Purchasing an Industrial Unit

[StottyGTR]

Hello, a family members business has been growing and looking to expand into a larger industrial unit for a few months. They've finally found the perfect one but the owner is now looking to sell the unit, the business doesn't have enough liquid cash to buy the premises so have asked if I am interested in buying it and letting out to them. Does anybody have any advice about how I'd go about this?

From my research so far I can only find mortgages for business' to buy units and all private mortgages are for residential properties. I'd need a buy to let mortgage on an industrial property, do these even exist?

[MustangGT]

My first thought is why can the family member not do exactly that?

Second thought is don't get involved in finance and family.

[Lotobear]

Put it in a SIPP and let it to the business. Alternatively they could put it into their own SIPP and use it as a pension vehicle with the business paying rent into their SIPP. This is a very commonplace arrangement.

[Chamon_Lee]

commerical mortgages do exists and are readily available however expect to fork out 50% deposit and show quite a bit of paperwork. Lenders want to cover their backs as commerical can be hit quite hard when things take a turn

[Burwood]

My thoughts would be. Who's to say the business doesn't outgrow this space. Renting is the sensible plan. Find another unit. I say this assuming they don't need to make material improvements to the space.

[StottyGTR]

Chamon_Lee said:

commerical mortgages do exists and are readily available however expect to fork out 50% deposit and show quite a bit of paperwork. Lenders want to cover their backs as commerical can be hit quite hard when things take a turn

I've been looking into these but they assume that you're a business purchasing the property which wouldn't be the case.

[soxboy]

They do exist but you need a high deposit and also have a lease in principle agreed. The terms the lender will accept as a minimum can be more onerous than a tenant may be willing to agree to, such as minimum unbroken 5 year lease.

[StottyGTR]

soxboy said:

They do exist but you need a high deposit and also have a lease in principle agreed. The terms the lender will accept as a minimum can be more onerous than a tenant may be willing to agree to, such as minimum unbroken 5 year lease.

Hi, brilliant thanks for the info. Would you be able to share any contacts or names of companies that provide this service? My current issue is finding someone to offer me this service.

[JQ]

StottyGTR said:

soxboy said:

They do exist but you need a high deposit and also have a lease in principle agreed. The terms the lender will accept as a minimum can be more onerous than a tenant may be willing to agree to, such as minimum unbroken 5 year lease.

Hi, brilliant thanks for the info. Would you be able to share any contacts or names of companies that provide this service? My current issue is finding someone to offer me this service.

Literally every single bank provides commercial mortgages, I can't think of one that doesn't. Actually Nationwide don't, they pulled out of commercial property a few years ago, but they're the only one i can think of. The first port of call should be your existing bank, they will have a commercial property team and having a history with them will count in your favour.

On the basis you're struggling, I'd perhaps suggest using a finance broker. They will often save you more money on the finance than the cost of their service. Try Paul at https://www.kingsbarn-capital.co.uk/.