The short-term nature of buy-to-sell mortgages makes them a perfect choice for those seeking quicker financing for properties but who don’t have the money necessary to make a purchase.
This makes this type of bridging finance perfect for several scenarios where timing is quite critical, such as the following:
House Flipping and Complete Home Renovation
House flipping is when someone buys a property, performs some renovations, and resells it for a profit. The renovations can be anything from simple do-ups to major or complete renovations.
Buy to sell mortgage is perfect for this purpose because it can provide home flippers with the necessary funds for both buying and renovating the house.
This way, the investor will get a quicker return on their investment, which is essential for this type of strategy to keep the business running.
Houses Listed Below Market Value
Both real estate investors and developers need to keep their eyes open for any potential business opportunity that they might come across.
Such an opportunity can come in the form of a property listed for a significantly lower price than its market value, which can happen for multiple reasons, such as auctioned houses where the completion timescale is limited to 28 days.
Many homeowners might also list their houses for a heavily discounted price when they need to sell them quickly. In that case, investors who don’t have enough capital to complete the purchase may opt for a buy-to-sell mortgage as a source of financing.