Rotton Ramble with Mo from Tuscan
Last week I took the opportunity to have a Ramble with Mo from Tuscan Capital and we met at Markeaton Park in Derby. I can’t deny, with the recent Derby/Forest result, it was too good an opportunity not to wear my Forest scarf. We chatted about all manner of things from families and sleepless nights to Zoom and new style business meetings.
Our ramblings did focus on the growth in the short term finance sector and the use of bridging for astute property investors.
Some key points we discussed: –
· Energy Performance Cerficates (again!) – Mo mentioned a recent report which stated that properties with a C rating or above were currently 16% more expensive than those D rated and below as investors look to prepare for 2026 and are encouraged by lenders offering preferential rates for these properties
· We are starting to see landlords coming to us looking for finance to support the purchase of below C rated stock by way of short-term finance to allow them time to carry out necessary refurbishments to ensure an improved EPC rating and then to refinance onto longer term mortgages
· These landlords are tapping into a Strategy known as the BRRRR method. This is Buy, Refurbish, Rent, Refinance and Repeat and to do this they use a bridging loan to finance the initial Buy and then a long term mortgage to Refinance once rented. The belief being that the uplift in value allows them to withdraw a significant percentage of their working capital to Repeat the exercise
· We are seeing the likes of Tuscan and others now offering specific products to support these investors with funds available to support both the initial purchase as well as, for the right projects, all the refurbishment costs
· We agreed the BRRRR strategy isn’t for the inexperienced as the cost and work involved in the refurbishment stage is time critical especially when you are taking on a more expensive loan during this period.
Finally, it goes without saying, fingers-crossed for Forest versus Leicester this weekend and hopefully I can be showing off the scarf in an LE postcode in the near future. Read more of my ramblings here Rotton’s Rambles – Sterling Commercial Finance and happy to take a walk if you want to put the world to rights
Nic
