I recently helped an elderly client to raise capital on a plot of land with a lake, in order to finance the construction of a new home.
My client was an 80-year-old, retired gentleman, who had seen online that we deal with complex financial situations and turn them into simple mortgage solutions. He wanted to refinance a plot of land which was located deep in the countryside in East Sussex, which consisted of 50% lake.
This refinance needed to be secured via a bridging loan, as the gentleman could not refinance his residential home due to complex divorce proceedings. His only other immediate asset option was the land in question; however, he could later pay back the loan with the money raised from the sale of his marital home.
As you can imagine, the fact that half of the asset was water posed quite an issue with lenders! The lake was huge and obviously could not be built upon, meaning not only was it unattractive to lenders, but it also was difficult to value.
I decided the best course of action was to borrow Enness CEO, Islay Robinson’s, wellington boots, and get down to the site to meet the valuer. I structured my client’s case in such a way to the valuer, that the lake was considered a commercial asset. I pulled together some numbers from local fishermen who fished in the lake to evidence the income it generated. As a result, the plot of land was valued at £250k market value.
Further, my client’s age was also an issue. Most lenders will typically only lend up to around the age of 70-75. I managed to negotiate the exit of the loan to be the sale of the property to satisfy this concern.
I approached a lender who I have worked very closely with on previous bridging cases, and exercised my influence to secure a fantastic rate for my very happy client. This bridging loan was offered over a 12-month period, for £185k at a rate of 1.25%.