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How to fund the purchase of a commercial property

ninja learning May 20, 2021


If an asset holding company that owns a portfolio of BTL properties wants to mortgage one (unencumbered) in order to loan those funds to another company (a child of that company) for the purpose of buying a commercial building in cash (i.e. office and warehouse) is this feasible or would lenders take issue with it?  Technically it's a vacant commercial unit.

This needs doing quickly as the deal is live right now.


It would be wise the check out with your accountant on the tax implications of your idea.  From a lending point of view, lenders have no issue with you raising money for a deposit from the equity of other properties you own, this is done frequently without problem. 

Where you will hit a problem is that you want this done quickly/immediately, it won’t be. It will take longer than that for the reason that mortgage lenders for the BTL mortgage are slower at processing mortgages than before Covid, for a variety of reasons but it means that ‘quickly’ is not going to happen.

There is another way to do this and leverage the fact that commercial properties that are not tenanted will only be valued at what they call 'vacant possession value'. The upside of this is that, when you put a tenant in it, the value will jump up so you will have a property that is worth more than you paid for it. 

To buy it really quickly, the smart answer is to buy with bridging finance, get it tenanted and get a commercial mortgage on the uplifted value of your now tenanted commercial property.

The result of that could be that when you get your commercial mortgage you get it for the full purchase price you paid and your deposit will be back in your bank account. 

Even smarter would be, don't even bother remortgaging your unencumbered property, a bridger will just give you one loan, against your current unencumbered property AND the commercial property you want to buy and that will cover 100% of the purchase price, no need for a deposit. This is a Cross Collateral Bridge, check out this video where I explain in more detail how this works.

Once you have refinanced your tenanted commercial property on to a mortgage and repaid your bridging loan, the big plus is that your unencumbered property returns to being unencumbered and you are not saddled with a mortgage on it for years to come.

If you are going to use a bridger you need to be very careful who you pick to broker it. There are many excellent mortgage brokers whose excellence doesn't stretch to bridging; you will be better served by using a bridging specialist broker. One that has

  • Talked bridging on a daily basis (like I have for most of the last decade)
  • Brokered literally hundreds of bridging loans in recent years (like we have)
  • Actually trains you on how to use bridging intelligently as well as broker it, (as I do with my Ninja Investor Programme, where you learn how to Recycle Your Cash

What you want to achieve is absolutely feasible - and can be done quickly if you’re prepared to think outside the box with your approach to finance.

There is a host of free to access property finance tips and mentee case studies on our YouTube channel -

Feel free to get in touch and we will help you buy this commercial property as quickly as you want to.


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