PIVOT PROVIDES AN URGENT BRIDGE FACILITY TO ENABLE COMPLETION OF UNDER MARKET VALUE TRANSACTION
FACILITATING THE PURCHASE AND REFURBISHMENT OF A RESIDENTIAL BTL PROPERTY IN HACKNEY.
NEWICK ROAD, LOWER CLAPTON, LONDON E5
Gross loan £1.07m LTV 71.97% Deal Type Residential Refurbishment DEAL DURATION 12 MONTHS
The Opportunity
Pivot was approached to provide an urgent bridging facility in order to complete on the acquisition of an undervalued, large terrace property in a highly desirable east London enclave. The borrower was a professional landlord, experienced property investor and seasoned developer. He had already committed to the purchase, paid the deposit, and exchanged contracts within hours of seeing the property.
In these circumstances, Pivot would typically support the project by contributing to the purchase and providing 100% of the refurbishment costs. However, due to the borrower’s extensive development experience, which Pivot was able to validate, Pivot allowed the borrower to self-finance the refurbishment works, estimated to be circa £300,000. The borrower had an extensive property portfolio to support a security package. Once refurbished, the property was likely to be worth significantly more than the purchase price, based on local comparables.
The Deal
The borrower had an interest in this up-and-coming area of east London, so always kept abreast of the property sales market there. When an agreed sale on the house fell through, he was immediately contacted by a local agent, went to view it and agreed to buy straight away, putting down an immediate 5% cash deposit to secure the bargain deal.
The property itself, with 5 beds and 2 baths, and the potential to turn the LGF into a self-contained flat, was in need of an overhaul, which the purchaser would fund himself from his own cash reserves. Pivot would provide the finance facility to complete on the sale and oversee the reparations needed on the property to bring it up to letting standard, and remained flexible with regard to the finance for the refurbishment due to the excellent guarantees offered by the borrower to fund this work.
The house location is the suburb of Lower Clapton in the London borough of Hackney. The area is predominantly residential with a plethora of local amenities, including popular pubs, cafes, coffee shops, restaurants, gyms and a wide variety of other retail shops. The area is less than a mile from Clapton station with regular services to London Liverpool Street.
The area is popular with young families and young professionals with the proximity of the Walthamstow, Hackney, and Leyton marshes. There is nowhere else in Zone 2 which boasts the amount of green space and outdoor amenities (Boating, horse riding, trail running, reservoirs etc) that Clapton can offer. Due to its location, amenities and transport connections in the area, property values have withstood fluctuations in the market and remain buoyant.
Key Transaction Highlights
· Fast bridge facility provided with minimal cash contribution from the borrower
· Borrower with good experience and A&L
· Excellent location of asset
· Deal agreed in 2 days
· Lending against value vs purchase price
· Allowing borrower to fund refurbishment works with minimal oversight / cost
Deal Team
Relationship Manager: Vishal Dixit, Pivot
Credit Manager: Jay King, Pivot
Legal: Field Fisher
Valuation: : London’s Surveyors & Valuers
Comment from Vishal Dixit at Pivot:
“The borrower needed Pivot to lend against the value vs the purchase price and time was of the essence in order not to lose out on this outstanding bargain transaction. The valuation was instructed on the day the enquiry was received and I accompanied the valuer to the site the next day at 9.00 a.m. The borrower had already exchanged and needed funds rapidly to complete, as part of the deal, so we had to act fast, furiously and flexibly. Along with the Pivot team, the broker, valuer and solicitors performed admirably, and amazingly, the deal was approved in 2 days.”
Comment from the broker: Alex Kyriacou, Funding Advisory Ltd
“We’ve completed a number of deals with Vish and Pivot previously and, once again, they have performed impeccably. I take assurance from their pragmatic approach and quick decision-making. They were the ideal choice to approach to finance this loan which was completed in good time with clear communication from the offset. The client was delighted with the outcome.”