Are you in property development and love the idea of title splits to increase property value?
I’m sharing a recent conversation I had with a quite new property developer on the question of financing a possible title split.
Imagine you want to purchase a larger residential property, refurbish it to create self-contained units, and then apply for a title split and change of use. What can you reasonably expect from a bridging lender at this stage?
First, if the change of use and title splits will not be effected on day 1 a commercial rather than a prime lender is more likely to take a view on your speculative plans. Simply because there is more risk involved. That said, most will need to take comfort in a solid plan B, in case the change of use and title splits don’t go ahead. As such, you will need to provide a Plan B that will equally stack up in terms of GDV and rental to make business sense if the property remains in its current structure.
As with every refurbishment project, it will be important to demonstrate to lenders that you either have experience with similar refurbishment projects, or you use a good and experienced contractor.
