Our short term bridging loans are for purchase, refinance, property improvement or to unlock working capital for business purposes.
This unique overdraft provides you with a flexible drawdown facility giving you instant liquidity and avoids heavy setting-up costs.
Individually structured loans for residential and commercial projects, with finance available for site purchase, construction and fees, refinance, equity release and to provide working capital. Loans are available up to 90% of the site cost.
Flexible first and second charge non-regulated loans available on terms from 3 to 5 years.
We have a commitment to innovation and with the ever changing financial landscape around us we have designed a range of unique Specialist Lending products that solve a range of property finance needs.
By Jonathan Rubins, Director & Chief Commercial Officer at Alternative Bridging Corporation
Navigating the world of buying at a commercial property auction can feel daunting, especially if you’re new to the sector. The rapid-fire bidding, the room full of experienced investors and the sheer diversity of properties available can make it an intimidating prospect. But with the right knowledge, the right strategy, and a bit of determination, the process can be simplified, even exhilarating. This comprehensive guide aims to explore the complexities and benefits of buying commercial properties at auctions and offer potential investors a roadmap to this fascinating part of the property market.
Purchasing commercial properties at auction can provide significant advantages, and while it may not be for everyone, it can open up a world of opportunity for those willing to try. Let’s unpick the top 10 reasons and uncover why this path might just be the ideal one for you:
With traditional property transactions, it can take weeks or even months to finalise a deal. The negotiations, inspections, and paperwork can drag on indefinitely, delaying your investment plans. But at auction, you can make a successful bid, sign a formal contract and put down a deposit all in a single day. By eliminating the risk of counteroffers, gazumping, or protracted chains that could derail the process, auctions offer a swift, straightforward path to property acquisition.
Auctions are a model of transparency. Once the auction catalogue is released, every property’s legal pack is available for review. This typically includes title deeds, lease information and any special conditions of sale. By examining this information in detail, you’ll know exactly what you’re buying, removing much of the guesswork and uncertainty that can come with traditional property purchases. This transparency also speeds up the conveyancing process post-purchase.
One of the greatest appeals of auctions is the sheer variety of properties available. You might find an empty corner shop close to your home, a water tower with conversion potential or even an alleyway with development opportunities. From small plots of land to large commercial spaces, auctions offer a wide range of choices, providing opportunities for both small-scale and large-scale investors.
Contrary to popular belief, auctions aren’t solely for cash buyers. Several mortgage providers may consider lending on properties in need of modernisation or refurbishment if you sort out your application in advance. Additionally, commercial bridging loans can provide the necessary funds between the auction day and the completion of a long-term mortgage.
Many sellers, including councils, charities, and mortgage lenders, prefer auctions because they provide a fair and open means of determining a property’s market value. This market-driven pricing model means you’re not relying on an estate agent’s valuation or a seller’s asking price. You’re bidding what you believe the property is worth, and if you’ve done your research, this can help ensure you pay a fair price.
At an auction, everyone has the same information, the same opportunities and the same ability to bid. This creates a level playing field, where you’re not competing against insiders or dealing with preferential treatment. It’s all about who is willing to pay the most, which can make for a fair and straightforward buying process.
Auctions can be a treasure trove of deals. Some properties come with no or very low reserve prices, and if you happen to be the highest bidder, you could walk away with a property at a fraction of its market value. This isn’t always the case, of course, but the potential for a bargain is always a draw.
The adrenaline rush that comes with bidding at auction can make the process exciting and enjoyable. This can be especially true if you’re the winning bidder, but even if you’re outbid, the experience can be rewarding. Many investors thrive on the fast-paced, high-stakes environment of the auction room.
If the idea of bidding in person seems intimidating, many auction houses offer remote bidding options. You can bid by phone, online, or even through a proxy, allowing you to participate in the auction from the comfort of your own home.
For aspiring property developers, auctions can provide a chance to gain public exposure. TV shows like Homes Under the Hammer often attend auctions, offering an excellent opportunity to gain public recognition. You might be able to use this exposure to boost your profile or even attract potential investors.
Despite the potential benefits, buying commercial property at auction is not without risks. The speed and intensity of the process can make it easy to make mistakes or miss important details. To avoid these pitfalls, it’s important to approach the process with a clear plan. Let’s break it down into a step-by-step strategy:
The first step to any new venture is to familiarise yourself with the process. Research how commercial property auctions work, what the typical timeline is, and what you’ll need to do at each stage. Understand the auction house rules, familiarise yourself with the bidding process, and comprehend auction terminology to avoid unexpected surprises.
Once you’ve got a handle on the process, you’ll need to delve into the specifics of the properties you’re interested in. Comprehensive research is crucial to mitigate risks associated with the ‘buyer beware’ principle. Examine the auction pack, which offers property details, and engage professionals, such as commercial property solicitors, to identify potential pitfalls. Remember, once the hammer falls, you’re committed to the purchase, so it’s vital to uncover any issues before you bid.
It’s advisable to arrange a viewing of any property you’re considering bidding on. This allows you to assess the property’s condition and location firsthand, potentially uncovering matters not disclosed in the auction pack. This can save you from potential future headaches and help you make a more informed bid.
Before you set foot in the auction room, ensure you have your financing arranged. The auction process moves quickly, and if your bid is successful, you’ll need to pay a deposit on the day. Commercial auction finance solutions, like commercial bridging loans offered by Alternative Bridging, can be a viable choice due to their adaptability and swift approval process.
The day of the auction can be stressful, but with a clear strategy in place, you can keep your cool. Define your budget and stick to it. It’s easy to get caught up in the heat of the moment, but overbidding can lead to financial strain down the line. Remember, if your bid is successful, you’ll need to pay a deposit, typically 10%, on the day itself.
Winning the bid is just the start. Once the hammer falls, you’ll be legally obligated to complete the purchase, usually within 28 days. Be prepared to follow through with the necessary legal and financial formalities post-auction. This may include arranging insurance, completing your mortgage application.
In the dynamic world of commercial property, the ability to act quickly is key to seizing opportunities. Traditional finance methods, such as commercial mortgages, while valuable, often don’t offer the rapidity required in this fast-paced market. This is where Alternative Bridging Corporation steps in, offering specialised Commercial Bridging Loan products that are tailored to the unique needs and pace of the commercial property sector.
At the heart of Alternative Bridging Corporation’s approach is a strong commitment to service and collaboration. We review each proposal on an individual basis, ensuring that every decision is made by people, not algorithms. This personalised approach allows us to establish long-term, productive relationships with commercial finance brokers, while our swift decision-making process means funding can progress without unnecessary delay.
Our Commercial Bridging Loans are designed to be short-term solutions, with a typical duration ranging from 3 to 24 months. They offer quick access to capital, enabling the purchase or renovation of property without the lengthy waiting times associated with traditional mortgages. This makes them an ideal choice for developers and investors needing rapid funding.
Choosing to work with Alternative Bridging Corporation for your commercial bridging loans comes with a huge host of benefits.
Our default position is to facilitate lending, with a proactive approach to overcome obstacles rather than create them.
Thanks to our streamlined structure, we can provide decisions in principle on the same day, ensuring your project doesn’t lose momentum.
With over 25 years in the industry, we have extensive knowledge of commercial bridging loans. As members of the Association of Short Term Lenders and patrons of the National Association of Commercial Finance Brokers, our expertise is backed by industry recognition.
Clarity and transparency are key to our approach, covering not only interest, repayments, and loan values, but also the source of your loan funds. We are the lenders, freeing them from the pressures and limitations that can impact other lenders.
Understanding your business is central to how we operate. By getting ‘under the skin’ of your operation, we can tailor loan arrangements to suit your specific needs. This personalised approach creates long-lasting relationships with many clients choosing to return for future projects.
Through our dedication to service, swift decision-making, industry expertise, transparency and tailored solutions, Alternative Bridging positions itself as a reliable partner in your commercial property ventures. Get in touch today
Disclaimer
Alternative Bridging Corporation accepts no liability or responsibility for any acquisitions made through property auctions, nor shall it be liable or responsible for the subsequent consequences arising from any such acquisitions. All proposed buyers must rely solely on appropriate separate professional advice before undertaking any such acquisition.
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