Property Funding Options To Build Your Property Portfolio


Raising property funding is one of the biggest challenges most property investors face.

Are you one of those property investors?


We have divided this into 3 different posts given the number of options at our disposal to share with you.

In this post, we will discuss a few other alternative options for property funding for your property investment journey, which can be risky but worth considering.


Options that we will be discussing in this and previous post are available to all property investors based on their financial situation.


Please discuss with a financial advisor to make sure you are not taking decisions in a rush to invest in property, and get into risky situations.

Please do your due diligence, always get contracts reviewed by a solicitor before signing.


Bridging is one of the well-known options for property funding.

Bridging is used to raise capital quickly to complete a purchase. The overall cost of money will be high.


It is not all that bad. If you plan your bridging loan properly, it is one of the options which can help close the deal.

Let us delve a bit deep into how this option can work for you.

When to use:

Bridging can be used in various scenarios when you may have to purchase the property quickly or where you can’t use the traditional mortgage.

Interest Rates:

Interest rates are quite high when compared to traditional mortgages. The interest rate can range based on the amount borrowed between 0.75% to 1.2% per month.

Needless to say “cost of money” will be high.

Loan to value(LTV):

The average loan to value can vary between 60% to 70% based on the property. Percentages may vary between commercial and residential properties. The information is based on our research for our residential properties.

We also noticed that the more bridging amount you take the LTV percentage might increase.


It is better to keep the term of bridging short so that the overall cost of money is less.


Make sure you can repay the money on the agreed date to avoid any penalties.

Costs involved:

With bridging, apart from the monthly interest rate, there may be other costs as well like entry fee, exit fee and renewal fee as a minimum.

It is better to check if there is an early repayment charge if you pay early.

This tip can help to save thousands of pounds if you can repay the bridging loan by either refinancing the property or raising capital at lower interest.


Bridging companies will need either 1st charge or 2nd charge on the property based on the type of loan.


Please make sure you review contracts and understand what you are signing. I have mentioned this before but want to reiterate as there is nothing worse than losing your investment or losing thousands of pounds because you didn’t understand the meaning of wording in the contract.


  • Quick money to complete the projects on time.
  • Can be used for auction properties, when a mortgage is not available,
  • Can be used when you fall short of cash even after a mortgage.


  • Cost of money is high
  • If bridging loan is not paid on time, penalties can be expensive.

Joint venture

A joint venture is a good property funding option where people choose to play to their strengths.

For example, someone who has money can join hands with someone who has time and knowledge to do property investing.

Joint venture can be between friends, relatives, people who can mutually benefit from the partnership.

One of the common JV is teaming up with builder and invest along with them. Make sure you  have the right JV partner.


Make sure that your core values are aligned with your JV partner’s core values. If not the partnership won’t last long, and the project can be in jeopardy.

Joint venture can be done either due to access to funds or knowledge/skills.

A joint venture mostly is done in the following two ways:

  1. As profit share
  2. Fixed interest, this is more like angel investing.


In a joint venture

  • Meet the JV partner in person and build the relationship before jumping into JV. Please don’t rush into JV after a quick coffee catch up or single meeting in a Network meeting.
  • Always ensure that there is a contract in place with clear exit criteria for the partnership.
  • Be clear on what each of the JV partners does and how the profits or losses will be shared.
  • What will they need to do if the project is going down south e.g. if they need to invest more money to complete the project?


  • More brains, more solutions to challenges.
  • The parties involved will share Costs and risks.
  • If likeminded people start working, they can help each other with their strengths.
  • If the project is delivered successfully, JV can continue on other projects as well.
  • It is not permanent, so if things didn’t work out, JV could stop once the project ends.


  • It can lead to complications and also affect relationships if the contract is not clear.
  • Too many cooks can spoil the broth.
  • Lack of clear communication can lead to chaos.
  • Unreliable partners mean an imbalance in team leading to frustrations.
  • Different expectations of objectives and deadlines based on limited knowledge can lead to conflicts.

Trade existing property

Have you thought about trading your property to raise required property funding?


Trading property is not an option that comes to mind when planning to buy a bigger or better property.

If you already own a property, then trading your property for the new property could be explored as well.

If you own a single property, which is your primary residence and you are using this option, quite a few builders are offering to purchase your property. You could move into one of their brand new properties once the deal is agreed between both parties.


  1. Guaranteed sale, once the deal is good for both parties.
  2. No property chain worries mean, peace of mind.
  3. Based on current regulations, if you own single primary residence, you don’t need to pay an extra 3% stamp duty or if you have paid, you could get it refunded, saving you thousands of pounds.
  4. You could live in your existing property till the new property is ready for you to move in.
  5. An estate agent is not involved, hence saving you more money.


  1. The property could be downvalued based on factors like location, any refurbishment required.
  2. Not all properties are eligible for part-exchange e.g property with short leasehold.
  3. Be careful about any provisional reservations that you pay. If you are not happy with the part exchange offer, then the reservation money may not always be paid back.



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