Two Recent Partner Deals
Two Recent Partner Deals Bridge-to-Term Facility Completion this week: A developer who had arranged the original finance through our partner wanted to refinance from the bridge onto a BTL term loan. The deal was for three linked properties, with a total loan of £810,000. With proc fee from our partners Shawbrook and a generous FSA fee, there was a total of £22,092 fee income. Buy-to-Let Refinance This month we have also refinanced a BTL property through our regulated route with Virgin Money. With three applicants and the property being adjacent to the family home, the lender was able to get comfortable that the tenants were not related and agreed to lend £239,000. The total fee income for this case was £1570.50 and was the AR’s first case over the line. More About Brokerplan Brokerplan is a compelling opportunity for anyone looking to generate a significant income from becoming a Commercial Finance Broker. Established in 2004, bringing years of experience in the industry, we provide all the tools you need to succeed in the industry. Our expert support and wide range of Finance Broker packages mean that there is an option for everyone. More About Us
Partner Completes on £1.5M Essex Development Project
Partner Completes on £1.5M Essex Development Project Loan to Purchase Part-Build Project – Deal Summary One of Brokerplan’s network partners has recently completed on a £1.5M loan with Octane Capital! The clients approached our network partner looking to purchase a half-build project in Essex, which had sat untouched for four years after being abandoned by the previous developer. The clients were looking to take out a facility that would assist them in purchasing the development site, complete the refurbishment works of the existing property and also with the building of 10 flats and 4 houses on the grounds of the property. The Brokerplan partner worked closely with the team at Octane and managed to get this case from application to drawdown in just 20 days, receiving £33K in commission from the Procuration and Broker fee on the case. For more information on how you can become a commercial finance broker and earn commissions on property and asset finance deals call 0333 405 6666 or email info@brokerplan.co.uk for more information
Brokerplan – A Multi-Award-Winning Business Opportunity
Brokerplan – A Multi-Award-Winning Business Opportunity Although we aren’t in business to try and achieve awards it appears that our efforts to grow the business and to support the ever growing community which is our network is being noticed within the business community. Brokerplan has achieved further recognition, after being awarded SME News’ ‘Best Commercial Finance Broker Training Specialists’ and Global 100’s ‘Best Commercial Finance Network’. With 2019 coming to a close, these awards are a credit to the hard work and dedication we continue to commit to our partners. This is in addition to our 2018 award from CV magazine, commending Brokerplan’s high standard of support and training. Awards CV Magazine – Best Commercial Finance Network – Franchise Awards 2018 SME News – Best Commercial Finance Broker Training Specialists – Finance Awards 2019 Global 100 – Best Commercial Finance Network – 2019 Awards
Case Study – Stoke on Trent BTL
Case Study – Stoke on Trent BTL Our AR was approached by a client who owned two unencumbered BTL properties of low value in the same street in Stoke on Trent, for a refinance to release some funds for a forward purchase. He believed each property was valued in the high £40ks. Our regulated team were unable to place the application due to the low values. As the client was looking to refinance both properties at the same time, and having previously completed on a similar case, we approached our lending partner Shawbrook who have some discretion on their minimum value of £50,000 when there is more than one security. Once the client had agreed to proceed with Shawbrook, we started the application on 4th October, requesting a £75,000 loan against a total value of £100,000. Shawbrook advised that they were able to use the Automatic Valuation Model (AMV) and agreed a maximum loan of £71,900. As the client wasn’t entirely sure of the valuations, he was happy to proceed on this basis and also avoided valuation fees and delays waiting for the valuation to take place. The indicative mortgage offer was issued on 10th October and all requested documentation provided by the client immediately. This made the process quick and helped the case immensely and as a result was offered on 22nd October. As he already owned the properties, Shawbrook advised that the client could go ‘Non-Represented’ on the legal side, so the legals would be actioned by Shawbrook’s solicitors only, thus again saving both time and money. From there, the lender moved swiftly and the case completed on 6th November, with both the client and the AR very happy with the service provided. Total fee income of £1902.74.
Case Study – Semi-Commercial Capital Raise
Case Study – Semi-Commercial Capital Raise Executive Summary: Client: Limited Company Client was a highly experienced property developer/investor located in the North West The client overall portfolio consisted of 136 Residential Units and 11 Commercial Units, with a combined value of c£18m vs. v£9m of debt All debt is on a fully amortising basis Debt was spread with a mixture of Tier 1 and Tier 2 lenders In 2018 the client had purchased an empty retail outlet on the ground floor with two floors of empty office space above consisting of over 30,000 square feet of space Successfully achieved planning approval for 28 apartments (split between 1 and 2 bedroom units) and 3 commercial units on the ground floor. The smallest residential unit was c45 square meters Due to the overall size of the project, client split the property into two separate freehold titles The 1st Phase was to create two commercial units (Restaurant and Tanning shop) as well as developing 12 x 1 bedroom apartments on the upper two floors During the initial development stage of Phase 1, the client created 14 individual 125 leases, with the freehold being held by the ‘Groups’ holding company The commercial units were completed at the start of 2019, with 2 x new 5-year leases being agreed The two commercial units are generating £33,700 in annual rent The residential units were given final Building Control approval on 5th September 2019 All 12 residential units were immediately let by way of standard AST agreements generating £90,120 in annual rent Client estimated an indicative value of c£1.65m across all 14 units Client Requirement Client wanted to borrow up to 75% of the indicative value of the said property Client was looking for a committed term of up to 25-years The client wanted a fully amortising facility over the committed term, ideally with an initial 5-year fixed rate However the client No1 requirement was for the facility to be drawn no later than Friday 4th October, as the funds were required to purchase an iconic commercial property in the same town centre, which the client had committed to purchase no later than 4th October Background The client made a direct approach to the Client Manager within the practice with whom he had undertaken 3 successful facilities whilst the Client Manager was working at Aldermore before joint Whiterose Finance as a Senior Client Manager The client manager arranged a site meeting with the client on 5th September, the same day the subject asset obtained its final building control approval notification from the Local Building Control Officer Client Manager’s Approach The client manager made contact with 3 potential funders and provided he funders with detailed terms of the client’s requirements, together with comprehensive details of the clients existing portfolio and borrowing One lender wanted to restrict the term of the facility to 20-years due to the, commercial and residential elements of the asset being pledged as security One lender would be happy to consider 75% Loan to Value and were happy to consider an initial 5-year fixed rate – however they were not prepared to commit to the client’s requirement in terms of completion The client manager also approached Mark Dolphin our Business Development Manager from Redwood bank who on his recent visit to the practice advised of the willingness of the bank to look at the interest rate for top quality proposals – which this case clearly was I provided Mark, with a detailed synopsis of the proposal along with the client’s requirements in terms of completion on 10th September 2019 I received a very positive response from Mark with indicative terms, which split the commercial properties from the residential properties Due to the quality of the client and the overall proposal Mark was happy to recommend a reduction in Redwoods standard interest rates by c1% The client manager provided the indicative terms to the client, which although was not exactly what the client wanted: lack of an available fixed rate, maximum Loan to Value of 70% was accepted on the basis the lender committed that they could complete the transaction within the clients timeframe Events to Completion Upon receiving a positive response from the client 11th September, the BDM prepared and submitted a detailed credit appraisal by the CoB on 12 September having already obtained the buy-in from Head Office in relation to the timescale Head of Credit approved the facility by close of business 13th September, but due the size of the facility the request also required the approval from 3 board members Received confirmation a sufficient number of board members had approved the facility by lunchtime on Saturday 14th September Client Manager advised the client by text and advised that arrangements re valuation and legal will be done on Monday, along with the credit backed facility letter By 17th September, the client had decided on the surveyor re valuation from the two who were prepared to undertake the request and report back within 5 days of site visit and also requested Redwood appoint Freeth’s as there solicitor Valuation date set for the following Tuesday 24th September, with the report being available by Monday 30th September By the time the surveyor was due visit the property, he was in receipt of the Certificates of Title of all 14 properties from the lender’s solicitor Our BDM also arranged for his colleague to undertake a site visit on 24th September Meeting arranged with the BDM and the client for the Wednesday 26th September Valuation report received Monday 30th September Valuation slightly lower than anticipated by c£20k, potentially reducing the client overall debt quantum by c£14k BDM suggested that the arrangement fee (2%) is added to the residential element of the facility rather than being deducted The commercial element of the proposal also exceeded the lenders maximum 70% LTV by 0.5% – the BDM suggested the facility remain unchanged as within 12-months the LTV would be back within 70% LTV Request approved by the Head of Credit
Case Study – Commercial Portfolio Refinance
Case Study – Commercial Portfolio Refinance Executive Summary: Clients: Husband & Wife operating as a Partnership Clients were experienced commercial and semi-commercial landlords with over 30+ years experience Clients owned 8 individual units with an approximate vale of c£1.9m, generating an annual rental income of £188,000+ per annum The clients had existing borrowing of c£536k Clients were looking to re-finance the portfolio to c£850k c45% LTV, which would allow the clients to undertake significant portfolio improvements and to leave surplus cash for annual repairs and maintenance, which would ensure the portfolio, remained in excellent order The portfolio enjoyed 100% occupancy, although a majority of the commercial leases were less than 3-years before expiry The clients had lending facilities with Danske Bank and Bank of Ireland both of whom declined the clients request to increase the level of borrowing Issues Clients ages with Mr ages 70 and Mrs aged 66 All of the properties were located in Ballymoney Northern Ireland Mr & Mrs both were directors of a number of limited companies which had entered into Liquidation, following a CVL Approach Discussed the proposal with both Atom Bank and Assetz Capital as both have a strong appetite for commercial property located in Northern Ireland Both lenders wanted details of the client’s succession plans and whether they were involved in the portfolio on a regular basis Both lenders were advised of the clients directorship of failed companies and were provided with full details surrounding the circumstances around the companies failure Atom Bank unfortunately could not get fully comfortable, however Assetz Capital were happy to move forward with the proposal at an expected LTV of c45%, albeit the interest rate was significantly higher Clients decided to go with the Assetz ‘Agreement in Principle’ which was expected to generate c£300k in additional ‘cash’ Facility was part amortising with a 15-year profile and a 5-year commitment Upfront costs The valuation cost of the portfolio was in excess of £8,000, paid prior to any formal offer Upon receipt of the reports and valuations, the actual Loan to Value increased to 51%, which increased the borrowing rate by 0.25% to the client as the Loan to Value had exceeded 50% Client accepted the valuations and agreed to move forward with the next stage – legal This required the client to pay his solicitor a cost undertaking of £6k (to cover Assetz Capital legal fees) + the clients own upfront legal fees, resulting in a further upfront commitment of £10k At this stage the client had committed a total of £18k in fees Issues Faced during Legal Process Many times during the legal process the client was considering withdrawing, and it was only the strength of relationship the Authorised Representative had built with the client, which ensured the case continued through until completion Overall Length of Case 16-weeks from initial approach from the Authorised Representative through until funds were received This case generated a Gross Income of £17,300 and was the Authorised Representative first submission Senior Client Manager Overview This case is a great example of what can be achieved where the Authorised Representative was fully prepared to be engaged with both the client and his client manger at ALL stages of the process, including getting the clients authority to speak directly to the clients solicitor and worked in conjunction with the case manager as follows: Chasing up the legal conditions imposed by the clients i.e. Asbestos Survey/Management Report across the portfolio, EPC Certificates for all properties with a minimum rating of E Collecting the Assetz Capital Relationship Manager from Belfast Airport to introduce the RM to the client, which included a tour of the subject security
Case Study – Chesterfield Development
Case Study – Chesterfield Development Case Overview We were approached by a client wanting to buy an investment property in Chesterfield, a single dwelling with a large garden, on the market for £260k. The client was prepared to pay £280k but he only had £60k of his own money to put in. He was a contractor for a large development company but had not been involved in any builds himself, if anything this was more like a refurbishment as the house was mortgage-able day one but could have done with a spruce up. This looked a no-brainer.Not only could we only get him at best 80% of the purchase price (£208k) but at a yield of £650 pcm this wasn’t even a good investment buy. Then we dug a little deeper… The client had made an arrangement with the vendor 6 months ago who was in no hurry to sell. If the vendor would wait 6 months and sell to him he would pay over the asking price but only if the vendor cooperated with him in securing planning permission for a new build with separate access in the garden. A number of neighbours rs had done something similar and ultimately the client was successful but was now struggling to secure funds to buy the property having sunk £20k into the planning process. We suggested that he approached a solicitor about splitting the title to the land at purchase as this would save him money on tax later (by attributing the value now rather than when built), but more importantly it would allow us to put two loans into place day 1. A buy to let mortgage on the house without the garden at 80% The land loan element of a development bridge on the garden which would lend at 70% gross followed by all of the build costs. The new build would cost 80k to build and be worth 220k on completion. We got an 80% BTL lender to get their surveyor to value the house without the garden and it came out at £240k so the client could borrow £192k from them. The bridging lender valued the land with PP at 80k and he was able to borrow once fees and interest were deducted circa £40k net day 1 then all the build costs in tranches in arrears. This gave the client a total day 1 borrowing from both lenders of £232k which even on the inflated purchase price of £280k allowed him to complete with his £60k- just! When the new build was complete we were able to secure him a buy to let at 80% which on the £220k gave him £176k – more than enough to pay off the £136k bridge. In fact once the legal and other costs were factored in he had about £30k left over. The client now had two properties with £58k of equity in one and £44k of equity in the other. He had sunk £80k of his own monies in but had been left with just £50k in the project. The properties were earning him £650 +£600 pcm so a gross income of £14,700 per year. With plans to refurbish the first property at the end of the buy to let discount period and hopefully take even more cash out on an increased value he was a happy man. As was the AR. We had two buy to let’s where the Proc. Fee had been only 0.5% so £368k = £1,840. The £136k bridge had paid a Proc Fee of 1.5% so £2,040. The real earn though was in the broker fee as the client had agreed to a 1% FSA on the entire borrowing as we had effectively created the loan structure for him so at £504k total the client paid £5k. Just short of £9k in income for a project that on first assessment had seemed impossible. Prospects of future earning on the refurbishment of the house and a client looking to use the AR for his next project as added bonuses.
London Discovery Session Success
London Discovery Session Success Photographs from the day Previous Next Brokerplan & Your Mortgage Plus – Combined Discovery Session On Wednesday 25th September 2019, Brokerplan held our first-ever, one-off discover session at the Funding Circle offices in central London. Brokerplan’s John Kent and Lee Hesketh were joined by Nick Newton of Funding Circle to present on both the Brokerplan and Your Mortgage Plus opportunities.
Central London Discovery Day
Central London Discovery Day Here at Brokerplan, we are celebrating the growth of our network – We are proud to announce that we now have over 100 network members! We would like to invite you to join us for a one-off discovery session in central London to learn more about the network and how you can follow in the footsteps of some of our most successful partners. We will show you how to earn: £100k+ on a single deal £100k+ per annum as a commercial finance broker £100k+ as a residential mortgage broker (Your Mortgage Plus Franchise) Generate uncapped income by referring business to Funding Circle as part of the Brokerplan Network We are currently under-represented in the South-East and as an incentive, we are offering a Limited Time Only discount of £100 across all of our packages! Details Date: 25th September 2019 Time: All are welcome from 9am for Coffee, at 9:45am the presentations will start with an approximate finish time of 2pm. Address: 71 Queen Victoria Street, London, EC4V 4AY (Funding Circle Offices) Cost of a seat is £15 – Lunch providedWe will refund £100 if you decide to join Brokerplan Email us to book a place
Recent Partner Case Studies
Recent Partner Case Studies Here you can read some of our current network partner’s recently closed case deals and the commissions they earned.
