His most recent acquisition was a 3 bed terrace, yet unlike his previous investments it was in need of extensive refurbishments. The condition of this property meant that there was absolutely no possibility of using it as security for a conventional mortgage. In fact, the work required was so extensive that the client had managed to negotiate a 56 day completion period with the vendor to allow sufficient time for the property to be made mortgageable.
Having paid his 10% deposit on the purchase price of £65,000 the client began the required redevelopment work. He invested a further £27,000 in the property and eventually a structural engineer signed off the renovation work and estimated the value at £115,000. Unfortunately this process had taken 53 days. The client had three days left to find the finance that was required to complete the purchase, or he risked losing his £6,500 deposit and the £27,000 he had spent on the renovations. Essentially, if he failed to complete he would have refurbished somebody else's property out of his own pocket. He contacted his broker, but they knew that they would not be able to move quickly enough to arrange a mortgage in time for the completion date.
Having met us at an auction and discussed our services the client decided to give us a call and see if we could help. Having seen all the relevant documents we agreed the loan, and the funds were advanced within the required three day timescale. Shortly afterwards the client sold the property on for £120,000. Thanks to the rapid turnaround provided by Auction Finance Limited he had realised a £28,000 profit on the deal; without our help it may well have been a £33,500 loss!