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buy refurb refinance Jan 25, 2021


That’s not a comment on the weather - it’s the acronym for Buy, Refurbish, Refinance.  It’s the hot topic in property.  

The concept is to buy a property that needs doing up at a relatively low price, refurbish it - probably a new kitchen and bathroom and maybe a coat of paint throughout - and then refinance at the uplifted value.

The challenge for most investors is that lenders don’t want to know about refinancing until you’ve owned a property for six months.  Lots of people know about the ‘six month rule’.  In reality it’s not a rule, just common practice - but most lenders aren’t willing to consider refinancing any property that you haven’t owned for long.

However, there are other aspects to this approach that most investors don’t think about.

  1. How do you convince a mortgage lender’s surveyor that, although you only paid £150,000 for the 3-bed terrace, because it was in rubbish condition, it’s now worth £200,000?

    Mortgage lenders are not interested in the comparable value of your property - they’re mostly focused on the buying price.  That’s what they want to provide a mortgage for.  It doesn’t matter how far BMV that you bought it - that’s what they’ll be focused on.  If you’ve done a fantastic refurb, you’ll need to provide more than your word for it, regarding how much the property has increased in value.

  2. Redeeming a mortgage within the first year doesn’t do anything to enhance your lending profile.  Mortgage lenders don’t like people who redeem very early - and, the more you do it, the harder you’ll find it to get the finance you want.

    Your credit profile could suffer too.  Regardless of your approach of increasing your asset’s value and profitability, lenders just don’t see it that way.

So does that mean you shouldn’t pursue the BRR approach?

On the contrary, if you know how to finance your property purchases intelligently, you can use this philosophy as the backbone of your investment strategies.

There are two aspects that you’ll need to understand that can really launch your property investment to a much higher level:

  1. How to use bridging finance effectively

  2. How to find properties that are considered unmortgageable - but have massive profit locked in.

So many people struggle with the BRR concept that I’m running a one-day Summit to help people to get their heads around this - with three expert speakers to help you to make BRR really profitable.  Check it out here.


You can learn more here:


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