Bridging lender Roma Finance talks about a situation where they lent £310,000 on a large mansion conversion so the clients could renovate it into both a family home and six luxury two-bedroom apartments…

Property: Conversion of a mansion into long-term rental income from house and 6 luxury flats Product: Two tranches of funding
Loan size: £310,000
Broker:  Y3S Bridging and Commercial

Roma Finance recently helped a client undertake a renovation to provide long term rental income, where it also provided a second facility to help get the most from the opportunities its client’s property provided. 

After spending two months trying to get funding from another lender and their client paying out for legals and fees, the broker, y3s Bridging and Commercial, decided to try another lender and called Roma Finance on a Friday morning. Although they hadn’t worked with Roma Finance before, they had heard about their individual approach and ability to help clients when a case gets stuck and clear decisions just are not being made.

The property was a much sought after old mansion nestling in beautiful parkland bought by the client for £790,000 with a loan from a High Street bank. The plan was to convert the property into a spacious family home, together with six luxury two bedroom apartments, which would be rented out.

After receiving the call on Friday morning, Roma were on site meeting the client on the Sunday morning, gave an immediate on the spot in-principle agreement and the client had £110,000 by Tuesday which enabled the client to complete the conversion of the first two flats.  

The client then requested that his broker raise a further £200,000 to convert four further luxury executive lets in the mansion which would be finished to the highest standards.

At this point, the broker was considering using another lender, but quickly realised that many lenders would only lend on the value of the property as the project progressed, not on its final value after work was completed, which would not provide enough finance to finish the conversion. Having seen work done so far on the completed apartments and realising the full potential of the income when the refurbishment was complete, Roma Finance stepped in again to provide the additional funding in stages as the work progressed, but based on the ultimate value of the property.

Roma Finance also built up a good relationship with the broker, who was paid the same as a gold packager with other lenders, despite Roma Finance putting in a lot of project management time to get the conversion funded.

With the work done, the valuations are impressive. The site as a whole is worth £1.8m, with the 6 flats worth £200,000 each and the remainder of the mansion is a substantial family home valued at £600,000.

However, for now they are not for sale. The rental income will be used by the client to provide long term income into retirement. The growth in asset value may be realised at a later stage as the house or one or more of the flats could be sold separately to release funds if required.  

Commenting on the deal, the client said: “I was very impressed with Roma’s speed and attentiveness. Unlike other lenders in this space, they made significant efforts to get to know me and fully understand the project.”

Scott Marshall, Director at Roma Finance added: “This was a very satisfying case to work on as it demonstrated the value of our individual approach to lending by working closely with the broker and the client to provide separate finance as the case progressed, with the objective of getting the most out of two renovations.

“Releasing funds in stages is also something we have experience in and could monitor progress as we released extra funding. Not many lenders would have spent so much time on a case to ensure a viable outcome for the client, but this is what we pride ourselves on at Roma Finance as every case is different and requires individual attention.”