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Mixed-use properties—those combining residential and commercial units—offer exceptional investment opportunities, blending rental income stability with commercial lease potential. However, financing these properties can pose challenges, particularly with traditional lenders. Bridging loans are an effective, flexible, and fast funding solution ideal for mixed-use investments.
This guide explains why bridging finance is ideal for mixed-use properties and how investors can leverage it successfully.
A mixed-use property integrates residential and commercial elements in a single building. Common examples include:
These properties typically appeal to diverse tenants and offer dual income streams, often commanding higher overall yields.
Conventional mortgage lenders often shy away from mixed-use properties for several reasons:
Bridging loans help investors sidestep these hurdles
Bridging loans provide quick, short-term funding designed to bridge the gap until long-term finance or property sales are secured.
Key advantages include:
Simple Criteria: Emphasis on property value rather than rigid borrower income assessments.
Follow these clear steps to secure bridging finance successfully:
Step 1: Identify the Right Bridging Lender
Choose lenders with experience in mixed-use finance. Specialist lenders understand the complexities and can structure suitable products swiftly.
Step 2: Prepare Your Documentation
Bridging lenders will typically require:
Step 3: Valuation and Due Diligence
The lender arranges a valuation to determine the property’s worth, viability, and any risks involved.
Step 4: Loan Offer and Legal Process
After valuation and assessment, a formal loan offer is issued. Your solicitor will handle the legal paperwork, typically completing within days to weeks.
Step 5: Drawdown of Funds
Once the legal aspects are finalised, the loan funds are quickly released, enabling swift property completion.
Case Study:
Sarah spots a mixed-use property at auction, combining a commercial shop and two flats above, priced at £400,000. She needs quick finance and opts for a bridging loan.
Sarah renovates, secures new commercial tenants, increases rental yields, and refinances the property onto a long-term mortgage at improved valuation. Bridging finance was crucial to secure this opportunity.
Ready to explore your options? Contact Auction Finance today to learn more about Catalyst’s bridging loans and find the perfect solution for your property goals.
A: Typically between 6 to 18 months, offering flexibility for refinancing or selling the property.
A: Rates typically range between 0.6% to 1.5% per month, depending on risk, property value, and LTV.
A: Ideally, planning permission should be in place or at least underway to secure better terms. However, bridging lenders can finance properties without full permissions if the exit plan is strong.
A: Yes. Bridging lenders focus primarily on the property’s value and your clear exit strategy rather than credit scores.
Bridging loans provide investors a fast, flexible funding solution perfectly suited for mixed-use properties. Whether buying at auction or capitalising on a rare market opportunity, bridging finance can mean the difference between success and missed potential.
For tailored advice on financing your mixed-use investment quickly and competitively:
Our bridging specialists are ready to support your next property investment.
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