When approaching an investment property, you need to ensure the funding is reliable and suits the needs of your project.
The lending environment
The first step in obtaining the right funding is understanding the lending environment. Alternative lenders are often best placed to support property investment deals because they work in areas high street banks often don’t, such as higher risk deals within unregulated bridging and development loans, also at higher leverage, making their expertise unparalleled.
If you’re a first-time property investor, you also need to understand the type of loan you need – residential bridging, commercial and land bridging, Bridge-to-Let, refurbishment or Buy-to-Let. The biggest alternative lenders often cover all of these product types and therefore have the right infrastructure and expertise to build financing around your project.
For more experienced investors looking for complex deals, a lender with a diverse product range can also suit your needs given the breadth of depth of expertise. More established lenders have Structured Property Finance teams to support more complex projects in a bespoke way.
After establishing what funding you need, you then need to pick the right lender for funding your investment property.
Evaluating track record
When you’ve decided what finance you need, you need to choose the right lender to fund your investment property.
When rates and fees are pretty standard across the board, reputation built on longevity and a track record of successful lending are important things to consider to know your chosen lender is reliably able to support your project through to completion.
Consider length of time lending but also the volumes of money lent that show a lender with a good appetite and trust within the industry to have people going back for deals.
The right approach to lending
Rates and fees are a factor for all professionals, but more importantly for bespoke, complex or first-time arrangements the expertise, speed and approach to lending is what matters more.
A lender who communicates, prioritises the right deal for your needs and can deliver transparently and quickly are often more valuable to a project than small rate differences in a busy marketplace.
The way alternative lenders are financed often lends itself to flexibility.
LendInvest as an example pulls its funding through bank funding lines, investment funds and individuals.
The biggest benefit of bridging lending and how it is financed is that it supports professionals with projects of every type – acquisition for development, refurbishment, purchasing before transitioning to Buy-to-Let, Development exit – and that it can be used for both residential, land and commercial projects.