Buy, Refurb, Refinance

Buy, Refurb, Refinance: from unmortgageable to cash-flowing investment

Our client identified a property that, in its condition at the time, no residential or buy to let lender would mortgage, a common barrier for investors targeting properties that need work before they meet standard lending criteria. It’s exactly where a Buy, Refurb, Refinance (BRR) strategy, backed by the right refurbishment finance, is designed to work.

We funded the purchase with bridging finance, saw the client through refurbishment, and refinanced the property onto a mortgage, turning an unmortgageable asset into a cash-flowing investment.

The scenario

The property was not mortgageable in its existing condition. No standard residential or buy to let lender would consider it as security, which meant a conventional mortgage was never an option for the purchase itself. The client’s strategy was to buy using short-term finance, carry out the works needed to bring the property up to standard, and then move onto a mortgage once it qualified.

The challenges

1. An unmortgageable starting point. With no residential or buy to let lender willing to mortgage the property as it stood, the purchase itself had to be funded outside standard mortgage lending from the outset.
2. Moving quickly to secure the purchase. Properties in this condition often attract competition from cash buyers and other investors working the same strategy, so the purchase finance needed to be arranged without delay.
3. Managing refurbishment without stalling the timeline. The property needed genuine works completed to bring it up to mortgageable standard, and any delay in that process would extend the time spent on more expensive short-term finance.
4. Timing the exit correctly. Moving from bridge to mortgage cleanly, as soon as the property qualified, mattered for keeping the overall cost of the strategy down: an exit that drags on erodes the value the refurbishment was meant to add.

The solution

To move quickly and purchase the property in its unmortgageable state, the client used bridging finance with Roma Finance. Bridging allowed the acquisition to complete at speed, without waiting on a mortgage lender who would have declined the property outright.

With the purchase complete, the property underwent refurbishment works, addressing the issues that had made it unmortgageable and preparing it to meet standard lending criteria. Once the works were finished, the client exited the bridging finance by refinancing onto a mortgage, the point at which property refurbishment finance is designed to release the investor from short-term, higher-cost bridging and onto long-term, lower-cost lending.

The outcome

With the refinance complete, the client retained the refurbished property as an investment, which now generates rental cash flow, while the equity uplift from the refurbishment remains in the deal.

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