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The land owner, developer and financier relationship.

Hi, it’s Graeme from Playfair Finance here.
Are you a land owner, a developer, or have some money put aside that you
want to do something with but are uncertain of what to do with it? If you
fit into any of those categories, then read on.

In the course of my work, I come across projects where people have got a
bit of land and they’re looking for a developer. Or, I come across
developers who are looking for a bit of land, so I can be a bit of a
‘dating agency’.

One of the things I certainly would like to do is talk to people who may
be private individuals, or have got funds that they wish to invest in this
type of arrangement.

Obviously, I can put you in touch with people and make your money turn into
more money.

There are a lot of people getting into that market which kind of makes a bit
of a mockery, sometimes, of the broker who says ‘I’m whole of market’. We
really can only say that you are ‘representative of market’ because there
are so many new lenders coming into the market nowadays, it’s hard to keep
track of them all.

But it gives you plenty of opportunity for developers to increase the housing
stock, which is effectively what I’m here for. So if that sounds of interest,
then please get in touch by filling out the contact form on this website.

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I’m currently working on a commercial mortgage for a client. I thought it appropriate
to go through some points that were raised in our recent discussion about commercial
mortgages.

So, most commercial mortgages are going through Tier 1. This is High Street lenders
effectively. You can get fifteen-year terms if you’re doing it as an investment, and
20 years if you’re actually owner-occupier, but High Street banks tend to be capital
and repayment.

The loan to values can be eighty percent for owner occupier, or 100 percent if you are
looking to buy a portfolio which is tenanted. So if it can be shown that it’s genuinely
under market value then effectively you may be able to do it without putting any money
in. In saying this, a lot of lenders prefer to see some ‘skin in the game’.

Tier 2 tends to become a little bit more attractive. This is on the basis of a lower cost
to repay because they will offer either a capital repayment, part and part, or interest-only
facility. So, whilst they will potentially be slightly higher in terms of their interest rate,
it may suit the strategy that you are operating. Because of that, tier 2 might be worth
looking at.

Tier 3. There are less that get there, let us put it that way. But it can be used if
potentially you have some adverse credit. So, if you have adverse credit, not within the
last 12 months, but 12 months or older that can be explained away then tier 3 may well
look to support you on that.

Now, commercial mortgage is obviously for property, but you can also use it for buying a
trading business. So, there are two valuations that you get when you are buying a trading
business that operates from a property, and one of them is called a market value and the
other is market value one, so MV1.

MV1 tends to include an element of goodwill, fixtures and fittings, and things like that,
so you can borrow slightly more if you are going to buy a business that is operating. Do
bear in mind that if you are going to be an owner operator your maximum term is going to
be 20 years. Also, if you are going to the High Street, it’s capital and repayment that
you’ll be looking at.

If you are look to buy a commercial property, or even a trading business and you think we
can help, please get in touch and we’ll be happy to have a conversation and see where it leads.