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Specialist Bridging Finance for Multi-Unit Freehold Blocks
As you begin to look at diversifying your property portfolio, you may have found that standard buy-to-let investments are no longer delivering the yields your properties once did. This has led many seasoned property investors to start turning their attention towards Multi-Unit Freehold Blocks (MUFBs).
These assets, which usually consist of multiple independent flats held under a single freehold title, offer unique opportunities and advantages. However, they also come with a level of complexity that requires a more bespoke financial plan than a high-street mortgage provider can offer.
The growing appeal of MUFBs
One of the primary reasons you may be considering an MUFB is the potential for significantly higher rental yields. By managing several units within one building, you can benefit from multiple streams of income while only dealing with a single freehold purchase.
Furthermore, the risk of a total void period, flats being empty, is greatly reduced because there is a less likely chance that every unit will be empty at the same time. Although the management of these blocks can be more intensive and require more work, the financial rewards often far outweigh the extra effort, and can make them a cornerstone of your investment strategy.
Overcoming the hurdles of complex titles
Although MUFBS have many benefits, they can be notoriously difficult to finance through traditional lenders. As most mainstream banks have rigid lending criteria, they often struggle with the legal structure of a multi-unit freehold block that has not been split into individual leases. This means that if a building requires extensive refurbishment or if you are looking to purchase a property at auction, the slow pace of a traditional bank can cause you to miss out on an MUFB deal.
Because of this, bridging finance is designed to bypass these obstacles by focusing on the underlying value of the building and your specific plans for the property, which can help you to capitalise on these opportunities much faster.
Using bridging loans as a tool to fund an MUFB
One of the most effective ways to use bridging loans for an MUFB is for a conversion or heavy refurbishment. For example, you may find a large Victorian house that is currently a single dwelling or an older block of flats that needs complete modernisation, which would typically be unmortgageable or unrentable. By using a bridging loan, you can secure the capital needed to carry out these extensive works quickly.
Once these properties are refurbished and the building is fully let, the value of the freehold block will inevitably increase, which puts you at a much stronger position to refinance onto a long-term commercial or specialist buy-to-let mortgage.
How KSEYE can help with MUFB investments
Whether you are looking to convert an existing building to an MUFB or looking to purchase an outdated MUFB, bridging loans are great for investors who are looking for speed and flexibility to secure these assets and complete refurbishments.
At KSEYE, we specialise in providing fast funding for investors and landlords looking to purchase MUFBs, and understand that these properties do not always fit into a standard investing model. This is why we look at the potential of your project and the overall value of the property when working with you.
With an in-house team of underwriters and legal experts, our team will be able to help you and your clients secure a bridging loan to help you fund your MUFB acquisitions and refurbishments with ease.