What is a Bridging Loan? How Does Bridging Finance Work?
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- Опубліковано 25 сер 2019
- What is a Bridging Loan? How Does Bridging Finance Work?
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In this video, leading industry expert, Samuel Leeds explains what a bridging loan is and how bridging finance can be used to invest in property without using any of your own money. With the right knowledge and mindset you CAN invest in real estate with zero money.
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As an Academy member and a complete newbie , doing all the training. I'm finally putting all the pieces together. I'm well on my way now. Great video again. 🏃🏾♂️⚽️🥅💥💯
i cant stop watching your videos Samuel, you're cracking fella and you make it so easy to understand, i will see you soon on the crash course.
Woooowwww that’s amazing Samuel Leeds. What I needed to hear. See you on the crash course for more profound information. God bless
hello samuel - this video couldn’t have been timed better! so looking forward to attending your free crash course in October!!
This video was very very useful and the way you explain everything was spot on. I have been wanting to start property development for a while and now I think I'm ready to take the leap of faith. Thank you
I wish I had met you long time ago...thanks for the video. Friend of mine is a property Investor he didn't even gave this much of a imformation
amazing as always Samuel thank you so much for sharing
Keep up the informative content pal!
Great video. Thanks Samuel!
Your video helped explain alot. Thank you kind sir!
Great video Samuel I am a broker and deal with bridging and I suggest always speaking to as many brokers and lenders as possible also always think about the exit plan. It's very easy to get into a Bridge often much harder to get out of one.
Hi there. What's your contact information
Awesome stuff samuel! Love you dude
Very helpful. Thanks
Fantastic info, thanks dude
Brilliant video Samuel!
Very useful stuff!!
Your awesome Sam !!
Can’t wait for the crash course! 🏠 🏠 🏠
Thank you Samuel 👍🏼
Thanks for your insight. can you recommend any reputable finance companies for bridging & buy to let finance please? is it a good idea to go to your bank ?
Good video, thank you
Great video Samuel. Do you have a recommendation for a good bridging finance?
Hi Samuel, im confused among these :
Bridging loan & refinance & equity release
Appreciated if you dedicate a video to this
Thanks Samuel for your never ending amazing content! Regarding Bridging Loans, is it possible to use this type of loan for a light refurb(like new furniture, painting, carpets) on a Rent to Rent?? Thanks
Good information
Amazing
Got two flats, want to convert back into original property as it was prior to being made into two self contained flats in the 70s. Both flats mortgaged at present in different names, is it possible to raise funding to convert these in the shape of a bridging loan? Or is there a safer less risk option to raise funds?
Thanks great video
Do you need deposit for when you refinance the property ?
is it still possible to find motivated sellers now with house prices at ATH?
What’s the maximum LTV you can get on bridging ?
so you’re saying you don’t need to have security in order to get a bridging finance ? So I’m in the market to invest in property but I don’t own property so will I still be able to do BRRR to HMO?
Can you speak about rental income taxes and strategies?
Do bridging loans give you 75% of purchase price or market value? Eg if i get a property 25% under market value will they pay full purchase price?
Where & when do you hold the crash course?
Even if you have bad credit, can you still remortgage it afterwards into a buy to let?
Hi samuel, most people love their 9-5 because it keeps them out of the house. Can property investment occupy you to keep you out of the house everyday?
it took over 1.20 min to get into it.
Is it possible to pay off bridge finanse with personal bank loan?
How can I tell the estate agent I’m buying cash if when they ask me to prove the funds in my account I then have to tell them I’m actually using a bridging loan?
Background tune takes back to the hip hop 90s era if Tupac and B I G ...nostalgic
So I have wanted to get into property all my life, finally in a position where I have the drive, the knowledge is growing and a property that looks to stack up, in my sights, secured a private investor for some of the deposit. Went on a hunt for a bridge to let or just a bridge. They seem to take very little information and yet only offer half of what I need and no money towards refurbishment. I am in no way giving up I'm just highlighting the struggle, please tell me what I'm doing wrong????
Hi if I was to get a bridging loan, once the house refurb is complete can I sell the property rather than get a mortgage?
Samuel you are so amazing I thank God your first video I watched because from that day I watch you every day for almost 2 weeks and I can't wait to be in your course. God bless you mightly
I am unemployed but I have a property with £100k equity. Could I use cross collateral bridging, refurb the property then bring in a JV partner who has an employed income when it comes to refinancing to a BTL mortgage?
Is it easier to get Bridging finance as an individual or a newly formed LTD company?
There's no difference in practical terms. The only issue is that you slightly reduce the number of lenders you can access. Some lenders will only lend to limited companies to avoid any risk of inadvertently doing regulated business.
I found a deal, so could you please keep your promise to joint venture it.
The project is a parcel of a land in a very strategic location. There is a small shop in this land currently rented. However, I want to develop a restaurant cafe or a food outlet and build two flats on top of the shop.
Rent or the sell the flats and keep the restaurant for my family.
Looking forward to hearing from you soon Samuel.
Can i buy a property as my credit score is not great i have 4 ccj on my credit report
Wow and wow
what about the bridiging company loan interest
Any plans for a Manchester course?
I'm a bridging finance advisor and can get rates of 5.88% depending on LTV. UK based. If you want to borrow 100% be prepared to provide extra security
Where can I get in touch with you? Seems like you know what you’re talking about.
More information please sir?
@matt depsey...Extra Security in the form of the house or a deposit?
@@jokeaaaa additional property, you can tie the loan to more than one asset
@@mattdempseyownz 👌🏾
Hi Samuel! By studying your youtube vids i think im going to make a first investment on no money down deal. Propery is worth 585k, i go for a chicky offer with 435 with extended lease for 99years (cost 100k) and refurb, refinance to 700-750k, pull money out to reinvest, rent. Thank you for changing my life and my mindset! See you on friday on crush course. (By the way if there is anyone want to join venture on that project? I have buiding company to do refurb on lux standard ) I love what you doing man! Keep doing great!!
thats amazing! make sure you make yourself known at the Crash Course my friend, I will also personally be there :)
@@SamuelLeeds i have a vip seat so we will have picture together ;) . We are the same age and I can understand your drive. Keep inspireing new people and keep being positive in this negative world!
Ok 2 years later..... did it work or you brought lots of courses from Sam? Lol
This sounds like a Hard money lender, or are there nuances that I didn't catch?
Kent Reliance for mortgages and which one is best for bringing loans?
J O yes Kent reliance is only good due to the fact they allow you to refinance on day one on title transfer.
For bridging companies it depends on what you have in mind?
• buying below market value?
• buying through auction?
• ground up development?
• commercial or residential?
• property refurb and flip?
Hi Samuel im buying my first property thats a fab deal my bridging finance company has put a charge on both my current home and the new one ? Im in a predicament as my solicitor is having panic attack she can't complete in time as its auction terms! and 2 properties to deal with. Its making me super frustrated not sure what I can do ? Pls any advice ? Got to complete on the 17th
So I go to view a house then say am buying it cash. Then I apply for a bridging loan? then once i've done it up. I apply for a buy to let mortgage? on the property?
Never use cash - it's an inefficient use of capital. Instead of doing one deal, you can do 2 or 3 at the same time.
if you take a bridging finance deal out. How do you pay them back with just a mortgage? Surely you need the money straight up to be able to pay the bridging loan
What do you think the value is of Scamuel Leeds CCJ's? £100K or under? £1M or under? Over £1M?
Which bridging loan companies will provide you with the refurb cost for the property
G A there are a lot . I have a lender who fund 70% of the property cost and 100% of the refurbishment and on completion you refinance to BTL/HMO mortgage as the exit to pay back the bridging lender
At the end of video you mentioned getting a mortgage on the house to pay back your investors. However can you also rent out the property and in turn have your tenants pay it back instead. Also in regards to mortgages banks won't loan you money without good credit or full time job. So if you are currently unemployed they won't lend you money. At least that's what aib bank in Ireland told me.
Further more, a credit line for a property means the bank pays the amount of money you need for buying the property to the owner. You dont actually "see the money". So, is not like the bank will give you 80K and you can then pay back for your bridge-loan. How exactly are you paying back the bridge-loan in that case? Maybe Samuel can clarify on it i might missing something or ...
@@cristianlungu6061I could be wrong but my thinking is in this case you directly get the money from the refinance, since you already bought the house through a bridging loan and are already the owner. Pretty much buying from yourself.
Bridge loans are wonderful if done intelligently or with a proper mentor. My company does this for peeps and helps to educate them on the value of the process. I love helping people win lol.
Hi! What’s the details of your company please? Do you have a website address?
Whats the max ltv would a bridging loan give on a property and would you recommend afew good companies ✊
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Thanks for the very informative video. Let's say I get this bridging loan and add value to the property, then I go to get mortgage and if that mortgage doesn't go through for some reason, not enough income or credit problems or whatever,, then what will happen? Can you please explain.
You can extend the current bridging loan, or indeed refinance with another bridging lender. Of course, you could also sell the property and take the cash out.
Extend for a year will add 20% interest niw thats a huge number
Hi Samual. Great video. How do i sign up for the crash course?
Link in description
Going by this example of buying with bridging finance, to make sure i have this right
House bought for 80k
Refurb cost 15k l
Let's say owed to bridging company 100k
You then get a mortgage on BTL.
The mortgage company does what, gives you 112k (75%ltv) via the new mortgage, you pay back the bridging finance with that money and that's the deal done?
in your example? how much of own[investor] money need to put down? for bridging loan? 80k buy price - 20k refurb ?
Typically 25%, can come from cash or equity elsewhere. Some lenders may allow less but interest rates will get that high that you'll lose your profit
You can't get second bridging loan on the same property
Great Video. Can you get a interest only mortgage or just a repayment mortgage
Great question, there are options. You would have to speak with a mortgage broker to see what is available for you.
Samuel Leeds thanks!
Do you still do this crash course?
You forgot to tell in order for you to get a mortgage on your home. your credit score and also your debt ratio well have to meet standards
Are you from Kent in the south east
I am not english, so I have a english question let and rent means the same thing in real estate terms?
yea same thing
Samuel is there also briging finance in europe??
Me eyes are open thx 2 you
Yes - in certain jurisdictions.
Am interested to move into buy to let and deal packaging. I need training please
You'll probably find a lot of value in our latest video on deal sourcing then!
Would this type of financing be useful to flip a house instead of renting?
ofcourse, as long as there's an increase in equity
Hi Sam
Can we enroll in your crash course program. We are in Manila, Philippines. Thank you
Hi Samuel, bit disappointed with your services, I was hoping to get on the property ladder and thought I should follow your videos.
I made contact with your company for the one day seminar and no one has bothered to get back to me.
Don’t know what to do and don’t know who to turn to!
H
When I transfer my bridging loan to a buy to let mortgage do they require me to put down a deposit? I thought mortgages usually only lend 75% of the value so I would have to put 25% to pay off the bridging loan. Meaning I would have put 25% deposit to get the bridging loan then another 25% to get the mortgage? Or will the buy to let mortgage cover the whole thing?
The value you add to the property becomes your deposit. So when you get a BTL mortgage on your newly renovated property you will only be able to take a loan out of 75% of the properties new value. So you need to make sure that 75% is enough to repay your bridging loan. This is what is meant by doing your research and making sure the numbers add up. If you buy a house for 70k, spend 20k renovating it, and now it's worth 100k, you've only added 10k to the value and will only be able to get 75k back from a BTL mortgage. So if you have used a bridging loan for the purchase and renovations costs, you will owe the bridging lender 90k but only have 75k from your BTL mortgage. This is obviously a very bad situation as you're only real option insto sell the house for HOPEFULLY 100k, repay your 90k loan, 10k profit.
If you find a house and those are the sort of numbers you're getting you should avoid that house. You need to be able to add enough value to the house so that the 75% BTL loan will cover your bridging finance loan. The riskiest way to use bridging finance is to use 0% deposit AS WELL AS a loan for the renovation costs. If you put a 25% deposit down on the bridging loan it gives you a little wiggle room when you want to get your BTL mortgage and plan to keep the house to rent out. If you plan to sell it anyway, you need to make sure the sell price will cover your bridging loan, as well as give you enough profit for your efforts to be worth it.
Ellis Thomas great explanation is there anyway I can contact you ? Social media or
@@casereviews9696 Sorry mate I should of explained I'm not a property investor just looking to be one in the near future. I only answered the question as I do have a good understanding of that subject but I am in no way experienced. Right now I'm learning everything I can so hopefully I can make the right decisions when I'm ready to invest. If you have any questions the best thing you can do is search the internet and get your answers from multiple sources. Don't just find one person giving you one answer, search around and find multiple opinions on whatever it is you want to know.
Ellis Thomas that’s fine, good luck on your property journey !
Ellis Thomas thanks for taking the time to respond in such detail. Thats great advice and info. Cheers
Amazing - never thought Bridging puts you as a cash buyer! Do bridging companies release money quickly? Also what is the standard amount of time a property investor may have bridging finance for a basic BRRR??
Considering doing a BRRR in a few months time!
12-24 months typically on unreg (non resi) but can be longer. If first charge can be as quick as 4 days, second charge quick as 2 weeks
I have been told bridging companies will only look to lend to a maximum of 60% ltv
I sure Most will only lend what you actually pay for the property. Not it's TRUE value.
what happens if you get accepted for the bridging finance, buy the house, refurb it then get knocked back for a mortgage?
Sell the property.
@@tigerfinancial3871 selling can take months. Legal to legal can take up to 9 months, taking into account that you have to find a buyer. Say you get the loan, you finalise the purchase in 2-3 weeks. You finalise the refurb in 6-8 weeks. That's already 8-11 weeks spent. Then you apply for remortgage and 4 weeks later you get knocked back. Oh shit. Now you've spent 12-15 weeks on nothing. Now you have 37 to 40 weeks to sell the house (assuming your bridging loan term is 12 months). I mean, good luck with that. I would recommend speaking with mortgage brokers in advance and go through your plan of action, otherwise you will have to: a) pay the ridiculous interest rate for the bridging loan; and; b) having to drop your newly refurb house price so that it sells asap, leaving you, potentially with a huge hole in your pocket.
@@craysheet3034 Having a solid exit strategy for repaying the bridging loan is extremely important. Doing your research is also critical. If you have bad credit and think you will get the mortgage declined, then of course speak to a mortgage broker prior to taking out the loan. And indeed, the bridging lender will ask you to evidence your mortgage exit by way of a DIP if you have impaired credit. Or alternatively, if you feel there is any risk that you will not redeem the loan in 12 months, you can take the loan out for longer.
Bridging finance is a useful and flexible product to allow property investors to execute projects that would not be eligible for mortgage funding. However, they are not generally suitable nor recommended for inexperienced investors, who don't know to speak to a mortgage broker before taking out a short term loan or don't understand the liquidity of the asset so are unsure if it will sell in a suitable timeframe.
@@tigerfinancial3871 exactly the point. The guy above has no exit strategy in case if he gets knocked back on mortgage, and simply selling the house is not that simple either. That's why he should, as you say, do the research and be prepared for the worst, rather than "sell the property" and think that this is a legit plan. Your reply to me should have been your reply to his question.
Hi Sam Wouldn’t I need a 25% deposit in order to get a bridging loan and what is the difference from just getting a buy to let?
Hi Jords, bridging is a short term loan and a mortgage is a long term loan. The deposit on bridging finance can vary depending on various factors. Hope this helps
Samuel Leeds yes it did thanks
Jords, A typical bridging company will charge you 0.79% Interest (if they are modest).... but that is not the concern here my friend. what people are not telling you is the FEES that are extortionate....They ask you to pay following. 1. 2% of the lenders fee. 2. Their solictors fees as well as your own. 3. You pay valuation fee. 4. You have to pay the broker fee. They mostly also offer you around 70% and no more, 60% presently due to coronavirus... A scenarios that I ran for a property I wanted to bridge.... the cost for finance was coming to £8K for 6 months and around 12-13K for 12 month case. If you fuck up.... you can go in a big shit hole. I have decided to raise funds through other mean rather than bridge.
@@UFPANZER2 hi, that is interesting. Thanks for making it clearer, I'm very new to all of this but very much interested as do not have much fund but very eager to start a property business 👍
Can I please ask what other means / routes did you take then? Thanks.
How is the Situation If i am from Germany so German Citizen. Can i still lend Money from your company ?
I don’t understand, why wouldn’t you just get a mortgage on it straight away if the interest is lower?
Francis unmortgagable properties are usually the best deals!
@francis...You can't get a mortgage on some houses at auction for instance, as some are'nt mortgageable until done up and its usually 28 days to complete at auction, but have good deals..Bridging loans give you more reactive speed than a typical mortgage to get those houses
Great advice from Grant Cardone, would love to see you get 1 to 1 advice from Tony Robbins he charges a million pounds or Richard Bandler, what do you think?
Sim Sons I think is all abaut focus in one person advice... the idea i think is there is a lot of advice and is because are difrent strategies. Tai Lopez give advice in the subjet of Real State but I see that they do another things not only Real State... and Samuel Leeds is all in Real State... thats what I mean I choose Samuel To Lear abaut it.... because I see the content this days and I see he live the Real State Game like in my opinion no other. Peace my friend ⛳🚉🌎🍃
It’s must must so difficult to choose a mentor especially if you have money
Sim Sons I have a house and people who can give my money but I need to learn to find the Deals ⛳🚉🌎🍃 but I have no answear and they talk abaut so difrent things that is confusing but also exciting... now i want to start doing the moves but i need some plan our something.. go from info to action... but I dont know where to start😅⛳🚉🌎👌
Ivhán ST try Samuel leeds crash course
Sim Sons thanks... I will start whit that... I see Samuel in the info of the video leave a link to that course ⛳🚉🌎☺📚👌
Tactic comment
A typical bridging company will charge you 0.79% Interest (if they are modest).... but that is not the concern here my friend. what people are not telling you is the FEES that are extortionate....They ask you to pay following. 1. 2% of the lenders fee. 2. Their solictors fees as well as your own. 3. You pay valuation fee. 4. You have to pay the broker fee. They mostly also offer you around 70% and no more, 60% presently due to coronavirus... A scenarios that I ran for a property I wanted to bridge.... the cost for finance was coming to £8K for 6 months and around 12-13K for 12 month case. If you fuck up.... you can go in a big shit hole. I have decided to raise funds through other mean rather than bridge.
and yes YOU HAVE put down not just a small deposit atleast atleast 30% deposit especially if you dealing with them for the first time... its not free money!
It's a high-risk transaction for the lender so of course the fees will be high. I would be interested to know the other means you found? If it was that easy clients would not bridge.
Where can i get your course on bridging finance ? Anywhere to contact you? email? Thank you sir.
We cover Bridging as well as forms of raising finance on Samuel365 which is our new Online Property Community portal .. and it will cost £1 for the first 14 days .. check it out www.Samuel365.com
still needs deposit?
Not always if buying enough under value.
this info is wrong samuel i tryed for a bridging loan and been told need security first so u need to own a house already before bridging loans will help you
But you can only get bridging finance when you have another property that you can use as collateral?
If you dont have the cash for a deposit then yes, youll need alternative security
@@mattdempseyownz thanks, could you give an example with numbers
@@ethanhunt3226Say your a landlord with a property worth 200k with 100k mortgage and you have found another property for 100k that you want to add to your portfolio. You have no cash and the seller wants to sell within a month.
You can secure bringing finance against both properties (liabilities/assets=about 75% Gross (66% not including fees and interest) LTV in this case)
The interest is retained throughout the term meaning no monthly payments and the only upfront costs to yourself are legal fees and valuation fee
Off the top of my head this would get you a rate of 9.66%
Is it essential to already be a landlord / have property to use bridging finance?
I wish samuel was my uncle..
Do you have your own bridge loan company?
i have been looking for a bridging finance company that will lend 100% of the property value plus extra for the refurb but i cant seem to find any out there. Im sure they exist can anyone help me out with this cheers :)
Luke Taylor if you have the experience you could apply for a JV. They fund all costs.
As it’s true you don’t need funding for property developments potentially. But I must stress the first project is always the hardest to get up and running.
If you are a seasoned developer and investor. We have private equity partners that will fund 100% JV funding. Meaning all costs will be covered by them - land costs, build costs and soft costs too. In exchange they will want 50/50 profit split in the SPV company.
This strategy is ideal if you have all your cash locked in on your current projects and need extra help to fund the development that came your way.
Hope it helps
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pretty sure this doesnt work with houses around and over 300k
surely you still got a mortgage to pay off though so hows that work
You’ve got a buy to let mortgage so you rent out the property paying off the mortgage and also own the asset as well as pulling out the equity made from refurb so you can then in theory invest again and buy another house.
mike surely it’ll be better to get a mortgage when the house is at the original value then?
Archie Wade If you have got all that money to fork out straight away 25% deposit and refurb dont forget you will get it a bit cheaper paying cash as well and are also able to refinance relatively soon. BRR is just a good way to start with little cash and build a portfolio of houses while recycling your initial investment.
mike thankyou mate i understand now👍
mike So does the equity need to be enough to pay back the bridging loan and the money you put in or just the money you put in, when do you pay the loan back with what money
#therealdeal
Hii, if anyone is in need of business loan,I will be able to help you out, specially in Traditional loan, Merchant cash advance, invoice finance, bridging loans etc.
Comments all feel sponsored 😮
Can you stop moving around a lot. Thankyou