- Client: Middle Eastern resident with global real estate holdings
- Property Value: Above £6.5 million
- Loan Amount: Circa £4.2 million
- Purpose: Acquisition and refurbishment of a vacant care home
Enness was approached by a law firm acting for a client based in the Middle East who was looking to acquire a vacant care home. The intention was to reconfigure and refurbish the property before reopening it to provide specialist care.
The client had a complex international income structure, with financial interests spanning several jurisdictions. This meant we needed to identify a lender that could take a broader view of the client’s financial position and be comfortable using their global income to assess affordability.
The proposed purchase also presented additional challenges. The care home was not generating income at the point of purchase, while the client had limited experience within the sector. The lender therefore needed to be comfortable not only with the client’s financial circumstances, but also with the proposed plans for the property.
Time was another important consideration. The transaction was subject to a tight deadline, meaning the client needed a lender that could move quickly while still completing the necessary assessment of the property, project and wider financial position.
Enness identified a lender that was comfortable with the client’s circumstances and the proposed project. A short-term facility was negotiated with a fixed structure for the term and a repayment strategy aligned with the client’s plans. This helped manage cash flow while the refurbishment works were being undertaken.
The valuation subsequently came back below the level originally anticipated. Rather than allowing this to derail the transaction, Enness returned to the lender and negotiated to maintain the agreed loan amount.
Throughout the process, we kept the vendor and agents updated with regular communication and clear evidence of progress. This helped maintain confidence in the transaction despite the complexities involved.
The case demonstrates the importance of looking beyond a property’s current income when financing a specialist asset such as a care home. Where the property is vacant and intended for refurbishment, the lender needs to be comfortable with the borrower, the proposed project and the overall repayment strategy.
Enness works with specialist lenders and has experience arranging finance for complex property transactions involving international clients and specialist assets. If you or your clients are considering finance for a care home acquisition or refurbishment project, speak to a mortgage specialist to discuss your requirements.
Disclaimer:
This case study is for illustrative purposes only and does not constitute financial, legal, tax or investment advice. Finance is subject to status, underwriting, valuation, property assessment and lender criteria. Terms and availability will vary depending on individual circumstances, the proposed project and the lender’s assessment of the transaction.
Information contained in our case studies is for market and illustrative purposes only. In some cases, these may be made up of multiple cases and are for illustrative purposes only.
Some case studies are made up of enquiries that have come into the business, not all business completes, and the posting of a case study does not represent a completed piece of business.
Property values can fall as well as rise, and you may not get back the amount originally invested. Property investments can be illiquid and may take time to sell. Where borrowing is used, your property may be repossessed if you do not keep up repayments on a mortgage or other loan secured against it.
