978 Investment Case Studies

‘100% Funding for Non-Status Borrower’

Our client, Matthew S has experience in business and particularly hospitality however, had unfortunately, recently fallen on hard times. They lost a business due to flooding which resulted in dramatic financial loss as the insurance company did not pay out properly. They then suffered identity theft and due to the combination of these factors, have a terrible credit rating and poor credit history.

Matthew said: “978 Investment sourced finance for 100% of the purchase price for our project based on Open Market Value and worked with us during the negotiation of the purchase. The quirks of the asset, combined with some short term financial issues for our company would have made the purchase impossible with traditional lenders. We were able to use 978 Investment’s close relationships with their lenders to progress the deal.

After completion, 978 Investment assisted with the ongoing redevelopment of the site, including the complex process of refinancing and ultimate marketing for sale of the property on a split-title basis.

Anyone who has completed a complex property transaction will know that the traditional 9–5 approach to business simply does not work. 978 Investment were flexible and on call ‘after hours’ matching their availability to the nature of the deal.”

The Figures

  • Open Market Value September 2018 red Book RICS Val – Vacant and with some rooms in poor condition- £800,000.00
  • Suggested value with cosmetic improvements and once tenanted £950,000.00
  • Purchase price negotiated by 978 Investment £500,000.00
  • Finance package secured by 978 Investment for Non-Status Borrower
  • Bridge for acquisition- 70% LTV of Open Market Value
  • Less 6 months interest @1.2%pcm £40,320.00
  • £560,000.00 gross loan
  • Less arrangement fee 2% £11,200.00
  • Net Loan £508,480.00
  • We managed to provide 100% funding for this acquisition with £8,480.00 to help towards the legal fees and associated costs.

This distressed asset in Wavertree, Liverpool came to 978 Investment. The property is a semi-commercial building consisting of a licensed 15 bed HMO and some office space on the ground floor.

The previous owners of the property lost control of the building through poor management which resulted in a vacant property which was falling into a sate of disrepair. With mounting debts, the vendor was willing to take a discounted price for a quick sale. 978 Investment specialises in the financing of below market value (BMV) property and were keen to provide a solution which would allow the distressed seller to step away from this asset and move on with their property journey with other projects in the pipeline taking priority.

The staff at 978 Investment took time to get to know the property, the client and the situation of the vendor. Through gaining a greater understanding of the whole picture we managed to build a robust case to our chosen lender and worked with all parties to get a suitable solution for all.

Matthew is now working hard to get the building up to standard and has had offers off corporate entities who wish to rent all 15 furnished rooms. There is a tenant in part of the commercial space downstairs who has now requested to expand into the other commercial units too. We are now
supporting the purchaser to arrange a commercial term mortgage as the exit from the bridge.

This was a tricky deal which took a long time to complete but with tenacity and creativity we got a great result for all involved.

‘25% BMV – 40% ROI – Mixed Use Acquisition’

The team at 978 secured this property off-market, direct to vendor and at a substantial discount. The previous owners needed to pay off some debts and were also looking into another project so were keen to offload this one quickly via way of private sale.

The majority of the sales process was handled during the COVID-19 Global Pandemic which posed its own difficulties however, due to 978’s strong network of experienced solicitors, surveyors and tradespeople, the team were able to progress the sale through to completion in a reasonable time-frame despite the pandemic and added complication that the purchaser was an overseas resident and foreign national.

This property had a lot to offer, the residential elements were converted in 2015 and completed to a high standard benefiting from fully tiled bathrooms and en-suites in 2 of the larger apartments. The property is less than a 10-minute walk to the site of ‘Eden North’ which will be the largest indoor tourist attraction in the North of the UK when it opens in a few years’ time.

The Figures

  • Open Market Value – £250,000.00
  • Purchase Price – £186,000.00
  • Discount – £64,000.00 – 25.6% BMV
  • Sourcing Fee – £12,000.00
  • Discount – £64,000.00 – 25.6% BMV
  • Refurbishment Costs – £30,000.00
  • Project Management – £3,000.00
  • GDV – £300,000.00
  • Rental Income – 32,740.00
  • ROI – 11.05%
  • With a COVID-19 Mortgage Product at 5% 65%LTV ROI = 40%

A great lot offering a high yield and a heavy discount as well as opportunity to add value, a solid property which would add balance to any portfolio.

39-41 Regent Road in Morecambe is a pair of semi-commercial Victorian terraced properties, relatively recently refurbished (in the main) but with scope to add further value. The property comprises of 3 x 2 Bed apartments, 1 x 1 bed apartment, 1 x Let commercial premises and 1 x derelict commercial premises (Ex Butchers).

The property had long term tenants in the residential elements who were happy to remain and were put onto new 6-month AST’s by our partner company Furness Bay. One commercial unit had a long-term tenant who was willing to sign up to a new 5-year lease. The other commercial unit, an ex-butchers needed extensive renovation, which is an opportunity to add value. 978 had the full schedule of works quoted and the builder lined up to start works by the time the sale completed.

An excellent turnkey investment with 978 & partners providing everything from sourcing, to project management, tenancy management and finance.