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How to structure this deal??

J

Johnzigler2

New Member
Hi all,
Brand new here and would like some advice on how we could structure this deal....
Out of the box-in the box, all options considered....
What is being purchased-
Currently there is a house and 2 bungalows (currently used as holiday lets)on one plot of land.
Original asking price £1.3M
Agreed sale price of £1.05M
Have had house valued at £800k ( residential mortgage)
Each cottage is worth £250k.
Need to maximise LTV.
Our thoughts-
option1. get vendor to split the titles and pay £800k for the house and £250k for the two bungalows. Problem is we then can’t release the true value from them.
Option 2. Buy it all on one title and split everything later. Problem is we would then have to bridge it and we don’t have enough deposit for that much of a bridge and it is very expensive.
Option 3. Buy house and 1 bungalow for £800k - split off bungalow later - using true value of othe bungalow as comparable later
Buy other bungalow for £250k.


Plus many other comutations running game round our head that may or may not work...
Any advice or other options would be welcome.
Thanks in advance...
 
F

FWL

Active Member
First thing I would say, DO NOT get the owner to split the titles or get involved fro here on in. You seem to have a good deal - pay up and get the assets first.

I am a little confused as to why you would need to bridge the property (I presume you mean bridging loan) at a later date if you have bought it outright?
 
J

Johnzigler2

New Member
Hi there,
Bridging would be required if I were to buy it in one lot.
Then we would refinance into long term funding soon after.
We think the cost I bridge would be somewhere in the region of £25k extra.
The vender seems happy enough to split it before purchase.
 
P

PostBrexitInvestor

Member
Would it be possible to buy an option to acquire one of the properties at a later date at a predetermined price? That might help with any short term funding issues.
 
F

FWL

Active Member
A non-refunable option for a short term period - say a year or so - on the second bungalow would protect the sellers price if you went ahead and also allow them to pocket the deposit if you decided not to go ahead. It would also show that you were serious.
 
P

PostBrexitInvestor

Member
Just looking back at your figures - you seem to have reduced the asking price by £250k so a bridging loan costing £25k is just a 1/10th of the savings your have made on the "market value".
 
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