What is delayed completion bridging?

a calk board with the words: 'What' written on it.

This strategy is something I teach as part of the Ninja Investor Programme and it’s often a revelation to my students.  It’s all about being smart with your financing.

There are some criteria to take into account:

  •  The property needs refurbing and is currently valued well below market value in comparison with its neighbouring properties.
  •  It needs to be vacant
  •  You need to find a bridger who will lend against the post-refurb price.

For smart investors, properties in need of a serious refurb are negotiable in relation to price, depending on the situation that may be as much as 50% below market value.  No mortgage lender will be interested, but this is an opportunity for you to make a significant profit.

Delayed completion bridging works by agreeing some specific things as part of your negotiation with the vendor.  These are:

  1. To exchange contracts quickly – reassuring them that the sale has been made.
  2. To get the keys to the property on exchange of contracts instead of waiting for completion.  While this isn’t the normal process, it is legal and if the vendor is finding it hard to sell (because nobody can get a mortgage due to the property condition), they should be willing to meet you halfway.
  3. Completion to be delayed until the refurb is completed.  This allows you to bring the property up to scratch to be mortgageable at market value.
  4. Source a bridger that will lend on the post refurb price, not the purchase price and get agreement for finance for this property.

Let’s say that the property is for sale at £100K, but neighbouring properties are selling at £180-200K.  You should be able to get a bridging loan for at least 70% of £180K.  That’s £117K, giving you not only the purchase price, but a big chunk towards your refurb costs.

As soon as contracts are exchanged you can get started on the refurb and when completion takes place, you can either resell or remortgage at the full £180-200K (probably at the higher end if you’ve done a good job of the refurb).

Not only does this allow you to purchase properties without a massive nest egg to invest, but you will get most of your cash back out on completion.

You can learn more here: