it works well for those and also for short leases that need no upgrade too Kingsley

welcome Artiom

no problem Moghees

appreciate your comment Jordan

Splitting the titles is a legal process that can only be done by the owner of the property. When you use EDC you are not the owner of the property so you cannot alter the legal status of it, until you buy it. Also, even if you could do that, every mortgage lender bases their mortgage on the LOWER of the purchase price or value, at point of purchase, so you could only borrow 75% of £300k. To leverage the £500k value, buy it with bridging for £300k, split the titles, as the new owner, then sell or refinance at the £500k value you believe each of the 5 flats is worth cumulatively. If you are making £200k on approx. a £5k legal cost of splitting the titles, you can afford the cost of bridging it.

@@KevinWrightProperty would i need to put in 10% with a bridger or would i be able to get 65% LTV with a lender based on done up value as per your video?

thank you Daniel. Bridging goes way beyond these figures, so yes to is bridging available. The issue here at this level, is that you will be putting £120k of your own cash into a property that you do not yet own. To a point you are protected by the fact that you have exchanged contracts with the owner but it is still a lot of money to be doing it this way. I would question if the rewards are sufficient on the numbers you gave me? From October onwards, stamp duty on a £700k property will be £46,000. Borrowing 65-70% on a value of £950k is likely to cost you £60-70k in bridging costs, with the £120k refurb you are up to £936k. Add in other fees and you wont be making much over £50k, which seems a small return for a project of this size

@@KevinWrightProperty great to know bridging has a lot of scope! Thank you for such a prompt reply. Also appreciate your other comments, Kevin. Is there no way to write in the exchange agreement that if they back out they need to pay all costs already committed to the refurb plus 10%? Completely right on the lack of profitability in those figures though. My offer would have to be at least £60k lower to make it worthwhile, but also my sale projection is very conservative. The property I've seen is also arguable uninhabitable so I could "potentially" receive a refund on stamp duty. But I understand that I would still need to front the £46k and later place a claim if my research is accurate.

@@danmatley - amending the contracts to the way you suggest, or something similar - direct that question to your solicitor, as they draft the contract. 'Uninhabitable' has been twisted from the original court case that defined it. Derelict would be a term closer to what the condition of the property has to be in to effectively evade SDLT. Agreed re chopping a minimum £60k of the buying price to make the deal into the realms of the viable.

Would it be wise to use an EDC instead of a PLO? the refurb is about £12K and the vendor has already paid to treat the JK.

@@nassah2010 yes you would use a Market Value bridge to lend on the current value at the time you buy and not the purchase price you are paying. A PLO doesn't include the rent acting as a down payment as a standard feature, you need to fully understand what you are trying to do on that. This is more of a tenant buyer strategy and would need a different legal set up to a PLO Bear in mind you cannot rely that there will be growth in that time period - 2% or otherwise A contact exchange ties you and the seller into the deal in a more finite way than a PLO does

@@KevinWrightProperty Thanks keving will keep you updated.

@@nassah2010 great

to borrow on the done up value Idowu. Mortgage lenders always lend on the lower of the purchase price or value when you buy a property - their valuer would ignore all the work you have done to it and just value the property on the purchase price you are paying. A Done Up Value bridger lends on the done up value, not the purchase price.

@@KevinWrightProperty thanks for your reply. You didn't understand my question. A bridge is used to do up a property with an exit agreed. A bridge is an expensive product. But it's more accessible for refurbishments than a mortgage. My question was, why or in what circumstances would you prefer to go onto a bridge when you have already done up the property? In other words, why go into an expensive product for a short term and then refinance out into exit if at that point nothing needs doing to the property anymore. Would it not be better to refinance or Finance into a product longterm like a mortgage? Please advise

@@show2780 I believe I did understand your question but lets go again, this time with some numbers to see if that helps. Clearly there is no NEED to use bridging in this scenario, it is a choice and you can instead just use a mortgage and save the cost of bridging which, as you rightly say, costs more. Lets use an example where you agreed to buy a property for £100,000, spent £20,000 refurbing it to create an uplifted exponential value of £150,000. Furthermore you did as I suggest in the video - exchanged contracts, got the keys and the owners permission to do the £20k refurb, then completed the purchase. There is no reason why you could not apply for a mortgage BUT when you are buying a property the basis of mortgage lending is the lower of the purchase price or value. In this case the lenders valuer will ignore the value your refurb has created and value the property for the mortgage based on the £100k purchase price. A 75% mortgage of £75,000 will require you to put in a 25% £25,000 cash deposit. Added to the £20,000 refurb you have already spent, you now have £45,000 of your cash stuck in the property - but you have saved the cost of using bridging. Alternatively, using a Done Up Value Bridge, as I explain in the video the bridgers valuer will value the property on the done up value - £150,000. If the bridger lends you 70% of £150k, that is £105,000. On the day you complete, you have £30,000 less cash stuck in the property because you have borrowed £105,000 rather than £75,000 Once you have completed the purchase, you can apply for a mortgage to pay off the bridging loan. The difference is now that you already own the property mortgage lenders are prepared to consider lending at the done up value of £150k. Bridging will clearly cost you a few thousand pounds but nowhere near the extra £30,000 you have extracted compared to just buying with a mortgage. So you can choose which you think is the best option, as can everyone else. a) save the cost of bridging but leave £45k cash sitting idly in the property b) incur the cost of bridging but have £20k + extra cash in your bank account

@@KevinWrightProperty fantastic insight. Clearly understood. I would bite the Bridging cost bullet all day. Thanks for your time.

@@show2780 - happy to have helped your understanding. When you next find a deal like this, we will be happy to broker both bridging and mortgage for you.