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Typically, if you are looking for a property conversion loan to complete a commercial-to-residential conversion, lenders will ideally want to see a previous project of a similar size and scale to evidence the experience.
That being said, this is not always necessary and there are instances where the lender can take a view on this.
What will a lender want to see to evidence the experience?
This is very much dependent on your individual circumstances.
If you have previously undertaken refurbishment projects and are now looking to undertake your first commercial-to-residential conversion, this is potentially something a lender could consider.
In this instance, you will need to be able to demonstrate to the lender the success of the previous projects. It is key to evidence that you were able to maintain deadlines, stay within budget and repay any funding within the prescribed term.
If you are able to evidence the efficient management of your previous projects, then a commercial-to-residential conversion is something a lender could look to consider further.
What if this is your first commercial-to-residential conversion project?
If you are looking to undertake a commercial-to-residential conversion as your first project, the lending options are reduced but there are still potential property conversion loan options.
If this is your first project then the key aspect for the lender is understanding your experience within the property sector, as well as the experience of the team you are working with; from the contracting firm carrying out the works, to the architect drawing up the plans.
It is important to work with established companies who have experience of completing similar commercial-to-residential conversion projects.
In the scenario where you have no or limited experience, a lender may require you to have a fixed-priced contract in place with a contractor to carry out the commercial-to-residential conversion works or the appointment of a project manager with relevant experience if you were planning to manage the works with self-employed contractors.
A fixed-price contract is a contract where the agreed-upon price for the job is unchanged throughout the project. It doesn’t matter if more time, materials or labor must be used than first estimated; the price stays the same.
This is beneficial as it reduces the risk of overspending on commercial-to-residential property conversion.
How can Advocate Finance help?
Advocate Finance are experts in arranging commercial to residential conversion loans. Every commercial-to-residential conversion is assessed on its own individual merits, as such, if you are looking to complete a potential commercial-to-residential conversion, do not hesitate to get in touch and we will explore your individual funding option needs.
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