Bridging for multiple flips

THE QUESTION

I am looking for advice on bridging finance (flip, not rent). 

I have cash for one property already, but the gaps between complete, sell and buy next house are proving too long. 

Does it make more sense to do bridging finance for smaller amounts/with cash deposit to allow work continuously (e.g., £150k properties straight after the other) or to mortgage against fully owned property while working on it to allow fewer, but larger, projects?

THE ANSWER

Having brokered hundreds of bridging loans stretching back over a decade and teaching many hundreds of investors how to intelligently and profitably use bridging finance I have plenty of insight on bridging as a finance vehicle.

Having the cash to buy one property gives you a really great start - zero borrowing costs on the first project.  Don’t deviate from that.

You have recognised the limitation that slows you down to a crawl - you have to kick your heels until you can sell the current property to get stuck into the next project - and that can be months of, frustratingly, doing nothing.

The smart solution is cross collateral bridging loans. This is simply using the equity in the property you already own, to fund 100% of the purchase price of the next project (possibly even the refurb costs too).

This means you can be lining up your next project while still working on the current one. You can complete the next purchase as soon as you have maximised the value of the current one - game changer or what?

As soon as you get the first project mortgaged, that cash pays down the bridging loan.

You can repeat this endlessly in a 3 property cycle

•  Property 1 - fully refurbed, mortgage applied for, cross collaterally bridged
•  Property 2 - undergoing refurb, also bridged
•  Property 3- next refurb project bring lined up for completion

We have brokered exactly this type of deal multiple times.

This video explains the process in more detail -

https://www.youtube.com/watch?v=n-j76pQkysg&t=8s

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