I often get opportunities offered like this:
I’ve got an Incredible BMV in West London – for a CASH BUYER ONLY. I’ve just got the valuation done via Home track and, guess what? Its worth £716,000!
The asking price is 495,000 for a quick sale and I could get it down to 450k, as it’s a very motivated seller who needs to sell asap. Do let me know immediately if interested.
This is from a property investor who – clearly – doesn’t actually have enough money in the bank to buy the property himself.
However, he is ignoring one very important fact … this property can be bought using bridging finance, possibly with a very small cash input, subject to a bit of due diligence:
On what do you base your value of £716,000?
Is it on the market with an agent and that is the asking price? Or is it just that Hometrack says that is what it is worth; would that be supported by a RICS survey report?
Assuming its value to be £716,000, a bridging lender that lends against value, rather than purchase price, would most likely lend 65% ish of value = £465,000 less costs
On that basis any buyer would not need £450k in cash but probably less than £30k.
I have set up bridging loans for deals like this before and if it is genuinely 35% BMV, it can be done with very little cash.