacing everything again.

Sort out your credit history, save up a bit more and do some proper research into what being a landlord actually entails. It's a business, not a game where it just brings you riches. It doesn't.

You have legal responsibilities, people deserve a good quality home and apparent high yields hide an often different reality. Sometimes you will get good tenants, sometimes you will not.

Davesnave

What do you think a bridging loan is, if it's not a form of credit secured against the asset?

Get one thing wrong and you could lose everything.

When entering into a businesss they know little about, most people get things wrong. The chances of being wrong as a new landlord are huge.

AnotherJoe

So in essence you are looking for someone to fund your startup business at their risk?

Good luck with that. Maybe there's some mugs on a P2P lender might fall for it.

AdrianC

Can you show us the (rough, not precise numbers) sums you've worked out?

Because I'm not sure whether it's us or you that's missing something...

Murphybear

I have a few questions for you OP

How many properties are you looking to buy? In your first post you talk about “properties” then you say “this property”.

Whereabouts are these very cheap properties? If you want decent tenants then you you need to provide decent properties. Properties this cheap are often in areas of high unemployment.

I’m sure we’d all like to make 10% after expenses but I’m sure if it were this easy there would be queues of would be landlords. What are your projected rents?

Have you investigated buy to let mortgages?

Have you come up with another idea for your cash?

pinkteapot

If you can save up money fast enough to repay a bridging loan and own the property outright after less than a year (the usual length for a bridging loan) then you'll almost certainly be better off waiting to buy until you can buy for cash...

Grenage

I read these posts and I wonder why people are so keen for the hassle. I get around 10% on S&S ISAs, and there's no tax or grief. Is it the prospect of property value growth at the end of the investment?


OP: Your plan seems mental.

prodigalson

AdrianC wrote: »

Can you show us the (rough, not precise numbers) sums you've worked out?




Because I'm not sure whether it's us or you that's missing something...

The property is a property I used to live in as a student, it is a 3 bedroom house on the market for £54,000 exactly I have looked at similiar properties in the area around that range, they all need a significant amount of work done. As a student I was paying £70/week including bills = 3 bedrooms*70*4 weeks/month*10 months = £8400
Now just would require misusing the cost of utilities and agent fee.

Murphybear wrote: »

I have a few questions for you OP

How many properties are you looking to buy? In your first post you talk about “properties” then you say “this property”.

Whereabouts are these very cheap properties? If you want decent tenants then you you need to provide decent properties. Properties this cheap are often in areas of high unemployment.

I’m sure we’d all like to make 10% after expenses but I’m sure if it were this easy there would be queues of would be landlords. What are your projected rents?

Have you investigated buy to let mortgages?

Have you come up with another idea for your cash?

If I waited could definitely buy the properties in cash. I used to own an extremely expensive flat in London which I sold last year due to huge debts, only £28k in debts left after using some of the money left from selling my flat for capital in my current business.

I want to buy the properties fast as time is money and I want to build a small student property portfolio of 3-4 properties. As students get student finance they rarely have issues paying rent.

Grenage wrote: »

I read these posts and I wonder why people are so keen for the hassle. I get around 10% on S&S ISAs, and there's no tax or grief. Is it the prospect of property value growth at the end of the investment?


OP: Your plan seems mental.

At the moment dont want exposure to stocks and shares as thats my main business and will be overexposed as if the market takes a hit will have significant losses.

MEM62

Grenage wrote: »

I get around 10% on S&S ISAs, and there's no tax or grief.

Really? Please let me know how and I'll retire now as I could live off a 10% yield from my pension fund.

babyblade41

What a pilchard ....oops second yellow card :-)