How Investors Use Bridging Finance to Buy Below Market Value Properties
How Investors Use Bridging Finance To Secure Below Market Value Property Deals
In property, some of the best deals usually require speed.
A lot of below market value opportunities do not hang around long. Sellers want things done quickly, chains break, or the property simply is not suitable for a normal mortgage straight away. That is where bridging finance comes in.
So what actually is bridging finance?
Bridging finance is basically a short term loan used to buy a property quickly.
Instead of waiting weeks or months for a traditional mortgage, investors use bridging to complete fast, secure the deal, and then sort long term finance afterwards.
Most bridging loans run anywhere from a few months up to about a year.
Why do investors actually use it?
The main reason is simple. It lets you move faster than everyone else.
A lot of below market value deals come from situations like:
- Probate sales where families want a quick sale
- Auction purchases where completion deadlines are tight
- Properties that are run down or cannot be mortgaged easily
- Sellers who need a guaranteed fast completion
- Opportunities where price is reduced for speed
In these situations, a standard mortgage can be too slow or too restrictive.
Bridging finance removes that barrier.
A real world example;
Let’s say you find a property worth around £240,000 on the open market.
The seller is willing to let it go for £180,000 because they want a quick stress free sale and the property needs work.
A normal buyer using a mortgage might struggle. Either the lender will not touch it in its current condition or the process takes too long and the seller pulls out.
An investor using bridging finance can step in, complete quickly, and secure the deal.
Once the property is bought, they will typically refurbish it, add value, and then either:
- Refinance onto a buy to let mortgage and keep it
- Or sell it on for a profit
The big advantage control
Bridging finance gives investors control of timing.
Instead of being stuck in a slow mortgage process, you are able to act when the opportunity appears.
And in property, timing is often what separates a good deal from a missed one.
The important bit people overlook:
Bridging finance is not just about getting money quickly. It only works if you know your exit plan before you even start.
That usually means one of three things:
- Refinancing onto a long term mortgage
- Selling the property once it is improved
- Or having another source of funds lined up
Without that plan, bridging can become expensive very quickly.
Final thought:
Bridging finance is not something you use on every deal, but when the right below market value opportunity comes up, it can be the difference between getting the property or watching someone else take it.
In today’s market, speed and flexibility are often just as important as price.
For investors we work with on a regular basis, we are also able to offer our own bridging solutions to help secure deals quickly and keep transactions moving without delays.
Enquire with us at: Charlie@openinvestgroup.com
