We were approached by three brother in laws who were looking to purchase their first rental property together.
One of the brother in laws works in property management, one works in healthcare and the other in finance. Only one of the applicants has any buy to let experience – he has a portfolio of 10 + rental properties.
They were looking to purchase a mid-terrace town house in West London which had recently been converted into a 5-bed HMO.
The clients had chosen to purchase the property in their personal names.
We submitted an application on behalf of the applicants, an offer was produced and the exchange of contracts took place.
With 28 days until completion we then received a phone call which added a slight complication to the deal.
After speaking with their accountant the brother in laws had decided they would be better off purchasing the property via an SPV Ltd Co. This meant we had just under 28 days to submit a new application and obtain a new valuation to ensure the deal would complete as scheduled.
Fortunately our chosen lender offers the same rates to both individuals and SPV limited companies, so was happy to assist with the switch.
The new valuation was instructed within a few days and the deal completed within the desired time frame.
Property value: £591,000
Loan amount: £358,000
Rate: 3.79% 2 years discounted
Term: 25 years interest only
Lender arrangement fee: 1.5% (£5,280)
Mortgage payment: £1,054 pcm
Rental income: £3,750 pcm
Gross yield: 7.6 % pa
Consultant: Paul Keddy, 01732 471655
ANY PROPERTY USED AS SECURITY, WHICH MAY INCLUDE YOUR HOME, MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.